11-K 1 d29556.htm 11-K



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

  


FORM 11-K

  

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

  

[ x ]

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

  

For the fiscal year ended:  December 31, 2011

  

OR

  

[   ]

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


For the transition period:  N/A

  

Commission file number 1-6905

  

   A.

Full title of the plan and the address of the plan, if different from that of the issuer named below:

  

HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN

(formerly known as RUDDICK RETIREMENT AND SAVINGS PLAN)

  

   B.

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

  

HARRIS TEETER SUPERMARKETS, INC.
701 CRESTDALE ROAD
MATTHEWS, NORTH CAROLINA  28105
(704) 372-5404







REQUIRED INFORMATION

  


The Harris Teeter Supermarkets, Inc. Retirement and Savings Plan (the “Plan”) is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  Accordingly, the financial statements and schedules of the Plan for the year ended December 31, 2011, which have been prepared in accordance with the financial reporting requirements of ERISA, are included in this report.






HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN

  

  

Financial Statements and Supplemental Schedule

  

As of December 31, 2011 and 2010 and for the year ended December 31, 2011

  

(With Report of Independent Registered Public Accounting Firm Thereon)







HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN

TABLE OF CONTENTS


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   1 
      
FINANCIAL STATEMENTS     
      
Statements of Net Assets Available for Benefits –
December 31, 2011 and 2010
   2 
      
Statement of Changes in Net Assets Available for Benefits –
For the Year Ended December 31, 2011
   3 
      
Notes to Financial Statements   4 
      
SUPPLEMENTAL SCHEDULE     
      
Schedule of Assets (Held at End of Year)
as of December 31, 2011
   12 







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Participants and the Retirement Plan Committee of

Harris Teeter Supermarkets, Inc. Retirement and Savings Plan

Matthews, North Carolina


We have audited the accompanying statements of net assets available for benefits of the Harris Teeter Supermarkets, Inc. Retirement and Savings Plan (formerly the Ruddick Retirement and Savings Plan) (the “Plan”) as of December 31, 2011 and 2010 and the related statement of changes in net assets available for benefits for the year ended December 31, 2011.  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 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.  We were not engaged to perform an audit of the Plan’s 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, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011 and 2010, and the changes in its net assets available for benefits for the year ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.


Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental schedule of assets (held at end of year) at December 31, 2011 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 supplemental schedule is the responsibility of the Plan’s management.  The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.



/s/ Dixon Hughes Goodman LLP

Charlotte, North Carolina

June 26, 2012



1






HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2011 and 2010


       
   2011  2010
       
ASSETS      
Cash  $—     $2,899 
Investments, at fair value (Notes B, C, D and E):          
   Mutual funds   250,184,925    268,388,383 
   Common collective trust funds   64,280,270    76,480,330 
   Harris Teeter Supermarkets, Inc. common stock   141,547,746    160,833,162 
    456,012,941    505,701,875 
Receivables (Note B):          
   Participant contributions   278,710    285,305 
   Employer contribution   13,015,632    13,657,825 
   Notes receivable from participants   22,693,234    21,248,874 
    35,987,576    35,192,004 
      Total Assets   492,000,517    540,896,778 
           
LIABILITIES          
Administrative expenses payable   —      6,875 
NET ASSETS, at fair value   492,000,517    540,889,903 
           
Adjustment from fair value to contract value for fully benefit-
  responsive investment contracts (Note B)
   (1,694,287)   (2,085,571)
NET ASSETS AVAILABLE FOR BENEFITS  $490,306,230   $538,804,332 
           
The accompanying notes are an integral part of these financial statements.          



2






HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 2011

    
    
Investment income:     
   Net appreciation in fair value of investments (Notes B and C)   $  12,836,315 
   Dividends   7,353,538 
    20,189,853 
      
Interest income on notes receivable from participants   1,097,209 
      
Contributions:  (Note A)     
   Participant   28,132,835 
   Employer   20,914,182 
    49,047,017 
      
              Total Additions   70,334,079 
      
Deductions:     
   Benefits paid to participants   46,823,756 
   Administrative expenses   655,383 
    47,479,139 
      
         Transfer to the American & Efird Retirement and Savings Plan (Note A)   71,353,042 
      
              Total Deductions   118,832,181 
      
      
NET DECREASE IN NET ASSETS AVAILABLE FOR BENEFITS   (48,498,102)
      
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year   538,804,332 
      
NET ASSETS AVAILABLE FOR BENEFITS, end of year   $490,306,230 
      
The accompanying notes are an integral part of these financial statements.     


3






HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010


NOTE A – DESCRIPTION OF THE PLAN


Effective April 2, 2012, Ruddick Corporation’s name was changed to “Harris Teeter Supermarkets, Inc.” (the “Company” or “HTSI” or “Employer”)  In addition, the Company’s ticker symbol for shares of its common stock listed on the New York Stock Exchange was changed from “RDK” to “HTSI.” Amendments were also made to change the name of the Company’s various employee benefit plans to coincide with the Company’s new name. Accordingly, the “Ruddick Retirement and Savings Plan” became the “Harris Teeter Supermarkets, Inc. Retirement and Savings Plan” effective April 2, 2012.


The following description of the Harris Teeter Supermarkets, Inc. Retirement and Savings Plan (the “Plan”) provides only general information.  Participants should refer to the plan document for a more complete description of the Plan’s provisions.


General

The Company sponsors the Plan, which is a defined contribution plan with 401(k) features. The Plan is maintained by the Company for the benefit of its employees and employees of its subsidiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Under the provisions of the Plan, eligible employees may elect to have the Company make contributions to the Plan on their behalf out of their regular salary and bonus (before state and federal income taxes).  Employees become eligible to participate in the Plan after three months of employment.  Participants may generally contribute up to 30% of gross pay not to exceed established limits of $16,500 for 2011.  Highly compensated employees are subject to additional contribution limitations.  In addition to established limits, participants age 50 or older may contribute “catch-up” contributions of $5,500 for 2011.  Effective July 1, 2011, the Plan offers a qualified Roth contribution program and permits certain in-plan Roth conversions.


On November 7, 2011, the Company completed the sale of all of its ownership interest in its American and Efird (“A&E”) subsidiary to two newly formed affiliates of KPS Capital Partners, LP.  In connection with the sale, A&E created the American & Efird Retirement and Savings Plan (the “A&E Plan”) in order to continue the retirement benefits of the A&E’s employees.  The A&E Plan was designed to mirror the Plan with respect to the A&E participants.  On November 30, 2011, A&E participant accounts totaling $71,353,042 were transferred to the A&E Plan.


Contributions

The Plan includes a Company matching contribution at a rate determined at the sole discretion of the Board of Directors of the Company or its delegate.  Except for A&E participants, the match rate was 50% of each individual participant’s contributions for 2011.  The match rate for A&E participants was suspended on April 1, 2009 and subsequently reinstated at a rate of 25% effective January 1, 2011.  The Company matching contribution is applicable only to the first 4% of compensation contributed by participants.  The matching contribution is deposited with each payroll contribution.  Contributions are subject to certain limitations.


For each plan year (January 1 – December 31), the Company generally makes an Automatic Retirement Contribution (“ARC”) to an individual participant’s account if the participant has completed at least 1,000 hours of service during the 12-month period ending on September 30 of each plan year and is employed by the Company or its subsidiaries on the last day of the plan year.  Contributions are a percentage of the individual participant’s pay, determined on the basis of the combined years of age and years of service as of the last day of the plan year.  A&E employees who were hired or rehired after June 30, 2008 were generally not eligible to receive the ARC.


Participants may direct the investment of their contributions, the Company’s matching contribution and their ARC from among various investment options offered by the Plan. In the event an effective investment direction is not made by the participant, and in the case of contributions made by or on behalf of a participant that, under the terms of the Plan, are to be invested in the Plan's default investment, such contributions shall be invested in a default investment fund that meets the requirements of ERISA, Department of Labor Regulations and any other related regulations or similar guidance.  Currently, the Plan's default investment fund is an age-appropriate retirement fund based upon retirement at age 65.  Effective August 1, 2010, participants may not direct more than 20% of their contributions into Company stock.  If participants direct more than 20% of their contributions into Company stock, the excess will be invested in the Plan's default investment.  In addition,



4




amounts may not be transferred from existing investment funds to Company stock if the resulting amount of Company stock exceeds 20% of the aggregate value of the participant’s account.


Participant Accounts

Each participant’s account is credited or charged with the participant’s contribution and allocations of the Company’s contributions, Plan earnings (losses), benefit payments and allocations of administrative expenses. Allocations of administrative expenses may be determined on a per participant basis or prorated across all participants’ investments based proportionately on each participant’s account balance, depending upon the category and nature of the expense. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.


Payment of Benefits

Once participants stop working for the Company, they may receive the vested value of their account.   In-service withdrawals are subject to certain restrictions, and they generally include rollover withdrawals, age 59-1/2 withdrawals, merged ESOP plan withdrawals, certain financial hardship withdrawals and qualified reservist distributions. Certain A&E employees were also eligible to withdraw certain amounts contributed to the American & Efird, Inc. Employees’ Profit Sharing Plan that was previously merged into the Plan. Participants are taxed on their accounts upon withdrawal, except for qualified rollovers into other tax deferred plans.


Vesting

Participants are immediately vested in their contributions plus actual earnings thereon.  For Company matching contributions, a participant is fully vested in the contributions plus actual earnings thereon after three years of service. A “Year of Service” requires a minimum of 1,000 hours of service during the vesting computation period with the Company.  In general (and except for certain distributions associated with the ARC which include an annuity purchase option), payment of any benefit is made in the form of a lump-sum payment as outlined in the Plan document.  However, subsequent to the end of the Plan’s 2011 fiscal year, effective January 1, 2012, the Plan was amended to allow participants to elect partial or installment distributions as well.


After completing five Years of Service, a participant is fully vested for ARCs made before January 1, 2007. For ARCs made on or after January 1, 2007, a participant is fully vested after completing three Years of Service.


Forfeited Accounts

A participant who terminates service without a fully vested interest forfeits any nonvested balance in his or her Company contribution account and ARCs as of the earlier of (a) distribution to the participant of the participant’s vested balance, or (b) the last day of the first Plan year in which the participant incurs five consecutive Breaks in Service, as defined by the Plan.  The forfeited funds are used to offset Employer contributions.  Forfeitures utilized to offset Employer contributions totaled $1,084,278 during 2011. The forfeiture balance was $417,884 and $528,957 at December 31, 2011 and 2010, respectively.


Notes Receivable From Participants

Participants may borrow from certain of their fund accounts, subject to certain restrictions and requirements, a minimum of $500 and up to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balance excluding ARC and merged ESOP accounts.  Only one loan per year may be taken, but up to two loans can be outstanding at a time.  A third loan, which is not subject to the minimum requirement, may be granted at any time for the sole purpose of applying the proceeds of such third loan to other outstanding loans to avoid or cure a loan default resulting from an administrative error. Except for certain loans relating to a participant’s principal residence, loans must be repaid within five years.  Loans bear a fixed interest rate of one percent over the prime rate in effect at the time of borrowing.  Interest on loans outstanding ranged from 4.25% to 9.25%, reflecting the change in interest rates during the last five years.  Principal and interest is paid through payroll deductions.


NOTE B – SIGNIFICANT ACCOUNTING POLICIES


Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).


Investment contracts held by a defined contribution plan are required to be reported at fair value.  However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive



5




if they were to initiate permitted transactions under the terms of the plan.  The Statements of Net Assets Available for Benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value.  The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.


Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.


Investment Valuation and Income Recognition

As reported by T. Rowe Price Trust Company (the “Trustee”), Plan investments are reported at fair value.  Fair value is the price that would be received from an asset sale or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  See Note D for a discussion of fair value measurements.


Purchases and sales of securities are recorded on a trade-date basis.  Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation and depreciation in fair value of investments is comprised of the net realized and unrealized gains and losses.


The Equity Index Fund is a common collective trust fund operated by T. Rowe Price Trust Company, a wholly owned subsidiary of T. Rowe Price Associates, Inc.  Each investor’s beneficial interest in the net assets of the trust is represented by units, an unlimited number of which are authorized.  Unit transactions are subject to terms, conditions, and limitations defined in the Declaration of Trust.  Trust units are issued and redeemed only on a valuation date and at the net asset value per unit computed on that date. The Equity Index trust’s financial instruments are valued and its net asset value is computed at the close of the New York Stock Exchange each day it is open for business.  The investment objective of the trust is to provide investment results that correspond to the total return performance of the common stock publicly traded in the United States as represented by Standard & Poor’s 500 Composite Stock Index.


Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.  Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan document.


Administrative Expenses

All direct expenses, to the extent allowed by law, are charged to the Plan. Direct expenses include trustee, investment manager, record-keeping, legal, audit, and communication expenses related to the Plan.


Payment of Benefits

Benefit payments to participants are recorded when paid.


Subsequent Events

The Company has evaluated subsequent events since the date of these financial statements. The Company has determined there are no material subsequent events which require adjustment to or additional disclosure in the Plan’s financial statements.



6




NOTE C – INVESTMENTS


Investments that represent 5% or more of the Plan’s net assets, at fair value, as of December 31, 2011 and 2010 are as follows:


   2011  2010
Employer Common Stock  $141,547,746   $160,833,162 
Mutual Funds:          
   T. Rowe Price Associates, Inc. Blue Chip Growth Fund   25,895,273    29,956,840 
Collective Trust Funds:          
   T. Rowe Price Associates, Inc. Stable Value Fund   48,582,160    57,701,389 
    216,025,179    248,491,391 
Aggregate of other  individual investments less than 5%   239,987,762    257,210,484 
   $456,012,941   $505,701,875 


The net appreciation (depreciation) in fair value of investments for each category of investments for the year ended December 31, 2011 consists of the following:


    
Mutual funds  $(10,250,473)
Common collective trust funds   331,356 
Common stock   22,755,432 
   $12,836,315 


NOTE D – FAIR VALUE MEASUREMENTS


Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosure, defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques.  Fair value is the price that would be received in an asset sale or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A fair value measurement assumes that the transaction in an asset sale or to transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market.  Valuation techniques that are consistent with the market, income or cost approach, as specified by ASC Topic 820, are used to measure fair value.


The standard describes three levels of inputs that may be used to measure fair value:


Level 1   –

 

Inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date;

 

 

 

Level 2   –

 

Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and

 

 

 

Level 3   –

 

Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.


A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.


HTSI Common Stock

These investments are valued at the closing price reported on the active market on which the individual securities are traded.  These investments are classified within Level 1 of the valuation hierarchy.



7




Mutual Funds

These investments are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the administrator of the fund.  The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.  The NAV is a quoted price in an active market and classified within Level 1 of the valuation hierarchy.


Common Collective Trust Funds

These investments are public investments vehicles valued using the NAV provided by the administrator of the fund.  The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.  The NAV is classified within Level 2 of the valuation hierarchy because the NAV’s unit price is quoted on a private market that is not active.


The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while Plan management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.  There have been no changes in the methodologies used at December 31, 2011 and 2010.


The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2011 and 2010.


             
   As of December 31, 2011
   Level 1  Level 2  Level 3  Fair Value
Mutual funds:                    
   Growth funds  $208,074,681   $—     $—     $208,074,681 
   Blended funds   21,397,035    —      —      21,397,035 
   Value funds   4,544,861    —      —      4,544,861 
   Bond funds   16,168,348    —      —      16,168,348 
   Total mutual funds   250,184,925    —      —      250,184,925 
                     
Common collective trust funds:                    
   Equity Index Fund   —      15,698,110    —      15,698,110 
   Stable Value Fund   —      48,582,160    —      48,582,160 
   Total common collective trust funds   —      64,280,270    —      64,280,270 
                     
HTSI common stock   141,547,746    —      —      141,547,746 
Total assets  $391,732,671   $64,280,270   $—     $456,012,941 


             
   As of December 31, 2010
   Level 1  Level 2  Level 3  Fair Value
Mutual funds:                    
   Growth funds  $169,414,870   $—     $—     $169,414,870 
   Blended funds   73,763,414    —      —      73,763,414 
   Value funds   6,558,219    —      —      6,558,219 
   Bond funds   18,651,880    —      —      18,651,880 
   Total mutual funds   268,388,383    —      —      268,388,383 
                     
Common collective trust funds:                    
   Equity Index Fund   —      18,778,941    —      18,778,941 
   Stable Value Fund   —      57,701,389    —      57,701,389 
   Total common collective trust funds   —      76,480,330    —      76,480,330 
                     
HTSI common stock   160,833,162    —      —      160,833,162 
Total assets  $429,221,545   $76,480,330   $—     $505,701,875 




8





Fair Value Estimated Using Net Asset Value per Share

The following table at December 31, 2011 and 2010 sets forth a summary of the Plan’s investments with a reported estimated fair value using net asset value per share:


 

Fair Value at
December 31,
2011

Fair Value at
December 31,
2010

Unfunded
Commitment

Redemption
Frequency

Other
Redemption
Restrictions

Redemption
Notice
Period

Stable Value Fund

$48,582,160

$57,701,389

$ 0

Daily

None

12- or 30-
month
advance
written notice

Equity Index Trust

$15,698,110

$18,778,941

$ 0

Daily

None

90-day
advance
written notice


NOTE E – STABLE VALUE FUND


The Stable Value Fund is a collective trust fund sponsored by T. Rowe Price Associates, Inc.  Each investor’s beneficial interest in the net assets of the trust is represented by units, an unlimited number of which are authorized. Unit transactions are subject to terms, conditions, and limitations defined in the Declaration of Trust. Trust units are issued and redeemed only on a valuation date and at the net asset value per unit computed on that date.  Trust units may be redeemed on a daily basis to meet benefit payments and other participant initiated withdrawals permitted by retirement plans invested in the trust.  The investment objectives of the trust are to maximize current income consistent with the maintenance of principal and to provide for withdrawals for certain participant initiated transactions under a retirement plan without penalty or adjustment. The trust will attempt to achieve these objectives by investing principally in guaranteed investment contracts (GICs) issued by insurance companies; investment contracts issued by banks (BICs); structured or synthetic investment contracts (SICs) issued by banks, insurance companies, and other issuers, as well as the securities supporting such SICs (underlying assets); separate account contracts (SACs); and other similar instruments that are intended to maintain a constant net asset value while permitting participant initiated, benefit-responsive withdrawals for certain events.


For plan years 2011 and 2010, the Stable Value Fund investment has been identified as a fully benefit-responsive investment. Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the benefit-responsive investments, plus earnings, less participant withdrawals, and administrative expenses. The benefit-responsive investments impose certain restrictions on the Plan, and the investments themselves may be subject to circumstances that impact their ability to transact at contract value, as described in the following paragraphs. Plan management believes that the occurrence of events that would cause the investments to transact at less than contract value is not probable.


General

All investment contracts held by the Stable Value Fund are effected directly between the trust and the issuer of the contract and are nontransferable. Permitted participant-initiated withdrawals refer to withdrawals from the trust by an employer-sponsored defined contribution plan directly as a result of participant transactions allowed by the plan, such as participant withdrawals for benefits, loans, or transfers to other funds or trusts within the plan.


Yield and return information for the years ended December 31, 2011 and 2010 is as follows:


   2011  2010
Total Return   3.55%   4.34%
Average yields:          
     Based on GAAP income   2.69%   3.65%
     Based on interest rate credited to unitholders   2.97%   4.10%
Ratio of investment income to average net assets   3.47%   4.26%


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NOTE F – INCOME TAX STATUS


The Internal Revenue Service (“IRS”) has determined and informed the Company by a letter dated February 3, 2004, 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 believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.  On January 31, 2011, the Company submitted a determination letter application to the IRS with respect to the Plan which is still under consideration by the IRS.


GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2011, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no tax audits for any tax periods in progress.  The plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2008. The Plan is currently under routine examination by the Employee Benefits Security Administration of the U.S. Department of Labor.


NOTE  G – PLAN TERMINATION


The Company expects to continue the Plan indefinitely but has the right to amend or terminate the Plan as necessary.  If the Plan were to be terminated, Plan participants would become fully vested in their account balances and all assets of the Plan would be distributed to the individual participants based upon their individual account balances at the date of termination.


NOTE H – PARTY-IN-INTEREST TRANSACTIONS


Certain plan assets invested in mutual funds with a fair value of $208,095,313 and $217,661,547 at 2011 and 2010, respectively, and collective trust funds with a fair value of $64,280,270 and $76,480,330 at 2011 and 2010, respectively, are managed by the Trustee or by T. Rowe Price Associates, Inc. (a company related to the Trustee through common ownership).  Such transactions qualify as party-in-interest transactions as defined by ERISA.  Fees paid by the Plan to the Trustee for administrative services were $5,000 for the year ended December 31, 2011.  There are additional fees paid by the Plan to parties-in-interest for investment management and other services, which are included in the net appreciation/depreciation and/or administrative expenses reported in the Statement of Changes in Net Assets Available for Benefits.


At December 31, 2011 the Plan held 3,319,600 shares of Company common stock with a fair value of $141,547,746. At December 31, 2010 the Plan held 4,365,721 shares of Company common stock with a fair value of $160,833,162.   


NOTE I – RISKS AND UNCERTAINTIES


The Plan provides for investments in various investment securities which, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks.  Further, 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 such changes could materially affect the participants’ account balances and amounts reported in the statements of net assets available for benefits.


NOTE J – RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500


The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 at December 31, 2011 and 2010:


       
   2011  2010
Net assets available for benefits per the financial statements  $490,306,230   $538,804,332 
Adjustment from contract value to fair value for fully benefit-responsive investment contracts   1,694,287    2,085,571 
Net assets available for benefits per the Form 5500  $492,000,517   $540,889,903 




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The following is a reconciliation of the net decrease in net assets available for benefits per the financial statements to net income per the Form 5500 for the year ended December 31, 2011:


    
Net decrease in net assets available for benefits per the financial statements   $(48,498,102)
Prior year adjustment from contract value to fair value for fully benefit-responsive investment
    contracts
   (2,085,571)
Current year adjustment from contract value to fair value for fully benefit-responsive investment
    contracts
   1,694,287 
Net decrease in net assets available for benefits per the Form 5500   $(48,889,386)



11




HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EMPLOYER INDENTIFICATION NUMBER:  56-0905940
PLAN NUMBER:  003
December 31, 2011


(a)

(b)

(c)

 

(d)

(e)

 

 

Description of Investment, including

 

 

 

 

Identity of Issue, borrower,

maturity date, rate of interest,

 

 

 

 

lessor, or similar party

collateral, par, or maturity value

Shares

Cost**

Current Value

 

 

 

 

 

 

 

 

MUTUAL FUNDS

 

 

 

 

American Funds

Cap World Growth & Income Fund

195,917

 

$6,292,855

 

American Funds

Growth Fund of America

219,334

 

6,299,285

 

American Funds

Europacific Growth Fund

167,455

 

5,882,701

 

Dryden

Global Real Estate Fund

53,835

 

949,649

 

PIMCO

Total Return Instl Fund

1,309,251

 

14,231,562

*

T. Rowe Price Associates, Inc.

U.S. Bond Index Fund

167,978

 

1,936,786

*

T. Rowe Price Associates, Inc.

Retirement 2005 Fund

116,747

 

1,305,230

*

T. Rowe Price Associates, Inc.

Retirement 2010 Fund

363,265

 

5,456,234

*

T. Rowe Price Associates, Inc.

Retirement 2015 Fund

1,063,374

 

12,313,870

*

T. Rowe Price Associates, Inc.

Retirement 2020 Fund

1,519,933

 

24,182,137

*

T. Rowe Price Associates, Inc.

Retirement 2025 Fund

1,980,917

 

22,939,023

*

T. Rowe Price Associates, Inc.

Retirement 2030 Fund

1,368,093

 

22,628,263

*

T. Rowe Price Associates, Inc.

Retirement 2035 Fund

1,445,160

 

16,850,564

*

T. Rowe Price Associates, Inc.

Retirement 2040 Fund

1,154,929

 

19,137,177

*

T. Rowe Price Associates, Inc.

Retirement 2045 Fund

1,641,606

 

18,106,918

*

T. Rowe Price Associates, Inc.     

Retirement 2050 Fund

651,210

 

6,023,696

*

T. Rowe Price Associates, Inc.

Retirement 2055 Fund

721,780

 

6,597,068

*

T. Rowe Price Associates, Inc.

Retirement Income Fund

209,983

 

2,719,276

*

T. Rowe Price Associates, Inc.

Personal Strategy Balanced Fund

687,004

 

12,785,147

*

T. Rowe Price Associates, Inc.

Value Fund

201,635

 

4,544,861

*

T. Rowe Price Associates, Inc.

Small Cap Value Fund

135,551

 

4,673,791

*

T. Rowe Price Associates, Inc.

Blue Chip Growth Fund

669,994

 

25,895,273

 

Vanguard

Capital Opportunity

62,117

 

4,233,891

 

Vanguard

Explorer Growth

63,191

 

4,199,668

 

 

Total Mutual Funds

 

250,184,925

 

 

 

 

 

 

 

 

COMMON COLLECTIVE TRUST FUNDS, AT FAIR VALUE

 

 

*

T. Rowe Price Associates, Inc.

Stable Value Fund

46,887,872

 

48,582,160

*

T. Rowe Price Associates, Inc.

Equity Index Trust

385,514

 

15,698,110

 

 

Total Common Collective Trust Funds

 

64,280,270

 

 

 

 

 

 

 

COMMON STOCK

 

 

*

HTSI

Common Stock

3,319,600

 

141,547,746

 

 

 

 

 

 

 

PARTICIPANT LOANS***

 

 

*

Participant Loans***

Interest rates ranging from 4.25%
 to 9.25%, maturing through
 December 2017.

 

 

22,693,234

 

 

 

 

 

 

 

 

 

 

 

$ 478,706,175

*

Party-in-Interest to the Plan

**

Cost omitted for participant directed investments.

***

The accompanying financial statements classify participant loans as notes receivable from participants.



12




Signatures


The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.



 

HARRIS TEETER SUPERMARKETS, INC. RETIREMENT AND SAVINGS PLAN

 

 

 

 

By:

Harris Teeter Supermarkets, Inc., as Plan Sponsor

 

 

 

Date:  June 26, 2012

By:

/s/ RONALD H. VOLGER               .            

 

 

Ronald H. Volger,
Vice President and Treasurer




13




EXHIBIT INDEX

EXHIBIT NO.

 

23

Consent of Dixon Hughes Goodman LLP






14