-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AcgA+bJGFlDJUfbSIIgNTzMeDbsV1sFlZKLEVV6GLfxVqof260ux8+6baYcpuFeN +DxxsZLrdpoP+OBNf+4b4g== 0000794367-97-000017.txt : 19970701 0000794367-97-000017.hdr.sgml : 19970701 ACCESSION NUMBER: 0000794367-97-000017 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED DEPARTMENT STORES INC /DE/ CENTRAL INDEX KEY: 0000794367 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 133324058 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13536 FILM NUMBER: 97633185 BUSINESS ADDRESS: STREET 1: 7 W SEVENTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2126954400 MAIL ADDRESS: STREET 1: 7 W SEVENTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: R H MACY & CO INC DATE OF NAME CHANGE: 19950307 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended December 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number: 1-13536 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Federated Department Stores, Inc. Retirement Income and Thrift Incentive Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Federated Department Stores, Inc. 151 West 34th Street New York, New York 10001 and 7 West Seventh Street Cincinnati, Ohio 45202 FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Financial Statements December 31, 1996 and 1995 With Independent Auditors' Report Thereon FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Index Independent Auditors' Report Statements of Net Assets Available for Benefits, with Fund Information - December 31, 1996 and 1995 Statements of Changes in Net Assets Available for Benefits, with Fund Information - Years Ended December 31, 1996 and 1995 Notes to Financial Statements Independent Auditors' Report Pension and Profit Sharing Committee Federated Department Stores, Inc. Retirement Income and Thrift Incentive Plan: We have audited the accompanying statements of net assets available for benefits of the Federated Department Stores, Inc. Retirement Income and Thrift Incentive Plan (the "Plan") as of December 31, 1996 and 1995, 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 generally accepted auditing standards. Those standards require that we plan and perform the audits 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. 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, 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, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The Fund Information 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. May 30, 1997 FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information December 31, 1996 Thrift Incentive Fund Fund A Fund B Fund C Fund D Total Assets: Investments, at fair value (note 3) - Participation in Master Trust $311,069,047 $205,204,044 $140,550,903 $28,639,172 $685,463,166 Receivables: Employee contributions 2,075,082 1,828,675 1,565,220 198,098 5,667,075 Interest receivable 17,399 11,696 7,886 1,577 38,558 Due from (to) other funds (1,452,119) 731,904 630,725 89,490 - Total receivables 640,362 2,572,275 2,203,831 289,165 5,705,633 Total assets 311,709,409 207,776,319 142,754,734 28,928,337 691,168,799 Liabilities: Trustee and management fees payable 265,021 317,852 55,979 11,636 650,488 Excess employer contribution (5,466) - - 178,731 173,265 Total liabilities 259,555 317,852 55,979 190,367 823,753 Net assets available for benefits $311,449,854 $207,458,467 $142,698,755 $28,737,970 $690,345,046 The accompanying notes are an integral part of these financial statements.
FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information December 31, 1995 Stability Diversified Income Thrift Incentive Fund Fund Fund Fund A Fund B Fund C Fund D Total Assets: Investments, at fair value (note 3) - Participation in Master Trust $143,822,947 $12,830,469 $230,187,959 $151,535,258 $90,648,217 $15,264,151 $644,289,001 Receivables: Employer contributions - - - - - 33,739 33,739 Employee contributions - - 1,762,832 1,314,502 896,929 63,592 4,037,855 Total receivables - - 1,762,832 1,314,502 896,929 97,331 4,071,594 Net assets available for benefits $143,822,947 $12,830,469 $231,950,791 $152,849,760 $91,545,146 $15,361,482 $648,360,595 The accompanying notes are an integral part of these financial statements.
(Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information Year Ended December 31, 1996 Stability Diversified Income Thrift Incentive Fund Fund Fund Fund A Fund B Fund C Fund D Total Additions: Net investment income - Plan interest in Master Trust investment income (Note 3) $ 10,094,132 $ 377,306 $ 14,370,016 $ 23,216,545 $ 22,186,244 $ 3,866,753 $ 74,110,996 Contributions: Employer 154,891 - 5,704 151 543 4,863,971 5,025,260 Employee - - 13,638,546 11,480,075 9,242,959 910,092 35,271,672 Total contributions 154,891 - 13,644,250 11,480,226 9,243,502 5,774,063 40,296,932 Total additions 10,249,023 377,306 28,014,266 34,696,771 31,429,746 9,640,816 114,407,928 Deductions - Distributions 8,612,913 1,928,594 37,509,690 14,771,088 7,940,164 1,661,026 72,423,475 Interfund transfers (145,459,057) (11,279,179) 88,994,487 34,683,024 27,664,027 5,396,698 - Net increase (decrease) (143,822,947) (12,830,469) 79,499,063 54,608,707 51,153,609 13,376,488 41,984,451 Net assets available for benefits: Beginning of year 143,822,947 12,830,469 231,950,791 152,849,760 91,545,146 15,361,482 648,360,595 End of year $ - $ - $311,449,854 $207,458,467 $142,698,755 $28,737,970 $690,345,046 The accompanying notes are an integral part of these financial statements.
(Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information Year Ended December 31, 1995 Stability Diversified Income Thrift Incentive Fund Fund Fund Fund A Fund B Fund C Fund D Total Additions: Net investment income - Plan interest in Master Trust investment income (Note 3) $ 33,434,616 $ 1,220,110 $ 19,879,755 $ 37,022,253 $24,872,815 $ 2,032,764 $118,462,313 Contributions: Employer - - 24,155 11,702 4,674 5,034,217 5,074,748 Employee - - 13,111,812 14,579,661 9,578,634 542,517 37,812,624 Total contributions - - 13,135,967 14,591,363 9,583,308 5,576,734 42,887,372 Total additions 33,434,616 1,220,110 33,015,722 51,613,616 34,456,123 7,609,498 161,349,685 Deductions - Distributions 25,989,769 5,886,209 51,438,577 20,217,307 10,480,554 1,364,739 115,377,155 Interfund transfers (1,485,771) 1,410,438 396,867 (1,556,900) 695,014 540,352 - Net increase (decrease) 5,959,076 (3,255,661) (18,025,988) 29,839,409 24,670,583 6,785,111 45,972,530 Net assets available for benefits: Beginning of year 137,863,871 16,086,130 249,976,779 123,010,351 66,874,563 8,576,371 602,388,065 End of year $143,822,947 $12,830,469 $231,950,791 $152,849,760 $91,545,146 $15,361,482 $648,360,595 The accompanying notes are an integral part of these financial statements.
(Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements December 31, 1996 and 1995 1. Description of the Plan The following brief description of the Federated Department Stores, Inc. Retirement Income and Thrift Incentive 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 sponsored by Federated Department Stores, Inc. (the "Company"). The Plan consists of two parts: a retirement income plan and a thrift incentive plan. The Plan was adopted in 1953 and is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and U.S. tax law. Eligibility and Vesting Employees are generally eligible for participation in the Plan after one year of service of at least 1,000 hours. Participants are immediately 100% vested in their own and the Company's contributions. Participant Accounts An account is maintained for each participant in the Plan which shows the participant's separate interest in the Retirement Income and Thrift Incentive portions of the Plan. At the end of each year, the Company's contributions are allocated to individual accounts for participants who did not make a withdrawal of basic (first 5% of compensation) savings during the year, in the proportion that each participant's basic savings made and not withdrawn during the year bears to the aggregate amounts of basic savings made and not withdrawn by all participants during the year. Additional voluntary contributions (any contributions in excess of 5% of compensation) do not participate in the Company's allocation. Company contributions are made at year end only to persons who are active participants on the last day of the year. At the end of each month, investment earnings for each fund are allocated to individual accounts on amounts not withdrawn during the month in the proportion that each such participant's interest at the beginning of the month bears to the total of all such participants' interests in that fund at the beginning of such month less withdrawals. Retirement Income Retirement Income interests represent Company contributions to the Retirement Income portion of the Plan prior to January 1, 1984 and the earnings on such contributions. A defined benefit pension plan (the "Pension Plan") was adopted as of January 1, 1984. With the Pension Plan in place, the Company continues to make contributions to the Thrift Incentive portion of the Plan as described below and has the right to make additional contributions to the Retirement Income portion of the Plan. (Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements - Continued December 31, 1996 and 1995 Thrift Incentive The Thrift Incentive portion of the Plan provides for voluntary contributions by participating employees and for Company contributions matching a portion of the participant's contributions. Participants may elect to contribute to the Thrift Incentive portion of the Plan an amount equal to 1% to 10% (subject to certain limitations) of the participant's eligible compensation. Alternatively, a participant may elect to make these contributions (subject to certain limitations) on a pre- tax basis pursuant to Section 401(k) of the Internal Revenue Code. Contributions up to 5% of eligible compensation are basic savings which are eligible for matching Company contributions. For 1984 and subsequent years, the Company's annual contribution is an amount equal to the greater of 2% of the Company's income before federal income taxes from participating divisions or the amount necessary to match 20% of participants' basic savings. The Company contributed 20% of participants' basic savings for the years ended December 31, 1996 and 1995. Participants are permitted to make withdrawals of their after- tax contributions to the Thrift Incentive portion of the Plan at any time. Withdrawals of pre-tax contributions are subject to the hardship rules of Section 401 of the Internal Revenue Code. At termination, participants may elect to receive the balance of their account either in a lump sum or an annuity contract. 2. Summary of Significant Accounting Policies a) Master Trust Effective January 1, 1995, the Plan entered into the Federated Department Stores, Inc. Defined Contribution Plan Master Trust (the "Master Trust") Agreement with Mellon Bank (the "Trustee"). The Company changed the Master Trust Trustee to Chase Manhattan Bank effective January 1, 1996. Under the terms of the Master Trust, the Trustee serves as Trustee custodian for the Master Trust which was established for the investment of assets of the Plan and of the Federated Savings Plan for Employees of Lazarus PA, Inc., (the "Lazarus PA Plan") also sponsored by the Company. The Federated Department Stores, Inc. Pension and Profit Sharing Committee selects a diversified group of investment managers who determine purchases and sales of investments for their respective portions of the assets allocated to them to manage in the Master Trust. b) Basis of Presentation The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting. c) Investments The fair value of the Plan's participation in the Master Trust is based on the beginning of year value of the Plan's participation in the Master Trust plus allocated investment income and actual contributions, less actual distributions and allocated administrative expenses. (Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements - Continued December 31, 1996 and 1995 Other investments are reported at fair value as determined by quoted market prices on an active market. Corporate bonds are valued based on yields currently available on comparable securities of issuers with similar credit ratings. Purchases and sales of securities are recorded on a trade-date basis. Realized gains and losses on the sale of securities are reported on the average cost method. Cash equivalents include highly liquid fixed-income securities with a maturity of one year or less. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned on an accrual basis. d) Insurance Contracts Insurance contracts are valued at contract value, which represents contributions made under the contract, plus interest earned, less benefits paid and expenses charged. e) Use of Estimates The Plan administrator has made a number of estimates and assumptions relating to the preparation of these financial statements. Actual results could differ from these estimates and assumptions. f) Reclassifications Certain 1995 amounts have been reclassified to conform with the 1996 presentation. 3. Investments All of the Plan's investments are included in the Master Trust which was established for the investment of assets of the Plan and of the Lazarus PA Plan. Each participating plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by the Trustee. At December 31, 1996 and 1995, the Plan's interest in the net assets of the Master Trust was approximately 99.2% and 99.1%, respectively. Investment income and administrative expense relating to the Master Trust are allocated to the individual plans based upon monthly balances invested by each plan. The Trustee under the Master Trust, in accordance with the trust agreement, invests all contributions to the Plan among several investment funds. The funds are: Diversified Fund - This fund is composed of employer contributions to the Retirement Income portion of the Plan and certain amounts transferred when certain plans were merged, together with the net earnings thereon. All amounts in this fund are invested in corporate equity and fixed-income securities, government fixed-income securities and common/collective trusts. This fund was discontinued during 1996 and the balance of the fund was transferred to the Thrift Incentive portion of the Plan. Participants could elect to redirect their balances to any of the four Thrift Incentive funds. In the event the participants declined this election, their balances were directed to Fund A. (Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements - Continued December 31, 1996 and 1995 Stability Income Fund - This fund consists of balances in the Retirement Income portion of the Plan of participants who were at least 60 years of age prior to December 31, 1986, or who have attained age 55 and who have completed at least ten years of service and have elected to transfer all or part of their balance out of the Diversified Fund. All amounts in this fund are invested in short-term, fixed- income corporate and government bonds. This fund was discontinued during 1996 and the balance of the fund was transferred to the Thrift Incentive portion of the Plan. Participants could elect to redirect their balances to any of the four Thrift Incentive funds. In the event the participants declined this election, their balances were directed to Fund A. Thrift Incentive Funds - These funds include Company and participants' contributions to the Thrift Incentive portion of the Plan, together with the net earnings thereon. The amounts in these funds are invested in four separate investment options as directed by the participants. Fund A is invested in fixed-income investments and insurance contracts. Fund B is composed of common/collective trusts which invest in a varying mixture of equity securities and fixed income instruments. Fund C is invested in an equity index fund consisting principally of shares of companies included in the S&P 500 Composite Stock Price Index. Fund D was established on April 1, 1994 and is invested in the common stock of the Company. Company contributions are directed to Fund D. Participants may elect to redirect the value of Company contributions to other investment options permitted pursuant to the Plan provisions. The following table presents the fair values or contract values of investments and total net assets for the Master Trust at December 31, 1996 and 1995: 1996 1995 Assets: Investments at fair value: Cash and cash equivalents $ 39,839,098 $ 18,087,401 U. S. government securities 68,486,345 106,828,383 Corporate debt instruments 60,779,347 61,405,982 Preferred stock - 133,239 Common stock 28,689,775 72,012,053 Foreign government securities 2,050,615 4,967,180 Common/collective trusts 339,497,225 278,246,438 Total investments at fair value 539,342,405 541,680,676 Insurance contracts at contract value 163,004,655 111,880,590 Total investments 702,347,060 653,561,266 Non interest bearing cash 5,264 - Receivables: Securities sold - 282,364 Accrued interest, dividend and other income 4,811,746 2,313,919 Other receivables 37,376 - Total receivables 4,849,122 2,596,283 Total assets 707,201,446 656,157,549 (Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements - Continued December 31, 1996 and 1995 1996 1995 Accrued liabilities: Due to broker for securities purchased 15,917,026 5,651,352 Accrued administrative expenses - 501,650 Total accrued liabilities 15,917,026 6,153,002 Total net assets $ 691,284,420 $ 650,004,547 Net investment income for the Master Trust for the years ended December 31, 1996 and 1995 is as follows: 1996 1995 Net appreciation in fair value of investments: Cash and cash equivalents $ (523) $ (5,610) U.S. government securities (2,319,416) 8,514,007 Corporate debt instruments (864,389) 1,564,391 Preferred stock (3,450) 9,323 Common stock 10,072,511 19,583,368 Foreign government securities 9,635 13,001 Miscellaneous securities (472,962) - Common/collective trusts 39,908,759 60,910,182 Net appreciation in fair value of investments 46,330,165 90,588,662 Interest 27,339,508 24,425,834 Dividends 4,062,055 4,337,912 Other - 2,856,868 Total investment income 77,731,728 122,209,276 Administrative expenses (2,841,013) (2,561,490) Net investment income $ 74,890,715 $ 119,647,786 4. Plan Termination Although the Company has not expressed any intent to terminate the Plan, it may do so at any time. In the event the Plan is terminated, the Company would have no further obligation to make contributions, and all sums credited to individual accounts (after expenses) would be distributed to participants. 5. Federal Income Taxes The Plan obtained its latest determination letter on June 18, 1996, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. While the Plan has been amended since receiving such determination letter, the Plan administrator and the Plan's tax counsel believe 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. (Continued) FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Notes to Financial Statements - Continued December 31, 1996 and 1995 The Plan's testings, subject to the provisions of the Internal Revenue Code, have not been completed for the current year. However, the Plan's sponsor believes that the Plan is currently in compliance. 6. Administrative Expenses The Plan pays reasonable and necessary expenses incurred for the ongoing administration of the Plan. 7. Subsequent Event Effective April 1, 1997, all previously existing tax-qualified savings plans maintained by the Company for Company employees were merged into the Plan. Concurrently, the Plan was amended and renamed the Federated Department Stores, Inc. Profit Sharing 401(k) Investment Plan (the "401(k) Plan"). Participants in the Plan became fully vested participants in the 401(k) Plan as of such date. Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Pension and Profit Sharing Committee (which is the administrative committee for the Federated Department Stores, Inc. Retirement Income and Thrift Incentive Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. FEDERATED DEPARTMENT STORES, INC. RETIREMENT INCOME AND THRIFT INCENTIVE PLAN Dated: June 30, 1997 By: /s/ John R. Sims John R. Sims Chairman of the Pension and Profit Sharing Committee -----END PRIVACY-ENHANCED MESSAGE-----