-----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, Q5o9qNk6jqgQHRsyr0M0Ukt8geTn4OiOFsiKp4Cw/u9cUSlXQDYDrNvYNSiLZS+h p4GFrqc2KMO+6z5FrxxceQ== 0000081061-00-000011.txt : 20000327 0000081061-00-000011.hdr.sgml : 20000327 ACCESSION NUMBER: 0000081061-00-000011 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991225 FILED AS OF DATE: 20000324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIX SUPER MARKETS INC CENTRAL INDEX KEY: 0000081061 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 590324412 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-00981 FILM NUMBER: 578393 BUSINESS ADDRESS: STREET 1: PO BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802-0407 BUSINESS PHONE: 9416887407 MAIL ADDRESS: STREET 1: P O BOX 407 STREET 2: P O BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802 10-K 1 ANNUAL REPORT FOR PERIOD ENDING 12/25/1999 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 25, 1999 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______________ to ______________ Commission File Number 0-981 ----- PUBLIX SUPER MARKETS, INC. ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Florida 59-0324412 - ----------------------- ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1936 George Jenkins Boulevard Lakeland, Florida 33815 - --------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (863) 688-1188 -------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock $1.00 Par Value Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- The aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 8, 2000 was approximately $5,397,728,580. The number of shares of Registrant's common stock outstanding as of March 8, 2000 was 214,789,989. DOCUMENTS INCORPORATED BY REFERENCE Pages 2 through 8 of Proxy Statement solicited for the 2000 Annual Meeting of Stockholders to be held on May 17, 2000 are incorporated by reference in Items 10, 11 and 13 of Part III hereof. PART I Item 1. Business - ----------------- Publix Super Markets, Inc. is based in Lakeland, Florida and was incorporated in Florida on December 27, 1921. Publix Super Markets, Inc. and its wholly owned subsidiary, hereinafter collectively referred to as the "Company," is in the business of operating retail food supermarkets in Florida, Georgia, South Carolina and Alabama. The Company has no other lines of business or industry segments. Therefore, financial information about industry segments or lines of business is omitted. The Company's supermarkets sell groceries, dairy, produce, deli, bakery, meat, seafood, housewares and health and beauty care items. Many stores have pharmacy, photo and floral departments. In addition, the Company has agreements with commercial banks to operate in many of its stores. The Company's lines of merchandise include a variety of nationally advertised and private label brands, as well as unbranded merchandise such as produce, meat and seafood. Private label items are produced in the Company's manufacturing facilities or are manufactured for the Company by outside suppliers. The Company manufactures dairy, bakery and deli products. The Company's dairy plants are located in Lakeland and Deerfield Beach, Florida, and Lawrenceville, Georgia. The bakery and deli plants are located in Lakeland, Florida. The Company receives the food and non-food items it distributes from many sources. These products are generally available in sufficient quantities to enable the Company to adequately satisfy its customers. The Company believes that its sources of supply of these products and raw materials used in manufacturing are adequate for its needs and that it is not dependent upon a single or relatively few suppliers. The Company operated 614 supermarkets at the end of 1999, compared with 586 at the beginning of the year. In 1999, 44 stores were opened, 16 stores were closed, and 82 stores were expanded or remodeled. The net increase in square footage was 1.4 million square feet or 5.3% since 1998. At the end of 1999, the Company had 490 stores located in Florida, 99 in Georgia, 22 in South Carolina and three in Alabama. Also, as of year end, the Company had 25 stores under construction in Florida, nine in Georgia and one in South Carolina. The Company is engaged in a highly competitive industry. Competition, based primarily on price, quality of goods and service, convenience and product mix, is with several national and regional chains, independent stores and mass merchandisers throughout its market areas. The Company anticipates continued competitor format innovation and location additions in 2000. The influx of winter residents to Florida and increased purchases of food during the traditional Thanksgiving, Christmas and Easter holidays typically results in seasonal sales increases between November and April of each year. The Company has experienced no significant changes in the kinds of products sold or in its methods of distribution since the beginning of the fiscal year. The Company had approximately 120,000 employees at the end of 1999, compared with 117,000 at the end of 1998. Of this total, approximately 70,200 at the end of 1999 and 70,400 at the end of 1998 were not full-time employees. The Company's research and development expenses are insignificant. Compliance by the Company with Federal, state and local environmental protection laws during 1999 had no material effect upon capital expenditures, earnings or the competitive position of the Company. Item 2. Properties - ------------------- At year end, the Company operated approximately 27.7 million square feet of retail space. The Company's stores vary in size. Current store prototypes range from 27,000 to 60,000 square feet. Stores are often located in strip shopping centers where the Company is the anchor tenant. The Company supplies its retail stores from eight distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Florida, and Lawrenceville, Georgia. The majority of the Company's retail stores are leased. Substantially all of these leases will expire during the next 20 years. However, in the normal course of business, it is expected that the leases will be renewed or replaced by leases on other properties. At 54 locations both the building and land are owned and at 31 other locations the building is owned while the land is leased. The Company's corporate offices, distribution facilities and manufacturing plants are owned with no outstanding debt. All of the Company's properties are well maintained and in good operating condition and suitable and adequate for operating its business. Item 3. Legal Proceedings - -------------------------- A purported class action was filed against the Company on April 3, 1997 in the Federal District Court for the Middle District of Florida (the "Court") by Lemuel Middleton and 15 other present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Middleton case"). In their Complaint, the plaintiffs allege that the Company has and is currently engaged in a pattern and practice of race-based discriminatory treatment of black employees and applicants with respect to hiring, promotion, job assignment, conditions of employment, and other employment aspects, all in violation of Federal and state law. Subsequently, seven of the named plaintiffs withdrew their claims with prejudice. The plaintiffs sought, among other relief, a certification of the suit as a class action, declaratory and injunctive relief, back pay, front pay, benefits and other compensatory damages, and punitive damages. On March 22, 1999, the Court certified the suit as a class action, but limited the class to those black employees and former black employees of the Company who have sought to be promoted or who have been discharged from employment at the Company's retail stores in Florida since April 3, 1993, and at retail stores in Georgia since January 14, 1995. The certified class excludes black employees or former black employees who worked only in pharmacy operations. The Court denied the plaintiffs' attempt to strike the demand that the Middleton case be tried to a jury. The Court also, among other things, granted the plaintiffs' motion to drop all claims for compensatory and punitive damages. Plaintiffs in the Middleton case still are seeking certification of a subclass of unsuccessful applicants and have put forward a new proposed class representative, Lydia Moultry. The parties are awaiting a ruling from the Court regarding whether Ms. Moultry can join the lawsuit and whether a subclass of unsuccessful applicants will be included in the Middleton case. Meanwhile, on July 26, 1999, the Court set the Middleton case for trial by jury beginning January 2, 2001. On November 6, 1997, another purported class action was filed against the Company in the Court by Shirley Dyer and five other present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Dyer case"). In their Complaint, the plaintiffs allege that the Company has violated and is currently violating Federal and state civil rights statutes by discriminating against female employees and applicants with respect to hiring, promotion, training, compensation, discipline, demotion and termination, and/or retaliation for bringing allegations of discrimination. The plaintiffs have moved to certify a class of all female current, former and future Company employees and applicants in all of the Company's manufacturing plants and distribution centers with respect to certain claims. The plaintiffs seek, among other relief, declaratory and injunctive relief, back pay, front pay, benefits and other compensatory damages, and punitive damages. The parties have briefed issues relating to class certification, engaged in oral argument on those issues on April 16, 1999 and now await the Court's ruling. On December 8, 1998, another purported class action was filed against the Company in the Court by Charlene Jones, individually and on behalf of other persons similarly situated (the "Jones case"). In her Complaint, the plaintiff alleges that the Company has violated and is currently violating Federal and state civil rights statutes by discriminating against female applicants for employment in the Company's manufacturing plants and distribution centers. The plaintiffs in the Jones and Dyer cases have asked the Court to combine the two cases. In papers filed with the Court on April 16, 1999, the Jones case plaintiff represented that she would not pursue a separate class action on behalf of unsuccessful female applicants for employment in the Company's manufacturing plants and distribution centers if the Jones case is not combined with the Dyer case. On June 29, 1999, another purported class action was filed against the Company in the Court by Lisa Lisenby, individually and on behalf of other persons similarly situated (the "Lisenby case"). In her Complaint, the plaintiff alleges that the Company has violated and is currently violating Federal statutory law by discriminating against female applicants and employees in the Company's manufacturing plants and distribution centers. On September 10, 1999, the Lisenby case plaintiff moved to combine her case with the Dyer case. The Company denies the allegations of the plaintiffs in the Middleton, Dyer, Jones and Lisenby cases and is vigorously defending the actions. Although these cases are subject to the uncertainties inherent in the litigation process, based on the information presently available to the Company, management does not expect the ultimate resolution of these actions to have a material adverse effect on the Company's financial condition or results of operations. The Company is also a party in various legal claims and actions considered in the normal course of business. In the opinion of management, the ultimate resolution of these legal proceedings will not have a material adverse effect on the Company's financial condition or results of operations. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None EXECUTIVE OFFICERS OF THE COMPANY --------------------------------- Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since - ---- --- -------- ---------------- ----- Howard M. Jenkins 48 Chairman of Cousin of 1976 the Board and Charles H. Jenkins, Chief Executive Jr., uncle of Officer W. Edwin Crenshaw and brother-in-law of Hoyt R. Barnett Charles H. Jenkins, Jr. 56 Chairman of the Cousin of 1974 Executive Committee Howard M. Jenkins and cousin of W. Edwin Crenshaw W. Edwin Crenshaw 49 President Nephew of 1990 Howard M. Jenkins and cousin of Charles H. Jenkins, Jr. Hoyt R. Barnett 56 Vice Chairman Brother-in-law of 1977 Howard M. Jenkins Jesse L. Benton 57 Vice President 1988 S. Keith Billups 67 Secretary 1968 David E. Bornmann 42 Vice President 1998 Joseph W. Carvin 49 Vice President 1998 R. Scott Charlton 41 Vice President 1992 Carolyn C. Day 54 Assistant Secretary 1992 David S. Duncan 46 Vice President 1999 Glenn J. Eschrich 55 Vice President 1995 William V. Fauerbach 53 Vice President 1997 John R. Frazier 50 Vice President 1997 M. Clayton Hollis, Jr. 43 Vice President 1994 Mark R. Irby 44 Vice President 1989 Tina P. Johnson 40 Senior Vice President 1990 James J. Lobinsky 60 Senior Vice President 1992 Thomas M. McLaughlin 49 Vice President 1994 Sharon A. Miller 56 Assistant Secretary 1992 EXECUTIVE OFFICERS OF THE COMPANY --------------------------------- Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since - ---- --- -------- ---------------- ----- Robert H. Moore 57 Vice President 1994 Thomas M. O'Connor 52 Senior Vice President 1992 David P. Phillips 40 Chief Financial 1990 Officer and Treasurer Henry J. Pileggi, Jr. 41 Vice President 1998 James H. Rhodes II 55 Vice President 1995 Daniel M. Risener 59 Senior Vice President 1985 and Chief Information Officer Edward T. Shivers 60 Vice President 1985 James F. Slappey 57 Vice President 1992 The terms of all officers expire at the annual meeting of the Company in May 2000. Name Business Experience During Last Five Years - ---- ------------------------------------------ Howard M. Jenkins Chairman of the Board and Chief Executive Officer of the Company. Charles H. Jenkins, Jr. Chairman of the Executive Committee of the Company. W. Edwin Crenshaw Executive Vice President of the Company to January 1996, President thereafter. Hoyt R. Barnett Executive Vice President and Trustee of the Profit Sharing Plan of the Company to August 1998, Executive Vice President, Trustee of the Profit Sharing Plan and Trustee of the Employee Stock Ownership Plan to January 1999, Vice Chairman, Trustee of the Profit Sharing Plan and Trustee of the Employee Stock Ownership Plan to December 1999, Vice Chairman, Trustee of the Employee Stock Ownership Plan, thereafter. Jesse L. Benton Vice President of the Company. S. Keith Billups Secretary of the Company. David E. Bornmann Business Development Manager - Corporate Purchasing of the Company to October 1998, Vice President thereafter. Joseph W. Carvin Human Resources Counsel of the Company to June 1998, Director of Human Resources and Employment Law to November 1998, Vice President thereafter. R. Scott Charlton Vice President of the Company. Carolyn C. Day Capital Stock Registrar and Transfer Agent and Assistant Secretary of the Company. David S. Duncan Director of Facility Services of the Company to November 1999, Vice President thereafter. Glenn J. Eschrich Director of Strategy Support of the Company to March 1995, Vice President thereafter. William V. Fauerbach Regional Director of Retail Operations - Miami Division of the Company to January 1997, Vice President thereafter. John R. Frazier Real Estate Manager of the Company to August 1996, Director of Real Estate to January 1997, Vice President thereafter. M. Clayton Hollis, Jr. Vice President of the Company. Mark R. Irby Vice President of the Company. Tina P. Johnson Treasurer of the Company to January 1995, Treasurer and Trustee of the 401(k) Plan - Publix Stock Fund to March 1996, Vice President, Treasurer and Trustee of the 401 (k) Plan - Publix Stock Fund to July 1997, Senior Vice President and Trustee of the 401(k) Plan - Publix Stock Fund thereafter. Name Business Experience During Last Five Years - ---- ------------------------------------------ James J. Lobinsky Vice President of the Company to July 1997, Senior Vice President thereafter. Thomas M. McLaughlin Vice President of the Company. Sharon A. Miller Director of Administration and Assistant Secretary of the Company. Robert H. Moore Vice President of the Company. Thomas M. O'Connor Vice President of the Company to November 1999, Senior Vice President thereafter. David P. Phillips Controller of the Company to March 1996, Vice President and Controller to July 1997, Vice President Finance and Treasurer to July 1999, Chief Financial Officer and Treasurer thereafter. Henry J. Pileggi, Jr. Regional Director of the Company to October 1998, Vice President thereafter. James H. Rhodes II Director of Human Resources of the Company to April 1995, Vice President thereafter. Daniel M. Risener Vice President of the Company to July 1999, Senior Vice President and Chief Information Officer thereafter. Edward T. Shivers Vice President of the Company. James F. Slappey Vice President of the Company. PART II Item 5. Market for the Company's Common Stock and Related Stockholder Matters - ------------------------------------------------------------------------------ (a) Market Information ------------------ Substantially all transactions of the Company's common stock have been among the Company, its employees, former employees, their families and the benefit plans established for the Company's employees. The market price of the Company's common stock is determined by the Board of Directors based upon appraisals prepared by an independent appraiser. The market price for 1999 and 1998 was as follows: 1999 1998 ---- ---- January - February $41.00 $23.25 March - April 46.50 30.75 May - July 46.50 34.75 August - October 46.50 38.25 November - December 44.50 41.00 (b) Approximate Number of Equity Security Holders --------------------------------------------- As of March 8, 2000, the approximate number of holders of record of the Company`s common stock was 78,000. (c) Dividends --------- The Company paid cash dividends of $.22 per share of common stock in 1999 and $.20 per share in 1998. Payment of dividends is within the discretion of the Company's Board of Directors and depends on, among other factors, earnings, capital requirements and the operating and financial condition of the Company. It is believed that comparable cash dividends will be paid in the future.
Item 6. Five Year Summary of Selected Financial Data - ----------------------------------------------------- 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Sales: Sales $13,068,900 12,067,125 11,224,378 10,431,302 9,393,021 Percent increase 8.3% 7.5% 7.6% 11.1% 8.4% Comparable store sales percent increase 5.0% 3.6% 3.3% 5.6% 2.8% Earnings: Gross profit $ 3,294,188 2,935,707 2,674,118 2,424,799 2,124,036 Earnings before income tax expense $ 719,569 584,388 555,357 416,584 381,500 Net earnings $ 462,409 378,274 354,622 265,176 242,141 Net earnings as a percent of sales 3.54% 3.13% 3.16% 2.54% 2.58% Common stock: Weighted average shares outstanding 216,160,316 217,383,413 218,871,661 221,195,884 225,852,938 Basic earnings per common share, based on weighted average shares outstanding $ 2.14 1.74 1.62 1.20 1.07 Dividends per share $ .22 .20 .15 .13 .11 Financial data: Capital expenditures $ 512,658 357,754 259,806 226,752 256,629 Working capital $ 515,257 467,385 366,680 317,265 232,570 Current ratio 1.48 1.47 1.37 1.35 1.31 Total assets $ 4,067,732 3,617,259 3,294,980 2,921,084 2,559,365 Long-term debt $ --- --- --- 108 1,765 Stockholders' equity $ 2,676,144 2,327,632 2,019,299 1,751,179 1,614,717 Other: Number of stores 614 586 563 534 508 NOTE: Amounts are in thousands, except per share, share amounts and number of stores. All years include 52 weeks.
Item 7. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations ------------- Business Environment - -------------------- As of December 25, 1999, the Company operated 614 retail grocery stores representing approximately 27.7 million square feet of retail space. Historically, the Company's primary competition has been from national and regional chains and smaller independents located throughout its market areas. The Company has continued to experience increased competition from mass merchandisers. The products offered by these retailers include many of the same items sold by the Company. At the end of fiscal 1999, the Company had 490 stores located in Florida, 99 in Georgia, 22 in South Carolina and three in Alabama. The Company opened 35 stores in Florida, eight stores in Georgia and one store in South Carolina during 1999. The Company intends to continue to pursue vigorously new locations in Florida and other states. Liquidity and Capital Resources - ------------------------------- Operating activities continue to be the Company's primary source of liquidity. Net cash provided by operating activities was approximately $796.4 million in 1999, compared with $665.0 million in 1998 and $589.2 million in 1997. Working capital was approximately $515.3 million as of December 25, 1999, as compared with $467.4 million and $366.7 million as of December 26, 1998 and December 27, 1997, respectively. Cash and cash equivalents aggregated approximately $626.6 million as of December 25, 1999, as compared with $669.3 million and $530.0 million as of December 26, 1998 and December 27, 1997, respectively. Capital expenditures totaled $512.7 million in 1999. These expenditures were primarily incurred in connection with the opening of 44 new stores and remodeling or expanding 82 stores. Significant expenditures were also incurred in the purchase of nine additional store sites from A & P in the greater Atlanta area and the expansion of a warehouse in Jacksonville, Florida. In addition, the Company closed 16 stores. The net impact of new and closed stores (net new stores) added an additional 1.4 million square feet in 1999, a 5.3% increase. Capital expenditures totaled $357.8 million in 1998. These expenditures were primarily incurred in connection with the opening of 31 new stores and remodeling or expanding 45 stores. In addition, the Company closed eight stores. Net new stores added an additional 1.0 million square feet in 1998, a 4.0% increase. Capital expenditures totaled $259.8 million in 1997. These expenditures were primarily incurred in connection with the opening of 33 new stores and remodeling or expanding 19 stores. In addition, the Company closed four stores. Net new stores added an additional 1.4 million square feet in 1997, a 5.9% increase. The Company plans to open as many as 54 stores in 2000. Although real estate development is unpredictable, the Company's 2000 new store growth represents a reasonable estimate of anticipated future growth. Capital expenditures for 2000, primarily made up of new store and warehouse construction and the remodeling or expanding of many existing stores, are expected to be approximately $635.0 million. This capital program is subject to continuing change and review. The 2000 capital expenditures are expected to be financed by internally generated funds and current liquid assets. In the normal course of operations, the Company replaces stores and closes unprofitable stores. The impact of future store closings is not expected to be material. The Company is self-insured, up to certain limits, for health care, fleet liability, general liability and workers' compensation claims. Reserves are established to cover estimated liabilities for existing and anticipated claims based on actual experience including, where necessary, actuarial studies. The Company has insurance coverage for losses in excess of varying amounts. The provision for self-insured reserves was $144.6 million, $136.4 million and $116.8 million in fiscal 1999, 1998 and 1997, respectively. The Company does not believe its self-insurance program will have a material adverse impact on its future liquidity, financial condition or results of operations. Cash generated in excess of the amount needed for current operations and capital expenditures is invested in short-term and long-term investments. Short-term investments were approximately $28.2 million in 1999 compared with $2.0 million in 1998. Long-term investments, primarily comprised of tax exempt bonds, taxable bonds, equity securities and preferred stocks, were approximately $398.9 million in 1999 compared with $385.6 million in 1998. Management believes the Company's liquidity will continue to be strong. The Company currently repurchases common stock at the stockholders' request in accordance with the terms of the Company's Employee Stock Purchase Plan. The Company expects to continue to repurchase its common stock, as offered by its stockholders from time to time, at its then currently appraised value. However, such purchases are not required and the Company retains the right to discontinue them at any time. Results of Operations - --------------------- The Company's fiscal year ends on the last Saturday in December. Fiscal years 1999, 1998 and 1997 include 52 weeks. Sales for 1999 were $13.1 billion as compared with $12.1 billion in 1998, an 8.3% increase. This reflects an increase of $603.4 million or 5.0% in sales from stores that were open for all of both years (comparable stores) and sales of $398.4 million or 3.3% from net new stores since the beginning of 1998. Sales for 1998 were $12.1 billion as compared with $11.2 billion in 1997, a 7.5% increase. This reflects an increase of $404.1 million or 3.6% in sales from comparable stores and sales of $438.6 million or 3.9% from net new stores since the beginning of 1997. Cost of merchandise sold including store occupancy, warehousing and delivery expenses was approximately 74.8% of sales in 1999 as compared with 75.7% and 76.2% in 1998 and 1997, respectively. In 1999 and 1998, cost of merchandise sold decreased as a percentage of sales due to buying and merchandising efficiencies. Operating and administrative expenses, as a percent of sales, were 20.7%, 20.5% and 19.9% in 1999, 1998 and 1997, respectively. The significant components of operating and administrative expenses are payroll costs, employee benefits and depreciation. In recent years, the impact of inflation on the Company's food prices has been lower than the overall increase in the Consumer Price Index. Accounting Standards - -------------------- In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS 133) effective for fiscal years beginning after June 15, 1999. SFAS 133 requires that derivatives be carried at fair value and provides for hedge accounting when certain conditions are met. In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 137, "Accounting for Derivative Instruments and Hedging Activities - - Deferral of the Effective Date of FASB Statement No. 133" (SFAS 137) which deferred the effective date of adoption of SFAS 133 for one year. The Company is currently evaluating the effect of adopting SFAS 133. Year 2000 - --------- In order to avoid potential Year 2000 problems, the Company adopted a Year 2000 plan (the "Plan") covering all of the Company's business units. The aim of the Plan was to take steps to prevent the Company's processes and systems, with emphasis on mission-critical functions, from being impaired due to Year 2000 problems. Year 2000 problems result from the use in computer hardware and software of two digits rather than four digits to define the applicable year. To oversee the Plan, the Company established a Year 2000 Project Office. The Project Office was staffed with representatives from the Company's Information Systems Department, non-Information Systems business areas and outside consultants. Additional consultants were used on an as needed basis. Under the Plan, three main areas were addressed: information technology (IT) systems; non-IT systems (including embedded chip technology); and supply chain and other third party business partner readiness. The Plan called for the Company to inventory its mission-critical computer hardware and software systems and embedded chips (computer chips with date-related functions, contained in a wide variety of devices); assess the effects of Year 2000 problems on the Company's business units; remedy systems, software and embedded chips in an effort to avoid material disruptions or other material adverse effects on mission-critical functions, processes and systems; verify and test the systems to which remediation efforts have been applied; and develop contingency plans to cope with the mission-critical consequences of Year 2000 problems that were not identified or remediated. As of February 2000, the Company has not experienced any significant Year 2000 problems prior to or after January 1, 2000. The Company further believes that it will not experience any material Year 2000 problems in its mission-critical functions, processes and systems. Additionally, the Company plans to discontinue the Project Office during the first quarter of 2000. The Company anticipated that total costs for Year 2000 awareness, inventory, assessment, analysis, conversion, testing and contingency planning would be approximately $40.0 million. As of February 2000, approximately $39.0 million had been incurred. The Company does not anticipate any significant additional costs related to Year 2000. The incurred costs include the costs of all equipment upgrades, software modifications, software replacements, employee salaries and consultant fees and expenses incurred in addressing Year 2000 problems. The funds to pay for addressing Year 2000 problems were financed by internally generated funds and current liquid assets. The costs incurred to address Year 2000 problems did not have a material effect on the Company's consolidated financial position or results of operations. From a forward-looking perspective, Year 2000 problems may affect the Company for some period of time after January 1, 2000. However, the extent and magnitude of these Year 2000 problems is difficult to predict or quantify. If, despite the Company's reasonable efforts under its Year 2000 Plan, there are mission-critical Year 2000 related failures that create substantial disruptions to the Company's business, the adverse impact on the Company's business could be material. Cautionary Note Regarding Forward-Looking Statements - ---------------------------------------------------- From time to time, information provided by the Company, including written or oral statements made by its representatives, may contain forward-looking information about the future performance of the Company which is based on management's assumptions and beliefs in light of the information currently available to them. When used in this document, the words "plan," "estimate," "project," "intend," "believe" and other similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from those statements including, but not limited to: competitive practices and pricing in the food and drug industries generally and particularly in the Company's principal markets; changes in the general economy; changes in consumer spending; and other factors affecting the Company's business in or beyond the Company's control. These factors include changes in the rate of inflation, changes in state and Federal legislation or regulation, adverse determinations with respect to litigation or other claims, ability to recruit and train employees, ability to construct new stores or complete remodels as rapidly as planned, stability of product costs, and issues arising from addressing Year 2000 IT and non-IT problems. Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking statements. The Company assumes no obligation to update publicly these forward-looking statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk - ------------------------------------------------------------------- The Company does not have any material exposure to market risk associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments. Item 8. Financial Statements and Supplemental Data - --------------------------------------------------- The Company's financial statements, together with the independent auditors' report thereon, are included in the section following Part IV of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and - ------------------------------------------------------------------------- Financial Disclosure -------------------- None PART III Item 10. Directors, Executive Officers, Promoters and Control Persons of the - ----------------------------------------------------------------------------- Registrant ---------- Certain information concerning the directors of the Company is incorporated by reference to pages 2 through 5 of the Proxy Statement of the Company (2000 Proxy Statement) which the Company intends to file no later than 120 days after its fiscal year end. Certain information concerning the executive officers of the Company is set forth in Part I under the caption "Executive Officers of the Company." Item 11. Executive Compensation - -------------------------------- Information regarding executive compensation is incorporated by reference to pages 5 through 8 of the 2000 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management - ------------------------------------------------------------------------ The following table sets forth, as of March 8, 2000, the information with respect to common stock ownership of all directors, including some who are 5% or more beneficial owners, and all officers and directors as a group. Also, listed are others known by the Company to own beneficially 5% or more of the shares of the Company's common stock. Amount and Nature Percent Name of Beneficial Ownership (1) of Class - ---- -------------------------- -------- Carol Jenkins Barnett 11,841,318 (2) 5.51 Hoyt R. Barnett 61,399,507 (3) 28.59 W. Edwin Crenshaw 632,240 * Mark C. Hollis 1,400,011 (4) * Charles H. Jenkins, Jr. 1,678,792 * Howard M. Jenkins 12,392,621 (5) 5.77 Tina P. Johnson 4,463,460 (6) 2.08 E. Vane McClurg 1,761,772 * William H. Vass 16,305 * All Officers and Directors as a group (32 individuals) 94,840,465 (7) 44.15 All Other Beneficial Owners: - ---------------------------- Publix Super Markets, Inc. Employee Stock Ownership Plan 60,065,487 (8) 27.96 Nancy E. Jenkins 14,638,789 6.82 *Shares represent less than 1% of class. Note references are explained on the following page. (1) As used in the table on the preceding page, "beneficial ownership" means the sole or shared voting or investment power with respect to the Company's common stock. Holdings of officers and former officers include shares allocated to their individual accounts in the Company's Employee Stock Ownership Plan (ESOP), over which each officer exercises sole voting power and shared investment power. In accordance with the beneficial ownership regulations, the same shares of common stock may be included as beneficially owned by more than one individual or entity. The address for all beneficial owners is 1936 George Jenkins Boulevard, Lakeland, Florida 33815. (2) Includes 1,226,675 shares of common stock which are also shown as beneficially owned by Carol Jenkins Barnett's husband, Hoyt R. Barnett, but excludes all other shares beneficially owned by Hoyt R. Barnett, as to which Carol Jenkins Barnett disclaims beneficial ownership. (3) Hoyt R. Barnett is Trustee of the ESOP which is the record owner of 60,065,487 shares of common stock over which he has shared investment power. As Trustee, Hoyt R. Barnett exercises sole voting power over 971,028 shares in the ESOP because such shares have not been allocated to participants' accounts. For ESOP shares allocated to participants' accounts, Hoyt R. Barnett will vote shares as instructed by participants. Additionally, Hoyt R. Barnett will vote ESOP shares for which no instruction is received. Total shares beneficially owned include 1,226,675 shares also shown as beneficially owned by his wife, Carol Jenkins Barnett, but exclude all other shares beneficially owned by Carol Jenkins Barnett, as to which Hoyt R. Barnett disclaims beneficial ownership. (4) Mark C. Hollis has shared voting and investment power over 1,312,461 shares of common stock. (5) Howard M. Jenkins has sole voting and investment power over 2,233,565 shares of common stock which are held directly, sole voting and investment power over 5,947,054 shares which are held indirectly and shared voting and investment power over 4,175,125 shares which are held indirectly. (6) Tina P. Johnson is Trustee of the 401(k) Plan - Publix Stock Fund which is the record owner of 4,403,285 shares of common stock over which she has sole voting and shared investment power. (7) Includes 64,468,772 shares of common stock owned by the ESOP and 401(k) Plan. (8) Includes 26,272,224 shares of common stock previously held by the Profit Sharing Plan as a result of the merger of the Plans. Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------- Information regarding certain relationships and related transactions is incorporated by reference to pages 2 through 5 and 8 of the 2000 Proxy Statement. PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K - ------------------------------------------------------------------------ (a) Consolidated Financial Statements and Schedule ---------------------------------------------- The consolidated financial statements and schedule listed in the accompanying Index to Consolidated Financial Statements and Schedule are filed as part of this Annual Report on Form 10-K. (b) Reports on Form 8-K ------------------- The Company filed no reports on Form 8-K during the fourth quarter of the year ended December 25, 1999. (c) Exhibits -------- 3(a). Articles of Incorporation of the Company, together with all amendments thereto, are incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 25, 1993. 3(b). Amended and Restated By-laws of the Company are incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 28, 1996. 10. Employment Agreement dated August 28, 1998, between William H. Vass and the Company, effective January 1, 1999 is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1998. 21. Subsidiary of the Company. 27. Financial Data Schedule. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PUBLIX SUPER MARKETS, INC. March 8, 2000 By: /s/ S. Keith Billups -------------------------- S. Keith Billups Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. Chairman of the Board, Chief Executive Officer and Director /s/ Howard M. Jenkins (Principal Executive Officer) March 8, 2000 - --------------------------- Howard M. Jenkins Chairman of the Executive /s/ Charles H. Jenkins, Jr. Committee and Director March 8, 2000 - --------------------------- Charles H. Jenkins, Jr. /s/ W. Edwin Crenshaw President and Director March 8, 2000 - --------------------------- W. Edwin Crenshaw /s/ Hoyt R. Barnett Vice Chairman and Director March 8, 2000 - --------------------------- Hoyt R. Barnett Senior Vice President /s/ Tina P. Johnson and Director March 8, 2000 - --------------------------- Tina P. Johnson Chief Financial Officer and Treasurer (Principal Financial and /s/ David P. Phillips Accounting Officer) March 8, 2000 - --------------------------- David P. Phillips PUBLIX SUPER MARKETS, INC. Index to Consolidated Financial Statements and Schedule Independent Auditors' Report Consolidated Financial Statements: Consolidated Balance Sheets - December 25, 1999 and December 26, 1998 Consolidated Statements of Earnings - Years ended December 25, 1999, December 26, 1998 and December 27, 1997 Consolidated Statements of Comprehensive Earnings - Years ended December 25, 1999, December 26, 1998 and December 27, 1997 Consolidated Statements of Stockholders' Equity - Years ended December 25, 1999, December 26, 1998 and December 27, 1997 Consolidated Statements of Cash Flows - Years ended December 25, 1999, December 26, 1998 and December 27, 1997 Notes to Consolidated Financial Statements The following consolidated supporting schedule of the Company for the years ended December 25, 1999, December 26, 1998 and December 27, 1997 is submitted herewith: Schedule: II - Valuation and Qualifying Accounts All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. INDEPENDENT AUDITORS' REPORT ---------------------------- To the Stockholders of Publix Super Markets, Inc.: We have audited the consolidated financial statements of Publix Super Markets, Inc. (the "Company") as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the consolidated financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Publix Super Markets, Inc. as of December 25, 1999 and December 26, 1998, and the results of its operations and its cash flows for each of the years in the three-year period ended December 25, 1999, in conformity with generally accepted accounting principles. Also in our opinion, the related consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Tampa, Florida February 24, 2000
PUBLIX SUPER MARKETS, INC. Consolidated Balance Sheets December 25, 1999 and December 26, 1998 Assets 1999 1998 ------ ---- ---- (Amounts are in thousands) Current assets: Cash and cash equivalents $ 626,636 669,326 Short-term investments 28,233 2,042 Trade receivables 107,185 71,267 Merchandise inventories 769,454 657,565 Deferred tax assets 57,065 53,578 Prepaid expenses 2,442 1,889 ---------- --------- Total current assets 1,591,015 1,455,667 ---------- --------- Long-term investments 398,865 385,571 Other noncurrent assets 22,682 11,680 Property, plant and equipment: Land 111,052 90,731 Buildings and improvements 702,322 659,209 Furniture, fixtures and equipment 1,927,899 1,815,852 Leasehold improvements 448,355 363,247 Construction in progress 117,759 62,829 ---------- --------- 3,307,387 2,991,868 Less accumulated depreciation 1,252,217 1,227,527 ---------- --------- Net property, plant and equipment 2,055,170 1,764,341 ---------- --------- $4,067,732 3,617,259 ========== ========= See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC. Consolidated Balance Sheets December 25, 1999 and December 26, 1998 Liabilities and Stockholders' Equity 1999 1998 ------------------------------------ ---- ---- (Amounts are in thousands, except share amounts) Current liabilities: Accounts payable $ 634,995 615,753 Accrued expenses: Salaries and wages 52,591 53,013 Contribution to retirement plans 182,981 146,107 Self-insurance reserves 69,356 61,413 Other 103,339 109,426 ---------- --------- Total accrued expenses 408,267 369,959 ---------- --------- Federal and state income taxes 32,496 2,570 ---------- --------- Total current liabilities 1,075,758 988,282 Deferred tax liabilities, net 135,413 123,821 Self-insurance reserves 100,154 98,956 Accrued postretirement benefit cost 55,735 48,858 Other noncurrent liabilities 24,528 29,710 ---------- --------- Total liabilities 1,391,588 1,289,627 ---------- --------- Stockholders' equity: Common stock of $1 par value. Authorized 300,000,000 shares; issued and outstanding 215,567,950 shares in 1999 and 216,862,215 shares in 1998 215,568 216,862 Additional paid-in capital 196,352 152,472 Reinvested earnings 2,271,323 1,958,459 ---------- --------- 2,683,243 2,327,793 Accumulated other comprehensive earnings (7,099) (161) ---------- --------- Total stockholders' equity 2,676,144 2,327,632 Commitments and contingencies --- --- ---------- --------- $4,067,732 3,617,259 ========== ========= See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC. Consolidated Statements of Earnings Years ended December 25, 1999, December 26, 1998 and December 27, 1997 1999 1998 1997 ---- ---- ---- (Amounts are in thousands, except per share amounts) Revenues: Sales $13,068,900 12,067,125 11,224,378 Other income, net 136,661 128,188 118,182 ----------- ---------- ---------- Total revenues 13,205,561 12,195,313 11,342,560 ----------- ---------- ---------- Costs and expenses: Cost of merchandise sold, including store occupancy, warehousing and delivery expenses 9,774,712 9,131,418 8,550,260 Operating and administrative expenses 2,711,280 2,479,507 2,236,943 ----------- ---------- ---------- Total costs and expenses 12,485,992 11,610,925 10,787,203 ----------- ---------- ---------- Earnings before income tax expense 719,569 584,388 555,357 Income tax expense 257,160 206,114 200,735 ----------- ---------- ---------- Net earnings $ 462,409 378,274 354,622 =========== ========== ========== Basic earnings per common share based on weighted average shares outstanding $ 2.14 1.74 1.62 =========== ========== ==========
PUBLIX SUPER MARKETS, INC. Consolidated Statements of Comprehensive Earnings Years ended December 25, 1999, December 26, 1998 and December 27, 1997 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Net earnings $462,409 378,274 354,622 Other comprehensive earnings Unrealized (loss) gain on investment securities available- for-sale, net of tax effect of ($6,089), ($5,683) and $2,113 in 1999, 1998 and 1997, respectively (9,707) (9,078) 3,376 Reclassification adjustment for net realized loss (gain) on investment securities available- for-sale, net of tax effect of $1,733, $2,787 and ($160) in 1999, 1998 and 1997, respectively 2,769 4,453 (255) -------- ------ ------- Comprehensive earnings $455,471 373,649 357,743 ======== ======= ======= See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC. Consolidated Statements of Stockholders' Equity Years ended December 25, 1999, December 26, 1998 and December 27, 1997 Common stock acquired Accumulated Total Additional from other stock- Common paid-in Reinvested stock- comprehensive holders' stock capital earnings holders earnings equity ----- ------- -------- ------- -------- ------ (Amounts are in thousands, except per share and share amounts) Balances at December 28, 1996 $219,943 91,991 1,437,902 --- 1,343 1,751,179 Comprehensive earnings for the year --- --- 354,622 --- 3,121 357,743 Cash dividends, $.15 per share --- --- (33,003) --- --- (33,003) Contribution of 1,407,322 shares to retirement plans --- 1,446 --- 30,479 --- 31,925 6,926,207 shares acquired from stockholders --- --- --- (153,886) --- (153,886) Sale of 2,995,314 shares to stockholders 358 7,320 --- 57,663 --- 65,341 Retirement of 2,881,508 shares (2,882) --- (62,862) 65,744 --- --- -------- ------- --------- -------- ------ --------- Balances at December 27, 1997 217,419 100,757 1,696,659 --- 4,464 2,019,299 Comprehensive earnings for the year --- --- 378,274 --- (4,625) 373,649 Cash dividends, $.20 per share --- --- (43,752) --- --- (43,752) Contribution of 2,269,549 shares to retirement plans 738 31,780 --- 45,929 --- 78,447 6,298,211 shares acquired from stockholders --- --- --- (213,981) --- (213,981) Sale of 3,471,695 shares to stockholders 757 19,935 --- 93,278 --- 113,970 Retirement of 2,051,992 shares (2,052) --- (72,722) 74,774 --- --- -------- ------- --------- -------- ------ --------- Balances at December 26, 1998 216,862 152,472 1,958,459 --- (161) 2,327,632 Comprehensive earnings for the year --- --- 462,409 --- (6,938) 455,471 Cash dividends, $.22 per share --- --- (47,846) --- --- (47,846) Contribution of 3,328,017 shares to retirement plans --- (517) --- 152,633 --- 152,116 10,789,790 shares acquired from stockholders --- --- --- (492,892) --- (492,892) Sale of 6,167,508 shares to stockholders 967 44,397 --- 236,299 --- 281,663 Retirement of 2,261,077 shares (2,261) --- (101,699) 103,960 --- --- -------- ------- --------- -------- ------ --------- Balances at December 25, 1999 $215,568 196,352 2,271,323 --- (7,099) 2,676,144 ======== ======= ========= ======== ====== ========= See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows Years ended December 25, 1999, December 26, 1998 and December 27, 1997 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Cash flows from operating activities: Cash received from customers $ 13,120,450 12,153,967 11,291,118 Cash paid to employees and suppliers (12,021,554) (11,218,411) (10,441,281) Dividends and interest received 55,329 55,056 42,437 Income taxes paid (214,773) (194,385) (188,842) Payment for self-insured claims (135,464) (123,481) (106,920) Other operating cash receipts 751 726 678 Other operating cash payments (8,335) (8,475) (7,982) ------------ ---------- ---------- Net cash provided by operating activities 796,404 664,997 589,208 ------------ ---------- ---------- Cash flows from investing activities: Payment for property, plant and equipment (512,658) (357,754) (259,806) Proceeds from sale of property, plant and equipment 2,679 7,562 7,778 Payment for investment securities - available-for-sale (AFS) (190,003) (193,707) (512,912) Proceeds from sale and maturity of investment securities - AFS 130,609 164,999 375,335 Other, net (10,515) (2,895) (5,204) ------------ --------- ---------- Net cash used in investing activities (579,888) (381,795) (394,809) ------------ --------- ---------- Cash flows from financing activities: Proceeds from sale of common stock 281,663 113,970 65,341 Payment for acquisition of common stock (492,892) (213,981) (153,886) Dividends paid (47,846) (43,752) (33,003) Other, net (131) (131) (238) ------------ ---------- ---------- Net cash used in financing activities (259,206) (143,894) (121,786) ----------- ---------- ---------- Net (decrease) increase in cash and cash equivalents (42,690) 139,308 72,613 Cash and cash equivalents at beginning of year 669,326 530,018 457,405 ------------ ----------- ---------- Cash and cash equivalents at end of year $ 626,636 669,326 530,018 ============ =========== ========== See accompanying notes to consolidated financial statements. (Continued)
PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows (Continued) 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Reconciliation of net earnings to net cash provided by operating activities Net earnings $462,409 378,274 354,622 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 199,428 181,020 168,613 Retirement contributions paid or payable in common stock 193,227 84,532 78,695 Deferred income taxes 12,461 24,742 17,345 Loss on sale of property, plant and equipment 20,015 4,877 3,674 Loss (gain) on sale of investments 4,586 7,240 (415) Self-insurance reserves in excess of current payments 9,141 12,886 9,897 Postretirement accruals in excess of current payments 6,877 6,246 5,317 Decrease in advance purchase allowances (5,051) (10,251) (10,690) Other, net 3,249 4,540 2,121 Change in cash from: Trade receivables (35,918) 51 (10,097) Merchandise inventories (111,889) (19,521) (67,790) Prepaid expenses (553) 264 (814) Accounts payable and accrued expenses 8,496 3,110 44,183 Federal and state income taxes 29,926 (13,013) (5,453) -------- ------- ------- Total adjustments 333,995 286,723 234,586 -------- ------- ------- Net cash provided by operating activities $796,404 664,997 589,208 ======== ======= ======= See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements December 25, 1999, December 26, 1998 and December 27, 1997 (1) Summary of Significant Accounting Policies ------------------------------------------ (a) Business -------- The Company is in the business of operating retail food supermarkets in Florida, Georgia, South Carolina and Alabama. (b) Principles of Consolidation --------------------------- The consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Definition of Fiscal Year ------------------------- The fiscal year ends on the last Saturday in December. Fiscal years 1999, 1998 and 1997 include 52 weeks. (d) Cash Equivalents ---------------- The Company considers all liquid investments with maturities of three months or less to be cash equivalents. (e) Inventories ----------- Inventories are valued at cost (principally the dollar value last-in, first-out method) including store inventories which are calculated by the retail method. (f) Property, Plant and Equipment and Depreciation ---------------------------------------------- Assets are recorded at cost and are depreciated using the straight-line method over their estimated useful life or the term of their lease. Maintenance and repairs are charged to expense as incurred. Expenditures for renewals and betterments are capitalized. The gain or loss is applied to the asset accounts for traded items or is reflected in income for disposed items. (g) Self-Insurance -------------- Self-insurance reserves are established for health care, fleet liability, general liability and workers' compensation claims. These reserves are determined based on actual experience including, where necessary, actuarial studies. The Company has insurance coverage for losses in excess of varying amounts. (h) Long-Lived Assets ----------------- The Company periodically reviews its long-lived assets and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if the fair value of the asset is less than the carrying amount. If an asset is impaired, a loss is recognized. (i) Comprehensive Income -------------------- The Company adopted Statement of Financial Accounting Standard No. 130, "Reporting Comprehensive Income," (SFAS 130) beginning with the quarter ended March 28, 1998. SFAS 130 sets forth standards for the reporting of comprehensive income in the financial statements. Comprehensive income includes net earnings and other comprehensive income. Other comprehensive income includes revenues, expenses, gains and losses that have been excluded from net earnings and recorded directly in the stockholders' equity section of the balance sheet. (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (j) Segment Information ------------------- In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 131, "Disclosures about Segments of an Enterprise and Related Information," (SFAS 131) effective for fiscal years beginning after December 15, 1997. SFAS 131 provides accounting guidance for reporting information about operating segments and requires interim segment reporting. The Company operates in a single segment of business. Therefore, there was no effect on the Company's financial statements from the adoption of SFAS 131. (k) Postretirement Benefits ----------------------- In February 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits," (SFAS 132) effective for fiscal years beginning after December 15, 1997. SFAS 132 revises employers' disclosures about pension and other postretirement benefit plans. SFAS 132 does not change the measurement or recognition of those plans. Therefore, the only effect from the adoption of SFAS 132 was in the notes to the Company's consolidated financial statements. (l) Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (m) Reclassifications ----------------- Certain 1998 and 1997 amounts have been reclassified to conform with the 1999 presentation. (2) Merchandise Inventories ----------------------- If the first-in, first-out method of valuing inventories had been used by the Company, inventories and current assets would have been higher than reported by approximately $109,379,000, $108,096,000 and $102,393,000 as of December 25, 1999, December 26, 1998 and December 27, 1997, respectively. Also, net earnings would have increased by approximately $630,000 or less than $.01 per share in 1999, $2,799,000 or $.01 per share in 1998 and $423,000 or less than $.01 per share in 1997. 2 (Continued PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (3) Fair Value of Financial Instruments ----------------------------------- The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents: The carrying amount for cash and cash ---------------------------- equivalents approximates fair value. Investment securities: The fair values for marketable debt and equity ---------------------- securities are based on quoted market prices. The carrying amount of the Company's financial instruments as of December 25, 1999 and December 26, 1998 approximated their respective fair values. (4) Investments ----------- Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. The Company had no held-to-maturity securities as of December 25, 1999 and December 26, 1998. All of the Company's debt securities and marketable equity securities are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as other comprehensive earnings and included as a separate component of stockholders' equity. The cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income, net. The cost of securities sold is based on the specific identification method. Following is a summary of available-for-sale securities as of December 25, 1999 and December 26, 1998: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value ---- ----- ------ ----- (Amounts are in thousands) 1999: Tax-free bonds $329,125 585 8,603 321,107 Taxable bonds 15,797 2,729 2,325 16,201 Equity securities 93,731 1,341 5,282 89,790 -------- ----- ------ ------- $438,653 4,655 16,210 427,098 ======== ===== ====== ======= 1998: Tax-free bonds $247,751 2,501 661 249,591 Taxable bonds 9,252 65 1,009 8,308 Equity securities 130,872 3,868 5,026 129,714 -------- ----- ------ ------- $387,875 6,434 6,696 387,613 ======== ===== ====== ======= 3 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements For the fiscal years ended December 25, 1999, December 26, 1998 and December 27, 1997, the realized gains on sales of available-for-sale securities totaled $1,566,000, $4,176,000 and $1,540,000, respectively, and the realized losses totaled $6,152,000, $11,416,000 and $1,125,000, respectively. The amortized cost and estimated fair value of debt and marketable equity securities classified as available-for-sale as of December 25, 1999 and December 26, 1998, by expected maturity, are as follows: 1999 1998 ------------------- -------------------- Amortized Fair Amortized Fair Cost Value Cost Value ---- ----- ---- ----- (Amounts are in thousands) Due in one year or less $ 28,513 28,233 2,351 2,042 Due after one year through three years 33,687 34,618 36,832 37,519 Due after three years 282,722 274,457 217,820 218,338 -------- ------- ------- ------- 344,922 337,308 257,003 257,899 Equity securities 93,731 89,790 130,872 129,714 -------- ------- ------- ------- $438,653 427,098 387,875 387,613 ======== ======= ======= ======= (5) Accumulated Other Comprehensive Earnings ---------------------------------------- Accumulated other comprehensive earnings consists of net unrealized gains (losses) on investment securities available-for-sale. Following is a summary of the change in the balance of accumulated other comprehensive earnings as of December 25, 1999 and December 26, 1998: 1999 1998 ---- ---- (Amounts are in thousands) Balance as of beginning of year $ (161) 4,464 Current period change (6,938) (4,625) ------- ------ Balance as of end of year $(7,099) (161) ======= ====== (6) Postretirement Benefits ----------------------- The Company provides life insurance benefits for salaried and hourly full-time employees. Such employees retiring from the Company on or after attaining age 55 and having ten years of credited full-time service are entitled to life insurance benefits. The Company funds the life insurance benefits on a pay-as-you-go basis. During 1999, 1998 and 1997, the Company made benefit payments to beneficiaries of retirees of approximately $1,877,000 and $1,361,000 and $1,271,000, respectively. 4 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements The following tables provide a reconciliation of the changes in the benefit obligations and fair value of plan assets and a statement of the funded status as of December 25, 1999 and December 26, 1998: 1999 1998 ---- ---- (Amounts are in thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 61,937 54,017 Service cost 3,754 3,124 Interest cost 4,551 4,097 Actuarial (gain) loss (6,677) 2,060 Benefit payments (1,877) (1,361) -------- ------ Benefit obligation at end of year $ 61,688 61,937 ======== ====== Change in fair value of plan assets: Fair value of plan assets at beginning of year $ - - Employer contributions 1,877 1,361 Benefit payments (1,877) (1,361) -------- ------ Fair value of plan assets at end of year $ - - ======== ====== Funded status $(61,688) (61,937) Unrecognized actuarial loss 5,953 13,079 -------- ------- Accrued postretirement benefit cost $(55,735) (48,858) ======== ======= Following are the actuarial assumptions that were used in the calculation of the year end benefit obligation: 1999 1998 1997 ---- ---- ---- Discount rate 7.75% 7.00% 7.25% Rate of compensation increase 4.00% 4.00% 4.00% Net periodic postretirement benefit cost consists of the following components: 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Service cost $3,754 3,124 2,533 Interest cost 4,551 4,097 3,755 Recognized actuarial loss 449 386 300 ------ ----- ----- Net periodic postretirement benefit cost $8,754 7,607 6,588 ====== ===== ===== Actuarial losses are amortized over the average remaining service life of active participants when the accumulation of such losses exceeds 10% of the greater of the projected benefit obligation or the fair value of plan assets. 5 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (7) Retirement Plans ---------------- The Company has a trusteed, noncontributory Profit Sharing Plan for the benefit of eligible employees. The amount of the Company's contribution to this plan is determined by the Board of Directors. The contribution cannot exceed 15% of compensation paid to participants. The expense recorded for contributions to this plan was approximately $92,731,000 in 1999, $73,048,000 in 1998 and $69,420,000 in 1997. Effective December 31, 1999, the Company merged the Profit Sharing Plan into the Employee Stock Ownership Plan (ESOP). The Company has an ESOP for the benefit of eligible employees. Annual contributions to the ESOP are determined by the Board of Directors and can be made in Company stock or cash. The expense recorded for contributions to this plan was approximately $90,256,000 in 1999, $73,048,000 in 1998 and $69,420,000 in 1997. The Company has a 401(k) plan for the benefit of eligible employees. The 401(k) plan is a voluntary defined contribution plan. Eligible employees may contribute up to 8% of their annual compensation, subject to certain maximum contribution restrictions. The Company may make a discretionary annual matching contribution to eligible participants of this plan as determined by the Board of Directors. During 1999, 1998 and 1997, the Board of Directors approved a match of 50% of eligible contributions up to 3% of eligible wages not to exceed a maximum of $750 per employee. The match, which is made in the subsequent year, is in the form of common stock of the Company. The expense recorded for the Company's match to the 401(k) plan was approximately $12,715,000 in 1999, $11,484,000 in 1998 and $9,275,000 in 1997. The Company intends to continue its retirement plans indefinitely; however, the right to modify, amend, terminate or merge these plans has been reserved. In the event of termination, all amounts contributed under the plans must be paid to the participants or their beneficiaries. 6 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (8) Income Taxes ------------ The provision for income taxes consists of the following: Current Deferred Total ------- -------- ----- (Amounts are in thousands) 1999: Federal $208,413 10,606 219,019 State 36,286 1,855 38,141 -------- ------ ------- $244,699 12,461 257,160 ======== ====== ======= 1998: Federal $154,384 21,128 175,512 State 26,988 3,614 30,602 -------- ------ ------- $181,372 24,742 206,114 ======== ====== ======= 1997: Federal $156,543 14,792 171,335 State 26,847 2,553 29,400 -------- ------ ------- $183,390 17,345 200,735 ======== ====== ======= The actual tax expense for 1999, 1998 and 1997 differs from the "expected" tax expense for those years (computed by applying the U.S. Federal corporate tax rate of 35% to earnings before income taxes) as follows: 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Computed "expected" tax expense $251,849 204,536 194,375 State income taxes (net of Federal income tax benefit) 24,792 19,892 19,108 Tax exempt interest (13,466) (11,663) (9,291) Other, net (6,015) (6,651) (3,457) -------- ------- ------- $257,160 206,114 200,735 ======== ======= ======= 7 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 25, 1999 and December 26, 1998 are as follows: 1999 1998 ---- ---- (Amounts are in thousands) Deferred tax assets: Self-insurance reserves $ 63,446 59,906 Advance purchase allowances 23,731 25,347 Postretirement benefit cost 21,503 18,857 Retirement plan contributions 17,410 14,098 Inventory capitalization 8,020 7,383 Other 11,879 13,732 -------- ------- Total deferred tax assets $145,989 139,323 ======== ======= Deferred tax liabilities: Property, plant and equipment, principally due to depreciation $222,733 208,123 Other 1,604 1,443 -------- ------- Total deferred tax liabilities $224,337 209,566 ======== ======= The Company expects the results of future operations to generate sufficient taxable income to allow utilization of deferred tax assets. (9) Commitments and Contingencies ----------------------------- (a) Operating Leases ---------------- The Company conducts a major portion of its retail operations from leased store and shopping center premises generally under 20 year leases. Contingent rentals paid to lessors of certain store facilities are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain cases, reimbursement of taxes and insurance. Total rental expense, net of sublease rental income, for the years ended December 25, 1999, December 26, 1998 and December 27, 1997, is as follows: 1999 1998 1997 ---- ---- ---- (Amounts are in thousands) Minimum rentals $178,812 167,536 154,727 Contingent rentals 10,685 10,259 9,835 Sublease rental income (7,028) (6,189) (4,366) -------- ------- ------- $182,469 171,606 160,196 ======== ======= ======= 8 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements As of December 25, 1999, future minimum lease payments for all noncancelable operating leases and related subleases are as follows: Minimum Sublease Rental Rental Year Commitments Income Net ---- ----------- ------ --- (Amounts are in thousands) 2000 $ 186,674 6,025 180,649 2001 185,638 5,575 180,063 2002 183,937 4,173 179,764 2003 181,561 2,342 179,219 2004 178,325 1,371 176,954 Thereafter 1,627,733 1,183 1,626,550 ---------- ------ --------- $2,543,868 20,669 2,523,199 ========== ====== ========= The Company also owns shopping centers which are leased to tenants for minimum monthly rentals plus, in certain instances, contingent rentals. Contingent rentals received are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain instances, reimbursement of taxes. Contingent rentals were estimated at December 25, 1999 and are included in trade receivables. Rental income was approximately $9,508,000 in 1999, $8,655,000 in 1998 and $9,622,000 in 1997. The approximate amounts of minimum future rental payments to be received under operating leases are $9,493,000, $7,446,000, $5,721,000, $4,070,000 and $2,387,000 for the years 2000 through 2004, respectively, and $4,806,000 thereafter. (b) Environmental ------------- The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. (c) Litigation ---------- A purported class action was filed against the Company on April 3, 1997 in the Federal District Court for the Middle District of Florida (the "Court") by Lemuel Middleton and 15 other present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Middleton case"). In their Complaint, the plaintiffs allege that the Company has and is currently engaged in a pattern and practice of race-based discriminatory treatment of black employees and applicants with respect to hiring, promotion, job assignment, conditions of employment, and other employment aspects, all in violation of Federal and state law. Subsequently, seven of the named plaintiffs withdrew their claims with prejudice. The plaintiffs sought, among other relief, a certification of the suit as a class action, declaratory and injunctive relief, back pay, front pay, benefits and other compensatory damages, and punitive damages. 9 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements On March 22, 1999, the Court certified the suit as a class action, but limited the class to those black employees and former black employees of the Company who have sought to be promoted or who have been discharged from employment at the Company's retail stores in Florida since April 3, 1993, and at retail stores in Georgia since January 14, 1995. The certified class excludes black employees or former black employees who worked only in pharmacy operations. The Court denied the plaintiffs' attempt to strike the demand that the Middleton case be tried to a jury. The Court also, among other things, granted the plaintiffs' motion to drop all claims for compensatory and punitive damages. Plaintiffs in the Middleton case still are seeking certification of a subclass of unsuccessful applicants and have put forward a new proposed class representative, Lydia Moultry. The parties are awaiting a ruling from the Court regarding whether Ms. Moultry can join the lawsuit and whether a subclass of unsuccessful applicants will be included in the Middleton case. Meanwhile, on July 26, 1999, the Court set the Middleton case for trial by jury beginning January 2, 2001. On November 6, 1997, another purported class action was filed against the Company in the Court by Shirley Dyer and five other present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Dyer case"). In their Complaint, the plaintiffs allege that the Company has violated and is currently violating Federal and state civil rights statutes by discriminating against female employees and applicants with respect to hiring, promotion, training, compensation, discipline, demotion and termination, and/or retaliation for bringing allegations of discrimination. The plaintiffs have moved to certify a class of all female current, former and future Company employees and applicants in all of the Company's manufacturing plants and distribution centers with respect to certain claims. The plaintiffs seek, among other relief, declaratory and injunctive relief, back pay, front pay, benefits and other compensatory damages, and punitive damages. The parties have briefed issues relating to class certification, engaged in oral argument on those issues on April 16, 1999 and now await the Court's ruling. On December 8, 1998, another purported class action was filed against the Company in the Court by Charlene Jones, individually and on behalf of other persons similarly situated (the "Jones case"). In her Complaint, the plaintiff alleges that the Company has violated and is currently violating Federal and state civil rights statutes by discriminating against female applicants for employment in the Company's manufacturing plants and distribution centers. The plaintiffs in the Jones and Dyer cases have asked the Court to combine the two cases. In papers filed with the Court on April 16, 1999, the Jones case plaintiff represented that she would not pursue a separate class action on behalf of unsuccessful female applicants for employment in the Company's manufacturing plants and distribution centers if the Jones case is not combined with the Dyer case. On June 29, 1999, another purported class action was filed against the Company in the Court by Lisa Lisenby, individually and on behalf of other persons similarly situated (the "Lisenby case"). In her Complaint, the plaintiff alleges that the Company has violated and is currently violating Federal statutory law by discriminating against female applicants and employees in the Company's manufacturing plants and distribution centers. On September 10, 1999, the Lisenby case plaintiff moved to combine her case with the Dyer case. 10 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements The Company denies the allegations of the plaintiffs in the Middleton, Dyer, Jones and Lisenby cases and is vigorously defending the actions. Although these cases are subject to the uncertainties inherent in the litigation process, based on the information presently available to the Company, management does not expect the ultimate resolution of these actions to have a material adverse effect on the Company's financial condition or results of operations. The Company is also a party in various legal claims and actions considered in the normal course of business. In the opinion of management, the ultimate resolution of these legal proceedings will not have a material adverse effect on the Company's financial condition or results of operations. 11 (Continued)
Schedule II ----------- PUBLIX SUPER MARKETS, INC. Valuation and Qualifying Accounts Years ended December 25, 1999, December 26, 1998 and December 27, 1997 (Amounts are in thousands) Balance at Additions Deductions Balance at beginning charged to from end of Description of year income reserves year ----------- ------- ------ -------- ---- Year ended December 25, 1999 Reserves not deducted from assets: Self-insurance reserves: -Current $ 61,413 143,407 135,464 69,356 -Noncurrent 98,956 1,198 --- 100,154 -------- ------- ------- ------- $160,369 144,605 135,464 169,510 ======== ======= ======= ======= Year ended December 26, 1998 Reserves not deducted from assets: Self-insurance reserves: -Current $ 57,415 127,479 123,481 61,413 -Noncurrent 90,068 8,888 --- 98,956 -------- ------- ------- ------- $147,483 136,367 123,481 160,369 ======== ======= ======= ======= Year ended December 27, 1997 Reserves not deducted from assets: Self-insurance reserves: -Current $ 64,250 100,085 106,920 57,415 -Noncurrent 73,336 16,732 --- 90,068 -------- ------- ------- ------- $137,586 116,817 106,920 147,483 ======== ======= ======= =======
EX-21 2 SUBSIDIARY OF THE COMPANY EXHIBIT 21 PUBLIX SUPER MARKETS, INC. Subsidiary of the Company Publix Alabama, Inc. (incorporated in Alabama) EX-27 3 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENT OF PUBLIX SUPER MARKETS, INC. FOR THE YEAR ENDED DECEMBER 25, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000081061 PUBLIX SUPER MARKETS, INC. 1,000 U.S. DOLLARS YEAR DEC-25-1999 DEC-27-1998 DEC-25-1999 1 626,636 28,233 107,185 0 769,454 1,591,015 3,307,387 1,252,217 4,067,732 1,075,758 0 0 0 215,568 2,460,576 4,067,732 13,068,900 13,205,561 9,774,712 12,485,992 0 0 0 719,569 257,160 462,409 0 0 0 462,409 2.14 2.14
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