-----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, H1Ic5AmAhFxdQ/nrPZ367BquMEwTv9bM0QHYYsRrpiMJ3263ljZRnXxXmFdEY+nc r4FbVtLfJ+FFsUp2w+QFeA== 0000081061-05-000046.txt : 20080805 0000081061-05-000046.hdr.sgml : 20080805 20050310154636 ACCESSION NUMBER: 0000081061-05-000046 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20041225 FILED AS OF DATE: 20050310 DATE AS OF CHANGE: 20060209 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: 1934 Act SEC FILE NUMBER: 000-00981 FILM NUMBER: 05672420 BUSINESS ADDRESS: STREET 1: 3300 PUBLIX CORPORATE PARKWAY CITY: LAKELAND STATE: FL ZIP: 33811 BUSINESS PHONE: 863-688-1188 MAIL ADDRESS: STREET 1: 3300 PUBLIX CORPORATE PARKWAY CITY: LAKELAND STATE: FL ZIP: 33811 10-K 1 k2004form10k.txt FORM 10-K, YEAR ENDED 12/25/2004 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, 2004 ( ) 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.) 3300 Publix Corporate Parkway Lakeland, Florida 33811 - --------------------------------------- -------- (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 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 ------- ------- 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. ( X ) Indicate by check mark whether the Registrant is an accelerated filer. Yes X No ------- ------- The aggregate market value of the voting stock held by non-affiliates of the Registrant as of February 2, 2005 was approximately $5,289,122,000. The number of shares of Registrant's common stock outstanding as of February 2, 2005 was 172,233,759. DOCUMENTS INCORPORATED BY REFERENCE Pages 2 through 12 of the Proxy Statement solicited for the 2005 Annual Meeting of Stockholders to be held on April 12, 2005 are incorporated by reference in Items 10, 11, 12, 13 and 14 of Part III hereof. TABLE OF CONTENTS Page ---- PART I Item 1. Business 1 Item 2. Properties 2 Item 3. Legal Proceedings 3 Item 4. Submission of Matters to a Vote of Security Holders 3 Executive Officers of the Company 4 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 8 Item 6. Five Year Summary of Selected Financial Data 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 19 Management's Report on Internal Control over Financial Reporting 20 Item 8. Financial Statements and Supplementary Data 21 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46 Item 9A. Controls and Procedures 46 Item 9B. Other Information 46 PART III Item 10. Directors and Executive Officers of the Registrant 47 Item 11. Executive Compensation 47 Item 12. Security Ownership of Certain Beneficial Owners and Management 47 Item 13. Certain Relationships and Related Transactions 47 Item 14. Principal Accounting Fees and Services 47 PART IV Item 15. Exhibits, Financial Statement Schedules 48 PART I Item 1. Business - ----------------- Publix Super Markets, Inc. and its wholly owned subsidiaries, hereinafter collectively referred to as the "Company," are in the primary business of operating retail food supermarkets in Florida, Georgia, South Carolina, Alabama and Tennessee. The Company has no other significant lines of business or industry segments. Merchandising and manufacturing - ------------------------------- The Company's supermarkets sell groceries, dairy, produce, deli, bakery, meat, seafood, housewares and health and beauty care items. Many supermarkets also have pharmacy and floral departments. In addition, the Company has agreements with commercial banks to operate in many of its supermarkets. 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. These products are delivered through Company distribution centers or directly from manufacturers and wholesalers. The Company receives the food and non-food products 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. Private label items are produced in the Company's dairy, bakery and deli manufacturing facilities or are manufactured for the Company by outside suppliers. 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. Store operations - ---------------- The Company operated 850 supermarkets at the end of 2004, compared with 801 at the beginning of the year. In 2004, 57 supermarkets were opened, eight supermarkets were closed and 71 supermarkets were expanded or remodeled. The net increase in square footage was 2.1 million square feet or 5.7% since 2003. At the end of 2004, the Company had 626 supermarkets located in Florida, 159 in Georgia, 37 in South Carolina, 21 in Alabama and seven in Tennessee. Also, as of year end, the Company had 12 supermarkets under construction in Florida, two in Georgia and two in Tennessee. Competition - ----------- The Company is engaged in a highly competitive industry. Competition is based primarily on price, quality of goods and service, convenience and product mix. The Company's primary competition throughout its market areas is with several national and regional supermarket chains, independent supermarkets, supercenters, membership warehouse clubs, mass merchandisers, dollar stores and drug stores. The Company anticipates continued competitor format innovation and location additions in 2005. Working capital - --------------- The Company's working capital at the end of 2004 consisted of $1,899.4 million in current assets and $1,677.8 million in current liabilities. Normal operating fluctuations in these balances can result in changes to cash flow from operating activities presented in the consolidated statements of cash flows that are not necessarily indicative of long-term operating trends. There are no unusual industry practices or requirements relating to working capital items. 1 Seasonality - ----------- 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. Employees - --------- The Company had approximately 128,000 employees at the end of 2004, compared with 125,000 at the end of 2003. Of this total, approximately 69,000 at the end of 2004 and 2003 were not full-time employees. The Company considers its employee relations to be good. Government regulation - --------------------- Compliance by the Company with Federal, state and local environmental protection laws during 2004 had no material effect upon capital expenditures, earnings or the competitive position of the Company. Company information - ------------------- The Company makes available through its website, free of charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. The Company's website address is http://www.publix.com/stock. --------------------------- Item 2. Properties - ------------------- At year end, the Company operated approximately 38.9 million square feet of supermarket space. The Company's supermarkets vary in size. Current supermarket prototypes range from 28,000 to 61,000 square feet. Supermarkets are often located in strip shopping centers where the Company is the anchor tenant. The majority of the Company's supermarkets 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 61 locations, both the building and land are owned and at 39 other locations, the building is owned while the land is leased. The Company supplies its supermarkets from eight distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Florida, and Lawrenceville, Georgia. The Company operates six manufacturing facilities including three dairy plants located in Lakeland and Deerfield Beach, Florida, and Lawrenceville, Georgia, two bakery plants located in Lakeland, Florida and Atlanta, Georgia and a deli plant located in Lakeland, Florida. 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 are suitable and adequate for operating its business. 2 Item 3. Legal Proceedings - -------------------------- The Company is 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, results of operations or cash flows. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None 3 EXECUTIVE OFFICERS OF THE COMPANY --------------------------------- Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since - ---- --- -------- ---------------- ----- Charles H. Jenkins, Jr. 61 Chief Executive Cousin of 1974 Officer William E. Crenshaw William E. Crenshaw 54 President Cousin of 1990 Charles H. Jenkins, Jr. Hoyt R. Barnett 61 Vice Chairman 1977 John A. Attaway, Jr. 46 Senior Vice President, 2000 General Counsel and Secretary David E. Bornmann 47 Vice President 1998 David E. Bridges 55 Vice President 2000 R. Scott Charlton 46 Vice President 1992 G. Gino DiGrazia 42 Vice President 2002 and Controller David S. Duncan 51 Vice President 1999 William V. Fauerbach 58 Vice President 1997 John R. Frazier 55 Vice President 1997 Linda S. Hall 45 Vice President 2002 M. Clayton Hollis, Jr. 48 Vice President 1994 John T. Hrabusa 49 Senior Vice President 2004 Mark R. Irby 49 Vice President 1989 Randall T. Jones, Sr. 42 Vice President 2003 Linda S. Kane 39 Vice President and 2000 Assistant Secretary James J. Lobinsky 65 Senior Vice President 1992 Thomas M. McLaughlin 54 Vice President 1994 Sharon A. Miller 61 Assistant Secretary 1992 4 EXECUTIVE OFFICERS OF THE COMPANY --------------------------------- Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since - ---- --- -------- ---------------- ----- Robert H. Moore 62 Vice President 1994 Dale S. Myers 52 Vice President 2001 Alfred J. Ottolino 39 Vice President 2004 David P. Phillips 45 Chief Financial 1990 Officer and Treasurer James H. Rhodes II 60 Vice President 1995 Daniel M. Risener 64 Senior Vice President 1985 and Chief Information Officer Richard J. Schuler II 49 Vice President 2000 Edward T. Shivers 65 Vice President 1985 Sandra J. Woods 45 Vice President 2002 and Controller The terms of all officers expire in May 2005 or upon the election of their successors. 5 Name Business Experience During Last Five Years - ---- ------------------------------------------ Charles H. Jenkins, Jr. Chairman of the Executive Committee of the Company to June 2000, Chairman of the Executive Committee and Chief Operating Officer to May 2001, Chief Executive Officer thereafter. William E. Crenshaw President of the Company. Hoyt R. Barnett Vice Chairman of the Company and Trustee of the Employee Stock Ownership Plan. John A. Attaway, Jr. Corporate Counsel of the Company to May 2000, General Counsel and Secretary to January 2005, Senior Vice President, General Counsel and Secretary thereafter. David E. Bornmann Vice President of the Company. David E. Bridges Regional Director of Retail Operations - Lakeland Division of the Company to July 2000, Vice President thereafter. R. Scott Charlton Vice President of the Company. G. Gino DiGrazia Director of Business Analysis and Reporting to May 2002, Vice President and Controller thereafter. David S. Duncan Vice President of the Company. William V. Fauerbach Vice President of the Company. John R. Frazier Vice President of the Company. Linda S. Hall Director of Internal Audit to November 2002, Vice President thereafter. M. Clayton Hollis, Jr. Vice President of the Company. John T. Hrabusa Vice President of Office Depot, Inc. to March 2004, Vice President of the Company to January 2005, Senior Vice President thereafter. Mark R. Irby Vice President of the Company. Randall T. Jones, Sr. Regional Director of Retail Operations - Jacksonville Division of the Company to November 2003, Vice President thereafter. Linda S. Kane Director of Benefits Administration of the Company to June 2000, Director of Benefits Administration and Assistant Secretary to May 2002, Vice President and Assistant Secretary thereafter. James J. Lobinsky Senior Vice President of the Company. Thomas M. McLaughlin Vice President of the Company. Sharon A. Miller Director of Administration and Assistant Secretary of the Company to May 2003, Executive Director Publix Super Markets Charities, Inc. and Assistant Secretary thereafter. 6 Name Business Experience During Last Five Years - ---- ------------------------------------------ Robert H. Moore Vice President of the Company. Dale S. Myers Regional Director of Retail Operations - Lakeland Division of the Company to July 2001, Vice President thereafter. Alfred J. Ottolino Vice President of Wakefern Food Corporation from June 1998 to June 2003, Vice President of Winn-Dixie Stores, Inc. from July 2003 to March 2004, Vice President of the Company thereafter. David P. Phillips Chief Financial Officer and Treasurer of the Company. James H. Rhodes II Vice President of the Company. Daniel M. Risener Senior Vice President and Chief Information Officer of the Company. Richard J. Schuler II Miami Distribution Manager of the Company to June 2000, Vice President thereafter. Edward T. Shivers Vice President of the Company. Sandra J. Woods Director of Corporate Accounting to May 2002, Vice President and Controller thereafter. 7 PART II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters - -------------------------------------------------------------------------------- and Issuer Purchases of Equity Securities ----------------------------------------- (a) Market Information - ----------------------- The Company's common stock is not traded on any public stock exchange. Therefore, 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 Company's common stock is made available for sale only to the Company's current employees and members of its Board of Directors through the Company's Employee Stock Purchase Plan (ESPP), Non-Employee Directors Stock Purchase Plan (Directors Plan) and 401(k) Plan. In addition, common stock is made available under the Employee Stock Ownership Plan (ESOP). The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, Directors Plan, 401(k) Plan and ESOP each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company. The Company serves as the registrar and stock transfer agent for its common stock. Because there is no trading of the Company's common stock on a public stock exchange, the market price of the Company's common stock is determined by the Board of Directors based upon quarterly appraisals prepared by an independent appraiser. The market price for 2004 and 2003 was as follows: 2004 2003 ---- ---- January - February $46.50 37.00 March - April 51.50 38.50 May - July 52.25 37.50 August - October 58.50 42.25 November - December 58.50 46.50 (b) Approximate Number of Equity Security Holders - -------------------------------------------------- As of February 2, 2005, the approximate number of holders of the Company's common stock was 91,000. (c) Dividends - -------------- The Company paid an annual cash dividend of $.45 per share of common stock in 2004 and $.40 per share in 2003. 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. 8 (d) Purchases of Equity Securities by the Issuer - ------------------------------------------------- Issuer Purchases of Equity Securities ------------------------------------- Shares of common stock repurchased by the Company during the three months ended December 25, 2004 were as follows: Total Number of Approximate Shares Dollar Value Purchased as of Shares Total Average Part of Publicly that May Yet Be Number of Price Announced Purchased Under Shares Paid per Plans or the Plans or Period Purchased Share Programs(1) Programs(1) ------ --------- ----- ----------- ----------- September 26, 2004 through October 30, 2004 941,563 $58.50 N/A N/A October 31, 2004 through November 27, 2004 643,391 58.50 N/A N/A November 28, 2004 through December 25, 2004 465,159 58.50 N/A N/A --------- ------ Total 2,050,113 $58.50 N/A N/A ========= ====== (1) Common stock is made available for sale only to the Company's current employees and members of its Board of Directors through the Company's Employee Stock Purchase Plan (ESPP), Non-Employee Directors Stock Purchase Plan (Directors Plan) and 401(k) Plan. In addition, common stock is made available under the Employee Stock Ownership Plan (ESOP). The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, Directors Plan, 401(k) Plan and ESOP each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company. The Company's common stock is not traded on any public stock exchange. The amount of common stock offered to the Company for repurchase is not within the control of the Company, but is at the discretion of the stockholders. The Company does not believe that these repurchases of its common stock are within the scope of a publicly announced plan or program (although the terms of the plans discussed above have been communicated to the participants). Thus, the Company does not believe that it has made any repurchases during the three months ended December 25, 2004 required to be disclosed in the last two columns of the table. 9
Item 6. Five Year Summary of Selected Financial Data - ----------------------------------------------------- 2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- Sales: Sales $18,554,486 16,760,749 15,851,301 15,209,824 14,522,366 Percent increase 10.7% 5.7% 4.2% 4.7% 11.2% Comparable store sales percent increase (decrease) 5.7% 0.0% (0.7%) 3.9% 4.1% Earnings: Gross profit $ 4,976,746 4,485,617 4,229,539 3,857,254 3,635,622 Earnings before income tax expense $ 1,295,011 1,047,089 1,002,830 826,823 823,553 Net earnings $ 819,383 660,933 632,404 530,421 530,406 Net earnings as a percent of sales 4.42% 3.94% 3.99% 3.49% 3.65% Common stock: Weighted average shares outstanding 176,775,733 184,112,742 194,466,212 202,171,794 210,145,666 Basic and diluted earnings per common share, based on weighted average shares outstanding $ 4.64 3.59 3.25 2.62 2.52 Cash dividends per share $ .45 .40 .33 .32 .27 Financial data: Capital expenditures $ 403,373 563,576 635,891 656,422 558,133 Working capital $ 221,583 209,941 127,870 49,328 193,088 Current ratio 1.13 1.15 1.10 1.04 1.16 Total assets $ 5,964,271 5,150,717 4,789,602 4,408,187 4,250,067 Stockholders' equity $ 3,585,716 3,169,310 3,008,068 2,762,551 2,662,435 Stores: Number of supermarkets 850 801 741 684 647 Number of convenience stores 5 4 4 2 - NOTE: Amounts are in thousands, except shares outstanding, per share amounts and number of stores. Fiscal year 2000 includes 53 weeks. All other years include 52 weeks. Certain prior year amounts have been reclassified to conform to the 2004 presentation.
10 Item 7. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations ------------- Overview - -------- The Company is primarily engaged in the retail supermarket business, operating stores in Florida, Georgia, South Carolina, Alabama and Tennessee. The Company has no other significant lines of business or industry segments. As of December 25, 2004, the Company operated 850 supermarkets representing approximately 38.9 million square feet of supermarket space. In 2001, the Company began piloting a convenience store concept. As of December 25, 2004, the Company operated five convenience stores. In 2002, the Company acquired a minority interest in Crispers, a casual dining restaurant chain based in Lakeland, Florida. In 2004, the Company increased its ownership in Crispers to a majority position. As of December 25, 2004, Crispers operated 26 restaurants, all located in Florida. In 2004, the Company began piloting a liquor store concept. The liquor stores are located adjacent to the Company's supermarkets. As of December 25, 2004, the Company operated five liquor stores in Florida. At the end of fiscal year 2004, the Company had 626 supermarkets located in Florida, 159 in Georgia, 37 in South Carolina, 21 in Alabama and seven in Tennessee. The Company opened 32 supermarkets in Florida, 13 supermarkets in Georgia, nine supermarkets in Alabama and three supermarkets in South Carolina during 2004. The Company's revenues are earned and cash is generated as merchandise is sold to customers in the supermarkets. Income is earned by selling merchandise at price levels that produce sales revenues in excess of cost of merchandise sold and operating and administrative expenses. The Company has historically been able to increase revenues and net profits from year to year. Further, the Company has historically been able to meet its cash requirements from internally generated funds without the need to generate cash through debt financing. The Company's year end cash balances are impacted by capital expenditures and stock repurchases during the year. The Company sells a variety of merchandise to generate revenues. This merchandise includes groceries, dairy, produce, deli, bakery, meat, seafood, housewares and health and beauty care items. Many of the Company's supermarkets also have pharmacy and floral departments. Merchandise includes a mix of nationally advertised and private label brands. Private label brands play an increasingly important role in the Company's merchandising strategy. Operating Environment - --------------------- The Company is engaged in the highly competitive retail food industry. Competition is based primarily on price, quality of goods and service, convenience and product mix. In addition, the Company competes with other retailers for prime retail site locations. The Company competes with retailers as well as other labor market competitors in attracting and retaining quality employees. The Company's primary competition throughout its market areas is with several national and regional traditional supermarket chains and independent supermarkets, as well as non-traditional competition such as supercenters, membership warehouse clubs, mass merchandisers, dollar stores and drug stores. As a result of the highly competitive environment, traditional supermarkets, including the Company, face increasing business challenges. There has been a trend in recent years for traditional supermarkets to 11 lose market share to non-traditional competition. The success of the Company, in particular its ability to retain its customers, depends on its ability to meet the business challenges created by this competitive environment. In order to meet the competitive challenges facing the Company, management continues to focus on the Company's core strategies: customer service, product quality, shopping environment and competitive pricing. The Company has implemented several strategic business and technology initiatives as part of the execution of these core strategies. The Company believes these core strategies and related strategic initiatives differentiate it from competition and present opportunities for increased market share and sustained financial growth. Liquidity and Capital Resources - ------------------------------- Cash and cash equivalents and short-term and long-term investments totaled approximately $1,390.4 million at December 25, 2004, compared to $674.6 million and $591.9 million at December 27, 2003 and December 28, 2002, respectively. Net cash provided by operating activities - ----------------------------------------- Net cash provided by operating activities was approximately $1,643.2 million for the year ended December 25, 2004, as compared with $1,303.7 million and $1,211.0 million for the years ended December 27, 2003 and December 28, 2002, respectively. Due to the hurricanes described below, the Company received an extension on its Federal income tax payments due September 15, 2004 and December 15, 2004 until December 30, 2004. The delay in these tax payments increased net cash provided by operating activities by $190.0 million. Any net cash in excess of the amount needed for current operations is invested in short-term and long-term investments. Net cash used in investing activities - ------------------------------------- Net cash used in investing activities was approximately $950.3 million for the year ended December 25, 2004, as compared with $526.5 million and $625.5 million for the years ended December 27, 2003 and December 28, 2002, respectively. The primary use of net cash in investing activities was funding capital expenditures and purchasing investments. During the year ended December 25, 2004, capital expenditures totaled approximately $403.4 million. These expenditures were primarily incurred in connection with the opening of 49 net new supermarkets (57 new supermarkets opened and eight supermarkets closed) and remodeling or expanding 71 supermarkets. Net new supermarkets added an additional 2.1 million square feet in the year ended December 25, 2004, a 5.7% increase. The average cost per supermarket opened during the year ended December 25, 2004 was less than the average cost per supermarket opened during the year ended December 27, 2003. Significant expenditures were also incurred in the construction and expansion of warehouses and new or enhanced information technology applications. During the year ended December 27, 2003, capital expenditures totaled approximately $563.6 million. These expenditures were primarily incurred in connection with the opening of 60 net new supermarkets (78 new supermarkets opened and 18 supermarkets closed) and remodeling or expanding 80 supermarkets. Net new supermarkets added an additional 3.2 million square feet in the year ended December 27, 2003, a 9.4% increase. Significant expenditures were also incurred in the expansion of warehouses and new or enhanced information technology applications. During the year ended December 28, 2002, capital expenditures totaled approximately $635.9 million. These expenditures were primarily incurred in connection with the opening of 57 net new supermarkets (76 new supermarkets opened and 19 supermarkets closed) and remodeling or expanding 91 supermarkets. Net new supermarkets added an additional 2.7 million square feet in the year ended December 28, 2002, 12 an 8.8% increase. Significant expenditures were also incurred in the expansion of warehouses, office construction and new or enhanced information technology applications. Capital expenditure projection - ------------------------------ In 2005, the Company plans to open approximately 45 supermarkets. Although real estate development is unpredictable, the Company's 2005 new store growth represents a reasonable estimate of anticipated future growth. Capital expenditures for 2005, primarily consisting of new supermarkets, remodeling and expanding certain existing supermarkets, new or enhanced information technology applications and expansion of warehouses, are expected to be approximately $400.0 million. This capital program is subject to continuing change and review. In the normal course of operations, the Company replaces supermarkets and closes supermarkets that are not meeting performance expectations. The impact of future supermarket closings is not expected to be material. Net cash used in financing activities - ------------------------------------- Net cash used in financing activities was approximately $599.7 million for the year ended December 25, 2004, as compared with $707.6 million and $589.3 million for the years ended December 27, 2003 and December 28, 2002, respectively. The primary use of net cash in financing activities was funding net common stock repurchases. The Company currently repurchases common stock at the stockholders' request in accordance with the terms of the Company's Employee Stock Purchase Plan, Non-Employee Directors Stock Purchase Plan, 401(k) Plan and Employee Stock Ownership Plan. Net common stock repurchases totaled approximately $518.8 million for the year ended December 25, 2004, as compared with $632.0 million and $523.7 million for the years ended December 27, 2003 and December 28, 2002, respectively. The amount of common stock offered to the Company for repurchase is not within the control of the Company, but is at the discretion of the stockholders. 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 for amounts similar to those in prior years. However, such purchases are not required and the Company retains the right to discontinue them at any time. Dividends - --------- The Company paid an annual cash dividend on its common stock of $80.8 million or $.45 per share, $75.5 million or $.40 per share and $65.4 million or $.33 per share in 2004, 2003 and 2002, respectively. Credit facility - --------------- The Company's committed line of credit totaling $100 million expired on December 31, 2004. This 364-day line of credit facility was available to fund liquidity requirements if necessary. The interest rate was based on LIBOR or prime. There were no amounts outstanding on this line of credit as of December 25, 2004. Since the Company did not require additional liquidity, this line of credit facility was not renewed. Cash requirements - ----------------- In 2005, the cash requirements for current operations, capital expenditures and common stock repurchases are expected to be financed by internally generated funds or liquid assets. Based on the Company's financial position, it is expected that short-term and long-term borrowings would be readily available to support the Company's liquidity requirements if needed. 13
Contractual Obligations - ----------------------- Following is a summary of contractual obligations as of December 25, 2004: Payments Due by Period ---------------------- 2006 - 2008 - There- Total 2005 2007 2009 after ----- ---- ---- ---- ----- (Amounts are in thousands) Contractual Obligations: Operating leases (1) $4,323,140 336,938 654,876 611,793 2,719,533 Purchase obligations (2)(3) 431,527 407,454 23,235 388 450 Other long-term liabilities reflected on the Company's Balance Sheet under GAAP (4) 224,443 --- 224,443 --- --- ---------- ------- ------- ------- --------- Total $4,979,110 744,392 902,554 612,181 2,719,983 ========== ======= ======= ======= ========= (1) For a more detailed description of the operating lease obligations refer to Note 9(a) Commitments and Contingencies - Operating Leases, in the Notes to Consolidated Financial Statements. (2) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable within 30 days without penalty. (3) As of December 25, 2004, the Company had $6.8 million outstanding in trade letters of credit and $2.1 million outstanding in standby letters of credit to support certain of these purchase obligations. (4) Includes standby letters of credit of $224.4 million for the benefit of the Company's insurance carriers for the self-insured portion of workers' compensation and fleet liability. The estimated amounts of these liabilities are included in the Company's consolidated balance sheets.
Off-Balance Sheet Arrangements - ------------------------------ The Company is not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company's financial condition, results of operations or cash flows. 14 Hurricane Impact - ---------------- During the third quarter ended September 25, 2004, the Company and the State of Florida experienced an unprecedented four major hurricanes in six weeks. The Company recorded the effect of these hurricanes, Charley, Frances, Ivan and Jeanne, in the third quarter of 2004. Store closings occurred throughout the Company due to weather conditions and evacuations of certain areas. Almost all affected stores were reopened within 24 hours, operating on generator power if normal power had not been restored. All stores were reopened within five days. The impact of the four hurricanes on the Company did not have a material adverse effect on the Company's financial condition, results of operations or cash flows. The Company estimated that its inventory losses due to power outages and additional distribution costs included in cost of merchandise sold related to the four hurricanes was approximately $58.0 million. The estimate of the additional operating and administrative expenses related to the four hurricanes was approximately $5.0 million. These expenses were primarily related to facility repairs and disposal fees for inventory lost due to power outages. The Company estimated the profit on the incremental sales resulting from repeated cycles of customers stocking up and replenishing as well as sales of hurricane supplies largely offset the losses incurred by the Company. The losses incurred by the Company are below the insurance policy deductible limits so there will be no recovery of the losses from insurance coverage. Results of Operations - --------------------- The Company's fiscal year ends on the last Saturday in December. Fiscal years 2004, 2003 and 2002 included 52 weeks. Sales - ----- Sales for 2004 were $18.6 billion as compared with $16.8 billion in 2003, an increase of $1,793.7 million or a 10.7% increase. The Company estimates that its sales increased approximately $833.7 million or 5.0% from net new supermarkets and approximately $960.0 million or 5.7% in comparable store sales (supermarkets open for the same weeks in both periods, including replacement supermarkets) since the beginning of 2003. Included in comparable store sales is approximately $189.0 million or 1.1% of sales related to the impact of the hurricanes described above. Sales for 2003 were $16.8 billion as compared with $15.9 billion in 2002, an increase of $909.4 million or a 5.7% increase. All of this increase was from net new supermarkets since the beginning of 2002 as comparable store sales were unchanged. Sales for 2002 were $15.9 billion as compared with $15.2 billion in 2001, an increase of $641.5 million or a 4.2% increase. This reflects an increase of $748.5 million or 4.9% from net new supermarkets and a decrease of $107.0 million or 0.7% in comparable store sales since the beginning of 2001. During the first quarter of 2002, the Company modified its calculation of comparable store sales to include replacement supermarkets. The comparable store sales calculation was modified to improve the comparability of this key performance measure to others in the food retailing industry. 15 Gross profit - ------------ Gross profit, as a percentage of sales, was approximately 26.8% in 2004 and 2003 as compared with 26.7% in 2002, respectively. In 2004, gross profit remained relatively unchanged compared to 2003 and 2002. During 2003, the Company modified its calculation of cost of merchandise sold to improve the comparability of the Company's gross profit to others in the food retailing industry. Operating and administrative expenses - ------------------------------------- Operating and administrative expenses, as a percentage of sales, were approximately 20.9%, 21.6% and 21.3% in 2004, 2003 and 2002, respectively. The decrease in operating and administrative expenses as a percentage of sales was due to the incremental sales from the hurricanes discussed above and the closure of PublixDirect, LLC, ("PublixDirect") during 2003 described below. The hurricanes decreased operating and administrative expenses as a percentage of sales in 2004 and the closure of PublixDirect increased the operating and administrative expenses as a percentage of sales in 2003. Additionally, the decrease in operating and administrative expenses as a percentage of sales during 2004 was primarily due to decreases in payroll, workers' compensation and repair and maintenance costs, which were partially offset by increases in health insurance and certain facilities costs. The increase during 2003 in operating and administrative expenses as a percentage of sales was primarily due to the closure of PublixDirect as well as increases in certain facilities costs and other expenses, which were partially offset by decreases in payroll and employee benefit costs. The operating and administrative expenses as a percentage of sales for prior years were adjusted due to the modification of the cost of merchandise sold calculation noted above. Income taxes - ------------ The effective income tax rates were 36.7% in 2004 and 36.9% in 2003 and 2002, respectively. The effective income tax rates differ from the expected Federal statutory rate of 35.0% in all years primarily due to the impact of state income taxes, partially offset by the Federal benefit of state income taxes, tax exempt interest and dividends paid to ESOP participants. PublixDirect closure - -------------------- During the third quarter of 2003, the Company announced its decision to close its online grocery shopping service operated under its wholly owned subsidiary, PublixDirect. As a result of the decision to close PublixDirect effective August 23, 2003, the Company recorded an expense of $30.0 million during the third quarter of 2003. The expense recorded represented approximately $17.0 million in asset impairments, $10.0 million in operating lease obligations and $3.0 million in payroll obligations and other costs. The expense was recognized in the Company's consolidated statements of earnings and is included in operating and administrative expenses. The impact of the expense recorded on net earnings was approximately $18.0 million or $.10 per share for the fiscal year ended December 27, 2003. Impact of inflation - ------------------- In recent years, the impact of inflation on the Company's product costs has been lower than the overall increase in the Consumer Price Index. Net earnings - ------------ Net earnings were $819.4 million or $4.64 per share, $660.9 million or $3.59 per share and $632.4 million or $3.25 per share for 2004, 2003 and 2002, respectively. 16 Accounting Standards - -------------------- In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, "Consolidation of Variable Interest Entities, an interpretation of ARB No. 51" (FIN 46). FIN 46 addresses the consolidation of entities whose equity holders (a) have not provided sufficient equity at risk to allow the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the consolidation of these entities, known as variable interest entities (VIEs), by the primary beneficiary of the entity. The primary beneficiary is the entity, if any, that is subject to a majority of the risk of loss from the VIEs' activities, entitled to receive a majority of the VIEs' residual returns, or both. In December 2003, the FASB issued FIN 46(R), "Consolidation of Variable Interest Entities," which represents a revision to FIN 46. FIN 46(R) provided clarifications to FIN 46 and excluded certain entities from its scope. The requirements of FIN 46(R) for entities commonly referred to as special-purpose entities (SPEs) are effective for periods ending after December 15, 2003. The requirements for all other types of entities are effective for periods ending after March 15, 2004. The Company does not have any entities classified as VIEs or SPEs; therefore, the adoption of FIN 46(R) had no effect on the Company's financial condition, results of operations or cash flows. In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 151, "Inventory Costs," (SFAS 151) effective for fiscal years beginning after June 15, 2005. SFAS 151 amends Accounting Research Bulletin No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. SFAS 151 requires that those items be recognized as current period charges and requires that allocation of fixed production overhead to the cost of conversion be based on the normal capacity of the production facilities. The adoption of SFAS 151 is not expected to have a material effect on the Company's financial condition, results of operations or cash flows. In December 2004, the Financial Accounting Standards Board (FASB) issued a revision to Statement of Financial Accounting Standard No. 123, "Share-Based Payment," (SFAS 123(R)) effective for the first interim or annual reporting period beginning after June 15, 2005. SFAS 123(R) will require all stock-based compensation awards to be recorded at fair value as an expense in the Company's consolidated financial statements. The Company does not have any stock-based employee compensation; therefore, the adoption of SFAS 123(R) will have no effect on the Company's financial condition, results of operations or cash flows. Critical Accounting Policies - ---------------------------- The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements 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. The Company's significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. The Company believes the following critical accounting policies reflect its more significant judgments and estimates used in the preparation of its consolidated financial statements: 17 Inventories ----------- Inventories are valued at the lower of cost or market. The cost for substantially all of the Company's inventories was determined using the dollar value last-in, first-out method. Under this method, inventory is stated at cost, which is determined by applying a cost-to-retail ratio to each similar merchandise category's ending retail value. The cost of all remaining inventories was determined using the first-in, first-out ("FIFO") method. The FIFO cost of inventory approximates replacement or current cost. The Company also reduces inventory for estimated losses related to shrink. Investments ----------- The Company reviews its investments for other-than-temporary impairments based on criteria that include the extent to which cost exceeds market value, the duration of the market decline and the financial health of and prospects for the issuer. This review requires significant judgment. If market or issuer conditions decline, the Company may incur future impairments. Property, Plant and Equipment and Depreciation ---------------------------------------------- Assets are recorded at cost and are depreciated using the straight-line method over their estimated useful lives or the terms of their leases, if shorter, as follows: buildings and improvements are at 10 - 40 years, furniture, fixtures and equipment are at 3 - 20 years and leasehold improvements are at 10 - 40 years. The Company considers lease renewals in the useful life of its leasehold improvements when such renewals are reasonably assured. Long-Lived Assets ----------------- The Company reviews its long-lived assets for impairment under the provisions of Financial Accounting Standards Board Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the net book value of an asset may not be recoverable. The Company's judgments regarding the existence of impairment indicators are based on market conditions and operational performance, such as operating profit and cash flows. The variability of these factors depends on a number of conditions, including uncertainty about future events; therefore, the Company's accounting estimates may change from period to period. These factors could cause the Company to conclude that impairment indicators exist and the applicable impairment tests could result in a determination that the value of long-lived assets is impaired, resulting in a write-down of the long-lived assets. Revenue Recognition ------------------- Revenue is recognized at the point of sale for retail sales. Vendor coupons that are reimbursed are accounted for as sales. Coupons and other sales incentives offered by the Company that are not reimbursed are recorded as a reduction of sales. Cost of Merchandise Sold ------------------------ Cost of merchandise sold includes costs of inventory and costs related to in-store production. Cost of merchandise sold also includes inbound freight charges, purchasing and receiving costs, warehousing costs and other costs of the Company's distribution network. 18 Vendor allowances and credits, including cooperative advertising fees, received from a vendor in connection with the purchase or promotion of the vendor's products, are recognized as a reduction of cost of merchandise sold as earned. These allowances and credits are recognized as earned in accordance with the underlying agreement with the vendor and completion of the earning process. Short-term vendor agreements with advance payment provisions are recorded as a current liability and are recognized over the appropriate period as earned according to the underlying agreement. Long-term vendor agreements with advance payment provisions are recorded as a noncurrent liability and are recognized over the appropriate period as earned according to the underlying agreement. 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 claims experience and an estimate of claims incurred but not reported, including, where necessary, actuarial studies. Actuarial projections of losses for general liability and workers' compensation are subject to a high degree of variability. The causes of variability include, but are not limited to, such factors as future inflation rates, future economic conditions, litigation trends and benefit level changes. The Company has insurance coverage for losses in excess of varying amounts. Forward-Looking Statements - -------------------------- From time to time, certain information provided by the Company, including written or oral statements made by its representatives, may contain forward-looking information as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking information includes statements 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, 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; results of programs to control or reduce costs, improve buying practices and control shrink; results of programs to increase sales, including private-label sales, improve perishable departments and pricing and promotional programs; changes in the general economy; changes in consumer spending; changes in population, employment and job growth in the Company's principal markets; 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 retain employees, increases in operating costs, including but not limited to labor costs, credit card fees and utility costs, particularly electric utility costs, ability to construct new stores or complete remodels as rapidly as planned and stability of product costs. 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 utilize financial instruments for trading or other speculative purposes, nor does it utilize leveraged financial instruments. The Company does not consider to be material the potential losses in future earnings, fair values and cash flows from reasonably possible near-term changes in interest rates. 19 Management's Report on Internal Control over Financial Reporting ---------------------------------------------------------------- Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934). The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company's internal control over financial reporting as of December 25, 2004. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on this assessment and these criteria, management believes that the Company's internal control over financial reporting was effective as of December 25, 2004. The Company's independent registered public accounting firm, KPMG LLP, has issued an audit report on management's assessment of the Company's internal control over financial reporting, which is included herein on page 23. 20 Item 8. Financial Statements and Supplementary Data - ---------------------------------------------------- Index to Consolidated Financial Statements and Schedule Page ---- Reports of Independent Registered Public Accounting Firm 22 Consolidated Financial Statements: Consolidated Balance Sheets - December 25, 2004 and December 27, 2003 24 Consolidated Statements of Earnings - Years ended December 25, 2004, December 27, 2003 and December 28, 2002 26 Consolidated Statements of Comprehensive Earnings - Years ended December 25, 2004, December 27, 2003 and December 28, 2002 27 Consolidated Statements of Stockholders' Equity - Years ended December 25, 2004, December 27, 2003 and December 28, 2002 28 Consolidated Statements of Cash Flows - Years ended December 25, 2004, December 27, 2003 and December 28, 2002 29 Notes to Consolidated Financial Statements 31 The following consolidated financial statement schedule of the Company for the years ended December 25, 2004, December 27, 2003 and December 28, 2002 is submitted herewith: Schedule: II - Valuation and Qualifying Accounts 45 All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. 21 Report of Independent Registered Public Accounting Firm ------------------------------------------------------- The Board of Directors and Stockholders Publix Super Markets, Inc.: We have audited the accompanying consolidated balance sheets of Publix Super Markets, Inc. and subsidiaries (the "Company") as of December 25, 2004 and December 27, 2003, and the related consolidated statements of earnings, comprehensive earnings, stockholders' equity and cash flows for each of the years in the three-year period ended December 25, 2004. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedule 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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. and subsidiaries as of December 25, 2004 and December 27, 2003, and the results of their operations and their cash flows for each of the years in the three-year period ended December 25, 2004, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related 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. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company's internal control over financial reporting as of December 25, 2004, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 22, 2005 expressed an unqualified opinion on management's assessment of, and the effective operation of, internal control over financial reporting. KPMG LLP Tampa, Florida February 22, 2005 22 Report of Independent Registered Public Accounting Firm ------------------------------------------------------- The Board of Directors and Stockholders Publix Super Markets, Inc.: We have audited management's assessment, included in the accompanying Management's Report on Internal Control over Financial Reporting, that Publix Super Markets, Inc. and subsidiaries maintained effective internal control over financial reporting as of December 25, 2004, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an opinion on the effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, management's assessment that Publix Super Markets, Inc. and subsidiaries maintained effective internal control over financial reporting as of December 25, 2004, is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by COSO. Also, in our opinion, Publix Super Markets, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 25, 2004, based on criteria established in Internal Control - Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Publix Super Markets, Inc. and subsidiaries as of December 25, 2004 and December 27, 2003, and the related consolidated statements of earnings, comprehensive earnings, stockholders' equity and cash flows for each of the years in the three-year period ended December 25, 2004, and our report dated February 22, 2005 expressed an unqualified opinion on those consolidated financial statements. KPMG LLP Tampa, Florida February 22, 2005 23
PUBLIX SUPER MARKETS, INC. Consolidated Balance Sheets December 25, 2004 and December 27, 2003 Assets 2004 2003 ------ ---- ---- (Amounts are in thousands) Current assets: Cash and cash equivalents $ 370,288 277,072 Short-term investments 101,718 16,661 Trade receivables 289,455 241,101 Merchandise inventories 1,054,183 981,456 Deferred tax assets 71,934 55,479 Prepaid expenses 11,804 9,778 ---------- --------- Total current assets 1,899,382 1,581,547 ---------- --------- Long-term investments 918,443 380,852 Other noncurrent assets 18,372 1,119 Property, plant and equipment: Land 159,023 174,283 Buildings and improvements 1,096,776 1,108,605 Furniture, fixtures and equipment 3,160,507 2,936,339 Leasehold improvements 912,689 833,569 Construction in progress 72,765 88,015 ---------- --------- 5,401,760 5,140,811 Less accumulated depreciation 2,273,686 1,953,612 ---------- --------- Net property, plant and equipment 3,128,074 3,187,199 ---------- --------- $5,964,271 5,150,717 ========== ========= See accompanying notes to consolidated financial statements.
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Liabilities and Stockholders' Equity 2004 2003 ------------------------------------ ---- ---- (Amounts are in thousands, except par value and share amounts) Current liabilities: Accounts payable $ 762,655 724,228 Accrued expenses: Contribution to retirement plans 290,136 244,848 Self-insurance reserves 115,010 123,462 Salaries and wages 90,069 76,050 Other 187,451 190,510 ---------- --------- Total accrued expenses 682,666 634,870 ---------- --------- Federal and state income taxes 232,478 12,508 ---------- --------- Total current liabilities 1,677,799 1,371,606 Deferred tax liabilities, net 313,073 284,458 Self-insurance reserves 240,821 202,737 Accrued postretirement benefit cost 68,101 67,960 Other noncurrent liabilities 78,761 54,646 ---------- --------- Total liabilities 2,378,555 1,981,407 ---------- --------- Stockholders' equity: Common stock of $1 par value. Authorized 300,000,000 shares; issued and outstanding 172,591,732 shares in 2004 and 178,369,413 shares in 2003 172,592 178,369 Additional paid-in capital 630,983 494,154 Retained earnings 2,779,592 2,492,759 ---------- --------- 3,583,167 3,165,282 Accumulated other comprehensive earnings 2,549 4,028 ---------- --------- Total stockholders' equity 3,585,716 3,169,310 Commitments and contingencies --- --- ---------- --------- $5,964,271 5,150,717 ========== =========
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PUBLIX SUPER MARKETS, INC. Consolidated Statements of Earnings Years ended December 25, 2004, December 27, 2003 and December 28, 2002 2004 2003 2002 ---- ---- ---- (Amounts are in thousands, except shares outstanding and per share amounts) Revenues: Sales $ 18,554,486 16,760,749 15,851,301 Other operating income 131,885 126,120 121,296 ------------ ----------- ----------- Total revenues 18,686,371 16,886,869 15,972,597 ------------ ----------- ----------- Costs and expenses: Cost of merchandise sold 13,577,740 12,275,132 11,621,762 Operating and administrative expenses 3,869,791 3,613,759 3,381,244 ------------ ----------- ----------- Total costs and expenses 17,447,531 15,888,891 15,003,006 ------------ ----------- ----------- Operating profit 1,238,840 997,978 969,591 ------------ ----------- ----------- Investment income, net 35,311 21,926 16,477 Other income, net 20,860 27,185 16,762 ------------ ----------- ----------- Earnings before income tax expense 1,295,011 1,047,089 1,002,830 Income tax expense 475,628 386,156 370,426 ------------ ----------- ----------- Net earnings $ 819,383 660,933 632,404 ============ =========== =========== Weighted average number of common shares outstanding 176,775,733 184,112,742 194,466,212 ============ =========== =========== Basic and diluted earnings per common share based on weighted average shares outstanding $ 4.64 3.59 3.25 ============ =========== =========== See accompanying notes to consolidated financial statements.
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PUBLIX SUPER MARKETS, INC. Consolidated Statements of Comprehensive Earnings Years ended December 25, 2004, December 27, 2003 and December 28, 2002 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Net earnings $819,383 660,933 632,404 Other comprehensive earnings Unrealized gain (loss) on investment securities available-for-sale, net of tax effect of $419, $3,174 and ($456) in 2004, 2003 and 2002, respectively 668 5,055 (726) Reclassification adjustment for net realized (gain) loss on investment securities available-for-sale, net of tax effect of ($1,348), ($800) and $3,854 in 2004, 2003 and 2002, respectively (2,147) (1,274) 6,136 -------- ------- ------- Comprehensive earnings $817,904 664,714 637,814 ======== ======= ======= See accompanying notes to consolidated financial statements.
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PUBLIX SUPER MARKETS, INC. Consolidated Statements of Stockholders' Equity Years ended December 25, 2004, December 27, 2003 and December 28, 2002 Common Stock (Acquired Accumulated Total Additional From) Sold Other Stock- Common Paid-in Retained to Stock- Comprehensive holders' Stock Capital Earnings holders Earnings Equity ----- ------- -------- ------- -------- ------ (Amounts are in thousands, except per share and share amounts) Balances at December 29, 2001 $197,112 343,834 2,226,768 --- (5,163) 2,762,551 Comprehensive earnings for the year --- --- 632,404 --- 5,410 637,814 Cash dividends, $.33 per share --- --- (65,439) --- --- (65,439) Contribution of 4,801,677 shares to retirement plans 1,809 72,350 --- 122,710 --- 196,869 Acquired 14,558,822 shares from stockholders --- (703) --- (597,776) --- (598,479) Sale of 1,813,378 shares to stockholders 137 5,538 --- 69,077 --- 74,752 Retirement of 9,890,943 shares (9,890) --- (396,099) 405,989 --- --- -------- ------- --------- -------- ------ --------- Balances at December 28, 2002 189,168 421,019 2,397,634 --- 247 3,008,068 Comprehensive earnings for the year --- --- 660,933 --- 3,781 664,714 Cash dividends, $.40 per share --- --- (75,455) --- --- (75,455) Contribution of 5,298,904 shares to retirement plans 1,705 69,313 --- 132,990 --- 204,008 Acquired 17,631,828 shares from stockholders --- --- --- (694,669) --- (694,669) Sale of 1,534,568 shares to stockholders 102 3,822 --- 58,720 --- 62,644 Retirement of 12,605,111 shares (12,606) --- (490,353) 502,959 --- --- -------- ------- --------- -------- ------ --------- Balances at December 27, 2003 178,369 494,154 2,492,759 --- 4,028 3,169,310 Comprehensive earnings for the year --- --- 819,383 --- (1,479) 817,904 Cash dividends, $.45 per share --- --- (80,764) --- --- (80,764) Contribution of 3,845,892 shares to retirement plans 2,506 133,243 --- 62,314 --- 198,063 Acquired 11,079,191 shares from stockholders --- --- --- (598,516) --- (598,516) Sale of 1,455,618 shares to stockholders 71 3,586 --- 76,062 --- 79,719 Retirement of 8,354,336 shares (8,354) --- (451,786) 460,140 --- --- -------- ------- --------- -------- ------ --------- Balances at December 25, 2004 $172,592 630,983 2,779,592 --- 2,549 3,585,716 ======== ======= ========= ======== ====== ========= See accompanying notes to consolidated financial statements.
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PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows Years ended December 25, 2004, December 27, 2003 and December 28, 2002 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Cash flows from operating activities: Cash received from customers $ 18,541,695 16,752,469 15,867,962 Cash paid to employees and suppliers (16,611,646) (15,044,383) (14,313,864) Income taxes paid (242,569) (344,364) (307,799) Payment for self-insured claims (185,869) (179,424) (153,674) Dividends and interest received 33,230 20,900 27,363 Other operating cash receipts 117,416 108,072 101,647 Other operating cash payments (9,079) (9,613) (10,649) ------------ ----------- ----------- Net cash provided by operating activities 1,643,178 1,303,657 1,210,986 ------------ ----------- ----------- Cash flows from investing activities: Payment for property, plant and equipment (403,373) (563,576) (635,891) Proceeds from sale of property, plant and equipment 69,254 35,679 15,512 Proceeds from sale-leasebacks 25,961 8,098 --- Payment for investment securities - available-for-sale (AFS) (793,487) (340,499) (265,381) Proceeds from sale and maturity of investment securities - AFS 159,811 327,485 259,622 Net (payments) proceeds to/from joint ventures and other investments (7,244) 6,528 644 Other, net (1,192) (212) 32 ------------ ----------- ----------- Net cash used in investing activities (950,270) (526,497) (625,462) ------------ ----------- ----------- Cash flows from financing activities: Payment for acquisition of common stock (598,516) (694,669) (598,479) Proceeds from sale of common stock 79,719 62,644 74,752 Dividends paid (80,764) (75,455) (65,439) Other, net (131) (131) (131) ------------ ----------- ----------- Net cash used in financing activities (599,692) (707,611) (589,297) ------------ ----------- ----------- Net increase (decrease) in cash and cash equivalents 93,216 69,549 (3,773) Cash and cash equivalents at beginning of year 277,072 207,523 211,296 ------------ ----------- ----------- Cash and cash equivalents at end of year $ 370,288 277,072 207,523 ============ =========== =========== See accompanying notes to consolidated financial statements.
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PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows (Continued) 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Reconciliation of net earnings to net cash provided by operating activities Net earnings $ 819,383 660,933 632,404 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 379,920 343,997 309,793 Retirement contributions paid or payable in common stock 244,087 199,620 213,722 Deferred income taxes 13,089 45,415 59,526 Loss on sale of property, plant and equipment 13,582 21,578 28,977 Amortization of deferred income from sale-leasebacks (2,235) (483) --- (Gain) loss on sale of investments (3,495) (2,074) 9,990 Self-insurance reserves in excess of current payments 29,632 46,582 39,095 Postretirement accruals in excess of (less than) current payments 141 (1,102) (1,089) Increase (decrease) in advance purchase allowances 119 (2,466) (6,721) Other, net 4,952 1,531 3,120 Change in cash from: Trade receivables (48,354) (53,024) (16,199) Merchandise inventories (72,727) (59,213) (82,128) Prepaid expenses (2,026) (5,515) (1,262) Accounts payable and accrued expenses 47,140 111,501 18,657 Federal and state income taxes 219,970 (3,623) 3,101 ---------- --------- --------- Total adjustments 823,795 642,724 578,582 ---------- --------- --------- Net cash provided by operating activities $1,643,178 1,303,657 1,210,986 ========== ========= ========= See accompanying notes to consolidated financial statements.
30 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements December 25, 2004, December 27, 2003 and December 28, 2002 (1) Summary of Significant Accounting Policies ------------------------------------------ (a) Business -------- The Company is in the primary business of operating retail food supermarkets in Florida, Georgia, South Carolina, Alabama and Tennessee. The Company operates in a single industry segment. (b) Principles of Consolidation --------------------------- The consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Fiscal Year ----------- The fiscal year ends on the last Saturday in December. Fiscal years 2004, 2003 and 2002 include 52 weeks. (d) Cash Equivalents ---------------- The Company considers all liquid investments with maturities of three months or less to be cash equivalents. (e) Trade Receivables ----------------- Trade receivables primarily includes amounts due from vendor allowances, debit and credit card sales and third party insurance pharmacy billings. (f) Inventories ----------- Inventories are valued at the lower of cost or market. The cost for approximately 86% and 87% of inventories was determined using the dollar value last-in, first-out method as of December 25, 2004 and December 27, 2003, respectively. The cost of all remaining inventories was determined using the first-in, first-out ("FIFO") method. The FIFO cost of inventory approximates replacement or current cost. (g) Investments ----------- The Company 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 investment income, net. The Company had no held-to-maturity securities as of December 25, 2004 and December 27, 2003. 31 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements All of the Company's debt 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 investment income, net. The Company reviews its investments for impairment based on criteria that include the extent to which cost exceeds market value, the duration of the market decline and the financial health of and prospects for the issuer. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in investment income, net. The cost of securities sold is based on the specific identification method. Interest income is accrued as earned. Dividend income is recognized as income on the ex-dividend date of the stock. The Company also from time to time holds investments in joint ventures, partnerships or other equity investments for which evaluation of the existence and quantification of other-than-temporary declines in value may be required. Realized gains and losses and declines in value judged to be other-than-temporary on other investments are included in investment income, net. (h) Property, Plant and Equipment and Depreciation ---------------------------------------------- Assets are recorded at cost and are depreciated using the straight-line method over their estimated useful lives or the terms of their leases, if shorter, as follows: Buildings and improvements 10 - 40 years Furniture, fixtures and equipment 3 - 20 years Leasehold improvements 10 - 40 years In 2002, the Company changed its useful life for leasehold improvement additions for new and existing stores to the lesser of 20 years or the terms of the applicable leases. The Company considers lease renewals in the useful life of its leasehold improvements when such renewals are reasonably assured. Maintenance and repairs are charged to operating expenses as incurred. Expenditures for renewals and betterments are capitalized. The gain or loss realized on disposed assets or assets to be disposed of is recorded in operating and administrative expenses in the consolidated statements of earnings. (i) Capitalized Computer Software Costs ----------------------------------- The Company capitalizes certain costs incurred in connection with developing or obtaining software for internal use. These costs are capitalized and amortized over a three year life. The amounts capitalized were approximately $17,444,000, $22,351,000 and $26,282,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. 32 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (j) Long-Lived Assets ----------------- The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the net book value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the net book value of an asset to the future net undiscounted cash flows expected to be generated by the asset. An impairment loss would be recorded for the excess of the net book value over the fair value of the asset impaired. The fair value is estimated based on expected discounted future cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell and are no longer depreciated. (k) 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. (l) Comprehensive Earnings ---------------------- Comprehensive earnings includes net earnings and other comprehensive earnings. Other comprehensive earnings includes revenues, expenses, gains and losses that have been excluded from net earnings and recorded directly to stockholders' equity. Included in other comprehensive earnings for the Company are unrealized gains and losses on available-for-sale securities net of income taxes. (m) Revenue Recognition ------------------- Revenue is recognized at the point of sale for retail sales. Vendor coupons that are reimbursed are accounted for as sales. Coupons and other sales incentives offered by the Company that are not reimbursed are recorded as a reduction of sales. (n) Other Operating Income ---------------------- Other operating income includes income generated from other activities conducted in the Company's stores, primarily automated teller transactions, lottery commissions, check cashing fees, commissions on licensee sales, coupon handling fees, money transfer and money order fees, vending machine commissions and in-store subleases. (o) Cost of Merchandise Sold ------------------------ Cost of merchandise sold includes costs of inventory and costs related to in-store production. Cost of merchandise sold also includes inbound freight charges, purchasing and receiving costs, warehousing costs and other costs of the Company's distribution network. 33 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements Vendor allowances and credits, including cooperative advertising fees, received from a vendor in connection with the purchase or promotion of the vendor's products, are recognized as a reduction of cost of merchandise sold as earned. These allowances and credits are recognized as earned in accordance with the underlying agreement with the vendor and completion of the earning process. Short-term vendor agreements with advance payment provisions are recorded as a current liability and are recognized over the appropriate period as earned according to the underlying agreement. Long-term vendor agreements with advance payment provisions are recorded as a noncurrent liability and are recognized over the appropriate period as earned according to the underlying agreement. During 2003, the Company modified its calculation of cost of merchandise sold to improve the comparability of its gross profit to others in the food retailing industry. (p) Advertising Costs ----------------- Advertising costs are expensed as incurred and were approximately $140,668,000, $125,209,000 and $116,210,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. (q) Other Income, net ----------------- Other income, net includes rent received from shopping center operations, net of related expenses and other miscellaneous nonoperating income. (r) Income Taxes ------------ Deferred tax assets and liabilities are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse. (s) Earnings Per Share ------------------ Basic and diluted earnings per common share are calculated by dividing net earnings by the weighted average number of common shares outstanding. Basic and diluted earnings per common share are the same because the Company does not have options or other stock compensation programs that would impact the calculation of diluted earnings per share. (t) Use of Estimates ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of 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. (u) Reclassifications ----------------- Certain 2003 and 2002 amounts have been reclassified to conform with the 2004 presentation. 34 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (2) Merchandise Inventories ----------------------- If the first-in, first-out method of valuing inventories had been used by the Company to value all inventories, inventories and current assets would have been higher than reported by approximately $141,808,000, $127,989,000 and $117,581,000 as of December 25, 2004, December 27, 2003 and December 28, 2002, respectively. (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 debt and marketable equity ---------------------- securities are based on quoted market prices. The carrying amount of the Company's other financial instruments as of December 25, 2004 and December 27, 2003 approximated their respective fair values. All other investments are accounted for using the equity method. The carrying amount of other investments approximates fair value. 35 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (4) Investments ----------- Following is a summary of investments as of December 25, 2004 and December 27, 2003: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value ---- ----- ------ ----- (Amounts are in thousands) 2004 ---- Available-for-sale: Tax exempt bonds $ 408,393 1,222 2,539 407,076 Taxable bonds 533,903 1,925 4,241 531,587 Equity securities 41,124 7,856 74 48,906 ---------- ------ ----- --------- 983,420 11,003 6,854 987,569 Other investments 32,592 --- --- 32,592 ---------- ------ ----- --------- $1,016,012 11,003 6,854 1,020,161 ========== ====== ===== ========= 2003 ---- Available-for-sale: Tax exempt bonds $ 144,352 2,082 2,055 144,379 Taxable bonds 131,584 457 2,049 129,992 Equity securities 85,122 8,630 508 93,244 ---------- ------ ----- --------- 361,058 11,169 4,612 367,615 Other investments 29,898 --- --- 29,898 ---------- ------ ----- --------- $ 390,956 11,169 4,612 397,513 ========== ====== ===== ========= The realized gains on sales of available-for-sale securities totaled approximately $5,462,000, $4,544,000 and $5,957,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively, and the realized losses totaled approximately $1,967,000, $2,470,000 and $15,947,000, respectively. The net realized gains on other investments totaled approximately $3,930,000, $259,000 and $1,903,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. 36 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements The amortized cost and estimated fair value of debt and marketable equity securities classified as available-for-sale and other investments as of December 25, 2004 and December 27, 2003, by expected maturity, are as follows: 2004 2003 -------------------- -------------------- Amortized Fair Amortized Fair Cost Value Cost Value ---- ----- ---- ----- (Amounts are in thousands) Due in one year or less $ 101,771 101,718 16,681 16,661 Due after one year through five years 207,800 206,933 55,964 56,897 Due after five years through ten years 65,896 65,786 47,818 47,325 Due after ten years 566,829 564,226 155,473 153,488 ---------- --------- ------- ------- 942,296 938,663 275,936 274,371 Equity securities 41,124 48,906 85,122 93,244 Other investments 32,592 32,592 29,898 29,898 ---------- --------- ------- ------- $1,016,012 1,020,161 390,956 397,513 ========== ========= ======= ======= Following is a summary of temporarily impaired investments as of December 25, 2004: Less Than 12 Months 12 Months or Longer Total --------- --------- ----- Unreal- Unreal- Unreal- Fair ized Fair ized Fair ized Value Losses Value Losses Value Losses ----- ------ ----- ------ ----- ------ (Amounts are in thousands) 2004 ---- Tax exempt bonds $286,815 1,722 25,696 817 312,511 2,539 Taxable bonds 294,955 2,994 48,097 1,247 343,052 4,241 Equity securities 3,798 17 126 57 3,924 74 -------- ----- ------ ----- ------- ----- Total temporarily impaired investments $585,568 4,733 73,919 2,121 659,487 6,854 ======== ===== ====== ===== ======= ===== The Company believes the unrealized losses presented above are temporary. To make this determination, management reviews the credit worthiness of the issuers as well as underlying factors mitigating risk of loss of principal or default of interest payments. There are 179 investment issues contributing to the total unrealized loss of $6,854,000. Of this amount, $6,780,000 or 99% of the unrealized loss is driven by changes in interest rates impacting the market value of the tax exempt and taxable bonds owned by the Company. The Company continues to receive scheduled principal and interest payments on these investments. 37 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (5) 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 postretirement life insurance benefits. Effective January 1, 2002, the Company amended the plan's eligibility requirements. As of October 1, 2001, an employee must have had at least five years of full-time service and the employee's age plus years of credited service must have equaled 65 or greater to retain postretirement life insurance benefits at retirement. In addition, the employee must be at least age 55 with ten years of full-time service at retirement to receive the benefit. The Company funds the life insurance benefits on a pay-as-you-go basis. The Company made benefit payments to beneficiaries of retirees of approximately $2,140,000, $2,255,000 and $1,879,000 during the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. The following tables provide a reconciliation of the changes in the benefit obligations and fair value of plan assets measured as of October 1, and a statement of the funded status as of December 25, 2004 and December 27, 2003: 2004 2003 ---- ---- (Amounts are in thousands) Change in benefit obligation: Benefit obligation as of beginning of year $ 72,702 62,297 Service cost 674 775 Interest cost 4,337 4,191 Actuarial loss 4,601 7,694 Benefit payments (2,140) (2,255) -------- ------- Benefit obligation as of end of year $ 80,174 72,702 ======== ======= Change in fair value of plan assets: Fair value of plan assets as of beginning of year $ --- --- Employer contributions 2,140 2,255 Benefit payments (2,140) (2,255) -------- ------- Fair value of plan assets as of end of year $ --- --- ======== ======= Funded status $(80,174) (72,702) Unrecognized actuarial loss 18,594 15,338 Unrecognized prior service cost (6,521) (10,596) -------- ------- Accrued postretirement benefit cost $(68,101) (67,960) ======== ======= 38 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements Following are the actuarial assumptions that were used in the calculation of the year end benefit obligation: 2004 2003 2002 ---- ---- ---- Discount rate 5.75% 6.00% 6.75% Rate of compensation increase 4.00% 4.00% 4.00% Net periodic postretirement benefit cost consists of the following components: 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Service cost $ 674 775 830 Interest cost 4,337 4,191 4,035 Amortization of prior service cost (4,075) (4,075) (4,075) Recognized actuarial loss 1,345 262 --- ------- ------ ------ Net periodic postretirement benefit cost $ 2,281 1,153 790 ======= ====== ====== 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. Following are the actuarial assumptions that were used in the calculation of the net periodic postretirement benefit cost: 2004 2003 2002 ---- ---- ---- Discount rate 6.00% 6.75% 7.25% Rate of compensation increase 4.00% 4.00% 4.00% The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year ---- (Amounts are in thousands) 2005 $ 2,433 2006 2,686 2007 2,939 2008 3,197 2009 3,457 2010 through 2014 21,431 39 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (6) Retirement Plans ---------------- The Company has a trusteed, noncontributory Employee Stock Ownership Plan (ESOP) for the benefit of eligible employees. The amount of the Company's discretionary contribution to the ESOP is determined annually by the Board of Directors and can be made in Company common stock or cash. The expense recorded for contributions to this plan was approximately $228,585,000, $184,849,000 and $198,315,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. 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 10% of their eligible annual compensation, subject to the maximum contribution limits established by Federal law. The Company may make a discretionary annual matching contribution to eligible participants of this plan as determined by the Board of Directors. During 2004, 2003 and 2002, the Board of Directors approved a match of 50% of eligible contributions up to 3% of eligible wages, not to exceed a maximum match of $750 per employee. The match, which is determined as of the last day of the plan year and paid in the subsequent plan year, is in common stock of the Company. The expense recorded for the Company's match to the 401(k) plan was approximately $15,502,000, $14,771,000 and $15,407,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. The Company intends to continue its retirement plans; 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. (7) Income Taxes ------------ The provision for income taxes consists of the following: Current Deferred Total ------- -------- ----- (Amounts are in thousands) 2004 ---- Federal $400,202 13,899 414,101 State 62,337 (810) 61,527 -------- ------ ------- $462,539 13,089 475,628 ======== ====== ======= 2003 ---- Federal $294,488 39,021 333,509 State 46,253 6,394 52,647 -------- ------ ------- $340,741 45,415 386,156 ======== ====== ======= 2002 ---- Federal $270,386 50,411 320,797 State 41,510 8,119 49,629 -------- ------ ------- $311,896 58,530 370,426 ======== ====== ======= 40 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements The actual tax expense for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002 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: 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Computed "expected" tax expense $453,254 366,481 350,991 State income taxes (net of Federal income tax benefit) 39,993 34,221 32,259 Tax exempt interest (3,973) (3,210) (4,088) Other, net (13,646) (11,336) (8,736) -------- ------- ------- $475,628 386,156 370,426 ======== ======= ======= The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 25, 2004 and December 27, 2003 are as follows: 2004 2003 ---- ---- (Amounts are in thousands) Deferred tax assets: Self-insurance reserves $125,254 115,682 Retirement plan contributions 29,863 24,217 Postretirement benefit cost 26,272 26,206 Reserves not currently deductible 17,602 16,308 Advance purchase allowances 11,197 11,226 Inventory capitalization 6,526 7,760 Other 6,370 1,547 -------- ------- Total deferred tax assets $223,084 202,946 ======== ======= Deferred tax liabilities: Property, plant and equipment, principally due to depreciation $454,134 417,327 Other 10,089 14,598 -------- ------- Total deferred tax liabilities $464,223 431,925 ======== ======= The Company expects the results of future operations and the reversal of deferred tax liabilities to generate sufficient taxable income to allow utilization of net deferred tax assets; therefore, no valuation allowance has been recorded as of December 25, 2004 and December 27, 2003. 41 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (8) PublixDirect Closure -------------------- During the third quarter of 2003, the Company announced its decision to close its online grocery shopping service operated under its wholly owned subsidiary, PublixDirect. As a result of the decision to close PublixDirect effective August 23, 2003, the Company recorded an expense of $30.0 million during the third quarter of 2003. The expense recorded represented approximately $17.0 million in asset impairments, $10.0 million in operating lease obligations and $3.0 million in payroll obligations and other costs. The expense was recognized in the Company's consolidated statements of earnings and is included in operating and administrative expenses. The impact of the expense recorded on net earnings was approximately $18.0 million or $.10 per share for the fiscal year ended December 27, 2003. (9) Commitments and Contingencies ----------------------------- (a) Operating Leases ---------------- The Company conducts a major portion of its retail operations from leased store premises. Initial terms of the leases are typically 20 years, followed by renewal options at five year intervals and may include rent escalation clauses. Contingent rentals include reimbursement of real estate taxes, insurance and maintenance and in certain stores, additional rentals based on a percentage of sales in excess of stipulated minimums. The reimbursement of real estate taxes, insurance and maintenance is generally based on the Company's prorata share using square footage. The Company recognizes rent expense for operating leases with step rent provisions and escalation clauses on a straight-line basis over the applicable lease term. As of December 25, 2004, less than 10.0% of the Company's store leases include rent escalation clauses during the initial term or the renewal options. Total rental expense for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, is as follows: 2004 2003 2002 ---- ---- ---- (Amounts are in thousands) Minimum rentals $320,365 295,539 257,258 Contingent rentals 7,851 6,392 8,949 Sublease rental income (10,087) (10,105) (10,181) -------- ------- ------- $318,129 291,826 256,026 ======== ======= ======= 42 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements As of December 25, 2004, 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) 2005 $ 336,938 8,637 328,301 2006 332,505 6,499 326,006 2007 322,371 4,005 318,366 2008 311,567 1,756 309,811 2009 300,226 670 299,556 Thereafter 2,719,533 547 2,718,986 ---------- ------ --------- $4,323,140 22,114 4,301,026 ========== ====== ========= The Company also owns shopping centers which are leased to tenants for minimum monthly rentals plus, in certain instances, contingent rentals. Contingent rentals include reimbursement of real estate taxes, insurance and maintenance and in certain instances, additional rentals based on a percentage of sales in excess of stipulated minimums. Contingent rentals are included in trade receivables and were approximately $1,604,000 and $1,262,000 as of December 25, 2004 and December 27, 2003, respectively. Rental income was approximately $15,048,000, $16,789,000 and $14,057,000 for the fiscal years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. The approximate amounts of minimum future rental payments to be received under noncancelable operating leases are $12,779,000, $10,645,000, $8,244,000, $5,983,000 and $4,380,000 for the years 2005 through 2009, respectively, and $19,126,000 thereafter. (b) Line of Credit -------------- The Company's committed line of credit totaling $100 million expired on December 31, 2004. This 364-day line of credit facility was available to fund liquidity requirements if necessary. The interest rate was based on LIBOR or prime. There were no amounts outstanding on this line of credit as of December 25, 2004. Since the Company did not require additional liquidity, this line of credit facility was not renewed. (c) Litigation ---------- The Company is 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, results of operations or cash flows. 43 (Continued) PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (10) Quarterly Information (unaudited) --------------------------------- Following is a summary of the quarterly results of operations for the fiscal years ended December 25, 2004 and December 27, 2003. All quarters have 13 weeks. Quarter Ended ---------------------------------------------------- March June September December ----- ---- --------- -------- (Amounts are in thousands, except per share amounts) 2004 ---- Revenues $4,682,820 4,527,748 4,662,731 4,813,072 Costs and expenses $4,369,490 4,221,165 4,391,943 4,464,933 Net earnings $ 203,396 199,409 183,711 232,867 Basic and diluted earnings per common share, based on weighted average shares outstanding $ 1.14 1.11 1.04 1.34 2003 ---- Revenues $4,329,575 4,119,603 4,076,324 4,361,367 Costs and expenses $4,042,182 3,873,510 3,880,804 4,092,395 Net earnings $ 187,108 161,510 134,570 177,745 Basic and diluted earnings per common share, based on weighted average shares outstanding $ .99 .87 .74 .99 44
Schedule II ----------- PUBLIX SUPER MARKETS, INC. Valuation and Qualifying Accounts Years ended December 25, 2004, December 27, 2003 and December 28, 2002 (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, 2004 Reserves not deducted from assets: Self-insurance reserves: -Current $123,462 177,417 185,869 115,010 -Noncurrent 202,737 38,084 --- 240,821 -------- ------- ------- ------- $326,199 215,501 185,869 355,831 ======== ======= ======= ======= Year ended December 27, 2003 Reserves not deducted from assets: Self-insurance reserves: -Current $102,722 200,164 179,424 123,462 -Noncurrent 176,895 25,842 --- 202,737 -------- ------- ------- ------- $279,617 226,006 179,424 326,199 ======== ======= ======= ======= Year ended December 28, 2002 Reserves not deducted from assets: Self-insurance reserves: -Current $103,048 153,348 153,674 102,722 -Noncurrent 137,474 39,421 --- 176,895 -------- ------- ------- ------- $240,522 192,769 153,674 279,617 ======== ======= ======= =======
45 Item 9. Changes in and Disagreements with Accountants on Accounting and - -------------------------------------------------------------------------------- Financial Disclosure -------------------- None Item 9A. Controls and Procedures - -------------------------------- Disclosure Controls and Procedures - ---------------------------------- As of the end of the period covered by this annual report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange Commission filings. There have been no significant changes in the Company's internal control over financial reporting during the quarter ended December 25, 2004, that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. Internal Control over Financial Reporting - ----------------------------------------- Management's report on the Company's internal control over financial reporting is included on page 20 of this report. The independent registered public accounting firm has issued their report, included herein on page 23, (1) on management's assessment of the effectiveness of internal control over financial reporting and (2) on the effectiveness of internal control over financial reporting. Item 9B. Other Information - -------------------------- None 46 PART III Item 10. Directors and Executive Officers of the Registrant - ----------------------------------------------------------- Certain information concerning the directors and executive officers of the Company is incorporated by reference to pages 2 through 8 of the Proxy Statement of the Company (2005 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." The Company has adopted a Code of Ethical Conduct for Financial Managers that applies to the Company's principal executive officer, principal financial officer, principal accounting officer or controller and all persons performing similar functions. A copy of the Code of Ethical Conduct for Financial Managers was filed as Exhibit 14 to the Annual Report of the Company on Form 10-K for the year ended December 28, 2002. Item 11. Executive Compensation - ------------------------------- Information regarding executive compensation is incorporated by reference to page 5 and pages 8 through 11 of the 2005 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management - ----------------------------------------------------------------------- Information regarding security ownership is incorporated by reference to pages 6 through 8 of the 2005 Proxy Statement. Item 13. Certain Relationships and Related Transactions - ------------------------------------------------------- Information regarding certain relationships and related transactions is incorporated by reference to pages 3 and 8 of the 2005 Proxy Statement. Item 14. Principal Accounting Fees and Services - ----------------------------------------------- Information regarding principal accounting fees and services is incorporated by reference to page 12 of the 2005 Proxy Statement. 47 PART IV Item 15. Exhibits, Financial Statement Schedules - ------------------------------------------------ (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) 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 quarterly report of the Company on Form 10-Q for the quarter ended June 29, 2002. 10. Indemnification Agreement, in the form attached as an exhibit to the quarterly report of the Company on Form 10-Q for the quarter ended March 31, 2001, between the Company and all of its directors and officers as reported in the quarterly and annual reports of the Company on Form 10-Q and Form 10-K for the periods ended March 31, 2001, June 30, 2001, September 29, 2001, June 29, 2002, December 28, 2002, September 27, 2003, December 27, 2003 and March 27, 2004. 10.1 Non-Employee Directors Stock Purchase Plan Summary Plan Description, as registered in the Form S-8 filed with the Securities and Exchange Commission on June 21, 2001, is incorporated by reference to the exhibits to the quarterly report of the Company on Form 10-Q for the quarter ended June 30, 2001. 10.2 Incentive Bonus Plan 14. Code of Ethical Conduct for Financial Managers is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 28, 2002. 21. Subsidiaries of the Registrant. 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 48 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PUBLIX SUPER MARKETS, INC. March 2, 2005 By: /s/ John A. Attaway, Jr. -------------------------- John A. Attaway, Jr. 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 registrant and in the capacities and on the dates indicated. /s/ Carol Jenkins Barnett Director March 2, 2005 - --------------------------- Carol Jenkins Barnett /s/ Hoyt R. Barnett Vice Chairman and Director March 2, 2005 - --------------------------- Hoyt R. Barnett /s/ Joan G. Buccino Director March 2, 2005 - --------------------------- Joan G. Buccino /s/ William E. Crenshaw President and Director March 2, 2005 - --------------------------- William E. Crenshaw /s/ Mark C. Hollis Director March 2, 2005 - --------------------------- Mark C. Hollis /s/ Sherrill W. Hudson Director March 2, 2005 - --------------------------- Sherrill W. Hudson Chief Executive Officer and Director /s/ Charles H. Jenkins, Jr. (Principal Executive Officer) March 2, 2005 - --------------------------- Charles H. Jenkins, Jr. Chairman of the Board and /s/ Howard M. Jenkins Director March 2, 2005 - --------------------------- Howard M. Jenkins /s/ E. Vane McClurg Director March 2, 2005 - --------------------------- E. Vane McClurg /s/ Kelly E. Norton Director March 2, 2005 - --------------------------- Kelly E. Norton Chief Financial Officer and Treasurer (Principal Financial and /s/ David P. Phillips Accounting Officer) March 2, 2005 - --------------------------- David P. Phillips 49 EX-10 3 k2004ex102.txt EX 10.2, INCENTIVE BONUS PLAN Exhibit 10.2 PUBLIX SUPER MARKETS, INC. Incentive Bonus Plan Purpose - ------- The purpose of the Company's incentive bonus plan is to provide an incentive in the form of an annual cash bonus to all executive officers and certain staff employees of the Company for achieving the Company's sales and profit goals. Approval - -------- The incentive bonus plan is approved by the Compensation Committee as to executive officers and by the Executive Committee as to the staff employees. Although the Company has a defined method for calculating the incentive bonus, these Committees retain the right to alter or discontinue the incentive bonus at their discretion at any time for the employees within their approval authority. Eligibility and Payment - ----------------------- The incentive bonus compensates the executive officers and staff employees for their services during the calendar year and the employees must be employed at the end of the calendar year to participate in the incentive bonus. The annual bonuses are paid in the year following the year earned. Incentive Bonus Calculation - --------------------------- The Company's incentive bonus plan is based on a target bonus equal to two months pay for all full incentive bonus participants (participants generally transition in to the incentive bonus over a two year period). The formula for the incentive bonus plan is based on the Company achieving its sales and profit goals for the fiscal year and thus paying the target bonus. The incentive bonus would be more or less than the target bonus based on the Company's actual results compared to its sales and profit goals. There is no incentive bonus unless greater than 80% of the target profit is achieved. In general, the incentive bonus pool is allocated to the executive officers and staff employees according to their relative base compensation amounts paid to them during the calendar year for which the incentive bonus is being paid. EX-21 4 k2004ex21.txt EX 21, SUBSIDIARIES OF REGISTRANT Exhibit 21 PUBLIX SUPER MARKETS, INC. Subsidiaries of the Registrant Publix Alabama, LLC (filed in Alabama) PublixDirect, LLC (filed in Florida) Publix Asset Management Company (filed in Florida) Publix Tennessee, LLC (filed in Florida) Real Sub, LLC (filed in Florida) Lone Palm Golf Club, LLC (filed in Florida) PTO, LLC (filed in Florida) EX-31 5 k2004ex311.txt EX 31.1, CERTIFICATION - SECTION 302, CEO Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Certification - ------------- I, Charles H. Jenkins, Jr., certify that: 1. I have reviewed this annual report on Form 10-K of Publix Super Markets, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 2, 2005 /s/ Charles H. Jenkins, Jr. - --------------------------- Charles H. Jenkins, Jr. Chief Executive Officer EX-31 6 k2004ex312.txt EX 31.2, CERTIFICATION - SECTION 302, CFO Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Certification - ------------- I, David P. Phillips, certify that: 1. I have reviewed this annual report on Form 10-K of Publix Super Markets, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 2, 2005 /s/ David P. Phillips - ------------------------------------- David P. Phillips Chief Financial Officer and Treasurer EX-32 7 k2004ex321.txt EX 32.1, CERTIFICATION - SECTION 906, CEO Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The certification set forth below is being submitted in connection with the Annual Report of Publix Super Markets, Inc. (the "Company") on Form 10-K for the period ending December 25, 2004 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code. I, Charles H. Jenkins, Jr., Chief Executive Officer of the Company, certify, to the best of my knowledge, that on the date hereof: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Charles H. Jenkins, Jr. - --------------------------- Charles H. Jenkins, Jr. Chief Executive Officer March 2, 2005 EX-32 8 k2004ex322.txt EX 32.2, CERTIFICATION - SECTION 906, CFO Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The certification set forth below is being submitted in connection with the Annual Report of Publix Super Markets, Inc. (the "Company") on Form 10-K for the period ending December 25, 2004 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code. I, David P. Phillips, Chief Financial Officer and Treasurer of the Company, certify, to the best of my knowledge, that on the date hereof: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ David P. Phillips - ------------------------------------- David P. Phillips Chief Financial Officer and Treasurer March 2, 2005 COVER 9 filename9.txt March 10, 2005 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549-1004 Attention: Filing Desk< Stop 1-4 Ladies and Gentlemen: RE: File number 0-981 Enclosed is our Form 10-K for the fiscal year ended December 25, 2004, filed electronically through EDGAR. Sincerely, Publix Super Markets, Inc. /s/ John A. Attaway, Jr. - ------------------------ John A. Attaway, Jr. Secretary JAA/kl Enclosures -----END PRIVACY-ENHANCED MESSAGE-----