10-K 1 PUBLIX SUPERMARKETS 10-K 12/31/94 1 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 31, 1994 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to --------- -------- Commission file number 0-981 ----- PUBLIX SUPER MARKETS, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Florida 59-0324412 ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1936 George Jenkins Boulevard Lakeland, Florida 33801 ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (813) 688-1188 -------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock $1.00 Par Value Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The aggregate market value of the voting stock held by non-affiliates of the Registrant as of February 24, 1995 was approximately $1,527,846,623. The number of shares of Registrant's common stock outstanding as of February 24, 1995 was 230,162,505. DOCUMENTS INCORPORATED BY REFERENCE Pages 2 through 8 of Proxy Statement solicited for the 1995 Annual Meeting of Stockholders to be held on May 16, 1995 is incorporated by reference in Items 10, 11 and 13 of Part III hereof. 2 PART I Item 1. Business Publix Super Markets, Inc. (the "Company") is based in Lakeland, Florida and was incorporated in Florida on December 27, 1921. The Company is in the business of operating retail food supermarkets in Florida, Georgia and South Carolina. The Company's supermarkets sell groceries, produce, deli, bakery, meat, seafood, housewares and health and beauty care items. In addition, some stores have pharmacy, photo and floral departments. The Company's lines of merchandise include a variety of nationally advertised and private label brands, as well as unbranded merchandise such as produce, meat and seafood. Private label items are produced in the Company's manufacturing facilities or are manufactured for the Company by outside suppliers. The Company manufactures dairy, bakery and deli products. The Company's dairy plants are located in Lakeland and Deerfield Beach, Florida. The bakery and deli plants are located in Lakeland, Florida. The Company receives the food and non-food items it distributes from many sources throughout the United States. These products are generally available in sufficient quantities to enable the Company to adequately satisfy its customers. The Company believes that its sources of supply of these products and raw materials used in manufacturing are adequate for its needs and that it is not dependent upon a single or relatively few suppliers. The Company operated 470 supermarkets at the end of 1994, compared with 425 at the beginning of the year. In 1994, 50 stores were opened, five stores were closed, and 18 stores were expanded or remodeled. The net increase in square footage was 2.4 million or 13.6% since 1993. The Company entered the Georgia market in 1991 and the South Carolina market in 1993. At the end of 1994, the Company had 427 stores located in Florida, 37 located in Georgia and six located in South Carolina. As of year end, the Company had four stores under construction in South Carolina, 12 in Georgia and 16 in Florida. During 1994, the Company completed construction of a new general merchandise warehouse in Lakeland, Florida and partially completed construction on a new distribution facility in Lawrenceville, Georgia. The Company is engaged in a highly competitive industry. Competition, based primarily on price, quality of goods and service, convenience and product mix, is with several national and regional chains, independent stores and mass merchandisers throughout its market areas. The Company anticipates continued competitor format innovation and location additions in 1995. The influx of winter residents to Florida and increased purchases of food during the traditional Thanksgiving and Christmas holidays typically results in seasonal sales increases between November and April of each year. The Company has experienced no significant changes in the kinds of products sold or in its methods of distribution since the beginning of the fiscal year. The Company had approximately 90,000 employees at the end of 1994, compared with 82,000 at the beginning of the year. Of this total, approximately 58,000 at the end of 1994 and 53,000 at the end of 1993 were not full-time employees. The Company's research and development expenses are insignificant. 3 Compliance by the Company with Federal, state and local environmental protection laws during 1994 had no material effect upon capital expenditures, earnings or the competitive position of the Company. Item 2. Properties At year end, the Company operated approximately 20.5 million square feet of retail space. The Company's stores vary in size. Current store prototypes range from 27,000 to 65,000 square feet. Stores are often located in strip shopping centers where the Company is the anchor tenant. The majority of the Company's retail stores are leased. Substantially all of these leases will expire during the next 20 years. However, in the normal course of business, it is expected that the leases will be renewed or replaced by leases on other properties. At 38 locations both the building and land are owned and at 21 other locations the building is owned while the land is leased. The Company supplies its retail stores from eight distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Florida, and Lawrenceville, Georgia. With the exception of a portion of the Miami distribution facility, the Company's corporate offices, distribution facilities and manufacturing plants are owned with no outstanding debt. All of the Company's properties are well maintained and in good operating condition, and suitable and adequate for operating its business. Item 3. Legal Proceedings A notice of charge was issued by the Equal Employment Opportunity Commission ("EEOC") on March 25, 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., Charge No. ###-##-####, alleging that the Company had engaged in past violations and was engaged in continuing violations of Title VII of the Civil Rights Act, as amended, by discriminating against women with respect to job assignments and promotions because of their sex. As currently amended, the charge covers employment practices by the Company in the State of Florida as a whole. On December 6, 1993, the EEOC gave notice it was expanding the scope of its investigation to include allegations of race discrimination. The EEOC has requested the Company to compile information and produce documents relating to these allegations. On October 13, 1994, the EEOC applied to the United States District Court, Southern District of Florida in Miami, for an order to show cause why an administrative subpoena issued by the EEOC to the Company should not be enforced (EEOC v. Publix Super Markets, Inc., Case No. 94-2119). The EEOC has agreed to substantial reductions in the information requested and further discussions as to additional reductions in the information requested are pending. The Company denies the allegations of the charge and the subsequent attempted expansion of the charge. The EEOC has advised that the charge does not in any respect constitute a final finding of a violation, but that the EEOC has a statutory duty to conduct a full and impartial investigation for the purpose of determining whether the facts and circumstances afford the EEOC reasonable cause to believe that the Company's employment patterns and practices constitute discrimination on the basis of sex and race. 4 The EEOC's investigation of the charge remains at the stage of considering whether there is reasonable cause to believe the allegations of the charge. At this early stage, the likelihood of an adverse finding of the Company's liability and an estimate of the amount of any exposure for any such liability cannot be determined. The Company is also a party in various other legal claims and actions considered in the normal course of business. Management believes that the ultimate disposition of these matters will not have a material effect on the Company's liquidity, results of operations or financial condition. Item 4. Submission of Matters to a Vote of Security Holders None 5 EXECUTIVE OFFICERS OF THE COMPANY
Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since ---- --- -------- ---------------- ---------- Howard M. Jenkins 43 Chairman of Cousin of 1976 the Board and Charles H. Jenkins, Chief Executive Jr., uncle of Officer W. Edwin Crenshaw and brother-in-law of Hoyt R. Barnett Mark C. Hollis 60 President and Father of 1968 Chief Operating M. Clayton Hollis, Jr. Officer Charles H. Jenkins, Jr. 51 Chairman of the Cousin of 1974 Executive Committee Howard M. Jenkins and cousin of W. Edwin Crenshaw Hoyt R. Barnett 51 Executive Brother-in-law of 1977 Vice President Howard M. Jenkins William H. Vass 45 Executive 1986 Vice President Jesse L. Benton 52 Vice President 1988 S. Keith Billups 62 Secretary 1968 Bennie F. Brown 53 Vice President 1992 R. Scott Charlton 36 Vice President 1992 W. Edwin Crenshaw 44 Executive Nephew of 1990 Vice President Howard M. Jenkins and cousin of Charles H. Jenkins, Jr. William R. Curry 54 Vice President 1990 Carolyn C. Day 49 Assistant Secretary 1992 Glenn J. Eschrich 50 Vice President 1995 M. Clayton Hollis, Jr. 38 Vice President Son of Mark C. Hollis 1994 Mark R. Irby 39 Vice President 1989 Tina P. Johnson 35 Treasurer 1990 James J. Lobinsky 55 Vice President 1992 Thomas M. McLaughlin 44 Vice President 1994 Sharon A. Miller 51 Assistant Secretary 1992 Robert H. Moore 52 Vice President 1994 Thomas M. O'Connor 47 Vice President 1992 David P. Phillips 35 Controller 1990 James H. Rhodes II 50 Vice President 1995
6 Daniel M. Risener 54 Vice President 1985 Edward H. Ruth 63 Vice President 1981 Edward T. Shivers 55 Vice President 1985 James F. Slappey 52 Vice President 1992
The terms of all officers expire at the annual meeting of the Company in May 1995, with the exception of Edward H. Ruth whose retirement is effective March 31, 1995. 7
Name Business Experience During Last Five Years ---- ----------------------------------------------------------------------------------------------------------- Howard M. Jenkins Chairman of the Board and Chief Executive Officer. Mark C. Hollis President and Chief Operating Officer of the Company. He is a Director of Bell South Telecommunications, a Bell South Company. Charles H. Jenkins, Jr. Chairman of the Executive Committee. Hoyt R. Barnett Executive Vice President of the Company to March 1992, Executive Vice President and Trustee of the Company's Profit Sharing Plan thereafter. William H. Vass Vice President and Treasurer of the Company to November 1992, Executive Vice President and Trustee of the Company's ESOT thereafter. Jesse L. Benton Vice President of the Company. S. Keith Billups Secretary of the Company. Bennie F. Brown Director of Meat Operations - Lakeland Division of the Company to January 1992, Vice President thereafter. R. Scott Charlton Bakery Plant General Manager of the Company to July 1990, Director of Manufacturing to January 1992, Vice President thereafter. W. Edwin Crenshaw Vice President of the Company to January 1994, Executive Vice President thereafter. William R. Curry Vice President of the Company. Carolyn C. Day Capital Stock Registrar and Transfer Agent of the Company to July 1992, Capital Stock Registrar and Transfer Agent and Assistant Secretary thereafter. Glenn J. Eschrich Assistant Director of Information Systems of the Company to February 1992, Director of Strategy Support to March 1995, Vice President thereafter. M. Clayton Hollis, Jr. Director of Government Relations of the Company to June 1994, Vice President thereafter. Mark R. Irby Vice President of the Company. Tina P. Johnson Assistant Secretary of the Company to September 1992, Treasurer to January 1995, Treasurer and Trustee of the 401(K) Plan - Publix Stock Fund thereafter. James J. Lobinsky Assistant Director of Merchandising - Miami Division of the Company to May 1990, Corporate Director of General Merchandise to January 1992, Vice President thereafter. Thomas M. McLaughlin Assistant Director of Retail Operations - Lakeland Division of the Company to January 1992, Director of Retail Operations - Lakeland Division to January 1994, Regional Director of Retail Operations - Lakeland Division to June 1994, Vice President thereafter.
8
Name Business Experience During Last Five Years ---- ----------------------------------------------------------------------------------------------------------- Sharon A. Miller Director of Merchandise Accounting of the Company to May 1991, Director of Administration to July 1992, Director of Administration and Assistant Secretary thereafter. Robert H. Moore Director of Retail Operations - Lakeland Division of the Company to January 1992, Director of Retail Operations - Atlanta Division to January 1994, Vice President thereafter. Thomas M. O'Connor Director of Distribution - Miami Division of the Company to November 1992, Vice President thereafter. David P. Phillips Controller of the Company. James H. Rhodes II Director of Human Resources of the Company to April 1995, Vice President thereafter. Daniel M. Risener Vice President of the Company. Edward H. Ruth Vice President of the Company. Edward T. Shivers Vice President of the Company. James F. Slappey Director of Warehousing and Distribution - Lakeland Division of the Company to November 1992, Vice President thereafter.
PART II Item 5. Market for the Company's Common Stock and Related Stockholder Matters (a) Market Information Substantially all transactions of the Company's common stock have been among the Company, its employees, former employees, their families and various benefit plans established for the Company's employees. The market price of the Company's common stock is determined by the Board of Directors based upon appraisals prepared by an independent appraiser. The market price for 1994 was $11.00 per share until March 1, 1994, when the price increased to $12.25 per share. In the second quarter, the price increased to $13.00 per share. In the third quarter, the price remained unchanged at $13.00 per share and in the fourth quarter, the price increased to $13.75 per share. The market price for 1993 was $11.50 per share until March 17, 1993, when the price decreased to $11.25 per share. In the second quarter, the price increased to $11.50 per share. In the third quarter, the price was unchanged at $11.50 per share and in the fourth quarter, the price decreased to $11.00 per share. (b) Approximate Number of Equity Security Holders As of February 24, 1995, the approximate number of holders of record of the Company's common stock was 61,000. (c) Dividends The Company paid cash dividends of $.09 per share of common stock in 1994 and $.08 per share in 1993. 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 expected that comparable cash dividends will be paid in the future. 9 Item 6. Five Year Summary of Selected Financial Data
1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- Sales: Sales $8,664,795 7,472,652 6,664,309 6,139,731 5,758,390 Percent increase 16.0% 12.1% 8.5% 6.6% 8.0% Comparable store sales percent increase 5.2% 6.4% 4.6% 2.3% 5.2% Earnings: Gross profit $1,952,043 1,638,044 1,479,788 1,391,255 1,275,706 Earnings before income tax expense and cumulative effect of changes in accounting principles $ 378,300 288,709 253,677 240,063 227,443 Net earnings before cumulative effect of changes in accounting principles $ 238,567 183,811 166,455 158,044 149,010 Net earnings $ 238,567 180,317 166,455 158,044 149,010 Net earnings as a percent of sales 2.75% 2.41% 2.50% 2.57% 2.59% Common stock: Weighted average shares outstanding* 231,514,459 236,249,110 239,248,081 242,872,610 243,365,735 Net earnings per common share, based on weighted average shares outstanding* $ 1.03 .76 .70 .65 .61 Dividends per share* $ .09 .08 .08 .07 .07 Financial data: Capital expenditures $ 374,190 320,167 202,597 158,983 163,676 Working capital $ 159,971 137,160 241,191 271,376 168,014 Current ratio 1.24 1.23 1.48 1.62 1.43 Total assets $2,302,336 2,054,315 1,791,247 1,623,720 1,475,737 Long-term debt $ 3,031 4,930 6,938 10,679 13,075 Stockholders' equity $1,473,154 1,308,009 1,168,091 1,068,463 960,124 Other: Number of stores 470 425 400 389 375
NOTE: Dollars are in thousands, except per share amounts. Fiscal year 1994 includes 53 weeks. All other years include 52 weeks. * Restated to give retroactive effect for 5-for-1 stock split in July 1992. 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Business Environment As of December 31, 1994, the Company operated 470 retail grocery stores representing approximately 20.5 million square feet of retail space. Historically, the Company's primary competition has been from national and regional chains and smaller independents located throughout its market areas. The Company has continued to experience increased competition from mass merchandisers. The products offered by these retailers include many of the same items sold by the Company. At the end of 1994, the Company had 427 stores located in Florida, 37 located in Georgia and six located in South Carolina. The Company opened its first store in Georgia during the fourth quarter of 1991 and opened its first store in South Carolina in the fourth quarter of 1993. The Company opened 23 stores in Florida, 22 stores in Georgia and five stores in South Carolina during 1994. The Company intends to continue to pursue vigorously new locations in Florida and other states. Liquidity and Capital Resources Operating activities continue to be the Company's primary source of liquidity. Net cash provided by operating activities was approximately $410.9 million in 1994, compared with $370.4 million in 1993 and $296.8 million in 1992. Working capital was approximately $160.0 million as of December 31, 1994, as compared with $137.2 million and $241.2 million as of December 25, 1993 and December 26, 1992, respectively. Cash and cash equivalents aggregated approximately $188.9 million as of December 31, 1994, as compared with $199.0 million and $293.5 million as of December 25, 1993 and December 26, 1992, respectively. Capital expenditures totaled $374.2 million in 1994. These expenditures were primarily incurred in connection with the opening of 50 new stores and remodeling or expanding 18 stores which added 2.60 million square feet. Construction was completed on a new general merchandise warehouse in Lakeland, Florida, and significant expenditures were incurred in the continued construction of a new distribution center in Lawrenceville, Georgia. In addition, the Company closed five stores. Capital expenditures totaled $320.2 million in 1993. These expenditures were primarily incurred in connection with the opening of 29 new stores and remodeling or expanding 13 stores which added 1.63 million square feet. Significant expenditures were also incurred in expanding the Deerfield Beach, Florida facility, acquisition of a grocery warehouse in Orlando, Florida and construction of a new general merchandise warehouse in Lakeland, Florida and a new distribution center in Lawrenceville, Georgia. In addition, the Company closed four stores. Capital expenditures totaled $202.6 million in 1992. These expenditures were primarily incurred in connection with the opening of 20 new stores and remodeling or expanding 12 stores which added 1.14 million square feet. Significant expenditures were also incurred in expanding the Deerfield Beach, Florida facility. In addition, the Company acquired three stores and closed 12 stores. The Company hopes to open as many as 59 stores in 1995. Although real estate development is unpredictable, the Company's 1995 new store growth represents a reasonable estimate of anticipated future growth. Capital expenditures for 1995, primarily made up of new store construction, the remodeling or expanding of several existing stores and the expansion and construction of distribution facilities, are expected to be approximately $400 million. This capital program is subject to continuing change and review. The 1995 capital expenditures are expected to be financed by internally generated funds and current liquid assets. In the normal course of operations, the Company replaces stores and closes unprofitable stores. The impact of future store closings is not expected to be material. 11 The Company is self-insured, up to certain limits, for health care, fleet liability, general liability and workers' compensation claims. Reserves are established to cover estimated liabilities for existing and anticipated claims based on actual experience including, where necessary, actuarial studies. The Company has insurance coverage for losses in excess of varying amounts. The provision for self-insured reserves was $89.6 million, $90.1 million and $78.7 million in fiscal 1994, 1993 and 1992, respectively. The Company does not believe its self-insurance program will have a material adverse impact on its future liquidity, financial condition or results of operations. The Company has committed lines of credit for $100.0 million and one uncommitted line of credit for $25.0 million. These lines are reviewed annually by the banks. The interest rates for these lines are at or below the prime rate. No amounts were outstanding on the lines of credit as of December 31, 1994 or December 25, 1993. Cash generated in excess of the amount needed for current operations and capital expenditures is invested in short-term and long-term investments. Short-term investments were approximately $77.2 million in 1994 compared with $59.8 million in 1993. Long-term investments, primarily comprised of tax exempt bonds and preferred stocks, were approximately $124.5 million in 1994 compared with $199.4 million in 1993. Management believes the Company's liquidity will continue to be strong. The Company currently repurchases common stock at the stockholders' request in accordance with the terms of the Company's Employee Stock Purchase Plan. The Company expects to continue to repurchase its common stock, as offered by its stockholders from time to time, at its then currently appraised value. However, such purchases are not required and the Company retains the right to discontinue them at any time. Results of Operations The Company's fiscal year ends on the last Saturday in December. Fiscal year 1994 included 53 weeks and fiscal years 1993 and 1992 included 52 weeks. Sales for fiscal 1994 were $8,664.8 million as compared with $7,472.7 million in fiscal 1993, a 16.0% increase. This reflects an increase of $171.9 million or 2.3% in sales from an additional week included in the 1994 fiscal year, $388.6 million or 5.2% in sales from stores that were open for all of both years (comparable stores) and sales of $631.6 million or 8.5% from the net impact of 50 new stores and five closed stores. Net new stores contributed an increase of 13.6% or approximately 2.4 million square feet in retail space. Sales for fiscal 1993 were $7,472.7 million as compared with $6,664.3 million in fiscal 1992, a 12.1% increase. This reflects an increase of $426.5 million or 6.4% in sales from stores that were open for all of both years (comparable stores) and sales of $381.9 million or 5.7% from the net impact of 29 new stores and four closed stores. Net new stores contributed an increase of 9.0% or approximately 1.50 million square feet in retail space. In 1992, the Company identified potential environmental problems relating to properties that are owned or leased. Other income, net includes $1.6 million in 1994, $1.5 million in 1993 and $8.0 million in 1992 which were accrued for estimated clean-up costs. 12 On August 24, 1992, Hurricane Andrew destroyed three of the Company's stores in south Florida. Several other stores sustained varying degrees of damage, but were operational within four weeks. The resulting property damage and business interruption losses were substantially covered by insurance and were immaterial to the Company's financial position and operations. During 1994, the Company recognized a $6.1 million gain on the settlement of claims for business interruption and property losses related to the extensive damage caused by Hurricane Andrew. This gain is recorded as a component of other income, net in the accompanying financial statements. Cost of merchandise sold including store occupancy, warehousing and delivery expenses was approximately 77.5% of sales in 1994 as compared with 78.1% and 77.8% in 1993 and 1992, respectively. In 1994, cost of merchandise sold decreased as a percentage of sales due to buying and merchandising efficiencies. In 1993 and 1992, cost of merchandise sold increased as a percent of sales due to competitive pressures. Operating and administrative expenses, as a percent of sales, were 19.1%, 19.1% and 19.3% in 1994, 1993 and 1992, respectively. In 1993, the Company's workers' compensation expense increased approximately $17.5 million or 89% as compared to 1992 due to increases in claim payments and estimated reserves for claim payments. The significant components of operating and administrative expenses are payroll costs, employee benefits and depreciation. In August 1993, the "Omnibus Budget Reconciliation Act of 1993" became effective. The major provision of the new tax law affecting the Company was the increase in the maximum corporate income tax rate from 34% to 35%. This 1% increase in the tax rate was retroactive to January 1, 1993. Therefore, in accordance with Financial Accounting Standard No. 109, "Accounting for Income Taxes," the Company recognized an additional $3.5 million income tax expense during fiscal year 1993. In recent years, the impact of inflation on the Company's food prices has been lower than the overall increase in the Consumer Price Index. New Accounting Standard The Company adopted Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities," in the first quarter of 1994. This Standard requires the reporting of certain securities at fair value except for those securities which the Company has the positive intent and ability to hold to maturity. The Company adopted the provisions of the new Standard for investments held as of, or acquired after, the beginning of fiscal 1994. The cumulative effect of adopting the Standard as of the beginning of fiscal 1994 is not material. In accordance with the Standard, prior period financial statements have not been restated to reflect the change in accounting principle. Item 8. Financial Statements and Supplemental Data The Company's financial statements, together with the independent auditors' report thereon, are included in the section following Part IV of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None 13 PART III Item 10. Directors, Executive Officers, Promoters and Control Persons of the Registrant Certain information concerning the directors of the Company is incorporated by reference to pages 2 through 5 of the Proxy Statement of the Company (1995 Proxy Statement) which the Company intends to file no later than 120 days after its fiscal year end. Certain information concerning the executive officers of the Company is set forth in Part I under the caption "Executive Officers of the Company." Item 11. Executive Compensation Information regarding executive compensation is incorporated by reference to pages 6 through 8 of the 1995 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management The following table sets forth, as of February 24, 1995, the information with respect to common stock ownership of all Directors, including some who are 5% or more beneficial owners, and all Officers and Directors as a group. Also, listed are others known by the Company to own beneficially 5% or more of the shares of the Company's common stock.
Amount and Nature Percent Name of Beneficial Ownership (1) of Class ---- --------------------------- -------- Carol Jenkins Barnett 13,134,987 (2) 5.71 Hoyt R. Barnett 23,404,038 (3) 10.17 W. Edwin Crenshaw 662,635 * Mark C. Hollis 2,598,335 (4) 1.13 Charles H. Jenkins, Jr. 2,288,398 * Charles H. Jenkins, Sr. 2,629,244 1.14 Howard M. Jenkins 42,027,187 (5) 18.26 Tina P. Johnson 42,724 * E. V. McClurg 1,993,932 * William H. Vass 29,486,553 (6) 12.81 All Officers and Directors as a group (28 individuals) 119,046,387 (7) 51.72 All Other Beneficial Owners: --------------------------- Publix Super Markets, Inc. Profit Sharing Plan and Trust 23,278,750 10.11 Publix Super Markets, Inc. Employee Stock Ownership Plan and Trust 29,453,743 12.80 Nancy E. Jenkins 15,206,894 (8) 6.61
*Shares represent less than 1% of class. Note references are explained on the following page. 14 (1) As used in the table on the preceding page, "beneficial ownership" means the sole or shared voting or investment power with respect to the Company's common stock. Holdings of officers include shares allocated to their individual accounts in the Company's Employee Stock Ownership Plan, over which each officer exercises sole voting power and shared investment power. In accordance with the beneficial ownership regulations, the same shares of common stock may be included as beneficially owned by more than one individual or entity. The address for all beneficial owners is 1936 George Jenkins Boulevard, Lakeland, Florida 33801. (2) Excludes shares of common stock beneficially owned by Carol Jenkins Barnett's husband, as to which Carol Jenkins Barnett disclaims beneficial ownership. (3) Hoyt R. Barnett is Trustee of the Profit Sharing Plan which is the record owner of 23,278,750 shares of common stock over which he exercises sole voting and investment power. Total shares beneficially owned excludes shares of common stock owned by Hoyt R. Barnett's wife, as to which Hoyt R. Barnett disclaims beneficial ownership. (4) Mark C. Hollis is Co-Trustee with Peoples Bank of Lakeland for 1,508,468 shares of common stock in two family trusts. The remaining shares are owned in a separate family trust over which Mark C. Hollis is Co-Trustee with his wife. As Co-Trustee, Mark C. Hollis has shared voting and investment power for these shares. (5) Howard M. Jenkins is Voting Trustee of a Voting Trust Agreement (Agreement), effective May 30, 1987, established by him, his brother and two of his sisters. The Agreement, as amended, has a ten year term and covers 41,455,760 shares of common stock, of which 12,396,395 shares are beneficially owned by Howard M. Jenkins and 14,185,405 shares are beneficially owned by Nancy E. Jenkins. The remaining shares held under the Agreement are owned by various individuals who are not beneficial owners of 5% or more of the Company's common stock. As Trustee, Howard M. Jenkins has voting power for the shares represented by the Agreement unless the stockholders of a majority of the shares direct him to vote all shares in a specified manner. In addition, Howard M. Jenkins beneficially owns 571,427 shares of common stock which are either individually owned or owned as Trustee for three trusts over which he exercises sole voting and investment power. (6) William H. Vass is Trustee of the Employee Stock Ownership Plan (ESOT) which is the record owner of 29,453,743 shares of common stock over which he has shared investment power. As Trustee, William H. Vass exercises sole voting power over 529,560 shares in the ESOT because such shares have not been allocated to participants' accounts. The ESOT participants, not William H. Vass, exercise sole voting power over all remaining shares in the ESOT. (7) Includes 52,732,493 shares of common stock owned by the Profit Sharing Plan and ESOT. (8) Includes 14,185,405 shares of common stock which are held in and subject to the Voting Trust Agreement, effective May 30, 1987, for which Howard M. Jenkins is Voting Trustee. Item 13. Certain Relationships and Related Transactions Information regarding certain relationships and related transactions is incorporated by reference to pages 2 through 5 and 8 of the 1995 Proxy Statement. 15 PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K (a) Financial Statements and Schedule The financial statements and schedule listed in the accompanying Index to Financial Statements and Schedule are filed as part of this Annual Report on Form 10-K. (b) Reports on Form 8-K The Company filed no reports on Form 8-K during the fourth quarter of the year ended December 31, 1994. (c) Exhibits 3(a). Articles of Incorporation of the Company, together with all amendments thereto are incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 25, 1993. 3(b). By-laws of the Company are incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K, as amended, for the year ended December 26, 1987. 9. Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 31, 1988. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective March 8, 1990, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 30, 1989. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective June 14, 1991, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 28, 1991. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective November 3, 1992, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1992. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective February 26, 1993, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1992. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective March 1, 1994. 18. Letter regarding change in accounting principle is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1992. 27. Financial Data Schedule for the year ended December 31, 1994 (for SEC use only). 16 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PUBLIX SUPER MARKETS, INC. March 14, 1995 By: /s/ S. Keith Billups -------------------------- S. Keith Billups Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. Chairman of the Board, Chief Executive Officer and Director /s/ Howard M. Jenkins (Principal Executive Officer) March 14, 1995 --------------------------- Howard M. Jenkins President, Chief Operating /s/ Mark C. Hollis Officer and Director March 14, 1995 --------------------------- Mark C. Hollis Chairman of the Executive /s/ Charles H. Jenkins, Jr. Committee and Director March 14, 1995 --------------------------- Charles H. Jenkins, Jr. Executive Vice President /s/ Hoyt R. Barnett and Director March 14, 1995 --------------------------- Hoyt R. Barnett Executive Vice President and Director /s/ William H. Vass (Principal Financial Officer) March 14, 1995 --------------------------- William H. Vass Executive Vice President /s/ W. Edwin Crenshaw and Director March 14, 1995 --------------------------- W. Edwin Crenshaw /s/ Tina P. Johnson Treasurer and Director March 14, 1995 --------------------------- Tina P. Johnson Controller /s/ David P. Phillips (Principal Accounting Officer) March 14, 1995 --------------------------- David P. Phillips
17 PUBLIX SUPER MARKETS, INC. Index to Financial Statements and Schedule Independent Auditors' Report Financial Statements: Balance Sheets - December 31, 1994 and December 25, 1993 Statements of Earnings - Years ended December 31, 1994, December 25, 1993 and December 26, 1992 Statements of Stockholders' Equity - Years ended December 31, 1994, December 25, 1993 and December 26, 1992 Statements of Cash Flows - Years ended December 31, 1994, December 25, 1993 and December 26, 1992 Notes to Financial Statements The following supporting schedule of Publix Super Markets, Inc. for the years ended December 31, 1994, December 25, 1993 and December 26, 1992 is submitted herewith: Schedule: II - Valuation and Qualifying Accounts All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. 18 INDEPENDENT AUDITORS' REPORT To The Stockholders Publix Super Markets, Inc.: We have audited the financial statements of Publix Super Markets, Inc. as listed in the accompanying index. In connection with our audits of the financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Publix Super Markets, Inc. as of December 31, 1994, and December 25, 1993 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1994, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. As discussed in note 1 of the notes to financial statements, the Company changed its methods of accounting for certain investments in debt and equity securities during 1994, postretirement benefits and income taxes during 1993 and, during 1992 changed its method of depreciation for all newly acquired fixed assets. KPMG PEAT MARWICK LLP Tampa, Florida February 28, 1995 19 PUBLIX SUPER MARKETS, INC. Balance Sheets December 31, 1994 and December 25, 1993
Assets 1994 1993 ------ ---- ---- (Amounts in thousands) Current assets: Cash and cash equivalents $ 188,885 198,997 Short-term investments 77,217 59,763 Receivables from associated companies 878 330 Trade receivables (principally due from suppliers) 39,971 44,047 Merchandise inventories 480,876 404,602 Deferred tax assets 28,320 25,299 Prepaid expenses 1,767 1,731 ---------- ---------- Total current assets 817,914 734,769 ---------- ---------- Long-term investments 124,494 199,385 Investment in joint ventures 5,036 5,142 Other noncurrent assets 5,149 5,844 Property, plant and equipment: Land 67,462 55,787 Buildings and improvements 477,203 396,220 Furniture, fixtures and equipment 1,420,663 1,210,354 Leasehold improvements 234,133 189,263 Construction in progress 122,499 115,373 ---------- ---------- 2,321,960 1,966,997 Less accumulated depreciation 972,217 857,822 ---------- ---------- Net property, plant and equipment 1,349,743 1,109,175 ---------- ---------- $2,302,336 2,054,315 ========== ==========
See accompanying notes to financial statements. 20 PUBLIX SUPER MARKETS, INC. Balance Sheets December 31, 1994 and December 25, 1993
Liabilities and Stockholders' Equity 1994 1993 ------------------------------------ ---- ---- (Amounts in thousands) Current liabilities: Current installments of long-term debt $ 1,619 2,010 Accounts payable 434,647 394,863 Accrued expenses: Salaries and wages 44,028 39,362 Contribution to profit sharing plan and ESOT 66,768 50,149 Self-insurance reserves 49,295 48,918 Other 58,857 54,054 ---------- ---------- Total accrued expenses 218,948 192,483 ---------- ---------- Federal and state income taxes 2,729 8,253 ---------- ---------- Total current liabilities 657,943 597,609 Long-term debt, excluding current installments 3,031 4,930 Deferred tax liabilities, net 78,168 63,409 Self-insurance reserves 59,710 50,534 Accrued postretirement benefit cost 30,330 26,465 Other noncurrent liabilities --- 3,359 ---------- ---------- Total liabilities 829,182 746,306 ---------- ---------- Stockholders' equity: Common stock of $1 par value. Authorized 300,000,000 shares; issued 231,585,497 shares in 1994 and 238,157,384 shares in 1993 231,585 238,157 Additional paid-in capital 78,421 73,240 Reinvested earnings 1,165,128 1,020,565 ---------- ---------- 1,475,134 1,331,962 Less: 2,120,612 shares of common stock acquired from stockholders in 1993, at cost --- 23,953 Unrealized loss on investment securities available-for-sale, net 1,980 --- ---------- ---------- Total stockholders' equity 1,473,154 1,308,009 Commitments and contingencies ---------- ---------- $2,302,336 2,054,315 ========== ==========
See accompanying notes to financial statements. 21 PUBLIX SUPER MARKETS, INC. Statements of Earnings Years ended December 31, 1994, December 25, 1993 and December 26, 1992
1994 1993 1992 ---- ---- ---- (Amounts in thousands, except per share amounts) Revenues: Sales $8,664,795 7,472,652 6,664,309 Other income, net 77,693 81,317 64,444 ---------- ---------- --------- Total revenues 8,742,488 7,553,969 6,728,753 ---------- ---------- --------- Costs and expenses: Cost of merchandise sold including store occupancy, warehousing and delivery expenses 6,712,752 5,834,608 5,184,521 Operating and administrative expenses 1,650,768 1,429,540 1,289,062 Interest expense 668 1,112 1,493 ---------- ---------- --------- Total costs and expenses 8,364,188 7,265,260 6,475,076 ---------- ---------- --------- Earnings before income tax expense and cumulative effect of changes in accounting principles 378,300 288,709 253,677 Income tax expense 139,733 104,898 87,222 ---------- ---------- --------- Net earnings before cumulative effect of changes in accounting principles 238,567 183,811 166,455 Cumulative effect on prior years of changes in accounting principles --- (3,494) --- ---------- ---------- --------- Net earnings $ 238,567 180,317 166,455 ========== ========== ========= Net earnings per common share before cumulative effect of changes in accounting principles $ 1.03 .78 .70 Cumulative effect on prior years of changes in accounting principles --- (.02) --- ---------- ---------- --------- Net earnings per common share, based on weighted average shares outstanding $ 1.03 .76 .70 ========== ========== =========
See accompanying notes to financial statements. 22 PUBLIX SUPER MARKETS, INC. Statements of Stockholders' Equity Years ended December 31, 1994, December 25, 1993 and December 26, 1992
Common Unrealized stock loss on acquired investment Total Additional from securities stock- Common paid-in Reinvested stock- available- holders' stock capital earnings holders for-sale, net equity ----- ------- -------- ------- ------------- ------ (Amounts in thousands) Balances at December 28, 1991 $242,171 74,040 752,252 --- --- 1,068,463 Net earnings for the year --- --- 166,455 --- --- 166,455 Cash dividends, $.08 per share --- --- (19,157) --- --- (19,157) Contribution of 1,307,863 shares to ESOT --- 1,632 --- 12,494 --- 14,126 8,796,502 shares acquired from stockholders --- --- --- (91,155) --- (91,155) Sale of 2,570,451 shares to stockholders --- --- --- 27,253 --- 27,253 Retirement of 4,307,044 shares (4,307) --- (40,326) 44,633 --- --- Issuance of 611,144 shares for acquisitions --- (4,669) --- 6,775 --- 2,106 -------- ------ --------- -------- ------ --------- Balances at December 26, 1992 237,864 71,003 859,224 --- --- 1,168,091 Net earnings for the year --- --- 180,317 --- --- 180,317 Cash dividends, $.08 per share --- --- (18,976) --- --- (18,976) Contribution of 3,297,684 shares to ESOT --- (849) --- 37,772 --- 36,923 6,563,903 shares acquired from stockholders --- --- --- (74,860) --- (74,860) Sale of 1,145,607 shares to stockholders 293 3,086 --- 13,135 --- 16,514 -------- ------ --------- -------- ------ --------- Balances at December 25, 1993 238,157 73,240 1,020,565 (23,953) --- 1,308,009 Net earnings for the year --- --- 238,567 --- --- 238,567 Cash dividends, $.09 per share --- --- (20,782) --- --- (20,782) Contribution of 3,306,417 shares to ESOT --- 5,181 --- 39,302 --- 44,483 9,255,992 shares acquired from stockholders --- --- --- (114,350) --- (114,350) Sale of 1,498,300 shares to stockholders --- --- --- 19,207 --- 19,207 Increase in valuation allowance --- --- --- --- (1,980) (1,980) Retirement of 6,571,887 shares (6,572) --- (73,222) 79,794 --- --- -------- ------ --------- -------- ------ --------- Balances at December 31, 1994 $231,585 78,421 1,165,128 --- (1,980) 1,473,154 ======== ====== ========= ======== ====== =========
See accompanying notes to financial statements. 23 PUBLIX SUPER MARKETS, INC. Statements of Cash Flows Years ended December 31, 1994, December 25, 1993 and December 26, 1992
1994 1993 1992 ---- ---- ---- (Amounts in thousands) Cash flows from operating activities: Cash received from customers $8,725,307 7,523,939 6,705,859 Cash paid to employees and suppliers (8,120,031) (7,002,932) (6,240,419) Cash paid to ESOT --- --- (21,200) Dividends and interest received 17,344 16,323 16,809 Interest paid (763) (1,112) (1,493) Income taxes paid (136,533) (93,583) (92,452) Payment for self-insured claims (80,044) (68,210) (67,389) Other operating cash receipts 12,231 309 767 Other operating cash payments (6,610) (4,303) (3,677) ---------- --------- --------- Net cash provided by operating activities 410,901 370,431 296,805 ---------- --------- --------- Cash flows from investing activities: Payment for property, plant and equipment (374,190) (320,167) (202,597) Proceeds from sale of property, plant and equipment 1,500 4,750 1,271 Payment for investment securities --- (282,109) (107,737) Payment for investment securities - held-to-maturity (HTM) (14,735) --- --- Payment for investment securities - available-for-sale (AFS) (189,597) --- --- Proceeds from sale of investment securities --- 214,721 60,829 Proceeds from sale and maturities of investment securities - HTM 16,527 --- --- Proceeds from sale of investment securities - AFS 257,396 --- --- Investment in joint ventures 185 (656) (2,479) Other, net 116 (2,174) (237) ---------- --------- --------- Net cash used in investing activities (302,798) (385,635) (250,950) ---------- --------- --------- Cash flows from financing activities: Payment of long-term debt (2,290) (1,950) (4,197) Proceeds from sale of common stock 19,207 16,514 27,253 Payment for acquisition of common stock (114,350) (74,860) (91,155) Dividends paid (20,782) (18,976) (19,157) Other, net --- --- 2,106 ---------- --------- --------- Net cash used in financing activities (118,215) (79,272) (85,150) ---------- --------- --------- Net decrease in cash and cash equivalents (10,112) (94,476) (39,295) Cash and cash equivalents at beginning of year 198,997 293,473 332,768 ---------- --------- --------- Cash and cash equivalents at end of year $ 188,885 198,997 293,473 ========== ========= =========
See accompanying notes to financial statements. (Continued) 24 PUBLIX SUPER MARKETS, INC. Statements of Cash Flows (Continued)
1994 1993 1992 ---- ---- ---- (Amounts in thousands) Reconciliation of Net Earnings to Net Cash Provided by Operating Activities Net earnings $238,567 180,317 166,455 Adjustments to reconcile net earnings to net cash provided by operating activities: Cumulative effect of changes in accounting principles, net of taxes --- 3,494 --- Depreciation and amortization 128,993 116,797 118,363 Contribution to ESOT 27,500 22,000 --- Deferred income taxes 12,981 1,462 2,230 (Gain) loss on sale of property, plant and equipment 3,672 (1,225) 7,870 (Gain) loss on sale of investments 3,234 (5,682) (5,605) Self-insurance reserves in excess of current payments 9,553 21,906 11,346 Postretirement accruals in excess of current payments 3,865 1,858 --- Decrease in purchase allowances (3,358) (3,358) (3,358) Other, net (1,201) (50) 13 Changes in current assets and liabilities: Increase in short-term investments (17,454) (9,397) (50,366) (Increase) decrease in receivables 3,528 (5,550) (9,898) Increase in merchandise inventories (76,274) (40,647) (16,401) (Increase) decrease in prepaid expenses (36) (860) 152 Increase in accounts payable and accrued expenses 82,855 83,698 83,464 Increase (decrease) in income taxes payable (5,524) 5,668 (7,460) -------- ------- ------- Total adjustments 172,334 190,114 130,350 -------- ------- ------- Net cash provided by operating activities $410,901 370,431 296,805 ======== ======= =======
See accompanying notes to financial statements. 25 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements December 31, 1994, December 25, 1993 and December 26, 1992 (1) Summary of Significant Accounting Policies (a) Definition of Fiscal Year The fiscal year ends on the last Saturday in December. Fiscal year 1994 includes 53 weeks. Fiscal years 1993 and 1992 include 52 weeks. (b) Cash Equivalents The Company considers all liquid investments with maturities of three months or less to be cash equivalents. (c) Investments At the beginning of fiscal year 1994, the Company adopted Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities," for investments held as of, or acquired after, the beginning of fiscal 1994, without restating prior years' financial statements. The cumulative effect of adopting the Standard as of the beginning of fiscal 1994 is not material (note 8). (d) Investment in Joint Ventures The Company has invested in joint ventures to develop shopping centers. The investment in these joint ventures is accounted for using the equity method. (e) Inventories Inventories are valued at cost (principally the dollar value last-in, first-out method) including store inventories which are calculated by the retail method. (f) Property, Plant and Equipment and Depreciation Maintenance and repairs are charged to expense as incurred. Expenditures for renewals and betterments are capitalized. The gain or loss on traded items is applied to the asset accounts or reflected in income for disposed items. Prior to fiscal year 1992, depreciation was computed for financial statement purposes by the declining balance and straight-line methods. During 1992, the Company adopted the straight-line method of depreciation for all newly acquired fixed assets. Assets acquired before 1992 continue to be depreciated using prior years' depreciation methods. The change to the straight-line method of depreciation was made to conform to predominant industry practice. Use of the straight-line method of depreciation on assets placed in service in 1994, 1993 and 1992, as compared with accelerated methods, resulted in decreases in depreciation expense of approximately $37,035,000, $20,800,000 and $4,743,000, and increases in net earnings of approximately $19,316,000, $10,848,000, and $2,514,000 or $.08, $.05 and $.01 per share in 1994, 1993 and 1992, respectively. (Continued) 26 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements (g) Postretirement Benefits At the beginning of fiscal year 1993, the Company adopted Financial Accounting Standard No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," without restating prior years' financial statements. This Standard requires that an employer's obligation for postretirement benefits be fully accrued by the date the employees attain full eligibility to receive these benefits. The cumulative effect of the change in method of accounting for postretirement benefits has been reported in the 1993 statement of earnings (note 3). (h) 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. (i) Income Taxes At the beginning of fiscal year 1993, the Company adopted Financial Accounting Standard No. 109, "Accounting for Income Taxes," without restating prior years' financial statements. This Standard required a change from the deferred method of accounting for income taxes of APB Opinion 11 to the asset and liability method of accounting for income taxes. The cumulative effect of the change in method of accounting for income taxes has been reported in the 1993 statement of earnings (note 6). (j) Reclassification Certain 1993 amounts have been reclassified to conform with the 1994 presentation. (2) Merchandise Inventories If the first-in, first-out method of valuing inventories had been used by the Company, inventories and current assets would have been higher than reported by approximately $90,276,000, $83,741,000 and $87,012,000 as of December 31, 1994, December 25, 1993 and December 26, 1992, respectively. Also, net earnings would have increased by approximately $3,408,000 or $.01 per share in 1994 and decreased $1,706,000 or less than $.01 per share in 1993 and decreased $1,547,000 or less than $.01 per share in 1992. (3) 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 service are entitled to postretirement life insurance benefits. The Company funds the life insurance benefits on a pay-as-you-go basis. During 1994 and 1993, the Company made benefit payments to retirees of approximately $657,000 and $702,000, respectively. As discussed in Note 1, the Company adopted Statement 106 at the beginning of fiscal year 1993. The accumulated postretirement benefit obligation accrued was $24,607,000. The cumulative effect of this accounting change decreased net earnings by approximately $15,347,000 in fiscal 1993. 2 (Continued) 27 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements
1994 1993 ---- ---- (Amounts in thousands) Net postretirement benefit cost consists of the following components: Service cost attributed to service during the year $ 1,440 1,039 Interest cost on postretirement benefit obligation 2,405 2,052 Net amortization 145 --- ------- ------ Net periodic postretirement benefit cost $ 3,990 3,091 ======= ====== The following summarizes the reconciliation of the amounts recognized in the Company's balance sheets as of December 31, 1994 and December 25, 1993: Accumulated postretirement benefit obligation: Retirees $12,105 10,738 Fully eligible active plan participants 9,032 9,150 Other active plan participants 12,041 12,209 ------- ------ Accumulated postretirement benefit obligation 33,178 32,097 Unrecognized net loss (2,848) (5,632) ------- ------ Accrued postretirement benefit cost $30,330 26,465 ======= ======
The accumulated postretirement benefit obligation as of December 31, 1994 was determined using an assumed discount rate of 8.25% and a salary increase rate of 4%. The accumulated postretirement benefit obligation as of December 25, 1993 was determined using an assumed discount rate of 7.25% and a salary increase rate of 4%. The change in the discount rate from 7.25% to 8.25% decreased the accumulated postretirement benefit obligation by $5,366,000 and is expected to decrease annual postretirement benefit costs by $505,000 beginning in 1995. (4) Common Stock Split On May 12, 1992, the Company's stockholders approved an increase in the number of authorized shares of common stock from 60,000,000 shares to 300,000,000 shares to effect a 5-for-1 stock split. All data in the accompanying financial statements has been restated to give retroactive effect for the stock split. (5) Retirement Plans The Company has a trusteed, noncontributory profit sharing plan for the benefit of eligible employees. The amount of the Company's contribution to this plan is determined by the Board of Directors. The contribution cannot exceed 15% of compensation paid to participants. Contributions to this plan amounted to $44,564,000 in 1994, $33,976,000 in 1993 and $29,867,000 in 1992. 3 (Continued) 28 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements The Company has an Employee Stock Ownership Trust (ESOT). Annual contributions to the ESOT are determined by the Board of Directors and can be made in Company stock or cash. In 1994, the Company contributed 2,000,000 shares of its common stock to the ESOT at an appraised value resulting in an expense to the Company of $27,500,000. In 1993, the Company contributed 2,000,000 shares of its common stock to the ESOT at an appraised value resulting in an expense to the Company of $22,000,000. In 1992, the Company contributed $21,200,000 in cash to the ESOT. During 1994, 1993 and 1992, the Board of Directors approved additional contributions to the ESOT of $22,257,000, $16,983,000 and $14,923,000, respectively. The additional contributions are made to the ESOT during the subsequent year. Effective January 1, 1995, the Company implemented 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 6% of their annual compensation, subject to certain maximum contribution restrictions. The amount of the Company's contribution to this plan is determined by the Board of Directors. The Company intends to continue the profit sharing plan, ESOT and 401(K) plan indefinitely; however, the right to modify, amend or terminate these plans has been reserved. In the event of termination, all amounts contributed under the plans must be paid to the participants or their beneficiaries. (6) Income Taxes As discussed in Note 1, the Company adopted Statement 109 at the beginning of fiscal year 1993. The cumulative effect of this accounting change resulted in a reduction of deferred Federal and state income taxes and an increase in net earnings of approximately $11,853,000. The provision for income taxes consists of the following:
Current Deferred Total ------- -------- ----- (Amounts in thousands) 1994: Federal $107,798 11,090 118,888 State 18,954 1,891 20,845 -------- ------ ------- $126,752 12,981 139,733 ======== ====== ======= 1993: Federal $ 89,580 (340) 89,240 State 15,861 (203) 15,658 -------- ------ ------- $105,441 (543) 104,898 ======== ====== ======= 1992: Federal $ 72,271 1,895 74,166 State 12,721 335 13,056 -------- ------ ------- $ 84,992 2,230 87,222 ======== ====== =======
4 (Continued) 29 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements Income tax expense amounted to $139,733,000 for 1994 (an effective rate of 36.9%), $104,898,000 for 1993 (an effective rate of 36.3%) and $87,222,000 for 1992 (an effective rate of 34.4%). The actual expense for 1994, 1993 and 1992 differs from the "expected" tax expense for those years (computed by applying the U.S. Federal corporate tax rate of 35% for 1994 and 1993 and 34% for 1992 to earnings before income taxes) as follows:
1994 1993 1992 ---- ---- ---- (Amounts in thousands) Computed "expected" tax expense $132,405 101,048 86,250 State income taxes (net of Federal income tax benefit) 13,550 10,178 8,617 Tax exempt interest (4,589) (5,065) (5,418) Effect of change in tax rate on deferred tax assets/liabilities --- 970 --- Other, net (1,633) (2,233) (2,227) -------- ------- ------ $139,733 104,898 87,222 ======== ======= ======
The "Omnibus Budget Reconciliation Act of 1993" included various rule changes and increased the maximum corporate income tax rate from 34% to 35%, effective January 1, 1993. The impact of the new tax law increased the Company's 1993 income tax expense by $3,484,000. This included $2,514,000 attributable to the new tax rate on current income and $970,000 resulting from an adjustment of deferred tax balances. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 31, 1994 and December 25, 1993 are as follows:
1994 1993 ---- ---- (Amounts in thousands) Deferred tax assets: Self-insurance reserves $ 40,484 36,008 Postretirement benefit cost 11,700 10,039 Uniform inventory capitalization 6,348 5,958 Other 12,923 11,669 -------- ------- Total deferred tax assets $ 71,455 63,674 ======== ======= Deferred tax liabilities: Difference in tax basis of property, plant and equipment, net $120,663 101,784 Other 640 --- -------- ------- Total deferred tax liabilities $121,303 101,784 ======== =======
The Company expects the results of future operations to generate sufficient taxable income to allow utilization of deferred tax assets. 5 (Continued) 30 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements (7) 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 value for marketable debt and equity securities are based on quoted market prices. Long-term debt, including current installments: The carrying amount for long-term debt approximates fair value based on current interest rates. The carrying amount and fair value of the Company's financial instruments as of December 31, 1994 and December 25, 1993 are as follows:
1994 1993 ------------------- ------------------ Carrying Fair Carrying Fair Amount Value Amount Value ------ ----- ------ ----- (Amounts in thousands) Cash and cash equivalents $188,885 188,885 198,997 198,997 Investment securities: Short-term investments 77,217 77,217 59,763 60,064 Long-term investments 124,494 124,494 199,385 202,118 Long-term debt, including current installments 4,650 4,650 6,940 6,940
(8) Investments Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in other income, net. The Company had no held-to-maturity securities as of December 31, 1994. Beginning with the fourth quarter of 1994, the Company transferred $62,254,000 of securities from the held-to-maturity classification to the available-for-sale classification. This amount represented the amortized cost of the securities at the date of transfer. The fair value of these securities was $61,408,000 resulting in a net unrealized loss of $846,000. The change in classification was a result of a change in management's intent with respect to these securities. In order to have the flexibility to respond to changes in interest rates and to take advantage of changes in the availability of and the yield on alternative investments, management determined that the classification of these securities as available-for-sale was appropriate. 6 (Continued) 31 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements Debt securities not classified as held-to-maturity 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 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 is included in other income, net. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income, net. The cost of securities sold is based on the specific identification method. Following is a summary of available-for-sale securities as of December 31, 1994:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value --------- ---------- ---------- --------- (Amounts in thousands) Tax-free bonds $185,042 53 2,101 182,994 Equity securities 19,805 334 1,509 18,630 -------- --- ----- ------- $204,847 387 3,610 201,624 ======== === ===== =======
For the fiscal year ended December 31, 1994, the realized gains on sales of available-for-sale securities totaled $1,562,000 and the realized losses totaled $4,751,000. The adjustment for unrealized losses on available-for-sale securities, net of applicable income taxes, included as a separate component of stockholders' equity, totaled $1,980,000. The amortized cost and estimated fair value of debt and marketable equity securities classified as available-for-sale as of December 31, 1994, by expected maturity, are as follows:
Amortized Fair Cost Value --------- --------- (Amounts in thousands) Due in one year or less $ 77,410 77,130 Due after one year through three years 65,873 64,700 Due after three years 41,759 41,164 -------- ------- 185,042 182,994 Equity securities 19,805 18,630 -------- ------- $204,847 201,624 ======== =======
As of December 31, 1994, the Company classified its one investment in common stock as a trading security. This investment had a cost of $198,000 and a fair value of $87,000. The unrealized loss on this investment is included in the statement of earnings as a reduction of other income, net. 7 (Continued) 32 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements (9) Commitments and Contingencies (a) Operating Leases The Company conducts a major portion of its retail operations from leased store and shopping center premises generally under 20 year leases. Contingent rentals paid to lessors of certain store facilities are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain cases, reimbursement of taxes and insurance. Total rental expense, net of sublease rental income, for the years ended December 31, 1994, December 25, 1993 and December 26, 1992, is as follows:
1994 1993 1992 ---- ---- ---- (Amounts in thousands) Minimum rentals $101,918 85,967 74,796 Contingent rentals 11,942 10,731 10,267 Sublease rental income (2,364) (2,253) (1,728) -------- ------ ------ $111,496 94,445 83,335 ======== ====== ======
As of December 31, 1994, future minimum lease payments for all noncancelable operating leases and related subleases are as follows:
Minimum Sublease rental rental Year commitments income Net ---- ----------- ------ --- (Amounts in thousands) 1995 $ 110,949 1,339 109,610 1996 110,274 1,049 109,225 1997 109,423 902 108,521 1998 108,021 673 107,348 1999 106,716 458 106,258 Thereafter 1,110,333 930 1,109,403 ---------- ----- --------- $1,655,716 5,351 1,650,365 ========== ===== =========
The Company also owns shopping centers which are leased to tenants for minimum monthly rentals plus, in certain instances, contingent rentals. Contingent rentals received are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain instances, taxes. Contingent rentals were estimated at December 31, 1994 and are included in trade receivables. Rental income was approximately $8,624,000 in 1994, $7,624,000 in 1993, and $7,034,000 in 1992. The approximate amounts of minimum future rental payments to be received under operating leases are $9,956,000, $8,528,000, $6,681,000, $4,928,000 and $3,315,000 for the years 1995 through 1999, respectively, and $10,598,000 thereafter. 8 (Continued) 33 PUBLIX SUPER MARKETS, INC. Notes to Financial Statements (b) Lines of Credit The Company has committed lines of credit for $100,000,000 and one uncommitted line of credit for $25,000,000 available for short-term borrowings, with interest rates at or below the prime rate. There were no amounts outstanding as of December 31, 1994 or December 25, 1993. The Company pays no fees related to these lines. (c) Litigation A notice of charge was issued by the Equal Employment Opportunity Commission ("EEOC") on March 25, 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., Charge No. ###-##-####, alleging that the Company had engaged in past violations and was engaged in continuing violations of Title VII of the Civil Rights Act, as amended, by discriminating against women with respect to job assignments and promotions because of their sex. As currently amended, the charge covers employment practices by the Company in the State of Florida as a whole. On December 6, 1993, the EEOC gave notice it was expanding the scope of its investigation to include allegations of race discrimination. The EEOC has requested the Company to compile information and produce documents relating to these allegations. On October 13, 1994, the EEOC applied to the United States District Court, Southern District of Florida in Miami, for an order to show cause why an administrative subpoena issued by the EEOC to the Company should not be enforced (EEOC v. Publix Super Markets, Inc., Case No. 94-2119). The EEOC has agreed to substantial reductions in the information requested and further discussions as to additional reductions in the information requested are pending. The Company denies the allegations of the charge and the subsequent attempted expansion of the charge. The EEOC has advised that the charge does not in any respect constitute a final finding of a violation, but that the EEOC has a statutory duty to conduct a full and impartial investigation for the purpose of determining whether the facts and circumstances afford the EEOC reasonable cause to believe that the Company's employment patterns and practices constitute discrimination on the basis of sex and race. The EEOC's investigation of the charge remains at the stage of considering whether there is reasonable cause to believe the allegations of the charge. At this early stage, the likelihood of an adverse finding of the Company's liability and an estimate of the amount of any exposure for any such liability cannot be determined. The Company is also a party in various legal claims and actions considered in the normal course of business. Management believes that the ultimate disposition of these matters will not have a material effect on the Company's liquidity, results of operations or financial condition. 9 34 Schedule II PUBLIX SUPER MARKETS, INC. Valuation and Qualifying Accounts Years Ended December 31, 1994, December 25, 1993 and December 26, 1992 (Amounts in thousands)
Balance at Additions Deductions Balance at beginning charged to from end of Description of year income reserves year ----------- ------- ------ -------- ---- Year ended December 31, 1994: Reserves not deducted from assets: Self-insurance reserves: -Current $48,918 80,421 80,044 49,295 -Noncurrent 50,534 9,176 --- 59,710 ------- ------ ------ ------- $99,452 89,597 80,044 109,005 ======= ====== ====== ======= Year ended December 25, 1993: Reserves not deducted from assets: Self-insurance reserves: -Current $32,108 85,020 68,210 48,918 -Noncurrent 45,438 5,096 --- 50,534 ------- ------ ------ ------ $77,546 90,116 68,210 99,452 ======= ====== ====== ====== Year ended December 26, 1992: Reserves not deducted from assets: Self-insurance reserves: -Current $22,995 76,502 67,389 32,108 -Noncurrent 43,204 2,234 --- 45,438 ------- ------ ------ ------ $66,199 78,736 67,389 77,546 ======= ====== ====== ======
35 PUBLIX SUPER MARKETS, INC. Index to Exhibit EXHIBIT 9 Amendment to Voting Trust Agreement EXHIBIT 27 Financial Data Schedule for the year ended December 31, 1994. (for SEC use only)
EX-9 2 AMENDMENT TO THE VOTING TRUST AGREEMENT 1 EXHIBIT 9 AMENDMENT TO THE VOTING TRUST AGREEMENT This is an Amendment (the "Amendment") to a Voting Trust Agreement dated September 12, 1986 (the "Voting Trust Agreement") among Julia J. Fancelli, Howard M. Jenkins, Nancy E. Jenkins, and David F. Jenkins, any other person (including a trustee) who elects to become a party hereto (the "Shareholders") and Howard M. Jenkins as trustee (the "Trustee"). Background From time to time, several of the Shareholders have expressed a desire to sell voting trust certificates representing shares of Publix Super Markets, Inc. ("Publix") common stock. However, the experience of the Shareholders to date has been that the voting trust certificates have been difficult to sell. The Shareholders now realize that it is in their best interest to remove a number of shares from the voting trust created by the Voting Trust Agreement (the "Voting Trust") in order that each Shareholder might have a supply of readily marketable shares of Publix common stock. Accordingly, in the consideration of the mutual covenants and agreements set forth below, the parties agree as follows: Terms 1. Removal of Shares from the Voting Trust. The Trustee shall transfer 1,000,000 shares of Publix common stock, presently held by the Trustee pursuant to the Voting Trust Agreement to each of the Shareholders upon surrender of voting trust certificates representing 1,000,000 shares of Publix common stock, duly endorsed for cancellation. 2. Effective Time. This Amendment was effective March 1, 1994. 3. Amendment to be Deposited with Publix. The Trustee shall deposit a copy of an executed copy of this Amendment with the Secretary of Publix. 1 2 4. Voting Trust Agreement to Remain in Full Force and Effect. Except as specifically amended by this Amendment, the Voting Trust Agreement will remain in full force and effect. IN WITNESS WHEREOF, the undersigned have executed this Amendment on the dates set forth below. Date: January 20 , 1995. /s/ Julia Jenkins Fancelli ----------------------- ------------------------------ Julia Jenkins Fancelli Date: January 20 , 1995. /s/ Nancy E. Jenkins ----------------------- ------------------------------ Nancy E. Jenkins Date: January 20 , 1995. /s/ David F. Jenkins ----------------------- ------------------------------ Daivd F. Jenkins Date: January 20 , 1995. /s/ Howard M. Jenkins ----------------------- ------------------------------ Howard M. Jenkins Individually and as Trustee 2 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENT OF PUBLIX SUPERMARKET FOR THE YEAR ENDED DECEMBER 31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 U.S. DOLLARS YEAR DEC-31-1994 DEC-26-1993 DEC-31-1994 1 188,885 77,217 39,971 0 480,876 817,914 2,321,960 972,217 2,302,336 657,943 3,031 231,585 0 0 1,241,569 2,302,336 8,664,795 8,742,488 6,712,752 8,363,520 0 0 668 378,300 139,733 238,567 0 0 0 238,567 1.03 1.03