-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dhctAqCZstaC24ncx0LLHuiew1m7ZFzTWHBnoS9JSyQ/Ahue3e8BNuYADlhbA6Vx cIu8F6V+Egpn/mjPeNpebQ== 0000089107-95-000006.txt : 199506290000089107-95-000006.hdr.sgml : 19950629 ACCESSION NUMBER: 0000089107-95-000006 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERVICE MERCHANDISE CO INC CENTRAL INDEX KEY: 0000089107 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISC GENERAL MERCHANDISE STORES [5399] IRS NUMBER: 620816060 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09223 FILM NUMBER: 95550103 BUSINESS ADDRESS: STREET 1: 7100 SERVICE MERCHANDISE DR CITY: BRENTWOOD STATE: TN ZIP: 37027 BUSINESS PHONE: 6156606000 MAIL ADDRESS: STREET 1: PO BOX 24600 CITY: NASHVILLE STATE: TN ZIP: 37202 11-K 1 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities and Exchange Act of 1934 For the Plan Year Ended December 31, 1994 Commission File Number: 1-9223 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN SERVICE MERCHANDISE COMPANY, INC. P.O. Box 24600, Nashville, Tennessee 37202-4600 (mailing address) 7100 Service Merchandise Drive, Brentwood, Tennessee 37027 (address of principal executive office) 2 Financial Statements and Schedules Description Page - ----------- ---- Financial Statements: Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . 3 Statements of Net Assets Available for Plan Benefits as of December 31, 1994 and December 31, 1993 . . . . . . . . . . . . . . . . 4 Statements of Changes in Net Assets Available for Plan Benefits for the Plan Years Ended December 31, 1994 and December 31, 1993 . . . . 5 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . 6-15 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Supplemental Schedules: Schedule I - Line 27a--Schedule of Assets Held for Investment Purposes as of December 31, 1994 . . . . . . . . . . . . . . . . . . . . 17 Schedule II - Line 27d--Schedule of Reportable Transactions for the Plan Year Ended December 31, 1994. . . . . . . . . . . . . . . . . . . . 18 Consent: Independent Auditor's Consent (Exhibit 23) . . . . . . . . . . . . . . . . 19 NOTE: Other schedules not included have been omitted as they are not applicable. 3 DELOITTE & TOUCHE LLP Suite 2400 424 Church Street Third National Financial Center Nashville, Tennessee 37219-2396 INDEPENDENT AUDITORS' REPORT Employee Benefit Plan Committee Service Merchandise Company, Inc. Nashville, Tennessee We have audited the accompanying statements of net assets available for Plan benefits of the Service Merchandise Company, Inc. Savings and Investment Plan as of December 31, 1994 and 1993, and the related statement of changes in net assets available for Plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the 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 net assets available for Plan benefits of the Service Merchandise Company, Inc. Savings and Investment Plan as of December 31, 1994 and 1993 and the changes in its net assets available for Plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment purposes and (2) reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules, which are the responsibility of the Plan's management, have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP June 12, 1995 - --------------- Deloitte Touche Tohmatsu International - --------------- 4 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, ------------------------ 1994 1993 ----------- ----------- Assets: Investments - current value (cost: $67,236,752 and $59,769,414, respectively) $59,738,992 $65,598,341 Receivables: Loans to participants 4,409,231 4,551,495 Employee contributions 179,194 178,818 Employer contributions 68,960 70,274 Dividends and interest 5,793 5,893 ----------- ----------- Total assets 64,402,170 70,404,821 ----------- ----------- Liabilities: Payable to Plan participants 241,962 360,493 ----------- ----------- Total liabilities 241,962 360,493 ----------- ----------- Net assets available for Plan benefits $64,160,208 $70,044,328 =========== =========== See Notes to Financial Statements.
5 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, ------------------------ 1994 1993 ----------- ----------- Net assets available for Plan benefits, beginning of year $70,044,328 $70,177,921 ----------- ----------- Additions: Employee contributions 9,408,232 9,183,749 Employer contributions 3,657,306 3,606,001 Dividend and interest income 3,205,407 2,470,076 Net depreciation in investments (13,755,377) (8,009,618) ----------- ---------- Total additions 2,515,568 7,250,208 ----------- ---------- Deductions: Payments to Plan participants 8,399,688 7,383,801 ----------- ---------- Total deductions 8,399,688 7,383,801 ----------- ---------- Net deductions (5,884,120) (133,593) ----------- ---------- Net assets available for Plan benefits, end of year $64,160,208 $70,044,328 =========== =========== See Notes to Financial Statements.
6 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 NOTE 1: Description of Plan The Service Merchandise Company, Inc. Savings and Investment Plan (the "Plan") is a qualified defined contribution plan, under Section 401(a) and 401(k) of the Internal Revenue Code, covering eligible associates of Service Merchandise Company, Inc. (the "Company"). The Plan was created on July 1, 1983 and amended and restated February 6, 1991, effective January 1, 1989. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. The following brief description of the Plan is intended to give a general summary of its principal provisions. Participants should refer to the Plan agreement for more complete information. Eligibility All associates are eligible upon completing one year of qualified service, as defined in the Plan agreement, and reaching a minimum age of 21. Contributions Associates may contribute through salary deferral from 1% to 15% of their annual salary. The Plan provides for a matching contribution to be made by the Company based on the ratio of "net profit," as defined, to net sales of the Company for the fiscal year corresponding with the previous Plan year. "Net profit" is defined as the Company's net profit 1) excluding any additional interest and expenses attributable to the Company's 1989 recapitalization and 2) excluding the provision for income taxes and any extraordinary items. Net Profit as Percentage of Company Sales for Fiscal Year Corresponding Employer Match with Previous Plan Year Percentage ----------------------------------- -------------- 0% 0% Greater than 0% but less than 1% 10% 1% or more but less than 2% 20% 2% or more but less than 3% 30% 3% or more but less than 4% 40% 4% or more 50% The Company's maximum matching contribution is limited to the first 6% of a participant's compensation, as defined in the Plan. In accordance with the aforementioned calculation, the Company's matching contribution was at the 50% level for the 1994 and 1993 Plan years and will be at the 30% level for the 1995 Plan year. 7 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 Vesting Participants are immediately 100% vested in all associate and Company contributions. Participant Accounts Each participant's account is credited with the participant's contribution and Company's matching contribution. Plan earnings are allocated based on the participant's pro-rata share of each investment fund. Investment Options Under the Plan, participants have a variety of investment options available. Except for the Service Merchandise Company, Inc. Common Stock Fund, the funds are proprietary products of T. Rowe Price, the investment manager and Plan trustee. Participants may invest their account, in minimum whole increments of 1%, in any of the following investment options: Service Merchandise Company, Inc. Common Stock Fund: consists exclusively of the Company's registered common stock. New Income Fund: consists of investments in a variety of debt securities such as corporate bonds, U.S. and Canadian Government issues, certificates of deposit and commercial paper. U.S. Treasury Fund: consists entirely of investments in United States Treasury securities and other obligations directly guaranteed by the U.S. Government. Equity Income Fund: consists of investments in corporate equity securities and bonds. Capital Appreciation Fund: consists of investments in equity securities of established companies offering above-average prospects for capital appreciation. Spectrum Growth Fund: consists of investments in a diversified group of domestic and international T. Rowe Price funds which invest principally in equity securities. Balanced Fund: consists of 60% of investments in equity securities of established companies and 40% in U.S. Government and investment grade bonds. 8 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 Earnings from the funds, consisting primarily of interest and dividends, are automatically reinvested in their respective fund. At December 31, 1994, there were a total of 7,367 participants in the Plan. Employee participation, by fund, at December 31, 1994 was as follows: Service Merchandise Company, Inc. Common Stock Fund 3,855 New Income Fund 2,554 U.S. Treasury Fund 3,635 Equity Income Fund 2,455 Capital Appreciation Fund 1,151 Spectrum Growth Fund 1,184 Balanced Fund 957 Payment of Benefits Upon termination of employment prior to retirement, all participant balances $3,500 or less are distributed in a lump-sum amount. Balances above $3,500 may, at the participant's option, be distributed in a lump-sum or held until retirement. As of December 31, 1994 and 1993, net assets available for benefits included benefits of $1,293,467 and $2,745,576, respectively, due to participants who have withdrawn from participation in the Plan and have not received their benefit distribution. Upon becoming permanently and totally disabled or upon retirement, the participant has the option of receiving his or her balance as a lump- sum, in installments, or as a combination. Distributions upon the death of a participant are in a lump-sum amount. Tax Effect on Participants Participants' contributions, subject to certain regulatory maximums, are in tax deferred dollars. Company matching contributions and investment earnings allocated to participants' accounts are not taxable to the participant until the amounts are distributed from the Plan. 9 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 NOTE 2: Summary of Accounting Policies Method of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. Investments Investments are valued based on quoted market prices as of the last business day of the Plan year. Net Depreciation on Investments Net depreciation on investments includes both realized and unrealized depreciation. The net depreciation for the Plan year ended December 31, 1994 was $13,755,377 as compared to $8,009,618 for the year ended December 31, 1993. In addition to the overall stock market decline, this variance is primarily related to the net depreciation in the Service Merchandise Company, Inc. Common Stock Fund as the market price decreased to $4.75 at December 31, 1994 from $10.00 at December 31, 1993. NOTE 3: Share or Unit Values Units of each investment fund are allocated daily based on changes in market valuation and participant contributions; Company contributions are allocated quarterly. The market value, per share or unit, by fund was as follows:
Fund December 31, 1993 March 31, 1994 June 30, 1994 September 30,1994 December 31, 1994 - ---- ----------------- ----------------- ----------------- ------------------ ------------------- Shares Shares Shares Shares Shares or Market or Market or Market or Market or Market Units Value Units Value Units Value Units Value Units Value ----------------- ----------------- ----------------- ------------------ ------------------- Service Merchandise Company, Inc. Common Stock Fund 2,045,065 $10.00 2,149,344 $8.00 2,259,505 $6.37 2,468,268 $6.37 2,591,211 $4.75 New Income Fund 1,297,186 $9.24 1,302,021 $8.83 1,290,590 $8.59 1,288,814 $8.49 1,263,569 $8.39 U.S. Treasury Fund 16,101,525 $1.00 16,129,116 $1.00 16,618,392 $1.00 16,709,848 $1.00 17,211,268 $1.00 Equity Income Fund 686,075 $16.65 694,813 $15.92 680,927 $16.09 685,776 $16.83 718,706 $15.98 Capital Appreciation 165,708 $12.66 178,777 $12.56 191,122 $12.59 208,928 $13.30 240,636 $12.10 Spectrum Growth Fund 150,784 $11.87 216,891 $11.49 214,051 $11.45 224,106 $12.22 273,875 $11.13 Balanced Fund 145,114 $12.02 152,337 $11.46 162,444 $11.22 174,540 $11.53 188,100 $11.14
10 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 NOTE 4: Investments The following table presents the fair values, as determined by quoted market prices as of the last day of the Plan year, of the Plan's investments.
December 31, December 31, 1994 1993 ------------------------------------------------------------------------------ Number of Number of Shares or Shares or Units Units of Current of Current Description Participation Cost Value Participation Cost Value - --------------------------------------------------------------------------------------------------------- Service Merchandise Company, Inc. Common Stock Fund 2,591,211 $18,979,124 $12,308,252 2,045,065 $15,828,100 $20,450,647 Service Merchandise Company, Inc. Common Stock - Cash - - 77,852 - - 5,085 New Income Fund 1,263,569 11,268,568 10,601,342 1,297,186 11,687,945 11,986,001 U.S. Treasury Fund 17,211,268 17,211,268 17,211,268 16,101,525 16,101,525 16,101,525 Equity Income Fund 718,706 11,452,160 11,484,918 686,075 10,806,167 11,423,145 Capital Appreciation Fund 240,636 2,975,182 2,911,694 165,708 1,980,798 2,097,858 Spectrum Growth Fund 273,875 3,199,227 3,048,228 150,784 1,716,401 1,789,808 Balanced Fund 188,100 2,151,223 2,095,438 145,114 1,648,478 1,744,272 ----------- ----------- ----------- ----------- Total Investments $67,236,752 $59,738,992 $59,769,414 $65,598,341 =========== =========== =========== ===========
The allocation by investment fund, of net assets available for benefits as of December 31, 1994 and 1993 and changes in net assets available for benefits for the year ended December 31, 1994 and 1993 are as follows on pages 11 through 14: 11 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS TO INVESTMENT PROGRAMS FOR THE PLAN YEAR ENDED DECEMBER 31, 1994
Service Merchandise Company, Inc. New U.S. Equity Capital Spectrum Participant Common Income Treasury Income Appreciation Growth Balanced Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total - ---------------------------------------------------------------------------------------------------------------------------------- Assets: Investments - current value $12,386,104 $10,601,342 $17,211,268 $11,484,918 $2,911,694 $3,048,228 $2,095,438 - $59,738,992 Receivables: Loans to participants 9,082 5,691 11,251 5,621 1,225 1,612 1,056 $4,373,693 4,409,231 Employee contributions 45,638 25,036 42,449 29,659 12,931 13,853 9,628 - 179,194 Employer contributions 17,477 9,665 16,642 11,313 4,893 5,243 3,727 - 68,960 Dividends and interest 1,585 944 1,739 910 186 267 162 - 5,793 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total assets 12,459,886 10,642,678 17,283,349 11,532,421 2,930,929 3,069,203 2,110,011 4,373,693 64,402,170 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Liabilities: Payable to Plan participants 50,559 42,775 43,479 59,729 16,843 12,228 16,349 - 241,962 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total liabilities 50,559 42,775 43,479 59,729 16,843 12,228 16,349 - 241,962 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net assets available for Plan benefits $12,409,327 $10,599,903 $17,239,870 $11,472,692 $2,914,086 $3,056,975 $2,093,662 $4,373,693 $64,160,208 =========== =========== =========== =========== ========== ========== ========== ========== ===========
12 SERVICE MERCHANDISE COMPANY, INC. SAVINGS & INVESTMENT PLAN ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS TO INVESTMENT PROGRAMS FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
Service Merchandise Company, Inc. New U.S. Equity Capital Spectrum Participant Common Income Treasury Income Appreciation Growth Balanced Loan Stock Fund Fund Fund Fund Fund Fund Fund Total - ---------------------------------------------------------------------------------------------------------------------------------- Assets: Investments - current value $20,455,732 $11,986,001 $16,101,525 $11,423,145 $2,097,858 $1,789,808 $1,744,272 - $65,598,341 Receivables: Loans to participants 9,793 5,848 10,185 5,614 935 950 941 $4,517,229 4,551,495 Employee contributions 49,915 28,511 43,033 31,411 10,038 8,071 7,839 - 178,818 Employer contributions 18,919 11,061 17,085 11,954 3,992 4,071 3,192 - 70,274 Dividends and interest 1,801 935 1,690 964 133 197 173 - 5,893 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total assets 20,536,160 12,032,356 16,173,518 11,473,088 2,112,956 1,803,097 1,756,417 4,517,229 70,404,821 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Liabilities: Payable to Plan participants 107,920 61,822 56,923 74,060 18,937 18,991 21,840 - 360,493 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total liabilities 107,920 61,822 56,923 74,060 18,937 18,991 21,840 - 360,493 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net assets available for Plan benefits $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328 =========== =========== =========== =========== ========== ========== ========== ========== ===========
13 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS TO INVESTMENT PROGRAMS FOR THE PLAN YEAR ENDED DECEMBER 31, 1994
Service Merchandise Company, Inc. New U.S. Equity Capital Spectrum Participant Common Income Treasury Income Appreciation Growth Balanced Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total - ---------------------------------------------------------------------------------------------------------------------------------- Net assets available for Plan benefits, beginning of year $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Additions: Employee contributions 2,448,197 1,392,561 2,243,375 1,582,592 623,104 639,195 479,208 - 9,408,232 Employer contributions 954,490 549,240 899,614 599,794 226,833 243,302 184,033 - 3,657,306 Dividend and interest income 89,619 871,659 658,466 997,708 236,038 235,780 116,137 - 3,205,407 Net depreciation in investments (11,717,746) (1,088,224) - (455,765) (144,063) (208,432) (141,147) - (13,755,377) ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total additions (8,225,440) 1,725,236 3,801,455 2,724,329 941,912 909,845 638,231 - 2,515,568 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Deductions: Payments to Plan participants 1,415,147 1,232,373 2,228,621 1,939,428 387,064 505,294 199,512 492,249 8,399,688 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total deductions 1,415,147 1,232,373 2,228,621 1,939,428 387,064 505,294 199,512 492,249 8,399,688 Net transfer between funds 2,047,755 (1,355,814) 387,427 (324,390) 344,132 979,531 32,667 (2,111,308) - Participant loans processed (426,081) (507,680) (836,986) (386,847) (78,913) (111,213) (112,301) 2,460,021 - ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net additions (deductions) (8,018,913) (1,370,631) 1,123,275 73,664 820,067 1,272,869 359,085 (143,536) (5,884,120) ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net assets available for Plan benefits, end of year $12,409,327 $10,599,903 $17,239,870 $11,472,692 $2,914,086 $3,056,975 $2,093,662 $4,373,693 $64,160,208 =========== =========== =========== =========== ========== ========== ========== ========== ===========
14 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS TO INVESTMENT PROGRAMS FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
Service Merchandise Company, Inc. New U.S. Equity Capital Spectrum Participant Common Income Treasury Income Appreciation Growth Balanced Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total - -------------------------------------------------------------------------------------------------------------------------------- Net assets available for Plan benefits, beginning of year $28,056,261 $12,129,853 $16,836,431 $7,632,081 $1,002,476 $351,323 $660,647 $3,508,849 $70,177,921 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Additions: Employee contributions 2,671,771 1,533,422 2,462,926 1,484,836 452,062 270,505 308,227 - 9,183,749 Employer contributions 1,030,656 606,742 982,946 587,307 165,363 108,761 124,226 - 3,606,001 Dividend and interest income 92,974 807,565 487,836 814,334 85,368 124,880 57,119 - 2,470,076 Net appreciation/ (depreciation) in investments (9,198,749) 303,582 - 547,477 144,897 96,683 96,492 - (8,009,618) ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total additions (5,403,348) 3,251,311 3,933,708 3,433,954 847,690 600,829 586,064 - 7,250,208 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Deductions: Payments to Plan participants 2,180,328 1,520,514 1,995,697 931,604 89,255 243,160 67,327 355,916 7,383,801 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Total deductions 2,180,328 1,520,514 1,995,697 931,604 89,255 243,160 67,327 355,916 7,383,801 ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net transfers between funds 850,196 (1,363,714) (1,619,041) 1,779,160 375,996 1,119,592 600,913 (1,743,102) - Participant loans processed (894,541) (526,402) (1,038,806) (514,563) (42,888) (44,478) (45,720) 3,107,398 - ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net additions (deductions) (7,628,021) (159,319) (719,836) 3,766,947 1,091,543 1,432,783 1,073,930 1,008,380 (133,593) ----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------- Net assets available for Plan benefits, end of year $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328 =========== =========== =========== =========== ========== ========== ========== ========== ===========
15 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993 NOTE 5: Loans to Participants Participants may borrow from their account subject to certain restrictions and limitations. Outstanding loans cannot exceed 50% of the participant's account balance and are subject to a maximum of $50,000 and a minimum of $1,000. The Plan requires the trustee to establish an interest rate on the date of loan origination which is comparable to the interest rate charged by lending institutions for loans made under similiar circumstances. Currently, loans bear interest at 1% over the prime rate in effect. Loan repayment periods generally range from one to five years. At December 31, 1994, 1,956 participants had loans outstanding from the Plan. NOTE 6: Administration of the Plan The Plan is administered by the Employee Benefit Plan Committee appointed by the Company's Board of Directors. T. Rowe Price of Baltimore, Maryland serves as trustee and investment manager. Currently, trustee fees are paid directly by the Company. NOTE 7: Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, Plan assets will be distributed, if permissible, or transferred for the benefit of participants in relation to their vested account balances. NOTE 8: Tax Status The Plan has received a determination letter indicating it is qualified under Section 401(a) and meets the additional requirements of Section 401(k) of the Internal Revenue Code. The Plan is exempt from federal income tax under Section 501(a) of the Internal Revenue Code. In March of 1995, the Plan applied for a determination letter with regard to the Plan Amendment and Restatement and anticipates a favorable ruling on its application. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN June 19,1995 By: /s/ Robert C. Eimers ---------------------- Robert C. Eimers Committee Chairman June 19,1995 By: /s/ Glen A. Bodzy ---------------------- Glen A. Bodzy Committee Member June 19,1995 By: /s/ S. Cusano ---------------------- S. Cusano Committee Member June 19,1995 By: /s/ Gary M. Witkin ---------------------- Gary M. Witkin Committee Member June 19,1995 By: /s/ Raymond Zimmerman ---------------------- Raymond Zimmerman Committee Member 17 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN SCHEDULE I - LINE 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1994
(a) (b) (c) (d) (e) Description of investment Identity of issue, borrower, lessor, including maturity date, rate of interest, Current of similiar party collateral, par or maturity value Cost Value ------------------------------------------------------------------------------------------------------------------ * Service Merchandise Company, Inc. Common Stock $18,979,124 $12,386,104 * T. Rowe Price New Income Fund 11,268,568 10,601,342 * T. Rowe Price U.S. Treasury Fund 17,211,268 17,211,268 * T. Rowe Price Equity Income Fund 11,452,160 11,484,918 * T. Rowe Price Capital Appreciation Fund 2,975,182 2,911,694 * T. Rowe Price Spectrum Growth Fund 3,199,227 3,048,228 * T. Rowe Price Balanced Fund 2,151,223 2,095,438 ----------- ----------- Total investments $67,236,752 $59,738,992 =========== =========== Loans to Participants Interest rate: Hi: 12 1/2% Low: 7% $4,409,231 =========== * Party-in-interest
18 SERVICE MERCHANDISE COMPANY, INC. SAVINGS AND INVESTMENT PLAN SCHEDULE II - LINE 27d SCHEDULE OF REPORTABLE TRANSACTIONS For the Plan Year Ended December 31, 1994
(a) (b) (c) (d) (e) (f) (g) (h) (i) Description of asset (include Current interest rate Expense value of and maturity incurred asset on Identity of party in case Purchase Selling Lease with Cost of transaction Net involved of a loan) Price Price rental transaction Asset date Gain/(Loss) - ------------------------------------------------------------------------------------------------------------------------------- Individual transactions None applicable. Series of transactions Service Merchandise Company, Inc. Common Stock $6,005,520 - - - $6,005,520 $6,016,306 - Service Merchandise Company, Inc. Common Stock - $2,440,952 - - 2,854,496 2,440,952 $(413,544) T. Rowe Price New Income Fund 3,171,434 - - - 3,171,434 3,171,739 - T. Rowe Price New Income Fund - 3,468,174 - - 3,590,810 3,468,174 (122,636) T. Rowe Price U.S. Treasury Fund 5,347,438 - - - 5,347,438 5,347,438 - T. Rowe Price U.S. Treasury Fund - 4,237,695 - - 4,237,695 4,237,695 - T. Rowe Price Equity Income Fund 3,942,830 - - - 3,942,830 3,938,855 - T. Rowe Price Equity Income Fund - 3,421,314 - - 3,296,837 3,421,314 124,477 - ------------------------------------------------------------------------------------------------------------------------------
EX-23 2 DELOITTE & EXHIBIT 23 TOUCHE LLP Suite 2400 424 Church Street Third National Financial Center Nashville, Tennessee 37219-2396 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-50185 of Service Merchandise Company, Inc. on Form S-8 of our report dated June 12, 1995, appearing in this Annual Report on Form 11-K of the Service Merchandise Company, Inc. Savings and Investment Plan for the year ended December 31, 1994. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP June 19, 1995 - --------------- Deloitte Touche Tohmatsu International - --------------- -----END PRIVACY-ENHANCED MESSAGE-----