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 30, 199528, 1996
( ) 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 3380133815
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (941) 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. (X)( )
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--------------- ------------------------------ --------------
The aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 15, 19964, 1997 was approximately
$2,200,549,106.$2,761,432,191.
The number of shares of Registrant's common stock outstanding as of
March 15, 19964, 1997 was 224,576,226.219,559,931.
DOCUMENTS INCORPORATED BY REFERENCE
Pages 2 through 8 of Proxy Statement solicited for the 19961997 Annual
Meeting of Stockholders to be held on May 14, 1996 is13, 1997 are 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
CompanyPublix Super Markets,
Inc. and its wholly owned subsidiary, hereinafter collectively
referred to as the "Company," is in the business of operating retail
food supermarkets in Florida, Georgia, South Carolina and South Carolina.Alabama.
The Company's supermarkets sell groceries, dairy, 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, and Lawrenceville, Georgia. The bakery and deli plants are
located in Lakeland, Florida. The Company receives the food and non-
food items it distributes from many sources throughout the United
States.sources. These products are
generally available in sufficient quantities to enable the Company to
adequately satisfy its customers. The Company believes that its
sources of supply of these products and raw materials used in
manufacturing are adequate for its needs and that it is not dependent
upon a single or relatively few suppliers.
The Company operated 508534 supermarkets at the end of 1995,1996,
compared with 470508 at the beginning of the year. In 1995, 441996, 34 stores
were opened, sixeight stores were closed, and 1412 stores were expanded or
remodeled. The net increase in square footage was 2.01.4 million or 9.8%6.2%
since 1994.1995. The Company entered the Georgia market in 1991, and the South
Carolina market in 1993.1993, and the Alabama market in 1996. At the end
of 1995,1996, the Company had 441446 stores located in Florida, 5673 located in
Georgia, and 1113 located in South Carolina. The Company has announced plans to open storesCarolina and two located in Alabama beginning in 1996.Alabama.
As of year end, the Company had eight12 stores under construction in
Florida, 1510 in Georgia, twothree in South Carolina and twoone in Alabama.
During 1995, the Company completed construction of a new distribution
center and dairy processing plant 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 1996.1997.
The influx of winter residents to Florida and increased purchases
of food during the traditional Thanksgiving, Christmas and ChristmasEaster
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 95,000103,000 employees at the end of
1995,1996, compared with 90,00095,000 at the beginningend of the year.1995. Of this total,
approximately 64,000 at the end of 1996 and 60,000 at the end of 1995 and 58,000 at the end
of 1994
were not full-time employees.
The Company's research and development expenses are
insignificant.
Compliance by the Company with Federal, state and local
environmental protection laws during 19951996 had no material effect upon
capital expenditures, earnings or the competitive position of the
Company.
3
Item 2. Properties
- -------------------
At year end, the Company operated approximately 22.523.9 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 4345 locations both the building and land are owned and at 2629 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, theThe 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- --------------------------
The Company was the subject of a notice of charge (the "Charge") was
issued by the Equal Employment Opportunity Commission (the "EEOC") onin
March 22, 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., Charge No. ###-##-####,
alleging that the Company had and was engaged in violations of Title
VII of the Federal Civil Rights Act by discriminating against women
with respect to job assignments and promotions because of their
sex.gender. The Charge was subsequently expanded to include allegations
of race discrimination.
A purportedThe Company was also a defendant in a certified class action
was filed against the Company onin July 19, 1995 in the Federal District Court for the Middle
District of Florida, Tampa Division Case No. 95-1162-Civ-T,(the "Court"), by Melodee
Shores and seven othercertain present
or former employees of the Company, individually and on behalf of all
other persons similarly situated (the "Shores case"). Four additional namedThe plaintiffs
have been added
to the suit. In their Complaint, the plaintiffs allegealleged that the Company hashad and is currentlywas then engaged in a policy and
pattern or practice of gender-based discriminatory treatment of female
employees with respect to job assignments, promotional opportunities,
management positions, equal pay, full-time status, bonuses, and other
benefits and conditions of employment, all in violation of Title VII
of the Federal Civil Rights Act, as well as the Florida Civil Rights
Act of 1992. The plaintiffs seek, among other relief, certification of the
suit as alitigation class action, a declaratory judgment that the Company's
practices are unlawful, back pay and other compensatory damages,
exemplary and punitive damages, and injunctive relief against future
improper conduct.
On March 12, 1996,certified by the Court certified a class comprisedconsisted of
all female employees of the Company who from May 22, 1991 (Florida and
South Carolina operations) or from October 19, 1991 (Georgia
operations) to the date of trial havehad worked areor were working or will work in the Company's retail
operations. Expresslyoperations; expressly excluded arewere females who havehad worked only in the
Company's pharmacy operations.
InOn January 1996,24, 1997, the Court granted a motion filed byCompany, the EEOC to
interveneand the plaintiffs in
the Shores case but limited the interventionentered into a settlement agreement (the "Shores
Agreement") with respect to all matters related to the issues raisedcase. On
January 27, 1997, the Court preliminarily approved the Shores
Agreement. All parties intend to diligently pursue final approval of
the Shores Agreement with the Court.
Under the Shores Agreement, the Company will pay $81.5 million to
the plaintiffs, their counsel and other class members. The Company
agreed to establish a formal system by which employees will be
considered for promotion. Promotions will be based on qualifications
and expressed interest of employees. The Company has also agreed to
make certain other procedural changes.
4
Also on January 24, 1997, the original plaintiffs. Under its Intervenor's
Complaint,Company agreed with the EEOC seeks(the
"EEOC Agreement") to correct what it allegessettle all pending EEOC charges related to be the
Company's unlawful employment practices on the basis of sexgender
and requestsrace discrimination that the Court, among other things, grant injunctive relief,
order the Company to provide back pay and compensation for
nonpecuniary losses resulting from the alleged unlawful practices and
order the Company to pay punitive damages.
Intervention by the EEOCwere not included in the Shores
case does not end the
EEOC's separate investigation underAgreement. Under the EEOC Charge, at leastAgreement, the Company agreed to pay an
additional $3.5 million to members of the affected classes. The
Company also agreed to follow procedures with respect to allegations of race discrimination, allegations of
discrimination against unsuccessful applicants and other matters not
involved inclass members
similar to those established under the Shores case.Agreement.
The Charge covers such employment
practices bysettlement agreements recognize that the Company continues to
deny that it has engaged in the State of Florida as a whole.any unlawful discriminatory activity.
The Company denieswill pay the allegations contained insettlements from liquid investment funds
currently on hand and the EEOC Charge
and in the complaint in the Shores case, and intends to continue to
vigorously defend these matters. The Company is unable, at this time,
to estimate with any degree of certainty the potential losses that
might result from an adverse decision in these matters. Accordingly,
no provision for any potential liability has been made insettlements were charged against the
Company's fiscal 1996 fourth quarter results. Management does not
believe that the settlements will cause any cash flow or liquidity
problems or will have any material impact on the Company's future
financial statements.results.
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 4445 Chairman of Cousin of 1976
the Board and Charles H.Jenkins,H. Jenkins,
Chief Executive Jr., uncle of
Officer W. Edwin Crenshaw
and brother-in-law
of Hoyt R. Barnett
Charles H. Jenkins, Jr. 5253 Chairman of the Cousin of 1974
Executive Committee Howard M. Jenkins and
cousin of
W. Edwin Crenshaw
W. Edwin Crenshaw 4546 President Nephew of 1990
Howard M. Jenkins
and cousin of
Charles H. Jenkins, Jr.
William H. Vass 4647 Executive 1986
Vice President
Hoyt R. Barnett 5253 Executive Brother-in-law of 1977
Vice President Howard M. Jenkins
Jesse L. Benton 5354 Vice President 1988
S. Keith Billups 6364 Secretary 1968
Bennie F. Brown 5455 Vice President 1992
R. Scott Charlton 3738 Vice President 1992
William R. Curry 5556 Vice President 1990
Carolyn C. Day 5051 Assistant Secretary 1992
Glenn J. Eschrich 5152 Vice President 1995
William V. Fauerbach 50 Vice President 1997
John R. Frazier 46 Vice President 1997
M. Clayton Hollis, Jr. 3940 Vice President 1994
Mark R. Irby 4041 Vice President 1989
Tina P. Johnson 3637 Vice President 1990
and Treasurer
James J. Lobinsky 5657 Vice President 1992
Thomas M. McLaughlin 4546 Vice President 1994
Sharon A. Miller 5253 Assistant Secretary 1992
Robert H. Moore 5354 Vice President 1994
6
EXECUTIVE OFFICERS OF THE COMPANY
Served as
Nature of Family Officer of
Relationship Company
Name Age Position Between Officers Since
---- --- -------- ---------------- -----
Thomas M. O'Connor 4849 Vice President 1992
David P. Phillips 3637 Vice President 1990
and Controller
James H. Rhodes II 5152 Vice President 1995
Daniel M. Risener 5556 Vice President 1985
Edward T. Shivers 5657 Vice President 1985
James F. Slappey 5354 Vice President 1992
The terms of all officers expire at the annual meeting of the Company
in May 1997, with the exception of Bennie F. Brown and William R.
Curry whose retirements were effective December 31, 1996. 7
Name Business Experience During Last Five Years
- ---- ------------------------------------------
Howard M. Jenkins Chairman of the Board and Chief Executive
Officer of the Company.
Charles H. Jenkins, Jr. Chairman of the Executive Committee of the Company.
W. Edwin Crenshaw Vice President of the Company to January 1994, Executive
Vice President to January 1996, President thereafter.
William H. Vass Vice President and Treasurer of the Company to November
1992, Executive Vice President and Trustee of the
ESOT thereafter.
Hoyt R. Barnett Executive Vice President of the Company to March 1992,
Executive Vice President and Trustee of the Profit Sharing
Plan thereafter.
Jesse L. Benton Vice President of the Company.
S. Keith Billups Secretary of the Company.
Bennie F. Brown Director of Meat Operations - Lakeland DivisionVice President of the Company to January 1992, Vice President thereafter.Company.
R. Scott Charlton Director of ManufacturingVice President of the Company to January 1992,
Vice President thereafter.Company.
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.
William V. Fauerbach Assistant Director of Retail Operations - Miami Division
of the Company to January 1994, Regional Director of
Retail Operations - Miami Division to January 1997, Vice
President thereafter.
John R. Frazier Real Estate Manager of the Company to August 1996,
Director of Real Estate to January 1997, Vice President
thereafter.
M. Clayton Hollis, Jr. 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 to March 1996, Vice
President, Treasurer and Trustee of the 401(k) Plan -
Publix Stock Fund thereafter.
James J. Lobinsky Corporate Director of General MerchandiseVice President of the Company
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 AccountingAdministration 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 - LakelandAtlanta 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 to March 1996, Vice President
and Controller thereafter.
James H. Rhodes II Director of Human Resources of the Company to April 1995,
Vice President thereafter.
Daniel M. Risener Vice President of the Company.
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 1996 and 1995 was
$13.75
per share until March 1, 1995, when the price increased to $14.25
per share. In the second quarter the price remained unchanged at
$14.25 per share. In the third quarter the price increased to
$15.50 per share and in the fourth quarter the price increased to
$16.25 per share. 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.as follows:
1996 1995
---- ----
January - February $16.25 $13.75
March - April 16.75 14.25
May - July 18.50 14.25
August - October 20.00 15.50
November - December 20.75 16.25
(b)Approximate Number of Equity Security Holders
---------------------------------------------
As of February 28, 1996,March 4, 1997, the approximate number of holders of record of
the Company`s common stock was 64,000.67,000.
(c)Dividends
---------
The Company paid cash dividends of $.11$.13 per share of common stock in
19951996 and $.09$.11 per share in 1994.1995. 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
- -----------------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Sales:
Sales $9,393,021$10,431,302 9,393,021 8,664,795 7,472,652 6,664,309
6,139,731
Percent increase 11.1% 8.4% 16.0% 12.1% 8.5% 6.6%
Comparable store sales
percent increase 5.6% 2.8% 5.2% 6.4% 4.6%
2.3%
Earnings:
Gross profit $2,124,036$ 2,424,799 2,124,036 1,952,043 1,638,044 1,479,788 1,391,255
Earnings before income
tax expense and
cumulative effect
of changes in
accounting
principles $ 416,584 381,500 378,300 288,709 253,677 240,063
Net earnings before
cumulative effect
of changes in
accounting
principles $ 265,176 242,141 238,567 183,811 166,455
158,044
Net earnings $ 265,176 242,141 238,567 180,317 166,455 158,044
Net earnings as a
percent of sales 2.54% 2.58% 2.75% 2.41% 2.50% 2.57%
Common stock:
Weighted average
shares outstanding* 221,195,884 225,852,938 231,514,459 236,249,110 239,248,081 242,872,610
Net earnings per
common share,
based on weighted
average shares
outstanding* $ 1.20 1.07 1.03 .76 .70
.65
Dividends per share* $ .13 .11 .09 .08 .08 .07
Financial data:
Capital expenditures $ 226,752 256,629 374,190 320,167 202,597
158,983
Working capital $ 317,265 232,570 159,971 137,160 241,191
271,376
Current ratio 1.35 1.31 1.24 1.23 1.48
1.62
Total assets $2,559,365$ 2,921,084 2,559,365 2,302,336 2,054,315 1,791,247
1,623,720
Long-term debt $ 108 1,765 3,031 4,930 6,938
10,679
Stockholders' equity $1,614,717$ 1,751,179 1,614,717 1,473,154 1,308,009 1,168,091 1,068,463
Other:
Number of stores 534 508 470 425 400 389
NOTE: DollarsAmounts are in thousands, except per share and 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 30, 1995,28, 1996, the Company operated 508534 retail grocery
stores representing approximately 22.523.9 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 1995,fiscal 1996, the Company had 441446 stores located in
Florida, 5673 located in Georgia, and 1113 located in South Carolina.Carolina and two
located in Alabama. The Company opened its first store in Georgia
during the fourth quarter of 1991;1991, its first store in South Carolina in
the fourth quarter of 1993;1993, and
has announced plans to open its first store in Alabama duringin the third
quarter of 1996. The Company opened 2013 stores in Florida, 1917 stores in
Georgia, and fivetwo stores in South Carolina and two stores in Alabama during
1995.1996. 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 $639.9 million in 1996, compared with $488.3 million in
1995 compared withand $428.4 million in 1994 and $379.8 million in 1993.1994. Working capital was approximately
$317.3 million as of December 28, 1996, as compared with $232.6 million
and $160.0 million as of December 30, 1995 as compared with $160.0 million
and $137.2 million as of December 31, 1994, and December 25, 1993,
respectively. Cash and cash equivalents aggregated approximately
$457.4 million as of December 28, 1996 as compared with $276.7 million
and $188.9 million as of December 30, 1995 as compared with $188.9 million
and $199.0 million as of December 31, 1994,
respectively.
Capital expenditures totaled $226.8 million in 1996. These
expenditures were primarily incurred in connection with the opening of
34 new stores and December 25, 1993,
respectively.remodeling or expanding 12 stores which added 1.4
million square feet. In addition, the Company closed eight stores.
Capital expenditures totaled $256.6 million in 1995. These
expenditures were primarily incurred in connection with the opening of
44 new stores and remodeling or expanding 1419 stores which added 2.2
million square feet. Construction was completed on a new distribution
center and dairy processing plant in Lawrenceville, Georgia. In
addition, the Company closed six stores. 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 2.6 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 1.6 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.
The Company hopes to open as many as 4044 stores in 1996.1997. Although
real estate development is unpredictable, the Company's 19961997 new store
growth represents a reasonable estimate of anticipated future growth.
Capital expenditures for 1996,1997, primarily made up of new store
construction and the remodeling or expanding of several existing
stores, are expected to be approximately $225$300 million. This capital
program is subject to continuing change and review. The 19961997 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 $122.0 million, $103.1 million $89.6 million and $90.1$89.6
million in fiscal 1996, 1995 1994 and 1993,1994, 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 totaling $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 30, 199528, 1996 or December 31, 1994.30, 1995.
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 $65.6
million in 1996 compared with $74.3 million in 1995 compared with $77.2 million in 1994.1995. Long-term
investments, primarily comprised of tax exempt bonds and preferred
stocks, were approximately $172.5 million in 1996 compared with $119.4
million in 1995 compared with $124.5
million in 1994.1995. Management believes the Company's liquidity will
continue to be strong.
The Company currently repurchases common stock at the
stockholders' request in accordance with the terms of the Company's
Employee Stock Purchase Plan. The Company expects to continue to
repurchase its common stock, as offered by its stockholders from time
to time, at its then currently appraised value. However, such
purchases are not required and the Company retains the right to
discontinue them at any time.
Results of Operations
- ---------------------
The Company's fiscal year ends on the last Saturday in December.
Fiscal years 19951996 and 19931995 included 52 weeks and fiscal year 1994
included 53 weeks.
Sales for fiscal 1996 were $10,431.3 million as compared with
$9,393.0 million in fiscal 1995, an 11.1% increase. This reflects an
increase of $526.0 million or 5.6% in sales from stores that were open
for all of both years (comparable stores) and sales of $512.3 million
or 5.5% from the net impact of new and closed stores since the
beginning of 1995. Net new stores contributed an increase of 6.2% or
approximately 1.4 million square feet in retail space in fiscal 1996.
Sales for fiscal 1995 were $9,393.0 million as compared with
$8,664.8 million in fiscal 1994, an 8.4% increase. On a comparative 52
week basis, the Company estimates that sales rose 10.3%. This
reflects an increase of $243.6 million or 2.8% in sales from
comparable stores
that were open for all of both years (comparable stores) and sales of $653.7 million or 7.5% from the net
impact of new and closed stores since the beginning of 1994. Net new
stores contributed an increase of 9.8% or approximately 2.0 million
square feet in retail space in fiscal 1995.
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 new and closed
stores since the beginning of 1993. Net new stores contributed an
increase of 13.3% or approximately 2.4 million square feet in retail
space in fiscal 1994.
Cost of merchandise sold including store occupancy, warehousing
and delivery expenses was approximately 77.4%76.8% of sales in 19951996 as
compared with 77.4% and 77.5% in 1995 and 78.1% in 1994, and 1993, respectively. In 19951996
and 1994,1995, cost of merchandise sold decreased as a percentage of sales
due to buying and merchandising efficiencies.
Operating and administrative expenses, as a percent of sales,
were 19.4%19.3%, 19.1%19.4% and 19.1% in 1996, 1995 1994 and 1993,1994, respectively. 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.
12
Nonrecurring Charge
- -------------------
An $89.0 million nonrecurring charge was recorded in the fourth
quarter of 1996 to cover the settlements of class action litigation
against the Company involving alleged violations of the Federal Civil
Rights Act and Florida law with respect to certain of the Company's
retail employees and certain other allegations resulting from a notice
of charge issued by the Equal Employment Opportunity Commission. The
nonrecurring charge covers the full cost of the settlements, including
the agreed payments to class members and their counsel, as well as the
estimated cost of implementing and complying with the procedures
agreed to be established under the settlements. The impact of the
nonrecurring charge on net earnings was $46.4 million or $.21 per
share for fiscal 1996.
The liability for the settlements is reflected as a current
nonrecurring accrued liability in the Company's consolidated balance
sheet as of December 28, 1996.
Accounting Standards
- --------------------
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 requiredrequires 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 this 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 was not material. In accordance with the Standard, prior
period financial statements were not restated to reflect the change in
accounting principle.
In March 1995, the Financial Accounting Standards Board issuedThe Company adopted Financial Accounting Standard No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," effective for fiscal years beginning after December 15, 1995.in the first quarter of 1996. This
Standard requires that long-lived assets and certain identifiable
intangibles held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of thean asset may not be recoverable. This Standard also
requires that long-lived assets and certain identifiable intangibles
to be disposed of be reported at the lower of the carrying amount or
fair value less costs to sell. The Company has historically reserved for
losses related toeffect of adopting the impairmentStandard as
of long-lived assets; therefore, the adoptionbeginning of this Standard willfiscal 1996 was not materially affect the Company's
financial statements.material.
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 (1996(1997 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 65 through 8 of the 19961997 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
The following table sets forth, as of March 15, 1996,4, 1997, the information
with respect to common stock ownership of all Directors,directors, including
some who are 5% or more beneficial owners, and all Officersofficers and
Directorsdirectors 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 13,071,24412,299,237 (2) 5.825.60
Hoyt R. Barnett 24,694,80922,594,229 (3) 11.0010.29
W. Edwin Crenshaw 643,571641,812 *
Mark C. Hollis 1,528,2881,432,188 (4) *
Charles H. Jenkins, Jr. 1,898,8221,791,593 *
Charles H. Jenkins, Sr. 2,504,144 1.12
Howard M. Jenkins 13,727,46113,683,037 (5) 6.116.23
Tina P. Johnson 1,003,4361,681,624 (6) *
E. V. McClurg 1,991,1321,987,892 *
William H. Vass 31,374,55932,590,655 (7) 13.9714.84
All Officers and Directors
as a group (29(28 individuals) 93,200,16088,063,160 (8) 41.5040.11
All Other Beneficial Owners:
- ----------------------------
Publix Super Markets, Inc.
Profit Sharing Plan and Trust 23,278,750 10.3721,200,000 9.66
Publix Super Markets, Inc.
Employee Stock Ownership Plan
and Trust 31,341,749 13.9632,556,845 14.83
Nancy E. Jenkins 14,703,305 6.556.70
*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 33801.33815.
(2) Includes 1,290,3231,268,316 shares which are also shown as beneficially
owned by Carol Jenkins Barnett's husband, Hoyt R. Barnett, but
excludes all other shares beneficially owned by Hoyt R. Barnett,
as to which Carol Jenkins Barnett disclaims beneficial ownership.
(3) Hoyt R. Barnett is Trustee of the Profit Sharing Plan which is
the record owner of 23,278,75021,200,000 shares of common stock over which
he exercises sole voting and investment power. Total shares
beneficially owned include 1,290,3231,268,316 shares also shown as
beneficially owned by his wife, Carol Jenkins Barnett, but
exclude all other shares of common stock beneficially owned by
Carol Jenkins Barnett, as to which Hoyt R. Barnett disclaims
beneficial ownership.
(4) All shares are owned in a 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.
The two
family trusts for which Mark C. Hollis was Co-Trustee with
Peoples Bank of Lakeland were terminated on August 29, 1995 and
shares were distributed to the beneficiaries of the trusts.
Therefore, certain shares which were the subject of the trusts
are no longer reflected as beneficially owned by Mark C. Hollis.
(5) Howard M. Jenkins has sole voting and sole investment power over
6,090,5912,802,490 shares of common stock which are held directly, sole
voting and sole investment power over 162,103 shares which are
held indirectly and shared voting and shared investment power
over 7,457,07310,700,373 shares which are held indirectly. The Voting
Trust Agreement for which Howard M. Jenkins was Voting Trustee
was terminated on June 9, 1995; and therefore certain shares
which were the subject of the Voting Trust are no longer
reflected as beneficially owned by Howard M. Jenkins.
(6) Tina P. Johnson is Trustee of the 401(k) Plan - Publix Stock Fund
which is the record owner of 959,2251,634,149 shares of common stock
over which she has sole voting and shared investment power.
(7) William H. Vass is Trustee of the Employee Stock Ownership Plan
(ESOT) which is the record owner of 31,341,74932,556,845 shares of common
stock over which he has shared investment power. As Trustee,
William H. Vass exercises sole voting power over 614,024643,923 shares
in the ESOT because such shares have not been allocated to
participants' accounts. For ESOT shares allocated to participants'
accounts, William H. Vass will vote ESOT shares as instructed by
participants and allparticipants. Additionally, William H. Vass will vote ESOT shares
for which no instruction is received.
(8) Includes 55,579,72455,390,994 shares of common stock owned by the Profit
Sharing Plan, ESOT and 401(k) Plan.
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 19961997 Proxy Statement. 15
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
- ------------------------------------------------------------------------
(a) Consolidated Financial Statements and Schedule
----------------------------------------------
The consolidated financial statements and schedule listed in the
accompanying Index to Consolidated Financial Statements and
Schedule are filed as part of this Annual Report on Form 10-K.
(b) Reports on Form 8-K
-------------------
The Company filed a report on Form 8-K dated December 5, 1995,January 24, 1997,
reporting the EEOC's filing of a Motion To InterveneShores Agreement and an
Intervener's Complaintthe EEOC Agreement as described
in Part I, Item 3.
(c) Exhibits
--------
3(a). Articles of Incorporation of the Company,
together with all amendments thereto are incorporated by
reference to the exhibits to the Annual Report of the
Company on Form 10-K for the year ended December 25, 1993.
3(b). Amended and Restated By-laws of the Company are incorporated by
reference to the exhibits to the Annual Report of the
Company on Form 10-K, as amended, for the year ended
December 26, 1987.Company.
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 is incorporated by reference to the exhibits
to the Annual Report of the Company on Form 10-K for the
year ended December 31, 1994.
Deed of Termination of Voting Trust Agreement
dated September 12, 1986, between Howard M. Jenkins, Julia
J. Fancelli, Nancy E. Jenkins and David F. Jenkins effective
June 9, 1995 is incorporated by reference to the exhibits to
the Annual Report of the Company on Form 10-K for the year
ended December 30, 1995.
21. Subsidiary of the Company.
27. Financial Data Schedule for the year ended December 30, 1995.28, 1996.
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 15, 19964, 1997 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 15, 1996
- ---------------------------
Howard M. Jenkins
Vice Chairman of the
/s/ Mark C. Hollis Board and Director March 15, 1996
- ---------------------------
Mark C. Hollis
Chairman of the Executive
/s/ Charles H. Jenkins, Jr. Committee and Director March 15, 1996
- ---------------------------
Charles H. Jenkins, Jr.
/s/ W. Edwin Crenshaw President and Director March 15, 1996
- ---------------------------
W. Edwin Crenshaw
Executive Vice President
and Director
/s/ William H. Vass (Principal Financial Officer) March 15, 1996
- ---------------------------
William H. Vass
Executive Vice President
/s/ Hoyt R. Barnett and Director March 15, 1996
- ---------------------------
Hoyt R. Barnett
Vice President,
/s/ Tina P. Johnson Treasurer and Director March 15, 1996
- ---------------------------
Tina P. Johnson
Vice President and Controller
/s/ David P. Phillips (Principal Accounting Officer) March 15, 1996Chairman of the Board, Chief
Executive Officer and Director
/s/ Howard M. Jenkins (Principal Executive Officer) March 4, 1997
- ---------------------------
Howard M. Jenkins
Chairman of the Executive
/s/ Charles H. Jenkins, Jr. Committee and Director March 4, 1997
- ---------------------------
Charles H. Jenkins, Jr.
/s/ W. Edwin Crenshaw President and Director March 4, 1997
- ---------------------------
W. Edwin Crenshaw
Executive Vice President
and Director
/s/ William H. Vass (Principal Financial Officer) March 4, 1997
- ---------------------------
William H. Vass
Executive Vice President
/s/ Hoyt R. Barnett and Director March 4, 1997
- ---------------------------
Hoyt R. Barnett
Vice President,
/s/ Tina P. Johnson Treasurer and Director March 4, 1997
- ---------------------------
Tina P. Johnson
Vice President and Controller
/s/ David P. Phillips (Principal Accounting Officer) March 4, 1997
- ---------------------------
David P. Phillips
17
PUBLIX SUPER MARKETS, INC.
Index to Consolidated Financial Statements and Schedule
Independent Auditors' Report
Consolidated Financial Statements:
Consolidated Balance Sheets - December 28, 1996 and December 30, 1995
Consolidated Statements of Earnings - Years ended December 28, 1996,
December 30, 1995 and December 31, 1994
Statements of Earnings - Years ended December 30, 1995, December 31, 1994
and December 25, 1993Consolidated Statements of Stockholders' Equity - Years ended
December 28, 1996, December 30, 1995 and December 31, 1994
and December 25, 1993Consolidated Statements of Cash Flows - Years ended December 28, 1996,
December 30, 1995 and December 31, 1994
and December 25, 1993
Notes to Consolidated Financial Statements
The following consolidated supporting schedule of Publix Super Markets, Inc.
for the years ended December 28, 1996, December 30, 1995 and
December 31, 1994 and
December 25, 1993 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 of
Publix Super Markets, Inc.:
We have audited the consolidated financial statements of Publix Super
Markets, Inc. (the "Company") as listed in the accompanying index. In
connection with our audits of the consolidated financial statements,
we also have audited the consolidated financial statement schedule as
listed in the accompanying index. These consolidated financial
statements and financial statement schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these consolidated financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Publix Super Markets, Inc. as of December 30, 199528, 1996 and December 31, 199430,
1995 and the results of its operations and its cash flows for each of
the years in the three-year period ended December 30, 199528, 1996 in
conformity with generally accepted accounting principles. Also in our
opinion, the related consolidated 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 and postretirement benefits and
income taxes during 1993.
KPMG PEAT MARWICK LLP
Tampa, Florida
February 28, 1996, except as to
Note 8(c), which is as
of March 12, 199626, 1997
19
PUBLIX SUPER MARKETS, INC.
Consolidated Balance Sheets
December 30, 199528, 1996 and
December 31, 199430, 1995
Assets 1996 1995 1994
------ ---- ----
(Amounts in thousands)
Current assets:
Cash and cash equivalents $ 457,405 276,700 188,885
Short-term investments 65,586 74,292 77,217
Trade receivables (principally due from
suppliers) 61,221 44,492 40,849
Merchandise inventories 570,254 542,886 480,876
Deferred tax assets 71,027 36,475 28,320
Prepaid expenses 1,339 3,269 1,767
---------- ----------
Total current assets 1,226,832 978,114 817,914
---------- ----------
Long-term investments 172,486 119,412 124,494
Investment in joint ventures 4,888 5,036
Other noncurrent assets 4,203 5,14911,491 9,091
Property, plant and equipment:
Land 87,052 77,741 67,462
Buildings and improvements 577,129 547,647 477,203
Furniture, fixtures and equipment 1,747,854 1,599,133 1,420,663
Leasehold improvements 282,922 256,517 234,133
Construction in progress 33,509 59,167 122,499
---------- ----------
2,728,466 2,540,205 2,321,960
Less accumulated depreciation 1,218,191 1,087,457 972,217
---------- ----------
Net property, plant and equipment 1,510,275 1,452,748 1,349,743
---------- ----------
$2,559,365 2,302,336$2,921,084 2,559,365
========== ==========
See accompanying notes to consolidated financial statements. 20
PUBLIX SUPER MARKETS, INC.
Consolidated Balance Sheets
December 30, 199528, 1996 and
December 31, 199430, 1995
Liabilities and Stockholders' Equity 1996 1995 1994
------------------------------------ ---- ----
(Amounts in thousands)
Current liabilities:
Current installments of long-term debt $ 130 1,265 1,619
Accounts payable 523,497 500,399 442,939
Accrued expenses:
Salaries and wages 47,115 41,276 33,880
Contribution to retirement plans 73,555 67,348 66,768
Self-insurance reserves 64,250 58,442
49,295
Other 90,984 75,496
60,713Nonrecurring charge 89,000 ---
---------- ----------
Total accrued expenses 364,904 242,562 210,656
---------- ----------
Federal and state income taxes 21,036 1,318 2,729
---------- ----------
Total current liabilities 909,567 745,544 657,943
Long-term debt, excluding current installments 108 1,765 3,031
Deferred tax liabilities, net 100,127 103,707 78,168
Self-insurance reserves 73,336 60,435 59,710
Accrued postretirement benefit cost 37,295 33,197
30,330Other noncurrent liabilities 49,472 ---
---------- ----------
Total liabilities 1,169,905 944,648
829,182---------- ----------
Stockholders' equity:
Common stock of $1 par value. Authorized
300,000,000 shares; issued and outstanding
219,942,912 shares in 1996 and 225,746,454
shares in 1995 and 231,585,497
shares in 1994219,943 225,746 231,585
Additional paid-in capital 91,991 85,280 78,421
Reinvested earnings 1,437,902 1,303,287 1,165,128
---------- ----------
1,749,836 1,614,313 1,475,134
Unrealized gain (loss) on investment
securities available-for-sale, net 1,343 404 (1,980)
---------- ----------
Total stockholders' equity 1,751,179 1,614,717 1,473,154
Commitments and contingencies
---------- ----------
$2,559,365 2,302,336$2,921,084 2,559,365
========== ==========
See accompanying notes to consolidated financial statements. 21
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Earnings
Years ended December 28, 1996, December 30, 1995
and December 31, 1994
and December 25, 1993
1996 1995 1994 1993
---- ---- ----
(Amounts in thousands,
except per share amounts)
Revenues:
Sales $9,393,021$10,431,302 9,393,021 8,664,795 7,472,652
Other income, net 94,667 77,685 77,693
81,317
--------------------- ---------- ----------
Total revenues 10,525,969 9,470,706 8,742,488
7,553,969
--------------------- ---------- ----------
Costs and expenses:
Cost of merchandise sold including
store occupancy, warehousing
and delivery expenses 8,006,503 7,268,985 6,712,752 5,834,608
Operating and administrative
expenses 2,013,655 1,819,792 1,650,768
1,429,540Nonrecurring charge 89,000 --- ---
Interest expense 227 429 668
1,112
--------------------- ---------- ----------
Total costs and expenses 10,109,385 9,089,206 8,364,188
7,265,260
--------------------- ---------- ----------
Earnings before income tax expense and cumulative effect
of changes in accounting
principles416,584 381,500 378,300 288,709
Income tax expense 151,408 139,359 139,733
104,898
---------- ---------- ----------
Net earnings before cumulative effect
of changes in accounting principles 242,141 238,567 183,811
Cumulative effect on prior years of
changes in accounting principles --- --- (3,494)
--------------------- ---------- ----------
Net earnings $ 265,176 242,141 238,567
180,317=========== ========== ========== ==========
Net earnings per common share before
cumulative effect of changes in
accounting principles $ 1.07 1.03 .78
Cumulative effect on prior years
of changes in accounting
principles --- --- (.02)
---------- ---------- ----------
Net earnings per common share,
based on weighted average
shares outstanding $ 1.20 1.07 1.03
.76=========== ========== ========= ==========
See accompanying notes to consolidated financial statements. 22
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Stockholders' Equity
Years ended December 28, 1996, December 30, 1995
and December 31, 1994
and December 25, 1993
Common Unrealized
stock gain (loss)
acquired on 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 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$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
ESOTretirement plans --- 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
Change 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
Net earnings for the year --- --- 242,141 --- --- 242,141
Cash dividends, $.11 per share --- --- (25,250) --- --- (25,250)
Contribution of 3,369,603 shares to
ESOTretirement plans --- 6,859 --- 47,898 --- 54,757
11,196,418 shares acquired from stockholders --- --- --- (162,137) --- (162,137)
Sale of 1,987,772 shares to stockholders --- --- --- 29,668 --- 29,668
Change in valuation allowance --- --- --- --- 2,384 2,384
Retirement of 5,839,043 shares (5,839) --- (78,732) 84,571 --- ---
-------- ------ --------- ------- ----------- ---------
Balances at December 30, 1995 $225,746225,746 85,280 1,303,287 --- 404 1,614,717
Net earnings for the year --- --- 265,176 --- --- 265,176
Cash dividends, $.13 per share --- --- (29,184) --- --- (29,184)
Contribution of 3,156,519 shares to
retirement plans --- 6,711 --- 57,487 --- 64,198
11,161,186 shares acquired from stockholders --- --- --- (206,235) --- (206,235)
Sale of 2,200,962 shares to stockholders --- --- --- 41,568 --- 41,568
Change in valuation allowance --- --- --- --- 939 939
Retirement of 5,803,705 shares (5,803) --- (101,377) 107,180 --- ---
-------- ------ --------- ------- ----- ---------
Balances at December 28, 1996 $219,943 91,991 1,437,902 --- 1,343 1,751,179
======== ====== ========= ======= =========== =========
See accompanying notes to consolidated financial statements. 23
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Cash Flows
Years ended December 28, 1996, December 30, 1995
and December 31, 1994
and December 25, 1993
1996 1995 1994 1993
---- ---- ----
(Amounts in thousands)
Cash flows from operating activities:
Cash received from customers $9,451,659$10,482,420 9,451,659 8,725,307 7,523,939
Cash paid to employees and suppliers (9,589,610) (8,758,575) (8,102,577) (6,993,535)
Dividends and interest received 28,816 21,649 17,344
16,323
Interest paid (256) (432) (763) (1,112)
Income taxes paid (170,412) (124,884) (136,533) (93,583)
Payment for self-insured claims (103,286) (93,250) (80,044) (68,210)
Other operating cash receipts 626 548 12,231 309
Other operating cash payments (8,395) (8,376) (6,610)
(4,303)----------- ---------- --------- -------------------
Net cash provided by operating
activities 639,903 488,339 428,355
379,828----------- ---------- --------- -------------------
Cash flows from investing activities:
Payment for property, plant and
equipment (226,752) (256,629) (374,190) (320,167)
Proceeds from sale of property, plant
and equipment 11,072 3,559 1,500 4,750
Payment for investment securities -
available-for-sale (AFS) (453,334) (241,414) (207,051) ---
Payment for investment securities -
held-to-maturity (HTM) --- (14,735) --- Payment for investment securities --- --- (291,506)(14,735)
Proceeds from sale and maturity of
investment securities - AFS 408,808 252,009 257,396 ---
Proceeds from sale and maturity of
investment securities - HTM --- 16,527 --- Proceeds from sale of investment
securities --- --- 214,721
Investment in joint ventures 300 185 (656)16,527
Other, net 990 116 (2,174)
---------(2,349) 1,290 301
----------- ---------- ----------
Net cash used in investing activities (262,555) (241,185) (320,252)
(395,032)
-------------------- ---------- ----------
Cash flows from financing activities:
Payment of long-term debt (2,792) (1,620) (2,290) (1,950)
Proceeds from sale of common stock 41,568 29,668 19,207 16,514
Payment for acquisition of common stock (206,235) (162,137) (114,350)
(74,860)
Dividends paid (29,184) (25,250) (20,782)
(18,976)
--------- -------------------- ---------- ----------
Net cash used in financing activities (196,643) (159,339) (118,215)
(79,272)
--------- -------------------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents 180,705 87,815 (10,112) (94,476)
Cash and cash equivalents at beginning
of year 276,700 188,885 198,997
293,473
--------------------- ---------- ----------
Cash and cash equivalents at end of year $ 457,405 276,700 188,885
198,997
===================== ========== ==========
See accompanying notes to consolidated financial statements. (Continued) 24
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Cash Flows
(Continued)
1996 1995 1994 1993
---- ---- ----
(Amounts in thousands)
Reconciliation of Net Earnings to Net Cash
Provided by Operating Activities
Net earnings $242,141$265,176 242,141 238,567 180,317
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 158,454 144,717 128,993
116,797
Contribution to ESOTretirement plans 36,313 32,500 27,500 22,000
Deferred income taxes (38,721) 15,886 12,981
1,462
(Gain) lossLoss on sale of property, plant and
equipment 242 5,891 3,672 (1,225)
(Gain) loss on sale of investments 126 (681) 3,234 (5,682)
Self-insurance reserves in excess of
current payments 18,709 9,872 9,553 21,906
Postretirement accruals in excess of
current payments 4,098 2,867 3,865
1,858
DecreaseIncrease (decrease) in advance purchase
allowances (3,358)60,773 (3,358) (3,358)
Other, net 967 1,236 (1,201) (50)
Changes in current assets and liabilities:
(Increase) decrease in trade receivables (16,729) (3,643) 3,528 (5,550)
Increase in merchandise inventories (27,368) (62,010) (76,274)
(40,647)
Increase(Increase) decrease in prepaid expenses 1,930 (1,502) (36) (860)
Increase in accounts payable and accrued
expenses 156,215 105,834 82,855 83,698
Increase (decrease) in federal and state
income taxes payable 19,718 (1,411) (5,524)
5,668
--------- --------- ----------------- ------- -------
Total adjustments 374,727 246,198 189,788
199,511
--------- --------- ----------------- ------- -------
Net cash provided by operating activities $488,339$639,903 488,339 428,355
379,828
========= ========= ================= ======= =======
See accompanying notes to consolidated financial statements. 24
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
December 28, 1996, December 30, 1995
and December 31, 1994
and December 25, 1993
(1) Summary of Significant Accounting Policies
------------------------------------------
(a)Business
--------
The Company is in the business of operating retail food supermarkets in
Florida, Georgia, South Carolina and Alabama.
(b)Principles of Consolidation
---------------------------
The consolidated financial statements include
the Company and its wholly owned subsidiary. All significant
intercompany balances and transactions have been eliminated
in consolidation.
(c)Definition of Fiscal Year
-------------------------
The fiscal year ends on the last Saturday in December. Fiscal
years 19951996 and 19931995 include 52 weeks. Fiscal year 1994
includes 53 weeks.
(b) (d)Cash Equivalents
----------------
The Company considers all liquid investments
with maturities of three months or less to be cash
equivalents.
(c) (e)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 iswas not material
(note 7).
(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) material.
(f)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) (g)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.
Assets are recorded at cost. Assets acquired
subsequent to fiscal year 1991 are depreciated using the
straight-line method. Assets acquired prior to fiscal year
1992 are depreciated using the straight-line or declining
balance method.
(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 required 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).
(Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(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.
(Continued)
26
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(i) Income TaxesLong-Lived Assets
-----------------
At the beginning of fiscal year 1993,1996, 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 5).
(j) New Accounting Standard
In March 1995, the Financial Accounting Standards
Board issued Financial Accounting Standard No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Bebe
Disposed Of,Of." effective for fiscal years beginning after
December 15, 1995. This Standard requires that long-lived assets and
certain identifiable intangibles held and used by an entity be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may
not be recoverable. This Standard also requires that long-lived
assets and certain identifiableidentifable intangibles to be disposed of be
reported at the lower of the carrying amount or fair value less
costs to sell. The Company has historically reserved for losses
related toeffect of adopting the impairmentStandard as of long-lived assets; therefore, the
adoptionbeginning of this Standard willfiscal 1996 was not materially affect the
Company's financial statements.
(k) material.
(j)Use of Estimates
----------------
The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
(l) (k)Reclassification
----------------
Certain 1994 and 19931995 amounts have been
reclassified to conform with the 19951996 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 $101,531,000, $96,231,000 $90,276,000 and
$83,741,000$90,276,000 as of December 28, 1996, December 30, 1995 and December
31, 1994, and December 25,
1993, respectively. Also, net earnings would have increased by
approximately $2,764,000 or $.01 per share in 1996, $3,106,000 or
$.01 per share in 1995 and increased by
$3,408,000 or $.01 per share in 1994 and decreased $1,706,000 or less
than $.01 per share in 1993.
2
(Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements1994.
(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 1995, 1994 and 1993 the Company made
benefit payments to beneficiaries of retirees of approximately
$1,311,000, $657,000 and $702,000, respectively.
As discussed in Note 1, the Company adopted Standard 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.
1995 1994 1993
(Amounts in thousands)
Net postretirement benefit cost consists
of the following components:
Service cost attributed to service
during the year $ 1,362 1,440 1,039
Interest cost on postretirement
benefit obligation 2,815 2,405 2,052
Net amortization --- 145 ---
------- ----- -----
Net periodic postretirement benefit cost $ 4,177 3,990 3,091
======= ===== =====
The following summarizes the reconciliation of the amounts
recognized in the Company's balance sheets as of December 30,
1995 and December 31, 1994:
1995 1994
---- ----
(Amounts in thousands)
Accumulated postretirement benefit obligation:
Retirees $13,820 12,105
Fully eligible active plan participants 10,951 9,032
Other active plan participants 17,979 12,041
------- ------
Accumulated postretirement benefit obligation 42,750 33,178
Unrecognized net loss (9,553) (2,848)
------- ------
Accrued postretirement benefit cost $33,197 30,330
======= ======
3 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
The following actuarial assumptions were used in the calculation
of the year end accumulated postretirement benefit obligation:
1995 1994 1993
---- ---- ----
Discount Rate 7.25% 8.25% 7.25%
Salary Increase Rate 4.00% 4.00% 4.00%
The change in the discount rate from 7.25% to 8.25% in 1994
decreased the accumulated postretirement benefit obligation by
$5,366,000. The change in the discount rate from 8.25% to 7.25%
in 1995 increased the accumulated postretirement benefit
obligation by $5,922,000 and is expected to increase annual
postretirement benefit costs by $923,000 beginning in 1996.
(4) 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
$44,941,000 in 1995, $44,564,000 in 1994 and $33,976,000 in 1993.
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 1995,
1994 and 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 $32,500,000 in 1995, $27,500,000 in
1994 and $22,000,000 in 1993. During 1995, 1994 and 1993, the
Board of Directors approved additional contributions to the ESOT
of $22,444,000, $22,257,000 and $16,983,000, respectively. The
additional contributions are made to the ESOT during the
subsequent year.
Effective January 1, 1995, the Company adopted 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 Company may make
a discretionary annual matching contribution to eligible
participants of this plan as determined by the Board of
Directors. During 1995, the Board of Directors approved a match
of 50% of eligible contributions up to 3% of eligible wages not
to exceed a maximum of $750 per employee. The match, which is
made in the subsequent year, will be in the form of common stock
of the Company.
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.
4 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(5) Income Taxes
As discussed in Note 1, the Company adopted Standard 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 in fiscal 1993.
The provision for income taxes consists of the following:
Current Deferred Total
------- -------- -----
(Amounts in thousands)
1995:
Federal $104,996 13,546 118,542
State 18,477 2,340 20,817
-------- ------- -------
$123,473 15,886 139,359
======== ======= =======
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
======== ======= =======
The actual tax expense for 1995, 1994 and 1993 differs from the
"expected" tax expense for those years (computed by applying the
U.S. Federal corporate tax rate of 35% to earnings before income
taxes) as follows:
1995 1994 1993
---- ---- ----
(Amounts in thousands)
Computed "expected" tax expense $133,525 132,405 101,048
State income taxes (net of
Federal income tax benefit) 13,532 13,550 10,178
Tax exempt interest (5,530) (4,589) (5,065)
Effect of change in tax rate on
deferred tax assets/liabilities --- --- 970
Other, net (2,168) (1,633) (2,233)
-------- ------- -------
$139,359 139,733 104,898
======== ======= =======
5 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
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 30, 1995 and December 31, 1994 are as
follows:
1995 1994
---- ----
(Amounts in thousands)
Deferred tax assets:
Self-insurance reserves $ 43,529 40,484
Postretirement benefit cost 12,806 11,700
Retirement plan contributions 9,133 ---
Uniform inventory capitalization 5,216 6,348
Other 12,909 12,923
---------- ------
Total deferred tax assets $ 83,593 71,455
========== ======
Deferred tax liabilities:
Difference in basis of property,
plant and equipment, net $ 150,721 120,663
Other 104 640
---------- -------
Total deferred tax liabilities $ 150,825 121,303
========== =======
The Company expects the results of future operations to generate
sufficient taxable income to allow utilization of deferred tax
assets.
(6) Fair Value of Financial Instruments
-----------------------------------
The following methods and assumptions were used by the Company in
estimating the fair value of its financial instruments:
Cash and cash equivalents: The carrying amount for cash and cash
equivalents approximates fair value.
Investment securities: The fair values for marketable debt and
equity securities are based on quoted market prices.
Long-term debt, including current installments: The carrying amount
for long-term debt approximates fair value based on current interest
rates.
The carrying amount of the Company's financial instruments as of
December 30, 199528, 1996 and December 31, 199430, 1995 approximated their respective
fair values.
62 (Continued) 27
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(7)(4) Investments
-----------
Management determines the appropriate classification of debt
securities at the time of purchase and reevaluates such designation
as of each balance sheet date. Debt securities are classified as
held-to-maturity when the Company has the positive intent and ability
to hold the securities to maturity. Held-to-maturity securities are
stated at cost, adjusted for amortization of premiums and accretion
of discounts to maturity. Such amortization and accretion is
included in other income, net. The Company had no held-to-maturity
securities as of December 30, 199528, 1996 and December 31, 1994.
In 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.30, 1995.
All of the Company's debt securities and marketable equity securities
are classified as available-for-sale. Available-for-sale securities
are carried at fair value, with the unrealized gains and losses, net
of tax, reported as a separate component of stockholders' equity.
The cost of debt securities in this category is adjusted for
amortization of premiums and accretion of discounts to maturity.
Such amortization and accretion is included in other income, net.
Realized gains and losses and declines in value judged to be other-than-temporaryother-
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 30, 199528, 1996 and December 31, 1994:30, 1995:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
(Amounts in thousands)
1995:1996:
Tax-free bonds $169,366 1,121 304 170,183$156,694 713 416 156,991
Equity securities 23,681 843 1,003 23,52179,191 2,584 694 81,081
-------- ----- ----- -------
$193,047 1,964 1,307 193,704$235,885 3,297 1,110 238,072
======== ===== ===== =======
1994:1995:
Tax-free bonds $185,042 53 2,101 182,994$169,366 1,121 304 170,183
Equity securities 19,805 334 1,509 18,63023,681 843 1,003 23,521
-------- ----- ----- -------
$204,847 387 3,610 201,624$193,047 1,964 1,307 193,704
======== ===== ===== =======
7 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
For the fiscal years ended December 30, 199528, 1996 and December 31, 1994,30, 1995,
the realized gains on sales of available-for-sale securities totaled
$887,000$451,000 and
$1,562,000,$887,000, respectively, and the realized losses totaled $663,000$577,000 and
$4,751,000,$663,000, respectively. The unrealized gains and losses on available-for-sale
securities, net of applicable income taxes, included as a separate
component of stockholders' equity, was an
unrealized gain$1,343,000 at the end of 1996
and $404,000 at the end of 1995 and an unrealized loss
of $1,980,000 at the end of 1994.1995.
The amortized cost and estimated fair value of debt and marketable
equity securities classified as available-for-sale as of December 30,
199528,
1996 and December 31, 1994,30, 1995, by expected maturity, are as follows:
1996 1995
1994
---- -------------------------- ----------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
(Amounts in thousands)
Due in one year or less $ 65,487 65,586 74,255 74,292 77,410 77,130
Due after one year through
three years 57,795 57,985 39,809 40,077 65,873 64,700
Due after three years 33,412 33,420 55,302 55,814 41,759 41,164
--------
------- ------- ------- -------
156,694 156,991 169,366 170,183
185,042 182,994
Equity securities 79,191 81,081 23,681 23,521 19,805 18,630
--------
------- ------- ------- $193,047-------
$235,885 238,072 193,047 193,704 204,847 201,624
======== ======= ======= =======
As3 (Continued)
28
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(5) Postretirement Benefits
-----------------------
The Company provides life insurance benefits for salaried and
hourly full-time employees. Such employees retiring from the
Company on or after attaining age 55 and having ten years of
December 31,credited service are entitled to postretirement life insurance
benefits. The Company funds the life insurance benefits on a pay-
as-you-go basis. During 1996, 1995 and 1994, the Company classifiedmade
benefit payments to beneficiaries of retirees of approximately
$1,420,000, $1,310,000 and $657,000, respectively.
Net postretirement benefit cost consists of the following
components:
1996 1995 1994
---- ---- ----
(Amounts in thousands)
Service cost attributed to service
during the year $ 1,980 1,362 1,440
Interest cost on postretirement
benefit obligation 3,208 2,815 2,405
Net amortization 330 --- 145
------- ----- -----
Net periodic postretirement benefit cost $ 5,518 4,177 3,990
======= ===== =====
The following summarizes the reconciliation of the amounts
recognized in the Company's consolidated balance sheets as of
December 28, 1996 and December 30, 1995:
1996 1995
---- ----
(Amounts in thousands)
Accumulated postretirement benefit obligation:
Retirees $15,337 13,820
Fully eligible active plan participants 12,981 10,951
Other active plan participants 18,201 17,979
------- ------
Accumulated postretirement benefit obligation 46,519 42,750
Unrecognized net loss (9,224) (9,553)
------- ------
Accrued postretirement benefit cost $37,295 33,197
======= ======
The following actuarial assumptions were used in the calculation
of the year end accumulated postretirement benefit obligation:
1996 1995 1994
---- ---- ----
Discount Rate 7.75% 7.25% 8.25%
Salary Increase Rate 4.00% 4.00% 4.00%
The change in the discount rate from 8.25% to 7.25% in 1995
increased the accumulated postretirement benefit obligation by
$5,922,000. The change in the discount rate from 7.25% to 7.75%
in 1996 decreased the accumulated postretirement benefit
obligation by $4,064,000 and is expected to decrease annual
postretirement benefit costs by $637,000 beginning in 1997.
4 (Continued)
29
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(6) Retirement Plans
----------------
The Company has a trusteed, noncontributory profit sharing plan
for the benefit of eligible employees. The amount of the
Company's contribution to this plan is determined by the Board of
Directors. The contribution cannot exceed 15% of compensation
paid to participants. The expense recorded for contributions to
this plan amounted to $49,010,000 in 1996, $44,941,000 in 1995
and $44,564,000 in 1994.
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 1996, the
Company contributed 1,750,000 shares of its one investment in common stock as a trading security. This investment had a costto the
ESOT at an appraised value resulting in an expense to the Company
of $198,000$36,313,000. In 1995 and a fair1994, 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 $87,000.$32,500,000 in
1995 and $27,500,000 in 1994. During 1996, 1995 and 1994, the
Board of Directors approved additional contributions to the ESOT
of $24,505,000, $22,444,000 and $22,257,000, respectively. The
additional contributions are made to the ESOT during the
subsequent year.
Effective January 1, 1995, the Company soldadopted 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 Company may make
a discretionary annual matching contribution to eligible
participants of this security.plan as determined by the Board of
Directors. During 1996 and 1995, the Board of Directors approved
a match of 50% of eligible contributions up to 3% of eligible
wages not to exceed a maximum of $750 per employee. The realized loss on this investmentmatch,
which is includedmade in the statementsubsequent year, is in the form of earningscommon
stock of the Company. The expense recorded for the Company's
match to the 401(k) plan was approximately $7,421,000 and
$5,441,000 in 1996 and 1995, respectively.
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.
(7) Nonrecurring Charge
-------------------
An $89.0 million nonrecurring charge was recorded in the fourth
quarter of 1996 to cover the settlements of class action
litigation against the Company involving alleged violations of
the Federal Civil Rights Act and Florida law with respect to
certain of the Company's retail employees and certain other
allegations resulting from a notice of charge issued by the Equal
Employment Opportunity Commission. The nonrecurring charge
covers the full cost of the settlements, including the agreed
payments to class members and their counsel, as well as the
estimated cost of implementing and complying with the procedures
agreed to be established under the settlements (see note 9).
The liability for the settlements is reflected as a reductioncurrent
nonrecurring accrued liability in the Company's consolidated
balance sheet as of otherDecember 28, 1996.
5 (Continued)
30
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(8) Income Taxes
------------
The provision for income net.
(8)taxes consists of the following:
Current Deferred Total
------- -------- -----
(Amounts in thousands)
1996:
Federal $162,460 (33,073) 129,387
State 27,669 (5,648) 22,021
-------- ------ -------
$190,129 (38,721) 151,408
======== ====== =======
1995:
Federal $104,996 13,546 118,542
State 18,477 2,340 20,817
-------- ------ -------
$123,473 15,886 139,359
======== ====== =======
1994:
Federal $107,798 11,090 118,888
State 18,954 1,891 20,845
-------- ------ -------
$126,752 12,981 139,733
======== ====== =======
The actual tax expense for 1996, 1995 and 1994 differs from the
"expected" tax expense for those years (computed by applying the
U.S. Federal corporate tax rate of 35% to earnings before income
taxes) as follows:
1996 1995 1994
---- ---- ----
(Amounts in thousands)
Computed "expected" tax expense $145,804 133,525 132,405
State income taxes (net of
Federal income tax benefit) 14,309 13,532 13,550
Tax exempt interest (7,066) (5,530) (4,589)
Other, net (1,639) (2,168) (1,633)
-------- ------- -------
$151,408 139,359 139,733
======== ======= =======
The tax effects of temporary differences that give rise to
significant portions of deferred tax assets and deferred tax
liabilities as of December 28, 1996 and December 30, 1995 are as
follows:
1996 1995
---- ----
(Amounts in thousands)
Deferred tax assets:
Self-insurance reserves $ 50,363 43,529
Nonrecurring charge 34,390 ---
Advance purchase allowances 23,483 ---
Postretirement benefit cost 14,356 12,806
Retirement plan contributions 9,432 9,133
Inventory capitalization 7,552 5,216
Other 11,161 12,909
________ _______
Total deferred tax assets $150,737 83,593
======== =======
Deferred tax liabilities:
Property plant and equipment,
principally due to depreciation $179,570 150,721
Other 267 104
-------- -------
Total deferred tax liabilities $179,837 150,825
======== =======
The Company expects the results of future operations to generate
sufficient taxable income to allow utilization of deferred tax
assets.
6 (Continued)
31
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated 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 28, 1996, December 30, 1995 and December
31, 1994, and December
25, 1993, is as follows:
1996 1995 1994 1993
---- ---- ----
(Amounts in thousands)
Minimum rentals $129,288$135,273 129,288 101,918 85,967
Contingent rentals 9,892 9,525 11,942 10,731
Sublease rental income (3,086) (2,600) (2,364 (2,253)(2,364)
-------- ------- ------
$136,213-------
$142,079 136,213 111,496 94,445
======== ======= =============
8 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
As of December 30, 1995,28, 1996, 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)
19961997 $ 128,618 2,080 126,538
1997 127,661 1,820 125,841142,698 3,311 139,387
1998 125,943 1,370 124,573141,716 2,910 138,806
1999 124,587 902 123,685140,405 2,424 137,981
2000 122,529 555 121,974138,717 2,039 136,678
2001 137,658 1,393 136,265
Thereafter 1,266,734 1,229 1,265,5051,381,368 1,945 1,379,423
---------- ----------- ---------
$1,896,072 7,956 1,888,116$2,082,562 14,022 2,068,540
========== =========== =========
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 30,
199528, 1996 and are included in trade
receivables. Rental income was approximately $9,491,000 in 1996,
$9,443,000 in 1995 and $8,624,000 in 1994 and
$7,624,000 in 1993.1994. The approximate
amounts of minimum future rental payments to be received under
operating leases are $6,823,000, $5,532,000, $4,186,000, $2,715,000$7,308,000, $5,950,000, $4,436,000,
$3,144,000 and $1,769,000$2,157,000 for the years 19961997 through 2000,2001,
respectively, and $7,766,000$7,085,000 thereafter.
(b)Lines of Credit
---------------
The Company has committed lines of credit totaling $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 30, 199528, 1996
or December 31,
1994.30, 1995. The Company pays no fees related to these
lines.
7 (Continued)
32
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(c)Litigation
A----------
The Company was the subject of a notice of charge (the
"Charge") was issued by the Equal Employment Opportunity
Commission (the "EEOC") onin March 22, 1992, In the Matter of: Kemp
v. Publix Super Markets, Inc.,
Charge No. ###-##-####, alleging that the Company had
and was engaged in violations of Title VII of the Federal
Civil Rights Act by discriminating against women with respect
to job assignments and promotions because of their sex.gender.
The Charge was subsequently expanded to include allegations
of race discrimination.
9 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
A purportedThe Company was also a defendant in a certified class action
was filed against the Company onin July 19, 1995 in the Federal District Court for the
Middle District of Florida, Tampa Division Case No. 95-1162-Civ-T,(the "Court"), by
Melodee Shores and seven othercertain present or former employees of the Company,
individually and on behalf of all other persons similarly
situated (the "Shores case"). Four
additional namedThe plaintiffs have been added to the suit. In
their Complaint, the plaintiffs allegealleged that
the Company hashad and is currentlywas then engaged in a policy and pattern
or practice of gender-based discriminatory treatment of
female employees with respect to job assignments, promotional
opportunities, management positions, equal pay, full-time
status, bonuses, and other benefits and conditions of
employment, all in violation of Title VII of the Federal
Civil Rights Act, as well as the Florida Civil Rights Act of
1992. The plaintiffs
seek, among other relief, certification of the suit as alitigation class action, a declaratory judgment that the Company's
practices are unlawful, back pay and other compensatory
damages, exemplary and punitive damages, and injunctive
relief against future improper conduct.
On March 12, 1996,certified by the Court certified a class comprisedconsisted
of all female employees of the Company who from May 22, 1991
(Florida and South Carolina operations) or from October 19,
1991 (Georgia operations) to the date of trial havehad worked areor were working or will work in the
Company's retail operations.
Expresslyoperations; expressly excluded arewere females
who havehad worked only in the Company's pharmacy operations.
InOn January 1996,24, 1997, the Court granted a motion filed byCompany, the EEOC to interveneand the plaintiffs
in the Shores case but limited the interventionentered into a settlement agreement (the
"Shores Agreement") with respect to all matters related to
the issues raisedcase. On January 27, 1997, the Court preliminarily
approved the Shores Agreement. All parties intend to
diligently pursue final approval of the Shores Agreement with
the Court.
Under the Shores Agreement, the Company will pay $81.5
million to the plaintiffs, their counsel and other class
members. The Company agreed to establish a formal system by
which employees will be considered for promotion. Promotions
will be based on qualifications and expressed interest of
employees. The Company has also agreed to make certain other
procedural changes.
Also on January 24, 1997, the original plaintiffs. Under its
Intervenor's Complaint,Company agreed with the EEOC
seeks(the "EEOC Agreement") to correct what it
allegessettle all pending EEOC charges
related to be the Company's unlawful employment practices on
the basis of sexgender and requestsrace discrimination that the Court, among other
things, grant injunctive relief, order the Company to provide
back pay and compensation for nonpecuniary losses resulting
from the alleged unlawful practices and order the Company to
pay punitive damages.
Intervention by the EEOCwere not
included in the Shores case does not end the
EEOC's separate investigation underAgreement. Under the EEOC Charge, at leastAgreement,
the Company agreed to pay an additional $3.5 million to
members of the affected classes. The Company also agreed to
follow procedures with respect to allegations of race discrimination,
allegations of discrimination against unsuccessful applicants
and other matters not involved inclass members similar to
those established under the Shores case.Agreement.
The Charge covers such employment practices bysettlement agreements recognize that the Company
continues to deny that it has engaged in the
State of Florida as a whole.any unlawful
discriminatory activity.
The Company denieswill pay the allegations contained insettlements from liquid investment
funds currently on hand and the EEOC
Charge and in the complaint in the Shores case, and intends
to continue to vigorously defend these matters. The Company
is unable, at this time, to estimate with any degree of
certainty the potential losses that might result from an
adverse decision in these matters. Accordingly, no provision
for any potential liability has been made insettlements were charged
against the Company's fiscal 1996 fourth quarter results (see
note 7). Management does not believe that the settlements
will cause any cash flow or liquidity problems or will have
any material impact on the Company's future financial
statements.results.
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.
108
33
Schedule II
- -----------
PUBLIX SUPER MARKETS, INC.
Valuation and Qualifying Accounts
Years ended December 28, 1996, December 30, 1995
and December 31, 1994
and December 25, 1993
(Amounts in thousands)
Balance at Additions Deductions Balance at
beginning charged to from end of
Description of year income reserves year
- ----------- ------- ------ -------- ----
Year ended December 28, 1996
Reserves not deducted from assets:
Self-insurance reserves:
-Current $ 58,442 109,094 103,286 64,250
-Noncurrent 60,435 12,901 --- 73,336
-------- ------- ------- -------
$118,877 121,995 103,286 137,586
======== ======= ======= =======
Year ended December 30, 1995
Reserves not deducted from assets:
Self-insurance reserves:
-Current $ 49,295 102,397 93,250 58,442
-Noncurrent 59,710 725 --- 60,435
----------------- ------- ------ ------- $ 109,005-------
$109,005 103,122 93,250 118,877
================= ======= ============= =======
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
========= ====== ====== =======
34
PUBLIX SUPER MARKETS, INC.
Index to Exhibits
EXHIBIT 9 Deed3(b) Amended and Restated By-Laws of Terminationthe Company
EXHIBIT 21 Subsidiary of Voting Trust Agreementthe Company
EXHIBIT 27 Financial Data Schedule for the year ended December 30, 1995.28, 1996