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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 1, 1994. Commission File No. 0-6080
F O O D L I O N, INC.
(Exact name of registrant as specified in its charter)
Incorporated in North Carolina 56-0660192
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 1330, 2110 Executive Drive
Salisbury, North Carolina 28145-1330
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code--
(704) 633-8250
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.50 per share
Class B Common Stock, par value $.50 per share
(Title of Class)
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 (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) 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.[ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant based on the price of such stock at the
close of business on March 24, 1994 was $1,642,348,284. For purposes
of this report and as used herein, the term "non-affiliate" includes
all shareholders of the Registrant other than Directors, executive
officers, and other senior management of the Registrant and persons
holding more than five per cent of the outstanding voting stock of the
Registrant.
Outstanding shares of common stock of the Registrant as of March
24, 1994.
Class A Common Stock - 244,135,824
Class B Common Stock - 239,571,114
Exhibit index is located on sequential page 20 hereof.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference in
this Form 10-K:
1. Portions of the Annual Report to Shareholders for the year ended
January 1, 1994 are incorporated by reference in Part II hereof.
2. Portions of Proxy Statement for the 1994 Annual Meeting of
Shareholders of the Company to be held on May 5, 1994, are
incorporated by reference in Part III hereof.
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PART I
Item 1. Business.
Food Lion, Inc. (the "Company") engages in one line of business,
the operation of retail food supermarkets principally in the
southeastern United States. The Company was incorporated in North
Carolina in 1957 and maintains its corporate headquarters in
Salisbury, North Carolina.
The Company's stores, which are operated under the name of "Food
Lion", sell a wide variety of groceries, produce, meats, dairy
products, seafood, frozen food, deli/bakery and non-food items such as
tobacco, health and beauty aids and other household and personal
products. The Company offers nationally and regionally advertised
brand name merchandise as well as products manufactured and packaged
for the Company under the private label of "Food Lion". The Company
offers over 18,000 Stock Keeping Units (SKU's) in its prototype 30,000
square foot model.
The products sold by the Company are purchased through a centralized
buying department at the Company's headquarters. The centralization of
the buying function allows the management of the Company to establish
long-term relationships with many vendors providing various alternatives
for sources of product supply.
Food Lion currently operates deli-bakery departments in approximately
50% of its stores. Deli-bakeries are included in approximately 80% of new
store openings. Deli-bakeries are added to existing stores after research
indicates a customer demand for such a product.
The business in which the Company is engaged is highly
competitive and characterized by low profit margins. The Company
competes with national, regional and local supermarket chains,
discount food stores, single unit stores, convenience stores and
warehouse clubs. The Company will continue to develop and evaluate
new retailing strategies that will challenge competitors. Seasonal
changes have no material effect on the operation of the Company's
supermarkets.
Since 1968, the Company has followed a policy of selling
merchandise at low item prices in order to increase volume without a
proportionate increase in fixed and operating expenses. Trading
stamps are not offered in any of the Company's supermarkets.
As of January 1, 1994, 1,096 supermarkets were in operation, of
which 365 were located in North Carolina, 101 in South Carolina, 213
in Virginia, 73 in Tennessee, 56 in Georgia, 121 in Florida, 21 in
Maryland, 6 in Delaware, 13 in West Virginia, 14 in Kentucky, 7 in
Pennsylvania, 82 in Texas, 19 in Oklahoma and 5 in Louisiana. On
January 7, 1994, Food Lion announced plans to close 88 unprofitable
store locations in 1994; 18 in Florida, 5 in Georgia, 2 in Kentucky; 6
in North Carolina, 11 in Oklahoma, 1 in Pennsylvania, 5 in South
Carolina, 3 in Tennessee, 36 in Texas and 1 in Virginia. As of March
24, 1994, the Company had opened 8 supermarkets since January 1, 1994,
closed 47 supermarkets and had signed leases for one supermarket which
is expected to open in either 1994 or 1995.
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Warehousing and distribution facilities, including a truck fleet,
are owned and operated by the Company and are located in Salisbury and
Dunn, North Carolina; Petersburg, Virginia; Elloree, South Carolina;
Green Cove Springs and Plant City, Florida; Clinton, Tennessee;
Greencastle, Pennsylvania and Roanoke, Texas.
As of January 1, 1994, the Company employed 28,673 full-time and
36,821 part-time employees.
Item 2. Properties.
Supermarkets operated by the Company in the southeastern United
States average 26,500 square feet in size. The Company's current
prototype retail format is a 30,000 square foot model with a deli-
bakery department. All of the Company's supermarkets are self-
service, cash and carry stores which have off-street parking
facilities. With the exception of 134 supermarkets which it owns, the
Company occupies its various supermarket premises under lease
agreements providing for initial terms of up to 25 years, with options
generally ranging from ten to twenty years. All supermarkets are
located in modern, air-conditioned facilities.
The table below sets forth information with respect to the
expiration of leases on supermarkets and surrounding land in
operation by the Company on January 1, 1994.
Year of Number of Leases Year of Number of Leases
Expiration* which expire Expiration* which expire
1995 1 2020 7
1997 1 2021 7
1998 1 2022 9
1999 2 2023 25
2001 3 2024 17
2004 4 2025 32
2005 1 2026 63
2005 2 2027 98
2007 5 2028 104
2008 5 2029 117
2009 3 2030 135
2010 3 2031 79
2011 1 2032 71
2012 3 2033 69
2013 6 2034 2
2014 4 2035 6
2015 1 2036 6
2016 2 2037 23
2017 7 2038 24
2018 6 2043 1
2019 5 2045 1
*NOTE: Year of expiration includes renewal terms.
-4-
The following table identifies the location and square footage of
distribution centers and office space owned by the Company as of
January 1, 1994.
Location of
Property Square Footage
Distribution Center #1 Salisbury, NC 1,630,233
Distribution Center #2 Petersburg, VA 1,124,718
Distribution Center #3 Elloree, SC 1,093,252
Distribution Center #4 Dunn, NC 1,224,652
Distribution Center #5 Green Cove Springs, FL 832,109
Distribution Center #6 Clinton, TN 825,967
Distribution Center #7 Greencastle, PA 758,549
Distribution Center #8 Plant City, FL 758,549
Distribution Center #9 Roanoke, TX 1,254,169
Corporate Headquarters Salisbury, NC 262,672
9,764,870
Item 3. Legal Proceedings.
Longman et al. v. Food Lion, Inc. and Tom E. Smith, 4:92 CV 696
(M.D.N.C.) (complaint filed November 12, 1992, and amended January 23,
1993) ("Longman"); and Feinman et al. v. Food Lion, Inc. and Tom E.
Smith, 4:92 CV 705 (M.D.N.C.) (complaint filed November 13, 1992)
("Feinman").
The Longman and Feinman actions assert claims under Section 10(b) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
Rule 10b-5 for "securities fraud," and claims of common law fraud and
negligent misrepresentation, and purport to be class actions on behalf
of purchasers of Food Lion stock during certain "class periods".
Theses actions seek damages for such purported class members in
presently unknown amounts, the Plaintiffs' attorneys' fees and costs,
punitive damages, prejudgment interest and certain other relief. In
the Longman and Feinman Actions, Tom E. Smith, Chairman of the Board,
Chief Executive Officer and President of the Company, is also a
defendant. Motions to Dismiss filed in the cases were denied by order
dated March 16,1994, with class action discovery beginning March 22,
1994. Based on currently available information, the Company believes
that any resulting liability will not have a material adverse effect
on the financial condition or results of operations of the Company.
In re Food Lion, Inc., Fair Labor Standards Act "Effective Scheduling"
Litigation, MDL Docket No. 929, pursuant to which a number of actions
against the Company have been transferred by the Multi-District
Litigation Panel to the United States District Court for the Eastern
District of North Carolina for consolidated pre-trial proceedings (the
"Multi-District Action"). The Multi-District Action involves
approximately 432 claims by litigants in Florida, North Carolina,
Tennessee and Virginia for alleged violations of the Fair Labor
Standards Act. The Multi-District Action primarily involves claims
seeking payment under the Fair Labor Standards Act for alleged
uncompensated overtime hours, liquidated damages, additional
-5-
contributions to the Company's profit sharing plan, costs and
attorneys' fees. We understand that settlement of some individual
claims is in the process of finalization and settlement negotiations
are underway with respect to certain other claims. The Company will
vigorously defend each of the Actions that remain pending. Based on
currently available information, the Company believes that any
resulting liability will not have a material adverse effect on the
financial condition or results of operations of the Company.
On February 16, 1994, plaintiff Sarah Bullock, an African-American
female, filed a motion to amend her federal district court complaint
in Bullock v. Food Lion, Inc., No. 93-CV-51-ATH (M.D. Ga.), a pending
individual plaintiff suit in which Ms. Bullock alleges that she was
denied a promotion and discharged because of her race, by adding 10
named additional plaintiffs and company-wide class action allegations
of race discrimination in violation of title VII of the Civil Rights
Act of 1964. The amended complaint alleges a pattern and practice of
discrimination in promotions, discipline, discharge, allocation of
hours, awarding full-time status, and wages. The amended complaint
seeks certification of a class defined as all past and present black
employees at Food Lion and all black applicants for employment, broad
injunctive relief, monetary damages including compensatory and
punitive damages, reasonable attorneys' fees, and expenses.
The court has not yet ruled on the motion requesting that the case be
converted to a class action, no class has been certified and the
plaintiff has not yet specified an amount of monetary damages alleged
to have been suffered by the class. While at this time the Company
cannot evaluate the consequences of an adverse judgment, the Company
intends to vigorously defend this action.
Item 4. Submission of Matters to a Vote of Security Holders.
This item is not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
The information pertaining to the Class A and Class B Common
Stock price range, dividends and record holders discussed beneath the
headings "Market Price of Common Stock" and "Dividends Declared Per
Share of Common Stock" in the Annual Report to Shareholders for the
year ended January 1, 1994, is hereby incorporated by reference.
Item 6. Selected Financial Data.
The information set forth beneath the heading "Ten Year Summary
of Operations" in the Annual Report to Shareholders for the year ended
January 1, 1994, is hereby incorporated by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
-5a-
The information set forth beneath the heading "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report to Shareholders for the year ended
January 1, 1994, is hereby incorporated by reference.
Item 8. Financial Statements and Supplementary Data.
The financial statements, including the accompanying notes and
results by quarter, set forth beneath the headings "Statements of
Income", "Balance Sheets", "Statements of Cash Flows", "Statements of
Shareholders' Equity", "Notes to Financial Statements" and "Results by
Quarter" in the Annual Report to Shareholders for the year ended
January 1, 1994, are hereby incorporated by reference.
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure.
This item is not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information pertaining to nominees for election as directors
and the Company's executive officers set forth beneath the heading
"Election of Directors" and in the description of employment
agreements beneath the heading "Employment Plans and Agreements"
in the Proxy Statement for the 1994 Annual Meeting of Shareholders
to be held May 5, 1994, is hereby incorporated by reference.
Item 11. Executive Compensation.
The information pertaining to executive compensation set forth
beneath the heading "Report of the Senior Managment Compensation
Committee, Stock Option Committee and Board of Directors" in the
Proxy Statement for the 1994 Annual Meeting Shareholders to be held
on May 5, 1994, is hereby incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information pertaining to security ownership of certain
beneficial owners and management set forth beneath the heading
"Security Ownership of Certain Beneficial Owners and Management" in
the Proxy Statement for the 1994 Annual Meeting of Shareholders to be
held on May 5, 1994, is hereby incorporated by reference.
-5b-
Item 13. Certain Relationships and Related Transactions.
The information relating to certain relationships and related
transactions set forth beneath the headings "Employment Plans and
Agreements - Low Interest Loan Plan" and "Compensation Committee
Interlocks and Insider Participation" in the Proxy Statement for
the 1994 Annual Meeting of Shareholders to be held May 5, 1994,
is hereby incorporated by reference.
-6-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) The following documents are filed as part of this
report:
1. Financial Statements:
The following financial statements are incorporated
by reference in Item 8 hereof from the Annual Report
to Shareholders for the year ended January 1, 1994:
ANNUAL REPORT
PAGE NO.
Statements of Income for the years
ended January 1, 1994, January 2,
1993 and December 28, 1991 10
Balance Sheets, as of January 1,
1994 and January 2, 1993 11
Statements of Cash Flows for the
years ended January 1, 1994,
January 2, 1993 and December 28, 1991 12
Statements of Shareholders' Equity
for the years ended January 1, 1994,
January 2, 1993 and December 28, 1991 13
Notes to Financial Statements 14-18
Results by Quarter (unaudited) 19
10-K
PAGE NO.
2. Financial Statement Schedules:
Report of Independent Accountants 14
II. Amounts Receivable from Related
Parties and Underwriters,
Promoters and Employees Other
Than Related Parties 15
V. Property, Plant and Equipment 16-17
VI. Accumulated Depreciation and
Amortization of Property, Plant
and Equipment 18
VIII. Valuation and Qualifying Accounts 19
-7-
All other schedules are omitted since the required information is
not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the financial statements and notes thereto.
With the exception of the financial statements listed in the
above index, the information referred to in Items 5, 6, 7 and the
supplementary quarterly financial information referred to in Item 8,
all of which is included in the 1993 Annual Report to Shareholders of
Food Lion, Inc. and incorporated by reference into this Form 10-K
Annual Report, the 1993 Annual Report to Shareholders is not to be
deemed "filed" as part of this report.
3. Exhibits:
Exhibit No.
3(a) Articles of Incorporation, together with all
amendments thereto (through May 5, 1988)
(incorporated by reference to Exhibit 3(a) of the
Company's Annual Report on Form 10-K dated March
24, 1992)
3(b) Bylaws of the Company effective July 1, 1990
(incorporated by reference to Exhibit 3(c) of
the Company's Annual Report on Form 10-K dated
March 25, 1991)
4(a) Indenture dated as of August 15, 1991 between
the Company and the Bank of New York, Trustee,
providing for the issuance of an unlimited amount
of Debt Securities in one or more series (incorpo-
rated by reference to Exhibit 4(a) of the Company's
Annual Report on Form 10-K dated March 24, 1992)
4(b) Form of Food Lion, Inc. Medium Term Note (Global
Fixed Rate) (incorporated by reference to Exhibit
4(b) of the Company's Annual Report on Form 10-K
dated March 24, 1992)
10(a) Low Interest Loan Plan (incorporated by reference
to Exhibit 19(a) of the Company's report on Form
8-K dated October 27, 1986)
10(b) Form of Deferred Compensation Agreement
(incorporated by reference to Exhibit 19(b) of
the Company's report on Form 8-K dated October 27,
1986)
10(c) Form of Salary Continuation Agreement (incorporated
by reference to Exhibit 19(c) of the Company's
report on Form 8-K dated October 27, 1986)
-8-
10(d) Shareholders Agreement dated September 22, 1988, by
and among Etablissements Delhaize Freres et Cie "Le
Lion" S.A., Delhaize The Lion America, Inc., Ralph
W. Ketner and Tom E. Smith (incorporated by
reference to Exhibit 10(d) of the Company's Annual
Report on Form 10-K dated March 20, 1989)
10(e) Proxy Agreement dated January 4, 1991 between
Etablissements Delhaize Freres et Cie "Le Lion"
S.A. and Delhaize the Lion, America, Inc.
(incorporated by reference to Exhibit 10(e) of
the Company's Annual Report on Form 10-K dated
March 25, 1991)
10(f) Annual Incentive Bonus Plan (incorporated by
reference to Exhibit 19(a) of the Company's
Annual Report on Form 10-K dated March 30, 1983)
10(g) Declaration of Amendment to the Company's Annual
Incentive Bonus Plan effective as of December 14,
1987 (incorporated by reference to Exhibit 10(h) of
the Company's Annual Report on Form 10-K dated
March 20, 1989)
10(h) Employment Agreement dated August 1, 1991 between
the Company and Tom E. Smith (incorporated by
reference to Exhibit 10(h) of the Company's Annual
Report on Form 10-K dated March 24, 1992)
10(i) Retirement and Consulting Agreement dated May 1,
1991 between the Company and Jerry W. Helms
(incorporated by reference to Exhibit 10(i) of the
Company's Annual Report on Form 10-K dated March
24, 1992)
10(j) Stock Purchase Agreement dated June 30, 1981
between the Company and Ralph W. Ketner
(incorporated by reference to Exhibit 10(j) of
the Company's Annual Report on Form 10-K dated
April 1, 1987)
10(k) Amended and Restated Food Lion, Inc. 1983
Employee Stock Option Plan (incorporated by
reference to Exhibit 10(k) of the Company's Annual
Report on Form 10-K dated March 24, 1992)
10(l) 1991 Employee Stock Option Plan of Food Lion,
Inc. (incorporated by reference to Exhibit 10(l) of
the Company's Annual Report on Form 10-K dated
March 24, 1992)
10(m) Split Dollar Life Insurance Agreement between the
Company and Tom E. Smith (incorporated by
reference to Exhibit 10(o) of the Company's
Annual Report on Form 10-K dated April 1, 1987)
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10(n) Split Dollar Life Insurance Agreement between the
Company and Tom E. Smith issued May 25, 1988
incorporated by reference to Exhibit 10(w) of the
Company's Annual report on Form 10-K dated March
20, 1989)
10(o) Letter Agreement dated May 10, 1990 between the
Company and Ralph W. Ketner. (incorporated by
reference to Exhibit 10(q) of the Company's Annual
Report on Form 10-K dated March 25, 1991)
10(p) U.S. Distribution Agreement dated August 20, 1991
between the Company and Goldman, Sachs & Co. and
Merrill Lynch & Co. relating to the sale of up to
$300,000,000 in principal amount of the Company's
Medium-Term Notes (incorporated by reference to
Exhibit 10(p) of the Company's Annual Report on
Form 10-K dated March 24, 1992)
10(q) $300,000,000 Credit Agreement dated June 4, 1993
between the Company and various banks and Wachovia
Bank of North Carolina, N.A. as agent
10(r) First Amendment to Credit Agreement dated August 2,
1993 effective as of June 4, 1993
10(s) Second Amendment to Credit Agreement dated February
1,1994 effective as of January 1, 1994
10(t) License Agreement between the Company and between
Etablissements Delhaize Freres Et Cie "Le Lion"
S.A. dated January 1, 1983
11 Computation of Earnings Per Share
13 Annual Report to Shareholders for the year
ended January 1, 1994
23 Consent of Independent Accountants
99 Undertaking of the Company to file exhibits
pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K
99(a) The complaint of an action entitled Longman v. Food
Lion, Inc. and Tom E. Smith, No. 4:92CV696.
(incorporated by reference to Exhibit 28(a) of the
Company's Annual Report on Form 10-K dated April
14, 1993)
99(b) The complaint of an action entitled Feinman et al
v. Food Lion, Inc. and Tom E. Smith, No. 4:92CV705.
(incorporated by reference to Exhibit 28(b) of
the Company's Annual Report on Form 10-K dated
April 14, 1993)
-10-
99(c) U.S. Department of Labor and Food Lion, Inc.
Settlement Agreement dated July 30, 1993
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K January 7, 1994
listing a)new director and b)various financial matters.
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Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
Report to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: March 31,1994 By Tom E. Smith
Tom E. Smith
President, Chief Executive
Officer, Principal
Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.
Date: March 31, 1994 By Tom E. Smith
Tom E. Smith
President, Chief Executive
Officer, Principal
Executive Officer and Director
Date: March 31, 1994 By Pierre-Olivier Beckers
Pierre-Olivier Beckers
Director
Date: March 31, 1994 By Raymond-Max Boon
Raymond-Max Boon
Director
Date: March 31, 1994 By Dan A. Boone
Dan A. Boone
Vice President of Finance,
Chief Financial Officer
Secretary, Principal
Financial Officer
Date:March 31, 1994 By Charles de Cooman
Charles de Cooman
d'Herlinckhove
Director
Date:March 31, 1994 By William G. Ferguson
William G. Ferguson
Director
Date:March 31, 1994 By Dr. Bernard Franklin
Dr. Bernard Franklin
Director
Date:March 31, 1994 By Carol Herndon
Carol Herndon
Corporate Financial
Controller and Director
of Financial Accounting
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Date: March 31, 1994 By Jacques LeClercq
Jacques LeClercq
Director
Date:March 31,1994 By Gui de Vaucleroy
Gui de Vaucleroy
Director
Date:March 31, 1994 By John P. Watkins
John P. Watkins
Director
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of Food Lion, Inc.:
We have audited the financial statements of Food Lion, Inc. as of
January 1, 1994 and January 2, 1993, and for each of the three fiscal
years in the period ended January 1, 1994, which financial statements
are included on pages 10 through 18 of the 1993 Annual Report to
Shareholders of Food Lion, Inc. and incorporated by reference herein.
We have also audited the financial statement schedules listed in the
index on page 7 of this Form 10-K. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Food Lion, Inc. as of January 1, 1994 and January 2, 1993, and the
results of its operations and its cash flows for each of the three
fiscal years in the period ended January 1, 1994, in conformity with
generally accepted accounting principles. In addition, in our
opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information
required to be included therein.
Charlotte, North Carolina
February 9, 1994, except for
Note 14, as to which the date
is March 24, 1994 COOPERS & LYBRAND
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SCHEDULE II. AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER
THAN RELATED PARTIES
For the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
Balance at
Deductions End of Period
Balance at Amounts
Beginning Amounts Written
Name of Debtor of Period Additions Collected off Current Not Current
1993
Eddie Benner $128,500 $128,500
Dan Boone 120,000 120,000
Chuck Buckley 135,975 11,000 146,975
Ken Harris 119,000 13,000 132,000
Gene McKinley 170,500 170,500
Tom E. Smith 226,460 (226,460) 0
John Watkins 160,875 160,875
Vince Watkins 124,500 124,500
1992
Eddie Benner $128,500 $128,500
Dan Boone 120,000 120,000
Chuck Buckley 135,975 135,975
Ken Harris 119,000 119,000
Gene McKinley 159,500 $ 11,000 170,500
Tom E. Smith 226,460 226,460
John Watkins __ 160,875 160,875
Vince Watkins 114,500 10,000 124,500
1991
Eddie Benner $128,500 $128,500
Dan Boone 94,750 $ 25,250 120,000
Chuck Buckley 72,375 63,600 135,975
Ken Harris 119,000 119,000
Jerry W. Helms 239,500 (239,500) --
Ralph W. Ketner 231,780 (231,780) --
Gene McKinley 145,000 14,500 159,500
Tom E. Smith 226,460 226,460
Vince Watkins 97,000 17,500 114,500
The Loans described above were made pursuant to the plan for low interest Loans to certain key employees which is
described beneath the heading "Low Interest Loan Plan" in the Proxy statement for the 1994 Annual Meeting of the
Shareholders to be held on May 5, 1994.
Interest is payable at a rate equal to one-half of the prime rate of NationsBank on the first business day of each
calendar quarter. All amounts are due on demand with interest payable monthly.
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SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT
For the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
Column A Column B Column C Column D Column E Column F
Balance at Balance
Beginning Additions Other Changes At End
Classification of Period at Cost Retirements Add/Deduct Of Period
1993
Land and improvements $ 135,264,357 $ 38,156,782 A $ 440,934 $ 0 $ 172,980,205
Buildings 395,968,888 35,420,031 B 59,809 12,356,496 382,185,602
(61,500,004) G
Furniture, Fixtures &
Equipment 842,038,973 101,681,489 C 11,902,007 (24,177,600) G 907,640,855
Vehicles 89,024,231 3,863,685 D 2,369,626 0 90,518,289
Leasehold improvements 75,589,235 8,089,130 604,571 4,041,052 85,697,839
( 1,417,007) G
Property under Capital
leases 268,718,820 62,367,336 E 3,096,551 0 327,989,606
Construction in Progress 66,091,397 ( 23,372,325) F 0 (16,397,548) 26,321,524
$1,872,695,901 $226,206,128 $ 18,473,498 $(87,094,611) $1,993,333,920
1992
Land and improvements $ 68,728,488 $ 66,535,869 H $ 135,264,357
Buildings 298,021,411 70,806,538 I 27,140,939 395,968,888
Furniture, Fixtures &
Equipment 677,400,188 173,648,183 J 9,120,717 111,319 842,038,973
Vehicles 78,467,968 12,021,709 K 1,465,446 89,024,231
Leasehold improvements 60,149,425 11,919,994 378,170 3,897,986 75,589,235
Property under Capital
leases 212,842,398 59,062,196 L 3,185,774 268,718,820
Construction in Progress 29,462,316 67,779,325 M (31,150,244) 66,091,397
$1,425,072,194 $461,773,814 $14,150,107 $ $1,872,695,901
1991
Land and improvements $ 14,147,054 $ 732,650 $ 81,490 $ 53,930,274 S $ 68,728,488
Buildings 172,686,403 40,882,075 N 84,452,933 S 298,021,411
Furniture, Fixtures &
Equipment 558,255,559 122,212,747 O 15,744,293 12,676,175 S 677,400,188
Vehicles 59,862,133 21,539,578 P 2,933,743 78,467,968
Leasehold improvements 51,932,018 9,208,102 968,510 ( 22,185) 60,149,425
Property under Capital
leases 167,466,347 47,900,378 Q 2,524,327 212,842,398
Construction in Progress 70,454,077 110,045,436 R (151,037,197) 29,462,316
$1,094,803,591 $352,520,966 $22,252,363 $ $1,425,072,194
(A) Completion of 31 additional owned stores.
(B) Completion of 31 additional owned stores.
(C) Equipped 101 additional stores.
(D) Purchased 187 additional vehicles.
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(E) Added 53 store capital leases.
(F) Store remodels and future site expansion.
(G) Write down of assets related to 88 stores to close in 1994.
(H) Completion of Harrison Road Warehouse and 61 additional owned stores.
(I) Completion of Harrison Road Warehouse and 61 additional owned stores.
(J) Equipped 140 additional stores.
(K) Purchased 427 additional vehicles.
(L) Added 46 store capital leases.
(M) Added Phase II of Texas Warehouse, store remodels and future store
expansion.
(N) Completion of Phase I of Greencastle, Pennsylvania Warehouse, Phase I
of Plant City Warehouse, and Phase I of Roanoke Texas Warehouse.
(O) Equipped 111 additional stores.
(P) Purchased 506 additional vehicles.
(Q) Added 43 store capital leases.
(R) Added Phase II of Green Cove Springs, Florida Warehouse, Phase II of
Clinton, Tennessee Warehouse, Phase I of Harrison Road Warehouse,
and future store expansion.
(S) Completion of 41 Texas stores.
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SCHEDULE VI. ACCUMULATED DEPRECIATION AND AMORTIZATION
PROPERTY, PLANT AND EQUIPMENT
For the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
Column A Column B Column C Column D Column E Column F
Balance at Additions Balance
Beginning Charged to Other Changes At End
Classification of Period Cost & Expenses Retirements Add/Deduct Of Period
1993
Land and improvements $ 2,316,153 $ 3,503,305 0 0 $ 5,819,458
Buildings 31,605,919 10,735,559 $ 26,858 $( 38) 42,314,582
Furniture, Fixtures &
Equipment 341,437,647 93,969,451 8,653,638 0 426,753,460
Vehicles 45,273,088 10,917,805 2,270,863 0 53,920,030
Leasehold improvements 35,836,253 9,043,850 552,675 38 44,327,466
Property under Capital
leases 43,460,116 14,871,660 2,344,382 0 55,987,394
$ 499,929,176 $143,041,630 $14,459,617 $ $ 629,122,390
1992
Land and improvements $ 667,291 $ 1,648,862 $ 2,316,153
Buildings 23,303,206 8,304,051 $ 3,750 $ 2,412 31,605,919
Furniture, Fixtures &
Equipment 268,111,604 81,737,407 8,414,541 3,177 341,437,647
Vehicles 36,107,232 10,451,293 1,285,437 45,273,088
Leasehold improvements 28,497,066 7,714,923 370,147 ( 5,589) 35,836,253
Property under Capital
leases 32,847,772 11,759,089 1,146,745 43,460,116
$ 389,534,171 $121,615,625 $11,220,620 $ $ 499,929,176
1991
Land and improvements $ 484,136 $ 183,155 $ 667,291
Buildings 17,708,734 5,594,472 23,303,206
Furniture, Fixtures &
Equipment 207,181,592 74,357,883 $13,449,543 $ 21,672 268,111,604
Vehicles 29,841,702 9,008,787 2,743,257 36,107,232
Leasehold improvements 23,166,445 6,167,302 815,009 ( 21,672) 28,497,066
Property under Capital
leases 24,644,431 9,302,624 1,099,283 32,847,772
$ 303,027,040 $104,614,223 $18,107,092 $ $ 389,534,171
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SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
Balance at (1) Additions (2)
Beginning Charged to Charges to other Deductions- Balance at end
Description of Period Cost & Expenses accounts-describe describe of period
Furniture, Fixtures &
Equipment $ 24,177,600 A $ 24,177,600
Leasehold improvements 1,417,007 A 1,417,007
Buildings 61,500,004 A 61,500,004
Other liabilities 55,100,000 A 55,100,000
Accrued expenses 28,305,389 A 28,305,389
$170,500,000 $170,500,000
(A) Represents the write-down of the assets of stores scheduled to close in 1994 to reflect the estimated realizable
value, the present value of remaining rent payments on leased stores and other costs associated with the store closings
such as legal expenses, relocation expenses and costs to store and transfer reusable equipment.
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EXHIBIT INDEX
to
ANNUAL REPORT ON FORM 10-K of
Food Lion, Inc.
For Year Ended January 1, 1994
Sequential
Exhibit No. Description Page No.
3(a) Articles of Incorporation, together with
all amendments thereto (through May 5,
1988) (incorporated by reference to Exhibit
3(a) of the Company's Annual Report on Form
10-K dated March 24, 1992)
3(b) Bylaws of the Company effective July 1, 1990
(incorporated by reference to Exhibit 3(c)
of the Company's Annual Report on Form 10-K
dated March 25, 1991)
4(a) Indenture dated as of August 15, 1991 between
the Company and the Bank of New York, Trustee,
providing for the issuance of an unlimited
amount of Debt Securities in one or more
series (incorporated by reference to Exhibit
4(a) of the Company's Annual Report on Form
10-K dated March 24, 1992)
4(b) Form of Food Lion, Inc. Medium Term Note
(Global Fixed Rate) (incorporated by
reference to Exhibit 4(b) of the Company's
Annual Report on Form 10-K dated March 24,
1992)
10(a) Low Interest Loan Plan (incorporated by
reference to Exhibit 19(a) of the Company's
report on Form 8-K dated October 27, 1986)
10(b) Form of Deferred Compensation Agreement
(incorporated by reference to Exhibit 19(b)
of the Company's report on Form 8-K dated
October 27, 1986)
10(c) Form of Salary Continuation Agreement
(incorporated by reference to Exhibit 19(c)
of the Company's report on Form 8-K dated
October 27, 1986)
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10(d) Shareholders Agreement dated September 22, 1988,
by and among Etablissements Delhaize Freres et Cie
"Le Lion" S.A., Delhaize The Lion America, Inc.,
Ralph W. Ketner and Tom E. Smith (incorporated by
reference to Exhibit 10(d) of the Company's Annual
Report on Form 10-K dated March 20, 1989)
10(e) Proxy Agreement dated January 4, 1991 between
Etablissements Delhaize Freres et Cie "Le Lion"
S.A. and Delhaize the Lion America, Inc.
(incorporated by reference to Exhibit 10(e) of the
Company's Annual Report on form 10-K dated March 25,
1991)
10(f) Annual Incentive Bonus Plan (incorporated by
reference to Exhibit 19(a) of the Company's
Annual Report on Form 10-K dated March 30, 1983)
10(g) Declaration of Amendment to the Company's Annual
Incentive Bonus Plan effective as of December 14,
1987 (incorporated by reference to Exhibit 10(h)
of the Company's Annual Report on Form 10-K dated
March 20, 1989)
10(h) Employment Agreement dated August 1, 1991 between
the Company and Tom E. Smith (incorporated by
reference to Exhibit 10(h) of the Company's Annual
Report on Form 10-K dated March 24, 1992)
10(i) Retirement and Consulting Agreement dated May 1,
1991 between the Company and Jerry W. Helms
(incorporated by reference to Exhibit 10(i) of
the Company's Annual Report on Form 10-K dated
March 24, 1992)
10(j) Stock Purchase Agreement dated June 30, 1981 between
the Company and Ralph W. Ketner (incorporated by
reference to Exhibit 10(j) of the Company's Annual
Report on Form 10-K dated April 1, 1987)
10(k) Amended and Restated Food Lion, Inc. 1983 Employment
Stock Option Plan (incorporated by reference to
Exhibit 10(k) of the Company's Annual Report on Form
10-K dated March 24, 1992)
10(l) 1991 Employee Stock Option Plan of Food Lion, Inc.
(incorporated by reference to Exhibit 10(l) of the
Company's Annual Report on Form 10-K dated March 24,
1992)
10(m) Split Dollar Life Insurance Agreement between the
Company and Tom E. Smith (incorporated by reference
to Exhibit 10(o) of the Company's Annual Report on
Form 10-K dated April 1, 1987)
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10(n) Split Dollar Life Insurance Agreement between
the Company and Tom E. Smith issued May 25, 1988
(incorporated by reference to Exhibit 10(w) of
the Company's Annual report on Form 10-K dated
March 20, 1989)
10(o) Letter Agreement dated May 10, 1990 between the
Company and Ralph W. Ketner (incorporated by
reference to Exhibit 10(q) of the Company's
Annual Report on Form 10-K dated March 25, 1991)
10(p) U.S. Distribution Agreement dated August 20, 1991
between the Company and Goldman, Sachs & Co and
Merrill Lynch & Co. relating to the sale of up to
$300,000,000 in principal amount to the Company's
Medium-Term Notes (incorporated by reference to
Exhibit 10(p) of the Company's Annual Report on
Form 10-K dated March 24, 1992)
10(q) $300,000,000 Credit Agreement dated June 4, 1993
between the Company and various banks and Wachovia
Bank of North Carolina, N.A. as agent
10(r) First Amendment to Credit Agreement dated August 2,
1993 effective as of June 4, 1993
10(s) Second Amendment to Credit Agreement dated February
1, 1994 effective as of January 1, 1994
10(t) License Agreement between the Company and between
Etablissements Delhaize Freres Et Cie "Le Lion"
S.A. dated January 1, 1983
11 Computation of Earnings Per Share
13 Annual Report to Shareholders for the year ended
January 1, 1994
23 Consent of Independent Accountants
99 Undertaking of the Company to file exhibits
pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K
99(a) The complaint of an action entitled Longman v. Food
Lion, Inc. and Tom E. Smith, No. 4:92CV696. (incor-
porated by reference to Exhibit 28(a) of the Company's
Annual Report on Form 10-K dated April 14, 1993)
99(b) The complaint of an action entitled Feinman et
al v. Food Lion, Inc. andTom E.Smith, No. 4:92CV705.
(incorporated by reference to Exhibit 28(b) of
the Company's Annual Report on Form 10-K dated
April 14, 1993)
99(c) U.S. Department of Labor and Food Lion, Inc.
Settlement Agreement dated July 30, 1993
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