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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, 2000
( ) 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
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PUBLIX SUPER MARKETS, INC.
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(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 33815
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (863) 688-1188
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock $1.00 Par Value
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 6, 2001 was approximately $5,527,623,158.
The number of shares of Registrant's common stock outstanding as of March 6,
2001 was 207,566,326.
DOCUMENTS INCORPORATED BY REFERENCE
Pages 2 through 8 of Proxy Statement solicited for the 2001 Annual Meeting of
Stockholders to be held on May 15, 2001 are incorporated by reference in Items
10, 11 and 13 of Part III hereof.
PART I
Item 1. Business
- -----------------
Publix Super Markets, Inc. is based in Lakeland, Florida and was
incorporated in Florida on December 27, 1921. Publix 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 Alabama. The Company has no other lines of business or
industry segments. Therefore, financial information about industry segments or
lines of business is omitted.
The Company's supermarkets sell groceries, dairy, produce, deli, bakery,
meat, seafood, housewares and health and beauty care items. Many stores have
pharmacy and floral departments. In addition, the Company has agreements with
commercial banks to operate in many of its stores.
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. 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 647 supermarkets at the end of 2000, compared with 614
at the beginning of the year. In 2000, 46 stores were opened, 13 stores were
closed, and 69 stores were expanded or remodeled. The net increase in square
footage was 1.5 million square feet or 5.3% since 1999. At the end of 2000, the
Company had 509 stores located in Florida, 111 in Georgia, 23 in South Carolina
and four in Alabama. Also, as of year end, the Company had 25 stores under
construction in Florida and ten stores in Georgia.
The Company is engaged in a highly competitive industry. Competition is
based primarily on price, quality of goods and service, convenience and product
mix. The Company's primary competition throughout its market areas is with
several national and regional chains, independent stores, mass merchandisers,
supercenters and membership warehouse clubs. The Company anticipates continued
competitor format innovation and location additions in 2001.
The influx of winter residents to Florida and increased purchases of food
during the traditional Thanksgiving, Christmas and Easter holidays typically
results in seasonal sales increases between November and April of each year.
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 126,000 employees at the end of 2000,
compared with 120,000 at the end of 1999. Of this total, approximately 71,500 at
the end of 2000 and 70,200 at the end of 1999 were not full-time employees.
Compliance by the Company with Federal, state and local environmental
protection laws during 2000 had no material effect upon capital expenditures,
earnings or the competitive position of the Company.
Item 2. Properties
- -------------------
At year end, the Company operated approximately 29.2 million square feet of
retail space. The Company's stores vary in size. Current store prototypes range
from 27,000 to 61,000 square feet. Stores are often located in strip shopping
centers where the Company is the anchor tenant.
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.
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 58 locations, both the building and land are
owned and at 29 other locations, the building is owned while the land is leased.
The Company's corporate offices, distribution facilities and manufacturing
plants are owned with no outstanding debt.
All of the Company's properties are well maintained and in good operating
condition and suitable and adequate for operating its business.
Item 3. Legal Proceedings
- --------------------------
The Company was a defendant in a class action filed in April 1997 in the
Federal District Court for the Middle District of Florida (the "Tampa Court") by
Lemuel Middleton and other present or former employees of the Company,
individually and on behalf of all other persons similarly situated (the
"Middleton case"). In their Complaint, the plaintiffs alleged that the Company
had been and was engaged in a pattern and practice of race-based discriminatory
treatment of black employees and applicants with respect to hiring, promotion,
job assignment, conditions of employment, and other employment aspects, all in
violation of Federal and state law.
On March 22, 1999, the Tampa Court certified the suit as a class action,
but limited the class to those black employees and former black employees of the
Company who had sought to be promoted or who had been discharged from employment
at the Company's retail supermarket stores in Florida since April 3, 1993, and
at retail supermarket stores in Georgia since January 14, 1995.
On December 29, 2000, the Company and the plaintiffs in the Middleton case
filed a proposed Consent Decree and other documents that, if approved by the
Tampa Court, would resolve all claims asserted in the Middleton case. Under the
terms of the proposed Consent Decree, the Company would pay $2.25 million to
resolve promotion claims, $5.45 million to resolve discharge claims, $400,000 to
the class representatives and $2.4 million for the plaintiffs' attorneys' fees.
The Company also would agree to continue its system of registration of interest
in promotions and its process of setting promotion goals in accordance with the
registered interest, to establish a discharge review process and to modify its
testing procedures for management promotions in its retail supermarket stores.
The Company and the plaintiffs in the Middleton case also agreed to extend the
relief set forth in the proposed Consent Decree to current and former black
employees in the Company's retail supermarket stores in South Carolina since
April 3, 1994 and Alabama since July 31, 1996. The Tampa Court is scheduled to
conduct a fairness hearing on the proposed Consent Decree on June 18, 2001.
On November 6, 1997, another purported class action was filed against the
Company in the Tampa Court by Shirley Dyer and other present or former employees
of the Company, individually and on behalf of all other persons similarly
situated (the "Dyer case"). In their Complaint, the plaintiffs alleged that the
Company had been and was violating Federal and state civil rights statutes by
discriminating against female employees and applicants with respect to hiring,
promotion, training, compensation, discipline, demotion and termination, and/or
retaliation for bringing allegations of discrimination. On March 21, 2000, the
Tampa Court entered an order denying the Dyer case plaintiffs' request for class
certification. At the Company's request, the Tampa Court severed the claims of
three of the plaintiffs including Ms. Dyer. As a result, the Company no longer
considers the Dyer case or those of the two other plaintiffs whose claims were
severed to be material.
The remaining plaintiffs from the former Dyer case, who are asserting
claims relating to the Company's warehousing and distribution and security
operations, are proceeding in the Tampa Court with Violet McGee as the lead
plaintiff (the "McGee case"). The plaintiffs in the McGee case are seeking an
opportunity to add or substitute additional plaintiffs and again to request
class certification.
On June 29, 1999, another purported class action was filed against the
Company in the Tampa Court by Lisa Lisenby, individually and on behalf of other
persons similarly situated (the "Lisenby case"). In her Complaint, the plaintiff
alleged that the Company had been and was violating Federal statutory law by
discriminating against female applicants and employees in the Company's
manufacturing plants and distribution centers. On March 22, 2000, the Tampa
Court entered an order at the request of the Company transferring the Lisenby
case to the Federal District Court for the Northern District of Georgia (the
"Atlanta Court"). On December 19, 2000, the Atlanta Court denied the plaintiff's
motion for class certification and she can now proceed to trial on her
individual claims. As a result, the Company no longer considers the Lisenby case
to be material.
On October 23, 2000, another purported class action was filed against the
Company in the Federal District Court for the Southern District of Florida by
Joaquin A. Garcia and other present or former employees of the Company,
individually and on behalf of all other persons similarly situated (the "Garcia
case"). In their Complaint, the plaintiffs alleged that the Company had been and
was engaged in a pattern and practice of national origin discrimination against
Hispanic employees and applicants in the Company's warehouses with respect to
hiring, promotion, discharges and conditions of employment, all in violation of
Federal and state law.
The Company denies the allegations of the plaintiffs in the McGee and
Garcia cases and is vigorously defending the actions. Although these cases are
subject to the uncertainties inherent in the litigation process, based on the
information presently available to the Company, management does not expect the
ultimate resolution of these actions to have a material adverse effect on the
Company's financial condition, results of operations or cash flows.
The Company is also a party in various legal claims and actions considered
in the normal course of business. In the opinion of management, the ultimate
resolution of these legal proceedings will not have a material adverse effect on
the Company's financial condition, results of operations or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None
EXECUTIVE OFFICERS OF THE COMPANY
---------------------------------
Served as
Nature of Family Officer of
Relationship Company
Name Age Position Between Officers Since
- ---- --- -------- ---------------- -----
Howard M. Jenkins 49 Chairman of Cousin of 1976
the Board and Charles H. Jenkins,
Chief Executive Jr., uncle of
Officer W. Edwin Crenshaw
and brother-in-law
of Hoyt R. Barnett
Charles H. Jenkins, Jr. 57 Chairman of the Cousin of 1974
Executive Committee Howard M. Jenkins
and Chief Operating and cousin of
Officer W. Edwin Crenshaw
W. Edwin Crenshaw 50 President Nephew of 1990
Howard M. Jenkins
and cousin of
Charles H. Jenkins, Jr.
Hoyt R. Barnett 57 Vice Chairman Brother-in-law of 1977
Howard M. Jenkins
John A. Attaway, Jr. 42 Secretary 2000
Jesse L. Benton 58 Vice President 1988
David E. Bornmann 43 Vice President 1998
David E. Bridges 51 Vice President 2000
Joseph W. Carvin 50 Vice President 1998
R. Scott Charlton 42 Vice President 1992
David S. Duncan 47 Vice President 1999
William V. Fauerbach 54 Vice President 1997
John R. Frazier 51 Vice President 1997
M. Clayton Hollis, Jr. 44 Vice President 1994
Mark R. Irby 45 Vice President 1989
Tina P. Johnson 41 Senior Vice President 1990
Linda S. Kane 35 Assistant Secretary 2000
James J. Lobinsky 61 Senior Vice President 1992
Thomas M. McLaughlin 50 Vice President 1994
Sharon A. Miller 57 Assistant Secretary 1992
EXECUTIVE OFFICERS OF THE COMPANY
---------------------------------
Served as
Nature of Family Officer of
Relationship Company
Name Age Position Between Officers Since
- ---- --- -------- ---------------- -----
Robert H. Moore 58 Vice President 1994
Thomas M. O'Connor 53 Senior Vice President 1992
David P. Phillips 41 Chief Financial 1990
Officer and Treasurer
Henry J. Pileggi, Jr. 42 Vice President 1998
James H. Rhodes II 56 Vice President 1995
Daniel M. Risener 60 Senior Vice President 1985
and Chief Information
Officer
Richard J. Schuler II 45 Vice President 2000
Edward T. Shivers 61 Vice President 1985
The terms of all officers expire at the annual meeting of the Company in May
2001.
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 to
June 2000, Chairman of the Executive Committee and
Chief Operating Officer thereafter.
W. Edwin Crenshaw President of the Company.
Hoyt R. Barnett Executive Vice President and Trustee of the Profit
Sharing Plan of the Company to August 1998,
Executive Vice President, Trustee of the Profit
Sharing Plan and Trustee of the Employee Stock
Ownership Plan to January 1999, Vice Chairman,
Trustee of the Profit Sharing Plan and Trustee of the
Employee Stock Ownership Plan to December 1999, Vice
Chairman, Trustee of the Employee Stock Ownership Plan
thereafter.
John A. Attaway, Jr. Partner in the law firm of Lane Trohn to December
1997, Corporate Counsel of the Company to May 2000,
General Counsel and Secretary thereafter.
Jesse L. Benton Vice President of the Company.
David E. Bornmann Business Development Manager - Corporate Purchasing of
the Company to October 1998, Vice President
thereafter.
David E. Bridges Regional Director of Retail Operations - Lakeland
Division of the Company to July 2000, Vice President
thereafter.
Joseph W. Carvin Human Resources Counsel of the Company to June 1998,
Director of Human Resources and Employment Law to
November 1998, Vice President thereafter.
R. Scott Charlton Vice President of the Company.
David S. Duncan Director of Facility Services of the Company to
November 1999, Vice President thereafter.
William V. Fauerbach Regional Director of Retail Operations - Miami
Division of the Company 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. Vice President of the Company.
Mark R. Irby Vice President of the Company.
Tina P. Johnson Treasurer and Trustee of the 401(k) Plan - Publix
Stock Fund of the Company to March 1996, Vice
President, Treasurer and Trustee of the 401(k)Plan
- Publix Stock Fund to July 1997, Senior Vice
President and Trustee of the 401(k) Plan - Publix
Stock Fund thereafter.
Name Business Experience During Last Five Years
- ---- -----------------------------------------------------
Linda S. Kane Treasury and Tax Analyst of the Company to January
1997, Manager of Business Analysis to May 1998,
Director of Benefits Administration to June 2000,
Director of Benefits Administration and Assistant
Secretary thereafter.
James J. Lobinsky Vice President of the Company to July 1997, Senior
Vice President thereafter.
Thomas M. McLaughlin Vice President of the Company.
Sharon A. Miller Director of Administration and Assistant Secretary
of the Company.
Robert H. Moore Vice President of the Company.
Thomas M. O'Connor Vice President of the Company to November 1999,
Senior Vice President thereafter.
David P. Phillips Controller of the Company to March 1996, Vice
President and Controller to July 1997, Vice President
Finance and Treasurer to July 1999, Chief Financial
Officer and Treasurer thereafter.
Henry J. Pileggi, Jr. Regional Director of Retail Operations - Jacksonville
Division of the Company to October 1998, Vice
President thereafter.
James H. Rhodes II Vice President of the Company.
Daniel M. Risener Vice President of the Company to July 1999, Senior
Vice President and Chief Information Officer
thereafter.
Richard J. Schuler II Miami Distribution Manager of the Company to June
2000, Vice President thereafter.
Edward T. Shivers Vice President of the Company.
PART II
Item 5. Market for the Registrant's Common Equity 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 the
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 quarterly appraisals prepared by an independent appraiser. The market
price for 2000 and 1999 was as follows:
2000 1999
---- ----
January - February $44.50 $41.00
March - April 45.00 46.50
May - July 45.50 46.50
August - October 46.50 46.50
November - December 47.00 44.50
(b) Approximate Number of Equity Security Holders
---------------------------------------------
As of March 6, 2001, the approximate number of holders of the Company's
common stock was 90,000.
(c) Dividends
---------
The Company paid cash dividends of $.27 per share of common stock in 2000
and $.22 per share in 1999. Payment of dividends is within the discretion
of the Company's Board of Directors and depends on, among other factors,
earnings, capital requirements and the operating and financial condition of
the Company. It is believed that comparable cash dividends will be paid in
the future.
Item 6. Five Year Summary of Selected Financial Data
- -----------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Sales:
Sales $14,575,031 13,068,900 12,067,125 11,224,378 10,431,302
Percent increase 11.5% 8.3% 7.5% 7.6% 11.1%
Comparable store sales
percent increase 3.4% 5.0% 3.6% 3.3% 5.6%
Earnings:
Gross profit $ 3,762,854 3,294,188 2,935,707 2,674,118 2,424,799
Earnings before income
tax expense $ 823,553 719,569 584,388 555,357 416,584
Net earnings $ 530,406 462,409 378,274 354,622 265,176
Net earnings as a
percent of sales 3.64% 3.54% 3.13% 3.16% 2.54%
Common stock:
Weighted average
shares outstanding 210,145,666 216,160,316 217,383,413 218,871,661 221,195,884
Basic and diluted
earnings per
common share,
based on weighted
average shares
outstanding $ 2.52 2.14 1.74 1.62 1.20
Cash dividends per
share $ .27 .22 .20 .15 .13
Financial data:
Capital expenditures $ 558,133 512,658 357,754 259,806 226,752
Working capital $ 176,776 515,257 467,385 366,680 317,265
Current ratio 1.15 1.48 1.47 1.37 1.35
Total assets $ 4,221,820 4,067,732 3,617,259 3,294,980 2,921,084
Stockholders' equity $ 2,662,435 2,676,144 2,327,632 2,019,299 1,751,179
Other:
Number of stores 647 614 586 563 534
NOTE: Amounts are in thousands, except shares outstanding, per share amounts
and number of stores. Fiscal year 2000 includes 53 weeks. All other
years include 52 weeks.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
Business Environment
- --------------------
As of December 30, 2000, the Company operated 647 retail grocery stores
representing approximately 29.2 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, supercenters and membership warehouse clubs. The products offered
by these retailers include many of the same items sold by the Company.
At the end of fiscal 2000, the Company had 509 stores located in Florida,
111 in Georgia, 23 in South Carolina and four in Alabama. The Company opened 32
stores in Florida, 12 stores in Georgia, one store in South Carolina and one
store in Alabama during 2000. 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 $1,058.1
million in 2000, compared with $796.4 million in 1999 and $665.0 million in
1998. Working capital was approximately $176.8 million as of December 30, 2000,
as compared with $515.3 million and $467.4 million as of December 25, 1999 and
December 26, 1998, respectively. Cash and cash equivalents aggregated
approximately $396.9 million as of December 30, 2000, as compared with $626.6
million and $669.3 million as of December 25, 1999 and December 26, 1998,
respectively.
Capital expenditures totaled $558.1 million in 2000. These expenditures
were primarily incurred in connection with the opening of 46 new stores and
remodeling or expanding 69 stores. Significant expenditures were also incurred
in the expansion of warehouses in Lakeland, Florida. In addition, the Company
closed 13 stores. The net impact of new and closed stores (net new stores) added
an additional 1.5 million square feet in 2000, a 5.3% increase. Capital
expenditures totaled $512.7 million in 1999. These expenditures were primarily
incurred in connection with the opening of 44 new stores and remodeling or
expanding 82 stores. Significant expenditures were also incurred in the purchase
of nine additional store sites from A & P in the greater Atlanta area and the
expansion of a warehouse in Jacksonville, Florida. In addition, the Company
closed 16 stores. Net new stores added an additional 1.4 million square feet in
1999, a 5.3% increase. Capital expenditures totaled $357.8 million in 1998.
These expenditures were primarily incurred in connection with the opening of 31
new stores and remodeling or expanding 45 stores. In addition, the Company
closed eight stores. Net new stores added an additional 1.0 million square feet
in 1998, a 4.0% increase.
The Company plans to open as many as 54 stores in 2001. Although real
estate development is unpredictable, the Company's 2001 new store growth
represents a reasonable estimate of anticipated future growth. Capital
expenditures for 2001, primarily made up of new store, warehouse and office
construction, remodeling or expanding of many existing stores and new or
enhanced information technology applications, are expected to be approximately
$667.0 million. Additionally, the Company expects capital expenditures of
approximately $33.0 million for PublixDirect, as described below. This capital
program is subject to continuing change and review. The 2001 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.
During 2001, the Company plans to launch an online grocery shopping service
under a new wholly owned subsidiary, PublixDirect. The online grocery shopping
service will enable customers within certain geographical boundaries to order
groceries online and have them delivered to their homes. The customer orders
will be filled and delivered from fulfillment centers. During 2001, the Company
expects to incur approximately $33.0 million in capital expenditures on behalf
of PublixDirect for the development of the online grocery service web site,
construction of a fulfillment center in Pompano Beach, Florida and future
fulfillment centers. Additionally, the Company expects to spend approximately
$18.0 million on other operating expenses for PublixDirect.
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 $177.0 million, $144.6 million and
$136.4 million in fiscal 2000, 1999 and 1998, 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 currently repurchases common stock at the stockholders' request
in accordance with the terms of the Company's Employee Stock Purchase Plan. Net
common stock repurchases under this plan totaled approximately $635.0 million,
$211.2 million and $100.0 million in fiscal 2000, 1999 and 1998, respectively.
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.
Cash generated in excess of the amount needed for current operations,
capital expenditures and common stock repurchases is invested in short-term and
long-term investments. Short-term investments were approximately $21.0 million
in 2000 compared with $28.2 million in 1999. Long-term investments, primarily
comprised of tax exempt bonds, taxable bonds, equity securities and preferred
stocks, were approximately $434.2 million in 2000 compared with $398.9 million
in 1999. Management believes the Company's liquidity will continue to be strong.
Results of Operations
- ---------------------
The Company's fiscal year ends on the last Saturday in December. Fiscal
year 2000 included 53 weeks and fiscal years 1999 and 1998 included 52 weeks.
Sales for 2000 were $14.6 billion as compared with $13.1 billion in 1999,
an 11.5% increase. This reflects an increase of $288.8 million or 2.2% in sales
from an additional week included in the 2000 fiscal year, $444.3 million or 3.4%
in sales from stores that were open for all of both years (comparable stores)
and sales of $773.0 million or 5.9% from net new stores since the beginning of
1999. Sales for 1999 were $13.1 billion as compared with $12.1 billion in 1998,
an 8.3% increase. This reflects an increase of $603.4 million or 5.0% in sales
from comparable stores and sales of $398.4 million or 3.3% from net new stores
since the beginning of 1998.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses was approximately 74.2% of sales in 2000 as compared with
74.8% and 75.7% in 1999 and 1998, respectively. In 2000 and 1999, cost of
merchandise sold decreased as a percentage of sales due to continuing
improvements in buying practices, promotional efficiencies and a shifting of the
sales mix toward higher margin products.
Operating and administrative expenses, as a percent of sales, were 21.2%,
20.7% and 20.5% in 2000, 1999 and 1998, respectively. The significant components
of operating and administrative expenses are payroll costs, employee benefits,
rent and depreciation.
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.
During the fourth quarter of 2000, an $11.7 million expense was recorded to
cover the settlement 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 black employees and former black employees. The
expense recorded covers the full cost of the settlement, including 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 settlement. The impact of the expense recorded on net earnings was
approximately $5.7 million or $.03 per share for fiscal 2000.
The liability for the settlement is reflected as an other accrued expense
in the Company's consolidated balance sheet as of December 30, 2000.
Accounting Standards
- --------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities," (SFAS 133) effective for fiscal years beginning after
June 15, 1999. In June 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133" (SFAS 137) which deferred the effective date of adoption of
SFAS 133 for one year. SFAS 133 requires that derivatives be carried at fair
value and provides for hedge accounting when certain conditions are met. The
Company does not have derivatives or enter into hedging activities as defined by
SFAS 133, therefore, the adoption of SFAS 133 will have no material effect on
the Company's financial condition, results of operations or cash flows.
Cautionary Note Regarding Forward-Looking Statements
- ----------------------------------------------------
From time to time, information provided by the Company, including written
or oral statements made by its representatives, may contain forward-looking
information about the future performance of the Company which is based on
management's assumptions and beliefs in light of the information currently
available to them. When used in this document, the words "plan," "estimate,"
"project," "intend," "believe" and other similar expressions, as they relate to
the Company, are intended to identify such forward-looking statements. These
forward-looking statements are subject to uncertainties and other factors that
could cause actual results to differ materially from those statements including,
but not limited to: competitive practices and pricing in the food and drug
industries generally and particularly in the Company's principal markets;
changes in the general economy; changes in consumer spending; and other factors
affecting the Company's business in or beyond the Company's control. These
factors include changes in the rate of inflation, changes in state and Federal
legislation or regulation, adverse determinations with respect to litigation or
other claims, ability to recruit and train employees, ability to construct new
stores or complete remodels as rapidly as planned and stability of product
costs. Other factors and assumptions not identified above could also cause the
actual results to differ materially from those set forth in the forward-looking
statements. The Company assumes no obligation to update publicly these
forward-looking statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
The Company does not have any material exposure to market risk associated
with activities in derivative financial instruments, other financial instruments
and derivative commodity instruments.
Item 8. Financial Statements and Supplementary 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
PART III
Item 10. Directors and Executive Officers 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 (2001
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 5 through 8 of the 2001 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
The following table sets forth, as of March 6, 2001, the information with
respect to common stock ownership of all directors, including some who are 5% or
more beneficial owners, and all officers and directors as a group. Also, listed
are others known by the Company to own beneficially 5% or more of the shares of
the Company's common stock.
Amount and Nature Percent
Name of Beneficial Ownership (1) of Class
- ---- --------------------------- --------
Carol Jenkins Barnett 11,814,765 (2) 5.69
Hoyt R. Barnett 58,832,310 (3) 28.34
W. Edwin Crenshaw 623,258 *
Mark C. Hollis 1,378,971 (4) *
Charles H. Jenkins, Jr. 2,170,863 (5) 1.05
Howard M. Jenkins 11,941,221 (6) 5.75
Tina P. Johnson 5,304,341 (7) 2.56
E. Vane McClurg 1,728,002 *
William H. Vass 8,211 *
All Officers and Directors
as a group (32 individuals) 93,004,188 (8) 44.81
All Other Beneficial Owners:
- ---------------------------
Publix Super Markets, Inc.
Employee Stock Ownership Plan 57,512,340 27.71
Huntington National Bank 12,087,452 (9) 5.82
Nancy E. Jenkins 14,638,789 7.05
*Shares represent less than 1% of class.
Note references are explained on the following page.
(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 (ESOP),
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 except
Huntington National Bank is 1936 George Jenkins Boulevard, Lakeland,
Florida 33815. The address for Huntington National Bank is 41 S. High
Street, Columbus, Ohio 43215.
(2) Includes 1,218,149 shares of common stock 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 ESOP which is the record owner of
57,512,340 shares of common stock over which he has shared investment
power. As Trustee, Hoyt R. Barnett exercises sole voting power over 978,551
shares in the ESOP because such shares have not been allocated to
participants' accounts. For ESOP shares allocated to participants'
accounts, Hoyt R. Barnett will vote shares as instructed by participants.
Additionally, Hoyt R. Barnett will vote ESOP shares for which no
instruction is received. Total shares beneficially owned include 1,218,149
shares also shown as beneficially owned by his wife, Carol Jenkins Barnett,
but exclude all other shares beneficially owned by Carol Jenkins Barnett,
as to which Hoyt R. Barnett disclaims beneficial ownership.
(4) Mark C. Hollis has shared voting and investment power over 1,378,547 shares
of common stock.
(5) Charles H. Jenkins, Jr. is co-trustee of a trust which is the record owner
of 532,807 shares of common stock over which he has shared voting and
investment power.
(6) Howard M. Jenkins has sole voting and investment power over 1,910,753
shares of common stock which are held directly, sole voting and investment
power over 5,947,054 shares which are held indirectly and shared voting and
investment power over 4,046,093 shares which are held indirectly.
(7) Tina P. Johnson is Trustee of the 401(k) Plan - Publix Stock Fund which is
the record owner of 5,243,286 shares of common stock over which she has
sole voting and shared investment power.
(8) Includes 62,755,626 shares of common stock owned by the ESOP and 401(k)
Plan.
(9) Huntington National Bank has sole voting and investment power over
12,065,952 shares of common stock which are held in trusts and shared
voting and investment power over 21,500 shares which are held in trusts.
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 2001 Proxy
Statement.
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 no reports on Form 8-K during the fourth quarter of the
year ended December 30, 2000.
(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 for the year ended December 28, 1996.
10. Employment Agreement dated August 28, 1998, between William H.
Vass and the Company, effective January 1, 1999 is incorporated by
reference to the exhibits to the Annual Report of the Company on
Form 10-K for the year ended December 26, 1998.
21. Subsidiary of the Company.
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 6, 2001 By: /s/ John A. Attaway, Jr.
------------------------
John A. Attaway, Jr.
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the 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 6, 2001
- ---------------------------
Howard M. Jenkins
Chairman of the Executive
Committee, Chief Operating
/s/ Charles H. Jenkins, Jr. Officer and Director March 6, 2001
- ---------------------------
Charles H. Jenkins, Jr.
/s/ W. Edwin Crenshaw President and Director March 6, 2001
- ---------------------------
W. Edwin Crenshaw
/s/ Hoyt R. Barnett Vice Chairman and Director March 6, 2001
- ---------------------------
Hoyt R. Barnett
Senior Vice President
/s/ Tina P. Johnson and Director March 6, 2001
- ---------------------------
Tina P. Johnson
Chief Financial Officer
and Treasurer
(Principal Financial and
/s/ David P. Phillips Accounting Officer) March 6, 2001
- ---------------------------
David P. Phillips
PUBLIX SUPER MARKETS, INC.
Index to Consolidated Financial Statements and Schedule
Independent Auditors' Report
Consolidated Financial Statements:
Consolidated Balance Sheets - December 30, 2000 and December 25, 1999
Consolidated Statements of Earnings - Years ended December 30, 2000,
December 25, 1999 and December 26, 1998
Consolidated Statements of Comprehensive Earnings - Years ended December 30,
2000, December 25, 1999 and December 26, 1998
Consolidated Statements of Stockholders' Equity - Years ended December 30,
2000, December 25, 1999 and December 26, 1998
Consolidated Statements of Cash Flows - Years ended December 30, 2000,
December 25, 1999 and December 26, 1998
Notes to Consolidated Financial Statements
The following consolidated financial statement schedule of the Company for the
years ended December 30, 2000, December 25, 1999 and December 26, 1998 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.
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Stockholders
Publix Super Markets, Inc.:
We have audited the accompanying 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 consolidated
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and consolidated financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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, 2000 and December 25, 1999, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 30, 2000, in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion, the related
consolidated financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
KPMG LLP
Tampa, Florida
February 23, 2001
PUBLIX SUPER MARKETS, INC.
Consolidated Balance Sheets
December 30, 2000 and
December 25, 1999
Assets 2000 1999
------ ---- ----
(Amounts are in thousands)
Current assets:
Cash and cash equivalents $ 396,906 626,636
Short-term investments 21,028 28,233
Trade receivables 102,126 107,185
Merchandise inventories 814,985 769,454
Deferred tax assets 55,598 57,065
Prepaid expenses 2,274 2,442
---------- ---------
Total current assets 1,392,917 1,591,015
---------- ---------
Long-term investments 434,226 398,865
Other noncurrent assets 28,354 22,682
Property, plant and equipment:
Land 119,016 111,052
Buildings and improvements 765,825 702,322
Furniture, fixtures and equipment 2,033,736 1,927,899
Leasehold improvements 537,417 448,355
Construction in progress 201,258 117,759
---------- ---------
3,657,252 3,307,387
Less accumulated depreciation 1,290,929 1,252,217
---------- ---------
Net property, plant and equipment 2,366,323 2,055,170
---------- ---------
$4,221,820 4,067,732
========== =========
See accompanying notes to consolidated financial statements. (Continued)
PUBLIX SUPER MARKETS, INC.
Consolidated Balance Sheets
December 30, 2000 and
December 25, 1999
Liabilities and Stockholders' Equity 2000 1999
------------------------------------ ---- ----
(Amounts are in thousands,
except share amounts)
Current liabilities:
Accounts payable $ 676,924 634,995
Accrued expenses:
Salaries and wages 57,090 52,591
Contribution to retirement plans 250,832 182,981
Self-insurance reserves 84,095 69,356
Other 117,532 103,339
---------- ---------
Total accrued expenses 509,549 408,267
---------- ---------
Federal and state income taxes 29,668 32,496
---------- ---------
Total current liabilities 1,216,141 1,075,758
Deferred tax liabilities, net 152,830 135,413
Self-insurance reserves 109,423 100,154
Accrued postretirement benefit cost 62,986 55,735
Other noncurrent liabilities 18,005 24,528
---------- ---------
Total liabilities 1,559,385 1,391,588
---------- ---------
Stockholders' equity:
Common stock of $1 par value. Authorized
300,000,000 shares; issued and outstanding
204,972,803 shares in 2000 and 215,567,950
shares in 1999 204,973 215,568
Additional paid-in capital 212,947 196,352
Reinvested earnings 2,252,661 2,271,323
---------- ---------
2,670,581 2,683,243
Accumulated other comprehensive earnings (8,146) (7,099)
---------- ---------
Total stockholders' equity 2,662,435 2,676,144
Commitments and contingencies --- ---
---------- ---------
$4,221,820 4,067,732
========== =========
See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Earnings
Years ended December 30, 2000, December 25, 1999
and December 26, 1998
2000 1999 1998
---- ---- ----
(Amounts are in thousands,
except shares outstanding
and per share amounts)
Revenues:
Sales $14,575,031 13,068,900 12,067,125
Other income, net 149,205 136,661 128,188
----------- ----------- -----------
Total revenues 14,724,236 13,205,561 12,195,313
----------- ----------- -----------
Costs and expenses:
Cost of merchandise sold, including
store occupancy, warehousing
and delivery expenses 10,812,177 9,774,712 9,131,418
Operating and administrative
expenses 3,088,506 2,711,280 2,479,507
----------- ----------- -----------
Total costs and expenses 13,900,683 12,485,992 11,610,925
----------- ----------- -----------
Earnings before income tax expense 823,553 719,569 584,388
Income tax expense 293,147 257,160 206,114
----------- ----------- -----------
Net earnings $ 530,406 462,409 378,274
=========== =========== ===========
Weighted average number of common
shares outstanding 210,145,666 216,160,316 217,383,413
=========== =========== ===========
Basic and diluted earnings per common
share based on weighted average
shares outstanding $ 2.52 2.14 1.74
=========== =========== ===========
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Comprehensive Earnings
Years ended December 30, 2000, December 25, 1999
and December 26, 1998
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Net earnings $530,406 462,409 378,274
Other comprehensive earnings
Unrealized loss on investment
securities available-for-sale,
net of tax effect of ($1,253),
($6,089) and ($5,683) in 2000,
1999 and 1998, respectively (1,995) (9,707) (9,078)
Reclassification adjustment for net
realized loss on investment securities
available-for-sale, net of tax effect
of $595, $1,733 and $2,787 in 2000,
1999 and 1998, respectively 948 2,769 4,453
-------- ------- -------
Comprehensive earnings $529,359 455,471 373,649
======== ======= =======
See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Stockholders' Equity
Years ended December 30, 2000, December 25, 1999
and December 26, 1998
Common
stock
acquired Accumulated Total
Additional from other stock-
Common paid-in Reinvested stock- comprehensive holders'
stock capital earnings holders earnings equity
----- ------- -------- ------- -------- ------
(Amounts are in thousands, except per share and share amounts)
Balances at December 27, 1997 $217,419 100,757 1,696,659 --- 4,464 2,019,299
Comprehensive earnings for the year --- --- 378,274 --- (4,625) 373,649
Cash dividends, $.20 per share --- --- (43,752) --- --- (43,752)
Contribution of 2,269,549 shares to
retirement plans 738 31,780 --- 45,929 --- 78,447
6,298,211 shares acquired from stockholders --- --- --- (213,981) --- (213,981)
Sale of 3,471,695 shares to stockholders 757 19,935 --- 93,278 --- 113,970
Retirement of 2,051,992 shares (2,052) --- (72,722) 74,774 --- ---
-------- ------- --------- -------- ------ ---------
Balances at December 26, 1998 216,862 152,472 1,958,459 --- (161) 2,327,632
Comprehensive earnings for the year --- --- 462,409 --- (6,938) 455,471
Cash dividends, $.22 per share --- --- (47,846) --- --- (47,846)
Contribution of 3,328,017 shares to
retirement plans --- (517) --- 152,633 --- 152,116
10,789,790 shares acquired from stockholders --- --- --- (492,892) --- (492,892)
Sale of 6,167,508 shares to stockholders 967 44,397 --- 236,299 --- 281,663
Retirement of 2,261,077 shares (2,261) --- (101,699) 103,960 --- ---
-------- ------- --------- -------- ------ ---------
Balances at December 25, 1999 215,568 196,352 2,271,323 --- (7,099) 2,676,144
Comprehensive earnings for the year --- --- 530,406 --- (1,047) 529,359
Cash dividends, $.27 per share --- --- (57,816) --- --- (57,816)
Contribution of 3,319,596 shares to
retirement plans --- 1,505 --- 148,251 --- 149,756
16,464,016 shares acquired from stockholders --- --- --- (751,479) --- (751,479)
Sale of 2,549,273 shares to stockholders 347 15,090 --- 101,034 --- 116,471
Retirement of 10,941,939 shares (10,942) --- (491,252) 502,194 --- ---
-------- ------- --------- -------- ------ ---------
Balances at December 30, 2000 $204,973 212,947 2,252,661 --- (8,146) 2,662,435
======== ======= ========= ======== ====== =========
See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Cash Flows
Years ended December 30, 2000, December 25, 1999
and December 26, 1998
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Cash flows from operating activities:
Cash received from customers $ 14,675,826 13,120,450 12,153,967
Cash paid to employees and suppliers (13,235,049) (12,021,554) (11,218,411)
Dividends and interest received 56,358 55,329 55,056
Income taxes paid (276,433) (214,773) (194,385)
Payment for self-insured claims (153,021) (135,464) (123,481)
Other operating cash receipts 826 751 726
Other operating cash payments (10,367) (8,335) (8,475)
------------ ----------- -----------
Net cash provided by operating
activities 1,058,140 796,404 664,997
------------ ----------- -----------
Cash flows from investing activities:
Payment for property, plant and
equipment (558,133) (512,658) (357,754)
Proceeds from sale of property, plant
and equipment 4,390 2,679 7,562
Payment for investment securities -
available-for-sale (AFS) (111,143) (190,003) (193,707)
Proceeds from sale and maturity of
investment securities - AFS 75,349 130,609 164,999
Other, net (5,247) (10,515) (2,895)
------------ ----------- -----------
Net cash used in investing activities (594,784) (579,888) (381,795)
------------ ----------- -----------
Cash flows from financing activities:
Proceeds from sale of common stock 116,471 281,663 113,970
Payment for acquisition of common stock (751,479) (492,892) (213,981)
Dividends paid (57,816) (47,846) (43,752)
Other, net (262) (131) (131)
------------ ----------- -----------
Net cash used in financing activities (693,086) (259,206) (143,894)
------------ ----------- -----------
Net (decrease) increase in cash and cash
equivalents (229,730) (42,690) 139,308
Cash and cash equivalents at beginning
of year 626,636 669,326 530,018
------------ ----------- -----------
Cash and cash equivalents at end of year $ 396,906 626,636 669,326
============ =========== ===========
See accompanying notes to consolidated financial statements. (Continued)
PUBLIX SUPER MARKETS, INC.
Consolidated Statements of Cash Flows
(Continued)
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Reconciliation of net earnings to net cash
provided by operating activities
Net earnings $ 530,406 462,409 378,274
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 226,950 199,428 181,020
Retirement contributions paid or payable
in common stock 218,790 193,227 84,532
Deferred income taxes 19,542 12,461 24,742
Loss on sale of property, plant and
equipment 15,683 20,015 4,877
Loss on sale of investments 1,543 4,586 7,240
Self-insurance reserves in excess of
current payments 24,008 9,141 12,886
Postretirement accruals in excess of
current payments 7,251 6,877 6,246
Decrease in advance purchase
allowances (6,261) (5,051) (10,251)
Other, net 3,922 3,249 4,540
Change in cash from:
Trade receivables 5,059 (35,918) 51
Merchandise inventories (45,531) (111,889) (19,521)
Prepaid expenses 168 (553) 264
Accounts payable and accrued expenses 59,438 8,496 3,110
Federal and state income taxes (2,828) 29,926 (13,013)
---------- -------- -------
Total adjustments 527,734 333,995 286,723
---------- -------- -------
Net cash provided by operating activities $1,058,140 796,404 664,997
========== ======== =======
See accompanying notes to consolidated financial statements.
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
December 30, 2000, December 25, 1999
and December 26, 1998
(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. The Company operates
in a single industry segment.
(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) Fiscal Year
-----------
The fiscal year ends on the last Saturday in December. Fiscal year
2000 includes 53 weeks. Fiscal years 1999 and 1998 include 52 weeks.
(d) Cash Equivalents
----------------
The Company considers all liquid investments with maturities of three
months or less to be cash equivalents.
(e) Inventories
-----------
Inventories are valued at the lower of cost (principally the dollar
value last-in, first-out method) or market value, including store
inventories, which are calculated by the retail method.
(f) Property, Plant and Equipment and Depreciation
----------------------------------------------
Assets are recorded at cost and are depreciated using the
straight-line method over their estimated useful lives or the terms
of their leases, if shorter, as follows:
Buildings and improvements 10 - 40 years
Furniture, fixtures and equipment 3 - 20 years
Leasehold improvements 10 - 40 years
Maintenance and repairs are charged to expense as incurred.
Expenditures for renewals and betterments are capitalized. The gain
or loss is applied to the asset accounts for traded items or is
reflected in income for disposed items.
(g) 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.
(h) Long-Lived Assets
-----------------
The Company periodically reviews its long-lived assets and evaluates
such assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable. Asset impairment is determined to exist if the fair
value of the asset is less than the carrying amount. If an asset is
impaired, a loss is recognized.
(Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(i) Comprehensive Earnings
----------------------
Comprehensive earnings includes net earnings and other comprehensive
earnings. Other comprehensive earnings includes revenues, expenses,
gains and losses that have been excluded from net earnings and
recorded directly to stockholders' equity. Included in other
comprehensive earnings for the Company are unrealized gains and
losses on available-for-sale securities.
(j) Advertising Costs
-----------------
Advertising costs are expensed as incurred and were approximately
$92,494,000, $88,466,000 and $85,240,000 for the fiscal years ended
December 30, 2000, December 25, 1999 and December 26, 1998,
respectively.
(k) Income Taxes
------------
Deferred tax assets and liabilities are established for temporary
differences between financial and tax reporting bases and are
subsequently adjusted to reflect changes in tax rates expected to be
in effect when the temporary differences reverse.
(l) Earnings Per Share
------------------
Basic and diluted earnings per common share are calculated by
dividing net earnings by the weighted average number of common shares
outstanding. Basic and diluted earnings per common share are the same
because the Company does not have options or other stock compensation
programs that would impact the calculation of diluted earnings per
share.
(m) 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.
(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 $112,606,000, $109,379,000 and $108,096,000 as
of December 30, 2000, December 25, 1999 and December 26, 1998,
respectively. Also, net earnings would have increased by approximately
$1,584,000 or less than $.01 per share in 2000, $630,000 or less than $.01
per share in 1999 and $2,799,000 or $.01 per share in 1998.
(3) Fair Value of Financial Instruments
-----------------------------------
The following methods and assumptions were used by the Company in
estimating the fair value of its financial instruments:
Cash and cash equivalents: The carrying amount for cash and cash
-------------------------
equivalents approximates fair value.
Investment securities: The fair values for marketable debt and equity
---------------------
securities are based on quoted market prices.
The carrying amount of the Company's financial instruments as of December
30, 2000 and December 25, 1999 approximated their respective fair values.
2 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(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, 2000 and December
25, 1999.
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 other comprehensive earnings and included as a separate
component of stockholders' equity. The cost of debt securities in this
category is adjusted for amortization of premiums and accretion of
discounts to maturity. Such amortization and accretion is included in
other income, net. Realized gains and losses and declines in value judged
to be other-than-temporary on available-for-sale securities are included
in other income, net. The cost of securities sold is based on the specific
identification method.
Following is a summary of available-for-sale securities as of December 30,
2000 and December 25, 1999:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
(Amounts are in thousands)
2000
----
Tax exempt bonds $356,921 1,940 6,256 352,605
Taxable bonds 13,537 2,353 3,044 12,846
Equity securities 98,057 2,115 10,369 89,803
-------- ----- ------ -------
$468,515 6,408 19,669 455,254
======== ===== ====== =======
1999
----
Tax exempt bonds $329,125 585 8,603 321,107
Taxable bonds 15,797 2,729 2,325 16,201
Equity securities 93,731 1,341 5,282 89,790
-------- ----- ------ -------
$438,653 4,655 16,210 427,098
======== ===== ====== =======
For the fiscal years ended December 30, 2000, December 25, 1999 and
December 26, 1998, the realized gains on sales of available-for-sale
securities totaled $1,388,000, $1,566,000 and $4,176,000, respectively,
and the realized losses totaled $2,931,000, $6,152,000 and $11,416,000,
respectively.
3 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
The amortized cost and estimated fair value of debt and marketable equity
securities classified as available-for-sale as of December 30, 2000 and
December 25, 1999, by expected maturity, are as follows:
2000 1999
-------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
(Amounts are in thousands)
Due in one year or less $ 21,926 21,028 28,513 28,233
Due after one year through
five years 79,920 80,396 58,848 58,930
Due after five years through
ten years 30,538 30,726 22,987 22,594
Due after ten years 238,074 233,301 234,574 227,551
-------- ------- ------- -------
370,458 365,451 344,922 337,308
Equity securities 98,057 89,803 93,731 89,790
-------- ------- ------- -------
$468,515 455,254 438,653 427,098
======== ======= ======= =======
(5) Postretirement Benefits
-----------------------
The Company provides life insurance benefits for salaried and hourly
full-time employees. Such employees retiring from the Company on or after
attaining age 55 and having ten years of credited full-time service are
entitled to life insurance benefits. The Company funds the life insurance
benefits on a pay-as-you-go basis. During 2000, 1999 and 1998, the Company
made benefit payments to beneficiaries of retirees of approximately
$1,165,000, $1,877,000 and $1,361,000, respectively.
4 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
The following tables provide a reconciliation of the changes in the
benefit obligations and fair value of plan assets and a statement of the
funded status as of December 30, 2000 and December 25, 1999:
2000 1999
---- ----
(Amounts are in thousands)
Change in benefit obligation:
Benefit obligation as of beginning of year $ 61,688 61,937
Service cost 3,429 3,754
Interest cost 4,987 4,551
Actuarial loss (gain) 404 (6,677)
Benefit payments (1,165) (1,877)
-------- -------
Benefit obligation as of end of year $ 69,343 61,688
======== =======
Change in fair value of plan assets:
Fair value of plan assets as of beginning
of year $ --- ---
Employer contributions 1,165 1,877
Benefit payments (1,165) (1,877)
-------- -------
Fair value of plan assets as of end of year $ --- ---
======== =======
Funded status $(69,343) (61,688)
Unrecognized actuarial loss 6,357 5,953
-------- -------
Accrued postretirement benefit cost $(62,986) (55,735)
======== =======
Following are the actuarial assumptions that were used in the calculation
of the year end benefit obligation:
2000 1999 1998
---- ---- ----
Discount rate 7.75% 7.75% 7.00%
Rate of compensation increase 4.00% 4.00% 4.00%
Net periodic postretirement benefit cost consists of the following
components:
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Service cost $3,429 3,754 3,124
Interest cost 4,987 4,551 4,097
Recognized actuarial loss --- 449 386
------ ----- -----
Net periodic postretirement benefit cost $8,416 8,754 7,607
====== ===== =====
Actuarial losses are amortized over the average remaining service life of
active participants when the accumulation of such losses exceeds 10% of
the greater of the projected benefit obligation or the fair value of plan
assets.
5 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(6) Retirement Plans
----------------
The Company has a trusteed, noncontributory Employee Stock Ownership Plan
(ESOP) for the benefit of eligible employees. The amount of the Company's
discretionary contribution to the ESOP is determined annually by the Board
of Directors and can be made in Company common stock or cash. The expense
recorded for contributions to this plan was approximately $204,968,000 in
2000, $90,256,000 in 1999 and $73,048,000 in 1998.
Prior to 2000, the Company had a trusteed, noncontributory Profit Sharing
Plan for the benefit of eligible employees. The amount of the Company's
discretionary contribution to this plan was determined annually by the
Board of Directors and was made in Company common stock or cash. The
expense recorded for contributions to this plan was approximately
$92,731,000 in 1999 and $73,048,000 in 1998. Effective December 31, 1999,
the Company merged the Profit Sharing Plan into the ESOP.
The Company has a 401(k) plan for the benefit of eligible employees. The
401(k) plan is a voluntary defined contribution plan. Eligible employees
may contribute up to 8% of their annual compensation, subject to the
maximum contribution limits established by Federal law. The Company may
make a discretionary annual matching contribution to eligible participants
of this plan as determined by the Board of Directors. During 2000, 1999
and 1998, the Board of Directors approved a match of 50% of eligible
contributions up to 3% of eligible wages, not to exceed a maximum match of
$750 per employee. The match, which is determined as of the last day of
the plan year and paid in the subsequent plan year, is in the form of
common stock of the Company. The expense recorded for the Company's match
to the 401(k) plan was approximately $13,822,000 in 2000, $12,715,000 in
1999 and $11,484,000 in 1998.
The Company intends to continue its retirement plans indefinitely;
however, the right to modify, amend, terminate or merge these plans has
been reserved. In the event of termination, all amounts contributed under
the plans must be paid to the participants or their beneficiaries.
6 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
(7) Income Taxes
------------
The provision for income taxes consists of the following:
Current Deferred Total
------- -------- -----
(Amounts are in thousands)
2000
----
Federal $233,284 16,761 250,045
State 40,321 2,781 43,102
-------- ------ -------
$273,605 19,542 293,147
======== ====== =======
1999
----
Federal $208,413 10,606 219,019
State 36,286 1,855 38,141
-------- ------ -------
$244,699 12,461 257,160
======== ====== =======
1998
----
Federal $154,384 21,128 175,512
State 26,988 3,614 30,602
-------- ------ -------
$181,372 24,742 206,114
======== ====== =======
The actual tax expense for 2000, 1999 and 1998 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:
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Computed "expected" tax expense $288,243 251,849 204,536
State income taxes (net of
Federal income tax benefit) 28,016 24,792 19,892
Tax exempt interest (12,990) (13,466) (11,663)
Other, net (10,122) (6,015) (6,651)
-------- ------- -------
$293,147 257,160 206,114
======== ======= =======
7 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities as of
December 30, 2000 and December 25, 1999 are as follows:
2000 1999
---- ----
(Amounts are in thousands)
Deferred tax assets:
Self-insurance reserves $ 71,115 63,446
Advance purchase allowances 12,589 23,731
Postretirement benefit cost 24,297 21,503
Retirement plan contributions 20,121 17,410
Inventory capitalization 9,497 8,020
Other 15,472 11,879
-------- -------
Total deferred tax assets $153,091 145,989
======== =======
Deferred tax liabilities:
Property, plant and equipment,
principally due to depreciation $248,287 222,733
Other 2,036 1,604
-------- -------
Total deferred tax liabilities $250,323 224,337
======== =======
The Company expects the results of future operations to generate
sufficient taxable income to allow utilization of deferred tax assets.
(8) Commitments and Contingencies
-----------------------------
(a) Operating Leases
----------------
The Company conducts a major portion of its retail operations from
leased store premises generally subject to 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 instances, reimbursement of taxes and insurance.
Total rental expense, net of sublease rental income, for the years
ended December 30, 2000, December 25, 1999 and December 26, 1998, is
as follows:
2000 1999 1998
---- ---- ----
(Amounts are in thousands)
Minimum rentals $200,267 178,812 167,536
Contingent rentals 11,498 10,685 10,259
Sublease rental income (8,260) (7,028) (6,189)
-------- ------- -------
$203,505 182,469 171,606
======== ======= =======
8 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
As of December 30, 2000, future minimum lease payments for all
noncancelable operating leases and related subleases are as follows:
Minimum Sublease
Rental Rental
Year Commitments Income Net
---- ----------- ------ ---
(Amounts are in thousands)
2001 $ 205,024 7,853 197,171
2002 203,434 6,101 197,333
2003 200,954 3,542 197,412
2004 197,313 2,259 195,054
2005 192,166 936 191,230
Thereafter 1,712,779 917 1,711,862
---------- ------ ---------
$2,711,670 21,608 2,690,062
========== ====== =========
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, reimbursement of taxes and insurance. Contingent rentals
were estimated at December 30, 2000 and are included in trade
receivables. Rental income was approximately $11,513,000 in 2000,
$9,508,000 in 1999 and $8,655,000 in 1998. The approximate amounts of
minimum future rental payments to be received under noncancelable
operating leases are $10,141,000, $8,708,000, $6,931,000, $4,942,000
and $3,080,000 for the years 2001 through 2005, respectively, and
$12,413,000 thereafter.
(b) Environmental
-------------
The Company accrues for losses associated with environmental
remediation obligations when such losses are probable and reasonably
estimable. Accruals for estimated losses from environmental
remediation obligations generally are recognized no later than
completion of the remedial feasibility study. Such accruals are
adjusted as further information develops or circumstances change.
(c) Litigation
----------
The Company was a defendant in a class action filed in April 1997 in
the Federal District Court for the Middle District of Florida (the
"Tampa Court") by Lemuel Middleton and other present or former
employees of the Company, individually and on behalf of all other
persons similarly situated (the "Middleton case"). In their
Complaint, the plaintiffs alleged that the Company had been and was
engaged in a pattern and practice of race-based discriminatory
treatment of black employees and applicants with respect to hiring,
promotion, job assignment, conditions of employment, and other
employment aspects, all in violation of Federal and state law.
On March 22, 1999, the Tampa Court certified the suit as a class
action, but limited the class to those black employees and former
black employees of the Company who had sought to be promoted or who
had been discharged from employment at the Company's retail
supermarket stores in Florida since April 3, 1993, and at retail
supermarket stores in Georgia since January 14, 1995.
9 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
On December 29, 2000, the Company and the plaintiffs in the Middleton
case filed a proposed Consent Decree and other documents that, if
approved by the Tampa Court, would resolve all claims asserted in the
Middleton case. Under the terms of the proposed Consent Decree, the
Company would pay $2.25 million to resolve promotion claims, $5.45
million to resolve discharge claims, $400,000 to the class
representatives and $2.4 million for the plaintiffs' attorneys' fees.
The Company also would agree to continue its system of registration
of interest in promotions and its process of setting promotion goals
in accordance with the registered interest, to establish a discharge
review process and to modify its testing procedures for management
promotions in its retail supermarket stores. The Company and the
plaintiffs in the Middleton case also agreed to extend the relief set
forth in the proposed Consent Decree to current and former black
employees in the Company's retail supermarket stores in South
Carolina since April 3, 1994 and Alabama since July 31, 1996. The
Tampa Court is scheduled to conduct a fairness hearing on the
proposed Consent Decree on June 18, 2001.
On November 6, 1997, another purported class action was filed against
the Company in the Tampa Court by Shirley Dyer and other present or
former employees of the Company, individually and on behalf of all
other persons similarly situated (the "Dyer case"). In their
Complaint, the plaintiffs alleged that the Company had been and was
violating Federal and state civil rights statutes by discriminating
against female employees and applicants with respect to hiring,
promotion, training, compensation, discipline, demotion and
termination, and/or retaliation for bringing allegations of
discrimination. On March 21, 2000, the Tampa Court entered an order
denying the Dyer case plaintiffs' request for class certification. At
the Company's request, the Tampa Court severed the claims of three of
the plaintiffs including Ms. Dyer. As a result, the Company no longer
considers the Dyer case or those of the two other plaintiffs whose
claims were severed to be material.
The remaining plaintiffs from the former Dyer case, who are asserting
claims relating to the Company's warehousing and distribution and
security operations, are proceeding in the Tampa Court with Violet
McGee as the lead plaintiff (the "McGee case"). The plaintiffs in the
McGee case are seeking an opportunity to add or substitute additional
plaintiffs and again to request class certification.
On June 29, 1999, another purported class action was filed against
the Company in the Tampa Court by Lisa Lisenby, individually and on
behalf of other persons similarly situated (the "Lisenby case"). In
her Complaint, the plaintiff alleged that the Company had been and
was violating Federal statutory law by discriminating against female
applicants and employees in the Company's manufacturing plants and
distribution centers. On March 22, 2000, the Tampa Court entered an
order at the request of the Company transferring the Lisenby case to
the Federal District Court for the Northern District of Georgia (the
"Atlanta Court"). On December 19, 2000, the Atlanta Court denied the
plaintiff's motion for class certification and she can now proceed to
trial on her individual claims. As a result, the Company no longer
considers the Lisenby case to be material.
10 (Continued)
PUBLIX SUPER MARKETS, INC.
Notes to Consolidated Financial Statements
On October 23, 2000, another purported class action was filed against
the Company in the Federal District Court for the Southern District
of Florida by Joaquin A. Garcia and other present or former employees
of the Company, individually and on behalf of all other persons
similarly situated (the "Garcia case"). In their Complaint, the
plaintiffs alleged that the Company had been and was engaged in a
pattern and practice of national origin discrimination against
Hispanic employees and applicants in the Company's warehouses with
respect to hiring, promotion, discharges and conditions of
employment, all in violation of Federal and state law.
The Company denies the allegations of the plaintiffs in the McGee and
Garcia cases and is vigorously defending the actions. Although these
cases are subject to the uncertainties inherent in the litigation
process, based on the information presently available to the Company,
management does not expect the ultimate resolution of these actions
to have a material adverse effect on the Company's financial
condition, results of operations or cash flows.
The Company is also a party in various legal claims and actions
considered in the normal course of business. In the opinion of
management, the ultimate resolution of these legal proceedings will
not have a material adverse effect on the Company's financial
condition, results of operations or cash flows.
(9) Quarterly Information (unaudited)
---------------------------------
Following is a summary of the quarterly results of operations for the
fiscal years ended December 30, 2000 and December 25, 1999. All quarters
have 13 weeks except the fourth quarter of 2000 which has 14 weeks.
Quarter Ended
----------------------------------------------------
(Amounts are in thousands, except per share amounts)
March June September December
----- ---- --------- --------
2000
----
Revenues $3,649,252 3,514,030 3,502,642 4,058,312
Costs and expenses $3,427,026 3,313,763 3,325,798 3,834,096
Net earnings $ 142,363 128,266 113,860 145,917
Basic and diluted
earnings per common
share, based on
weighted average
shares outstanding $ .67 .60 .55 .70
1999
----
Revenues $3,394,420 3,172,465 3,191,094 3,447,582
Costs and expenses $3,207,893 2,991,639 3,031,188 3,255,272
Net earnings $ 118,568 116,099 103,368 124,374
Basic and diluted
earnings per common
share, based on
weighted average
shares outstanding $ .55 .54 .48 .57
11 (Continued)
Schedule II
-----------
PUBLIX SUPER MARKETS, INC.
Valuation and Qualifying Accounts
Years ended December 30, 2000, December 25, 1999
and December 26, 1998
(Amounts are in thousands)
Balance at Additions Deductions Balance at
beginning charged to from end of
Description of year income reserves year
----------- ------- ------ -------- ----
Year ended December 30, 2000
Reserves not deducted from assets:
Self-insurance reserves:
-Current $ 69,356 167,760 153,021 84,095
-Noncurrent 100,154 9,269 --- 109,423
-------- ------- ------- -------
$169,510 177,029 153,021 193,518
======== ======= ======= =======
Year ended December 25, 1999
Reserves not deducted from assets:
Self-insurance reserves:
-Current $ 61,413 143,407 135,464 69,356
-Noncurrent 98,956 1,198 --- 100,154
-------- ------- ------- -------
$160,369 144,605 135,464 169,510
======== ======= ======= =======
Year ended December 26, 1998
Reserves not deducted from assets:
Self-insurance reserves:
-Current $ 57,415 127,479 123,481 61,413
-Noncurrent 90,068 8,888 --- 98,956
-------- ------- ------- -------
$147,483 136,367 123,481 160,369
======== ======= ======= =======