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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 25, 1993
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________ to __________
Commission file number 0-981
PUBLIX SUPER MARKETS, INC.
(Exact name of Registrant as specified in its charter)
Florida 59-0324412
- ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1936 George Jenkins Boulevard
Lakeland, Florida 33801
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (813) 688-1188
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock $1.00 Par Value
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( )
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at March 4, 1994 was approximately $1,229,789,811.
The number of shares of Registrant's common stock outstanding as of March 4,
1994, was 231,210,104.
DOCUMENTS INCORPORATED BY REFERENCE
Pages 2 through 9 of Proxy Statement solicited for the 1994 Annual Meeting of
Stockholders to be held on May 17, 1994, is incorporated by reference in Items
10, 11 and 13 of Part III hereof.
2
PART I
Item 1. Business
Publix Super Markets, Inc. (the "Company") is based in Lakeland, Florida
and was incorporated in Florida on December 27, 1921. The Company is in the
business of operating retail food supermarkets in Florida, Georgia and South
Carolina.
The Company's supermarkets sell groceries, produce, deli, bakery, meat,
seafood, housewares and health and beauty care items. In addition, some stores
have pharmacy and floral departments.
The Company's lines of merchandise include a variety of nationally
advertised and private label brands, as well as unbranded merchandise such as
produce, meat and seafood. Private label items are produced in the Company's
manufacturing facilities or are manufactured for the Company by outside
vendors.
The Company manufactures dairy, bakery and deli products. The Company's
dairy plants are located in Lakeland and Deerfield Beach, Florida. The bakery
and deli plants are located in Lakeland, Florida. The Company receives the
food and non-food items it distributes from many sources throughout the United
States. These products are generally available in sufficient quantities to
enable the Company to adequately satisfy its customers. The Company believes
that its sources of supply of these products and raw materials used in
manufacturing are adequate for its needs and that it is not dependent upon a
single or relatively few suppliers.
The Company operated 425 supermarkets at the end of 1993, compared with
400 at the beginning of the year. In 1993, 29 stores were opened, 4 stores
were closed, and 13 stores were expanded or remodeled. The net increase in
square footage was 1.50 million or 9.0% since 1992. All of the Company's
stores are located in Florida, with the exception of 15 stores located in
Georgia and one located in South Carolina.
The Company entered the Georgia market in 1991 and the South Carolina
market in 1993. As of year end, the Company had 5 stores under construction in
South Carolina, 21 in Georgia and 14 in Florida. In 1994, the Company will
continue construction of additional distribution centers in Lakeland, Florida
and Lawrenceville, Georgia.
The Company is engaged in a highly competitive industry. Competition,
based primarily on price, quality of goods and service, convenience and product
mix, is with several national and regional chains, independent stores and mass
merchandisers throughout its market areas. The Company anticipates continued
competitor format innovation and location additions in 1994.
The influx of winter residents to Florida and increased purchases of
food during the traditional Christmas and Thanksgiving 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 82,000 employees at the end of 1993,
compared with 73,000 at the beginning of the year. Of this total,
approximately 53,000 at the end of 1993 and 47,000 at the end of 1992 were not
full-time employees.
The Company's research and development expenses are insignificant.
3
Compliance by the Company with Federal, state and local environmental
protection laws during 1993 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 18.1 million square feet
of retail space. The Company's stores vary in size. Current store prototypes
range from 27,000 to 65,000 square feet. Stores are often located in strip
shopping centers where Publix is the anchor tenant.
The majority of the Company's retail stores are leased. Substantially
all of these leases will expire during the next 20 years. However, in the
normal course of business, it is expected that the leases will be renewed or
replaced by leases on other properties. At 35 locations both the building and
land are owned and at 20 other locations the buildings are owned while the land
is leased.
The Company supplies its retail stores from seven distribution centers
located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach
and Boynton Beach, Florida. A new distribution center is currently under
construction in Lawrenceville, Georgia.
With the exception of a portion of the Miami distribution facility, the
Company's corporate offices, distribution facilities and manufacturing plants
are owned with no outstanding debt.
All of the Company's properties are well maintained and in good
operating condition, and suitable and adequate for operating its business.
Item 3. Legal Proceedings
On January 19, 1993, the Equal Employment Opportunity Commission
("EEOC") applied to the United States District Court, Southern District of
Florida in Miami, for an order to show cause why an administrative subpoena
previously issued by the EEOC to the Company should not be enforced (EEOC v.
Publix Super Markets, Inc., Case No. 93-0091). The application, among other
things, alleged that information previously supplied by the Company to the EEOC
did not fully comply with the subpoena and that the EEOC was entitled to
require the Company to compile additional information and produce additional
documents. The matter was resolved by a Consent Order, with which the Company
complied, resulting in an order on June 17, 1993 dismissing the action.
This application arose out of a notice of charge issued by the EEOC on
March 25, 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., Charge
No. 150-92-1508, alleging that the Company had engaged in past violations and
was engaged in continuing violations of Title VII of the Civil Rights Act, as
amended, by discriminating against women with respect to job assignments and
promotions because of their sex. As currently amended, the charge covers
employment practices by the Company in the State of Florida as a whole.
4
On December 6, 1993, the EEOC sought to expand the scope of its
investigation to include allegations of race discrimination. The EEOC has
requested the Company to compile information and produce documents relating to
these allegations. The Company has objected to the expansion and the EEOC has
agreed to substantial reductions in the information requested and further
discussions as to additional reductions in the information requested are
pending.
The Company denies the allegations of the charge and the subsequent
attempted expansion of the charge. The EEOC has advised that the charge does
not in any respect constitute a final finding of a violation, but that the EEOC
has a statutory duty to conduct a full and impartial investigation for the
purpose of determining whether the facts and circumstances afford the EEOC
reasonable cause to believe that the Company's employment patterns and
practices constitute discrimination on the basis of sex and race.
The EEOC's investigation of the charge remains at the stage of
considering whether there is reasonable cause to believe the allegations of the
charge. At this early stage, the likelihood of an adverse finding of the
Company's liability and an estimate of the amount of any exposure for any such
liability cannot be determined.
The Company is also a party in various other legal claims and actions
considered in the normal course of business. Management believes that the
ultimate disposition of these matters will not have a material effect on the
Company's financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
None
5
EXECUTIVE OFFICERS OF THE COMPANY
Served as
Nature of Family Officer of
Relationship Company
Name Age Position Between Officers Since
- ---- --- -------- ---------------- ----------
Howard M. Jenkins 42 Chairman of First cousin of 1976
the Board and Charles H. Jenkins,
Chief Executive Jr., uncle of
Officer W. Edwin Crenshaw
and brother-in-law
of Hoyt R. Barnett
Mark C. Hollis 59 President and 1968
Chief Operating
Officer
Charles H. Jenkins, Jr. 50 Chairman of the First cousin of 1974
Executive Committee Howard M. Jenkins
Hoyt R. Barnett 50 Executive Brother-in-law of 1977
Vice President Howard M. Jenkins
William H. Vass 44 Executive 1986
Vice President
Jesse L. Benton 51 Vice President 1988
S. Keith Billups 61 Secretary 1968
Bennie F. Brown 52 Vice President 1992
R. Scott Charlton 35 Vice President 1992
W. Edwin Crenshaw 43 Executive Nephew of 1990
Vice President Howard M. Jenkins
William R. Curry 53 Vice President 1990
Carolyn C. Day 48 Assistant Secretary 1992
Mark R. Irby 38 Vice President 1989
Tina P. Johnson 34 Treasurer 1990
James J. Lobinsky 54 Vice President 1992
Sharon A. Miller 50 Assistant Secretary 1992
Robert H. Moore 51 Vice President 1994
Thomas M. O'Connor 46 Vice President 1992
David P. Phillips 34 Controller 1990
Daniel M. Risener 53 Vice President 1985
Edward H. Ruth 62 Vice President 1981
Edward T. Shivers 54 Vice President 1985
James F. Slappey 51 Vice President 1992
The terms of all officers expire at the annual meeting of the Company in May
1994.
6
Name Business Experience During Last Five Years
- ---- --------------------------------------------------------------------------------------------
Howard M. Jenkins Chairman of the Executive Committee of the Company to January 1990, Chairman of the Board and
Chief Executive Officer thereafter.
Mark C. Hollis President and Chief Operating Officer of the Company. He is a Director of Bell South
Telecommunications, a Bell South Company.
Charles H. Jenkins, Jr. Executive Vice President of the Company to January 1990, Chairman of the Executive Committee
thereafter.
Hoyt R. Barnett Executive Vice President of the Company and Trustee of the Company's Profit Sharing Plan.
William H. Vass Controller of the Company to February 1990, Vice President and Treasurer to November 1992,
Executive Vice President and Trustee of the Company's ESOT thereafter.
Jesse L. Benton Vice President of the Company.
S. Keith Billups Assistant Secretary of the Company to February 1990, Secretary thereafter.
Bennie F. Brown Director of Meat Operations - Lakeland Division of the Company to January 1992, Vice President
thereafter.
R. Scott Charlton Bakery Plant General Manager of the Company to July 1990, Director of Manufacturing to January
1992, Vice President thereafter.
W. Edwin Crenshaw Director of Retail Operations - Lakeland Division of the Company to January 1990, Vice
President to January 1994, Executive Vice President thereafter.
William R. Curry Director of Real Estate of the Company to January 1990, Vice President thereafter.
Carolyn C. Day Capital Stock Registrar and Transfer Agent of the Company to July 1992, Capital Stock Registrar
and Transfer Agent and Assistant Secretary thereafter.
Mark R. Irby Director of Marketing of the Company to January 1989, Vice President thereafter.
Tina P. Johnson Tax Manager of the Company to February 1990, Assistant Secretary to September 1992, Treasurer
thereafter.
James J. Lobinsky Assistant Director of Merchandising - Miami Division of the Company to May 1990, Corporate
Director of General Merchandise to January 1992, Vice President thereafter.
Sharon A. Miller Assistant Director of General Accounting of the Company to February 1990, Director of
Merchandise Accounting to May 1991, Director of Administration to July 1992, Director of
Administration and Assistant Secretary thereafter.
7
Name Business Experience During Last Five Years
- ---- ---------------------------------------------------------
Robert H. Moore Assistant Director of Retail Operations - Lakeland Division of the Company to January
1990, Director of Retail Operations - Lakeland Division to January 1992,
Director of Retail Operations - Atlanta Division to January 1994, Vice President
thereafter.
Thomas M. O'Connor Director of Distribution - Miami Division of the Company to November 1992, Vice
President thereafter.
David P. Phillips Internal Audit Manager of the Company to February 1990, Controller thereafter.
Daniel M. Risener Vice President of the Company.
Edward H. Ruth Vice President of the Company.
Edward T. Shivers Vice President of the Company.
James F. Slappey Assistant Director of Warehousing and Distribution - Lakeland Division of the Company to
January 1990, Director of Warehousing and Distribution - Lakeland Division to
November 1992, Vice President thereafter.
PART II
Item 5. Market for the Company's Common Stock and Related Stockholder Matters
(a) Market Information*
Substantially all transactions of the Company's common stock have been
among the Company, its employees, former employees and various benefit
plans established for the Company's employees. The market price of the
Company's common stock is determined by the Board of Directors based
upon appraisals prepared by an independent appraiser. The market price
for 1993 was $11.50 per share until March 17, 1993, when the price
decreased to $11.25 per share. In the second quarter, the price
increased to $11.50 per share. In the third quarter, the price was
unchanged at $11.50 per share and in the fourth quarter, the price
decreased to $11.00 per share. The market price for 1992 was $9.30 per
share until the second quarter when the price increased to $10.60 per
share. In the third quarter, the price increased to $10.80 per share
and in the fourth quarter the price increased to $11.50 per share.
(b) Approximate Number of Equity Security Holders
As of March 4, 1994, the approximate number of holders of record of the
Company's common stock was 57,500.
(c) Dividends*
The Company paid cash dividends of $.08 per share of common stock in
1993 and $.08 per share in 1992. Payment of dividends is within the
discretion of the Company's Board of Directors and depends on, among
other factors, earnings, capital requirements and the operating and
financial condition of the Company. It is expected that comparable cash
dividends will be paid in the future.
*Restated to give retroactive effect for 5-for-1 stock split in July 1992.
8
Item 6. Five Year Summary of Selected Financial Data
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Sales:
Sales $7,472,652 6,664,309 6,139,731 5,758,390 5,331,008
Percent increase 12.1% 8.5% 6.6% 8.0% 11.0%
Comparable store sales
percent increase 6.4% 4.6% 2.3% 5.2% 4.1%
Earnings:
Gross profit $1,638,044 1,479,788 1,391,255 1,275,706 1,190,947
Earnings before income
tax expense and
cumulative effect of
changes in accounting
principles $ 288,709 253,677 240,063 227,443 200,215
Net earnings before
cumulative effect of
changes in accounting
principles $ 183,811 166,455 158,044 149,010 128,458
Net earnings $ 180,317 166,455 158,044 149,010 128,458
Net earnings as a
percent of sales 2.41% 2.50% 2.57% 2.59% 2.41%
Common stock:
Weighted average
shares outstanding* 236,249,110 239,248,081 242,872,610 243,365,735 250,147,925
Net earnings per
common share,
based on weighted
average shares
outstanding* $ .76 .70 .65 .61 .51
Dividends per share* $ .08 .08 .07 .07 .06
Financial data:
Capital expenditures $ 320,167 202,597 158,983 163,676 159,568
Working capital $ 137,160 241,191 271,376 168,014 96,709
Current ratio 1.23 1.48 1.62 1.43 1.27
Total assets $2,054,315 1,791,247 1,623,720 1,475,737 1,307,212
Long-term debt $ 4,930 6,938 10,679 13,075 15,377
Stockholders' equity $1,308,009 1,168,091 1,068,463 960,124 837,253
Other:
Number of stores 425 400 389 375 367
NOTE: Dollars are in thousands except per share amounts.
All years include 52 weeks.
* Restated to give retroactive effect for 5-for-1 stock split in July 1992.
9
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Business Environment
As of December 25, 1993, the Company operated 425 retail grocery stores
representing approximately 18.1 million square feet of retail space.
Historically, the Company's primary competition has been from national and
regional chains and smaller independents located throughout its market areas.
The Company has continued to experience increased competition from mass
merchandisers. The products offered by these retailers include many of the
same items sold by the Company.
All of the Company's stores are located in Florida with the exception of
15 stores located in Georgia and one store located in South Carolina. The
Company opened its first store in Georgia during the fourth quarter of 1991,
four stores during 1992 and 10 additional stores during 1993. The Company
opened its first store in South Carolina during the fourth quarter of 1993.
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 $370.4
million in 1993 compared with $296.8 million in 1992 and $313.7 million in
1991. Working capital was approximately $137.2 million as of December 25, 1993
as compared with $241.2 million and $271.4 million as of December 26, 1992 and
December 28, 1991, respectively. Cash and cash equivalents aggregated $199.0
million as of December 25, 1993, as compared with $293.5 million and $332.8
million as of December 26, 1992 and December 28, 1991, respectively.
Capital expenditures totaled $320.2 million in 1993. These expenditures
were primarily incurred in connection with the opening of 29 new stores and
remodeling or expanding 13 stores which added 1.63 million square feet.
Significant expenditures were incurred in the continued expansion of the
Deerfield Beach, Florida facility, acquisition of a grocery warehouse in
Orlando, Florida and construction of a new general merchandise warehouse in
Lakeland, Florida and a new distribution center in Lawrenceville, Georgia. In
addition, the Company closed four stores. Capital expenditures totaled $202.6
million in 1992. These expenditures were primarily incurred in connection with
the opening of 20 new stores and remodeling or expanding 12 stores which added
1.14 million square feet. Significant expenditures were incurred in expanding
the Deerfield Beach facility. In addition, the Company closed 12 stores.
Capital expenditures totaled $159.0 million in 1991. These expenditures were
primarily incurred in connection with the opening of 20 new stores and
remodeling or expanding 11 stores which added 1.10 million square feet. In
addition, the Company closed six stores.
The Company hopes to open as many as 60 stores in 1994. Although real
estate development is unpredictable, the Company's 1994 new store growth
represents a reasonable estimate of anticipated future growth. Capital
expenditures for 1994, primarily made up of new store construction, the
remodeling or expanding of several existing stores and the expansion and
construction of distribution facilities, are expected to be approximately $400
million. This capital program is subject to continuing change and review. The
1994 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.
10
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 $90.1 million, $78.7
million and $56.2 million in fiscal 1993, 1992 and 1991, respectively. The
Company does not believe its self-insurance program will have a material
adverse impact on its future liquidity, financial condition or results of
operations.
The Company has committed lines of credit for $75.0 million. These
lines are reviewed annually by the banks. The interest rate for these lines is
at or below the prime rate. No amounts were outstanding on the lines of credit
as of December 25, 1993 or December 26, 1992.
Cash generated in excess of the amount needed for current operations and
capital expenditures is invested in short-term and long-term investments.
Short-term investments were approximately $59.8 million in 1993 compared with
$50.4 million in 1992. Long- term investments, primarily comprised of tax
exempt bonds and preferred stocks, were approximately $199.4 million in 1993
compared with $126.8 million in 1992. Management believes the Company's
liquidity will continue to be strong.
The Company currently repurchases common stock at the stockholders'
request in accordance with the terms of the Company's Employee Stock Purchase
Plan. The Company expects to continue to repurchase its common stock, as
offered by its stockholders from time to time, at its then currently appraised
value. However, such purchases are not required and the Company retains the
right to discontinue them at any time.
Results of Operations
The Company's fiscal year ends on the last Saturday in December. Fiscal
years 1993, 1992 and 1991 included 52 weeks.
Sales for fiscal 1993 were $7,472.7 million as compared with $6,664.3
million in fiscal 1992, a 12.1% increase. This reflects an increase of $426.5
million or 6.4% in sales from stores that were open for all of both years
(comparable stores) and sales of $381.9 million or 5.7% from the net impact of
29 new stores and four closed stores. This activity contributed a net increase
of 9.0% or approximately 1.50 million square feet in retail space.
Sales for fiscal 1992 were $6,664.3 million as compared with $6,139.7
million in fiscal 1991, an 8.5% increase. This reflects an increase of $283.9
million or 4.6% in sales from stores that were open for all of both years
(comparable stores) and sales of $240.7 million or 3.9% from the net impact of
23 new stores and 12 closed stores. This activity contributed a net increase
of 5.9% or approximately .88 million square feet in retail space. This
includes the acquisition of three stores from affiliated companies and the
three stores closed as a result of extensive damage caused by Hurricane Andrew.
In 1992, the Company identified potential environmental problems relating to
properties that are owned or leased. Other income, net includes $8.0 million
which was accrued for estimated clean-up costs.
11
On August 24, 1992, Hurricane Andrew destroyed three of the Company's
stores in south Florida. Several other stores sustained varying degrees of
damage but were operational within four weeks. In management's opinion, the
resulting property damage and business interruption losses are substantially
covered by insurance and are immaterial to the Company's financial position and
operations.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses was approximately 78.1% of sales in 1993 as compared with
77.8% and 77.3% in 1992 and 1991, respectively. In 1993 and 1992, cost of
merchandise sold increased as a percent of sales due to competitive pressures.
Operating and administrative expenses, as a percent of sales, were
19.1%, 19.3% and 19.9% in 1993, 1992 and 1991, respectively. In 1993, the
Company's workers' compensation expense increased approximately $17.5 million
or 89% as compared to 1992 due to increases in claim payments and estimated
reserves for claim payments. The significant components of operating and
administrative expenses are payroll costs, employee benefits and depreciation.
In August 1993, the "Omnibus Budget Reconciliation Act of 1993" became
effective. The major provision of the new tax law affecting the Company is the
increase in the maximum corporate income tax rate from 34% to 35%. This 1%
increase in the tax rate was retroactive to January 1, 1993. Therefore, in
accordance with Financial Accounting Standard No. 109, "Accounting for Income
Taxes," the Company recognized an additional $3.5 million income tax expense
during fiscal year 1993.
In recent years, the impact of inflation on the Company's food prices
continues to be lower than the overall increase in the Consumer Price Index.
New Accounting Standards
The Company adopted Statement 109, without restating prior years'
financial statements, in the first quarter of 1993. This Standard requires a
change from the deferred method to the asset and liability method of accounting
for income taxes. The cumulative effect of the change in method resulted in a
reduction of deferred Federal and state income taxes and an increase in net
earnings of approximately $11.8 million.
The Company adopted Financial Accounting Standard No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," in the first
quarter of 1993. This Standard requires that an employer's obligation for
postretirement benefits be fully accrued by the date the employees attain full
eligibility to receive these benefits. The Company provides certain life
insurance benefits for retired employees. Employees become eligible for these
benefits when they reach normal retirement age while working for the Company.
The cumulative effect of the change in method resulted in a decrease in net
earnings of approximately $15.3 million. At the beginning of 1993, the
accumulated postretirement obligation accrued was $24.6 million. During 1993,
the Company's accrual increased approximately $1.9 million in additional annual
costs under the new Standard.
In May 1993, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," effective for fiscal years beginning after December 15,
1993. This Standard expands the use of fair value accounting for certain debt
securities that are classified as available-for-sale or trading but retains the
use of the amortized cost method for investments in debt securities that the
Company has the positive intent and ability to hold to maturity. The Company
will prospectively adopt Statement 115 in the first quarter of 1994. This
Standard is not expected to materially affect the Company's financial
statements.
12
In November 1992, the Financial Accounting Standards Board issued
Financial Accounting Standard No. 112, "Employers' Accounting for
Postemployment Benefits," effective for fiscal years beginning after December
15, 1993. This Standard requires the accrual of a liability for the estimated
cost of benefits provided by an employer to former or inactive employees after
employment but before retirement. The Company has historically accrued
postemployment benefits; therefore, the adoption of Statement 112 will not
materially affect the Company's financial statements.
Item 8. Financial Statements and Supplemental Data
The Company's financial statements, together with the independent
auditors' report thereon, are included in the section following Part IV of this
report.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons of the
Registrant
Certain information concerning the directors of the Company is
incorporated by reference to pages 2 through 5 of the Proxy Statement of the
Company (1994 Proxy Statement) which the Company intends to file no later than
120 days after its fiscal year end. Certain information concerning the
executive officers of the Company is set forth in Part I under the caption
"Executive Officers of the Company."
Item 11. Executive Compensation
Information regarding executive compensation is incorporated by
reference to pages 6 through 9 of the 1994 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 4, 1994, the information
with respect to common stock ownership of all Directors, including some who are
5% or more beneficial owners, and all Officers and Directors as a group. Also,
listed are others known by the Company to own beneficially 5% or more of the
shares of the Company's common stock.
Amount and Nature Percent
Name of Beneficial Ownership (1) of Class
- ---- --------------------------- --------
Carol Jenkins Barnett 13,134,987 (2) 5.68
Hoyt R. Barnett 23,399,650 (3) 10.12
Jesse L. Benton 73,270 *
Bennie F. Brown 78,942 *
W. Edwin Crenshaw 665,867 *
Mark C. Hollis 2,675,491 (4) 1.16
Note references are explained on the next two pages.
13
Amount and Nature Percent
Name of Beneficial Ownership (1) of Class
- ---- --------------------------- --------
Charles H. Jenkins, Jr. 2,428,862 1.05
Charles H. Jenkins, Sr. 2,702,191 1.17
Howard M. Jenkins 46,305,923 (5) 20.03
Tina P. Johnson 39,124 *
E. V. McClurg 1,998,546 *
William H. Vass 27,643,630 (6) 11.96
All Officers and Directors
as a group (26 individuals) 121,511,419 (7) 52.55
All Other Beneficial Owners:
- ---------------------------
Publix Super Markets, Inc.
Profit Sharing Plan and Trust 23,278,750 10.07
Publix Super Markets, Inc.
Employee Stock Ownership Plan
and Trust 27,610,780 11.94
Nancy E. Jenkins 14,756,894 (8) 6.38
*Shares represent less than 1% of class
(1) As used in the table on the preceding page, "beneficial ownership" means
the sole or shared voting or investment power with respect to the
Company's common stock. Holdings of officers include shares allocated
to their individual accounts in the Company's Employee Stock Ownership
Plan, over which each officer exercises sole voting power and shared
investment power. In accordance with the beneficial ownership
regulations, the same shares of common stock may be included as
beneficially owned by more than one individual or entity. The address
for all beneficial owners is 1936 George Jenkins Boulevard, Lakeland,
Florida 33801.
(2) Excludes shares of common stock beneficially owned by Carol Jenkins
Barnett's husband, as to which Carol Jenkins Barnett disclaims
beneficial ownership.
(3) Hoyt R. Barnett is Trustee of the Profit Sharing Plan which is the
record owner of 23,278,750 shares of common stock over which he
exercises sole voting and investment power. Total shares beneficially
owned excludes shares of common stock owned by Hoyt R. Barnett's wife,
as to which Hoyt R. Barnett disclaims beneficial ownership.
(4) Mark C. Hollis is Co-Trustee with Peoples Bank of Lakeland for 1,577,699
shares of common stock in three family trusts. The remaining shares are
owned in a separate family trust over which Mark C. Hollis is Co-Trustee
with his wife. As Co-Trustee, Mark C. Hollis has shared voting and
investment power for these shares.
14
(5) Howard M. Jenkins is Voting Trustee of a Voting Trust Agreement
(Agreement), effective May 30, 1987, established by him, his brother and
two of his sisters. The Agreement, as amended, has a ten year term and
covers 45,733,983 shares of common stock, of which 13,887,305 shares are
beneficially owned by Howard M. Jenkins and 14,185,405 shares are
beneficially owned by Nancy E. Jenkins. The remaining shares held under
the Agreement are owned by various individuals who are not beneficial
owners of 5% or more of the Company's common stock. As Trustee, Howard
M. Jenkins has voting power for the shares represented by the Agreement
unless the stockholders of a majority of the shares direct him to vote
all shares in a specified manner. In addition, Howard M. Jenkins
beneficially owns 571,940 shares of common stock which are either
individually owned or owned as Trustee for three trusts over which he
exercises sole voting and investment power.
(6) William H. Vass is Trustee of the Employee Stock Ownership Plan (ESOT)
which is the record owner of 27,610,780 shares of common stock over
which he has shared investment power. As Trustee, William H. Vass
exercises sole voting power over 545,249 shares in the ESOT because such
shares have not been allocated to participants' accounts. The ESOT
participants, not William H. Vass, exercise sole voting power over all
remaining shares in the ESOT.
(7) Includes 50,889,530 shares of common stock owned by the Profit Sharing
Plan and ESOT.
(8) Includes 14,185,405 shares of common stock which are held in and subject
to the Voting Trust Agreement, effective May 30, 1987, for which Howard
M. Jenkins is Voting Trustee.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions is
incorporated by reference to pages 2 through 5 and 9 of the 1994 Proxy
Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements and Schedules
The financial statements and schedules listed in the accompanying Index
to Financial Statements and Schedules 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 25, 1993.
(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, as amended, for
the year ended December 26, 1987.
Articles of Amendment of the Restated Articles of Incorporation
of the Company filed with the Secretary of the State of Florida,
effective June 9, 1993 is incorporated herein.
15
3(b). By-laws of the Company are incorporated by reference to the
exhibits to the Annual Report of the Company on Form 10-K, as
amended, for the year ended December 26, 1987.
9. Voting Trust Agreement dated September 12, 1986, between
Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and
David F. Jenkins, is incorporated by reference to the exhibits
to the Annual Report of the Company on Form 10-K for the year
ended December 31, 1988.
Amendment to Voting Trust Agreement dated September 12, 1986,
between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins
and David F. Jenkins, effective March 8, 1990, is incorporated
by reference to the exhibits to the Annual Report of the
Company on Form 10-K for the year ended December 30, 1989.
Amendment to Voting Trust Agreement dated September 12, 1986,
between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins
and David F. Jenkins, effective June 14, 1991, is incorporated
by reference to the exhibits to the Annual Report of the
Company on Form 10-K for the year ended December 28, 1991.
Amendment to Voting Trust Agreement dated September 12, 1986,
between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins
and David F. Jenkins, effective November 3, 1992, is
incorporated by reference to the exhibits to the Annual Report
of the Company on Form 10-K for the year ended December 26,
1992.
Amendment to Voting Trust Agreement dated September 12, 1986,
between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins
and David F. Jenkins, effective February 26, 1993, is
incorporated by reference to the exhibits to the Annual Report
of the Company on Form 10-K for the year ended December 26,
1992.
18. Letter regarding change in accounting principle is
incorporated by reference to the exhibits to the Annual Report
of the Company on Form 10-K for the year ended December 26,
1992.
27. Financial Data Schedule for the year ended December 25, 1993.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PUBLIX SUPER MARKETS, INC.
March 15, 1994 By:
------------------------------
Keith Billups
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report signed below by the following persons on behalf of the Company and
in the capacities and on the dates indicated.
Chairman of the Board, Chief
Executive Officer and Director
/s/ Howard M. Jenkins (Principal Executive Officer) March 15, 1994
- ---------------------------
Howard M. Jenkins
President, Chief Operating
/s/ Mark C. Hollis Officer and Director March 15, 1994
- ---------------------------
Mark C. Hollis
Chairman of the Executive
/s/ Charles H. Jenkins, Jr. Committee and Director March 15, 1994
- ---------------------------
Charles H. Jenkins, Jr.
Executive Vice President
/s/ Hoyt R. Barnett and Director March 15, 1994
- ---------------------------
Hoyt R. Barnett
Executive Vice President
and Director
/s/ William H. Vass (Principal Financial Officer) March 15, 1994
- ---------------------------
William H. Vass
/s/ Bennie F. Brown Vice President and Director March 15, 1994
- ---------------------------
Bennie F. Brown
Executive Vice President
/s/ W. Edwin Crenshaw and Director March 15, 1994
- ---------------------------
W. Edwin Crenshaw
Controller
/s/ David P. Phillips (Principal Accounting Officer) March 15, 1994
- ---------------------------
David P. Phillips
17
PUBLIX SUPER MARKETS, INC.
Index to Financial Statements and Schedules
Independent Auditors' Report
Financial Statements:
Balance Sheets - December 25, 1993 and December 26, 1992
Statements of Earnings - Years ended December 25, 1993, December 26, 1992
and December 28, 1991
Statements of Stockholders' Equity - Years ended December 25, 1993,
December 26, 1992 and December 28, 1991
Statements of Cash Flows - Years ended December 25, 1993,
December 26, 1992 and December 28, 1991
Notes to Financial Statements
The following supporting schedules of Publix Super Markets, Inc.
for the years ended December 25, 1993, December 26, 1992 and
December 28, 1991 are submitted herewith:
Schedules:
V - Property, Plant and Equipment
VI - Accumulated Depreciation of Property, Plant and Equipment
VIII - Valuation and Qualifying Accounts
IX - Short-term Borrowings
All other schedules are omitted as the required information is
inapplicable or the information is presented in the financial
statements or related notes.
18
INDEPENDENT AUDITORS' REPORT
To The Stockholders
Publix Super Markets, Inc.:
We have audited the financial statements of Publix Super Markets, Inc. as
listed in the accompanying index. In connection with our audits of the
financial statements, we also have audited the financial statement schedules as
listed in the accompanying index. 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 Publix Super Markets, Inc. as
of December 25, 1993, and December 26, 1992, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 25, 1993, in conformity with generally accepted accounting principles.
Also in our opinion, the related financial statement schedules, when considered
in relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
As discussed in note 1 of the notes to financial statements, the Company
changed its methods of accounting for postretirement benefits and income taxes
during 1993 and, during 1992 changed its method of depreciation for all newly
acquired fixed assets.
KPMG PEAT MARWICK
Tampa, Florida
March 9, 1994
19
PUBLIX SUPER MARKETS, INC.
Balance Sheets
December 25, 1993 and
December 26, 1992
Assets 1993 1992
------ ---- ----
(Amounts in thousands)
Current assets:
Cash and cash equivalents $ 198,997 293,473
Short-term investments 59,763 50,366
Receivables from associated companies 330 275
Trade receivables (principally due from
vendors) 44,047 38,552
Merchandise inventories 404,602 363,955
Deferred tax assets 25,299 ---
Prepaid expenses 1,731 871
---------- ----------
Total current assets 734,769 747,492
---------- ----------
Long-term investments 199,385 126,765
Investment in joint ventures 5,142 4,486
Other noncurrent assets 5,844 3,716
Property, plant and equipment:
Land 55,787 54,052
Buildings and improvements 396,220 350,679
Furniture, fixtures and equipment 1,210,354 1,066,996
Leasehold improvements 189,263 164,523
Construction in progress 115,373 55,629
---------- ----------
1,966,997 1,691,879
Less accumulated depreciation 857,822 783,091
---------- ----------
Net property, plant and equipment 1,109,175 908,788
---------- ----------
$2,054,315 1,791,247
========== ==========
See accompanying notes to financial statements.
20
PUBLIX SUPER MARKETS, INC.
Balance Sheets
December 25, 1993 and
December 26, 1992
Liabilities and Stockholders' Equity 1993 1992
------------------------------------ ---- ----
(Amounts in thousands)
Current liabilities:
Current installments of long-term debt $ 2,010 1,952
Accounts payable 394,863 339,233
Accrued expenses:
Salaries and wages 39,362 37,065
Contribution to profit sharing plan
and ESOT 50,149 44,863
Self-insurance reserves 48,918 32,108
Other 54,054 48,495
---------- ----------
Total accrued expenses 192,483 162,531
---------- ----------
Federal and state income taxes 8,253 2,585
---------- ----------
Total current liabilities 597,609 506,301
Long-term debt, excluding current installments 4,930 6,938
Deferred tax liabilities, net 63,409 57,762
Self-insurance reserves 50,534 45,438
Accrued postretirement benefit cost 26,465 ---
Other noncurrent liabilities 3,359 6,717
---------- ----------
Total liabilities 746,306 623,156
---------- ----------
Stockholders' equity:
Common stock of $1 par value. Authorized
300,000,000 shares; issued 238,157,384 shares
in 1993 and 237,863,456 shares in 1992 238,157 237,864
Additional paid-in capital 73,240 71,003
Reinvested earnings 1,020,565 859,224
---------- ----------
1,331,962 1,168,091
Less: 2,120,612 shares of common stock
acquired from shareholders, at cost 23,953 ---
---------- ----------
Total stockholders' equity 1,308,009 1,168,091
Commitments and contingencies --- ---
---------- ----------
$2,054,315 1,791,247
========== ==========
See accompanying notes to financial statements.
21
PUBLIX SUPER MARKETS, INC.
Statements of Earnings
Years ended December 25, 1993, December 26, 1992
and December 28, 1991
1993 1992 1991
---- ---- ----
(Amounts in thousands,
except per share amounts)
Revenues:
Sales $7,472,652 6,664,309 6,139,731
Other income, net 81,317 64,444 74,030
---------- ---------- ----------
Total revenues 7,553,969 6,728,753 6,213,761
---------- ---------- ----------
Costs and expenses:
Cost of merchandise sold including
store occupancy, warehousing
and delivery expenses 5,834,608 5,184,521 4,748,476
Operating and administrative
expenses 1,429,540 1,289,062 1,223,665
Interest expense 1,112 1,493 1,557
---------- ---------- ----------
Total costs and expenses 7,265,260 6,475,076 5,973,698
---------- ---------- ----------
Earnings before income tax
expense and cumulative effect
of changes in accounting
principles 288,709 253,677 240,063
Income tax expense 104,898 87,222 82,019
---------- ---------- ----------
Net earnings before cumulative effect
of changes in accounting principles 183,811 166,455 158,044
Cumulative effect on prior years of
changes in accounting principles (3,494) --- ---
---------- ---------- ----------
Net earnings $ 180,317 166,455 158,044
========== ========== ==========
Net earnings per common share before
cumulative effect of changes in
accounting principles $ .78 .70 .65
Cumulative effect on prior years
of changes in accounting
principles (.02) --- ---
---------- ---------- ----------
Net earnings per common share,
based on weighted average
shares outstanding $ .76 .70 .65
========== ========== ==========
See accompanying notes to financial statements.
22
PUBLIX SUPER MARKETS, INC.
Statements of Stockholders' Equity
Years ended December 25, 1993, December 26, 1992
and December 28, 1991
Common
stock
acquired Total
Additional from stock-
Common paid-in Reinvested stock- holders'
stock capital earnings holders equity
----- ------- ---------- ------- ------
(Amounts in thousands)
Balances at December 29, 1990 $245,711 73,819 640,594 --- 960,124
Net earnings for the year --- --- 158,044 --- 158,044
Cash dividends, $.07 per share --- --- (17,019) --- (17,019)
Contribution of 2,000,000 shares
to ESOT --- 94 --- 18,506 18,600
7,118,400 shares acquired
from stockholders --- --- --- (66,921) (66,921)
Sale of 1,580,365 shares
to stockholders --- 127 --- 15,508 15,635
Retirement of 3,538,035 shares (3,540) --- (29,367) 32,907 ---
-------- ------ --------- ------- ---------
Balances at December 28, 1991 242,171 74,040 752,252 --- 1,068,463
Net earnings for the year --- --- 166,455 --- 166,455
Cash dividends, $.08 per share --- --- (19,157) --- (19,157)
Contribution of 1,307,863 shares
to ESOT --- 1,632 --- 12,494 14,126
8,796,502 shares acquired
from stockholders --- --- --- (91,155) (91,155)
Sale of 2,570,451 shares
to stockholders --- --- --- 27,253 27,253
Retirement of 4,307,044 shares (4,307) --- (40,326) 44,633 ---
Issuance of 611,144 for
acquisition of affiliated
companies --- (4,669) --- 6,775 2,106
-------- ------ --------- ------- ---------
Balances at December 26, 1992 237,864 71,003 859,224 --- 1,168,091
Net earnings for the year --- --- 180,317 --- 180,317
Cash dividends, $.08 per share --- --- (18,976) --- (18,976)
Contribution of 3,297,684 shares
to ESOT --- (849) --- 37,772 36,923
6,563,903 shares acquired from
stockholders --- --- --- (74,860) (74,860)
Sale of 1,145,607 shares
to stockholders 293 3,086 --- 13,135 16,514
-------- ------ --------- ------- ---------
Balances at December 25, 1993 $238,157 73,240 1,020,565 (23,953) 1,308,009
======== ====== ========= ======= =========
See accompanying notes to financial statements.
23
PUBLIX SUPER MARKETS, INC.
Statements of Cash Flows
Years ended December 25, 1993, December 26, 1992
and December 28, 1991
1993 1992 1991
---- ---- ----
(Amounts in thousands)
Cash flows from operating activities:
Cash received from customers $ 7,523,939 6,705,859 6,185,351
Cash paid to employees and suppliers (7,002,932) (6,240,419) (5,741,593)
Cash paid to ESOT --- (21,200) (13,384)
Dividends and interest received 16,323 16,809 17,477
Interest paid (1,112) (1,493) (1,557)
Income taxes paid (93,583) (92,452) (75,048)
Payment for self-insured claims (68,210) (67,389) (53,102)
Other operating cash receipts 309 767 1,205
Other operating cash payments (4,303) (3,677) (5,611)
----------- ----------- -----------
Net cash provided by operating
activities 370,431 296,805 313,738
----------- ----------- -----------
Cash flows from investing activities:
Payment for property, plant and
equipment (320,167) (202,597) (158,983)
Proceeds from sale of property, plant
and equipment 4,750 1,271 1,256
Payment for investment securities (282,109) (107,737) (20,073)
Proceeds from sale of investment
securities 214,721 60,829 62,909
Investment in joint ventures (656) (2,479) (2,007)
Other, net (2,174) (237) 503
----------- ----------- -----------
Net cash used in investing activities (385,635) (250,950) (116,395)
----------- ----------- -----------
Cash flows from financing activities:
Payment of long-term debt (1,950) (4,197) (2,290)
Proceeds from sale of common stock 16,514 27,253 15,635
Payment for acquisition of common stock (74,860) (91,155) (66,921)
Dividends paid (18,976) (19,157) (17,019)
Other, net --- 2,106 ---
----------- ----------- -----------
Net cash used in financing activities (79,272) (85,150) (70,595)
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents (94,476) (39,295) 126,748
Cash and cash equivalents at beginning
of year 293,473 332,768 206,020
----------- ----------- -----------
Cash and cash equivalents at end of year $ 198,997 293,473 332,768
=========== =========== ===========
See accompanying notes to financial statements.
(Continued)
24
PUBLIX SUPER MARKETS, INC.
Statements of Cash Flows
(Continued)
1993 1992 1991
---- ---- ----
(Amounts in thousands)
Reconciliation of Net Earnings to Net Cash
Provided by Operating Activities
Net earnings $ 180,317 166,455 158,044
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Cumulative effect of changes in accounting
principles, net of taxes 3,494 --- ---
Depreciation and amortization 116,797 118,363 120,219
Contribution to ESOT 22,000 --- 18,600
Deferred income taxes 1,462 2,230 4,995
(Gain) loss on sale of property, plant and
equipment (1,225) 7,870 4,609
Gain on sale of investments (5,682) (5,605) (9,283)
Self-insurance reserves in excess of
current payments 21,906 11,346 3,103
Decrease in purchase allowances (3,358) (3,358) (3,359)
Other, net 1,808 13 (413)
Changes in current assets and liabilities:
Increase in short-term investments (9,397) (50,366) ---
Increase in receivables (5,550) (9,898) (1,208)
Increase in merchandise inventories (40,647) (16,401) (18,005)
(Increase) decrease in prepaid expenses (860) 152 (759)
Increase in accounts payable and accrued
expenses 83,698 83,464 35,219
Increase (decrease) in income taxes payable 5,668 (7,460) 1,976
-------- -------- --------
Total adjustments 190,114 130,350 155,694
-------- -------- --------
Net cash provided by operating activities $370,431 296,805 313,738
======== ======== ========
See accompanying notes to financial statements.
25
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
December 25, 1993, December 26, 1992
and December 28, 1991
(1) Summary of Significant Accounting Policies
(a) Definition of Fiscal Year
The fiscal year ends on the last Saturday in December. Fiscal
years 1993, 1992 and 1991 comprised 52 weeks.
(b) Cash Equivalents
The Company considers all liquid investments with maturities of
three months or less to be cash equivalents.
(c) Investments
Short and long-term investments are recorded at the lower of cost
or market. The Company will adopt Financial Accounting Standard
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," in the first quarter of 1994. This Standard is not
expected to materially affect the Company's financial statements.
(d) Investment in Joint Ventures
The Company has invested in joint ventures to develop shopping
centers. The investment in these joint ventures is accounted for
using the equity method.
(e) Inventories
Inventories are valued at cost (principally the dollar value
last-in, first-out method) including store inventories which are
calculated by the retail method.
(f) Property, Plant and Equipment and Depreciation
Maintenance and repairs are charged to expense as incurred.
Expenditures for renewals and betterments are capitalized. The
gain or loss on traded items is applied to the asset accounts or
reflected in income for disposed items.
Prior to fiscal year 1992, depreciation was computed for
financial statement purposes by the declining balance and
straight-line methods. During 1992, the Company adopted the
straight-line method of depreciation for all newly acquired fixed
assets. Assets acquired before 1992 continue to be depreciated
using prior years' depreciation methods. The change to the
straight-line method of depreciation was made to conform to
predominant industry practice. Use of the straight-line method
of depreciation on assets placed in service in 1993 and 1992, as
compared with accelerated methods, resulted in an increase in
earnings before income taxes of approximately $20,800,000 and
$4,743,000 and in net earnings of approximately $10,848,000 or
$.05 per share and $2,514,000 or $.01 per share in 1993 and 1992,
respectively.
(Continued)
26
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(g) Postretirement Benefits
At the beginning of fiscal year 1993, the Company adopted
Financial Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," without restating
prior years' financial statements. This Standard requires that
an employer's obligation for postretirement benefits be fully
accrued by the date the employees attain full eligibility to
receive these benefits. The cumulative effect of the change in
method of accounting for postretirement benefits has been
reported in the 1993 statement of earnings (note 3).
(h) Self-insurance
Self-insurance reserves are established for heath care, fleet
liability, general liability and workers' compensation claims.
These reserves are determined based on actual experience
including, where necessary, actuarial studies. The Company has
insurance coverage for losses in excess of varying amounts.
(i) Income Taxes
At the beginning of fiscal year 1993, the Company adopted
Financial Accounting Standard No. 109, "Accounting for Income
Taxes," without restating prior years' financial statements.
This Standard requires a change from the deferred method of
accounting for income taxes of APB Opinion 11 to the asset and
liability method of accounting for income taxes. Under the asset
and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. The cumulative
effect of the change in method of accounting for income taxes has
been reported in the 1993 statement of earnings (note 7).
In prior years, the deferred method under APB Opinion 11 was
applied. Under the deferred method, deferred income taxes are
recognized for income and expense items that are reported in
different years for financial reporting purposes and income tax
purposes using the tax rate applicable for the year of the
calculation. Deferred taxes are not adjusted for subsequent
changes in tax rates.
(j) Related Parties
Historically, the Company sold merchandise, performed various
services and leased equipment and fixtures from two affiliated
companies. In November 1992, the Company acquired these
companies (note 6).
2
(Continued)
27
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(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 $83,741,000, $87,012,000 and $89,930,000
as of December 25, 1993, December 26, 1992 and December 28, 1991,
respectively. Also, net earnings would have decreased by approximately
$1,706,000 or less than $.01 per share in 1993 and $1,547,000 or less
than $.01 per share in 1992 and $712,000 or less than $.01 per share in
1991.
(3) Postretirement Benefits
The Company provides life insurance benefits for salaried and hourly
full-time employees. Such employees retiring from the Company on or
after attaining age 55 and having ten years of credited service are
entitled to postretirement life insurance benefits. The Company funds
the life insurance benefits on a pay-as-you-go basis. During 1993, the
Company made benefit payments of approximately $1,233,000.
As discussed in Note 1, the Company adopted Statement 106 at the
beginning of fiscal year 1993. The accumulated postretirement
obligation accrued was $24,607,000. The cumulative effect of this
accounting change decreased net earnings by approximately $15,347,000.
1993
----
(Amounts in thousands)
Net postretirement benefit cost for 1993 consists
of the following components:
Service cost attributed to service
during the year $ 1,039
Interest cost on postretirement
benefit obligation 2,052
-------
Net periodic postretirement benefit cost $ 3,091
=======
The following summarizes the reconciliation of the
amounts recognized in the Company's balance sheet
as of December 25, 1993:
Accumulated postretirement benefit obligation:
Retirees $10,738
Fully eligible active plan participants 9,150
Other active plan participants 12,209
-------
Accumulated postretirement benefit obligation 32,097
Unrecognized net loss (5,632)
-------
Accrued postretirement benefit cost $26,465
=======
3
(Continued)
28
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
The accumulated postretirement benefit obligation calculated at the
beginning of fiscal year 1993 was determined using an assumed discount
rate of 8% and a salary increase rate of 4%. The accumulated
postretirement benefit obligation as of December 25, 1993 was determined
using an assumed discount rate of 7.25% and a salary increase rate of
4%. The change in the discount rate from 8% to 7.25% increased the
accumulated postretirement benefit obligation by $3,892,000 and is
expected to increase annual postretirement benefit costs by $455,000,
beginning in 1994.
(4) Common Stock Split
On May 12, 1992, the Company's stockholders approved an increase in the
number of authorized shares of common stock from 60,000,000 shares to
300,000,000 shares to effect a 5-for-1 stock split. All data in the
accompanying financial statements has been restated to give retroactive
effect for the stock split.
(5) Profit Sharing Plan and
Employee Stock Ownership Trust
The Company has a trusteed, noncontributory profit sharing plan for the
benefit of eligible employees. The amount of the Company's contribution
to the plan is determined by the Board of Directors. The contribution
cannot exceed 15% of compensation paid to participants. Contributions
to the plan amounted to $33,976,000 in 1993, $29,867,000 in 1992 and
$28,310,000 in 1991.
The Company has an Employee Stock Ownership Trust (ESOT). Annual
contributions to the ESOT are determined by the Board of Directors and
can be made in Company stock or cash. In 1993, the Company contributed
2,000,000 shares of its common stock to the ESOT at an appraised value
resulting in an expense to the Company of $22,000,000. In 1992, the
Company contributed $21,200,000 in cash to the ESOT. In 1991, the
Company contributed 2,000,000 shares of its common stock to the ESOT at
an appraised value resulting in an expense to the Company of
$18,600,000. During 1993, 1992 and 1991, the Board of Directors
approved additional contributions to the ESOT of $16,983,000,
$14,923,000 and $14,126,000, respectively. The additional contributions
are made to the ESOT during the subsequent year.
The Company intends to continue the profit sharing plan and ESOT
indefinitely; however, the right to modify, amend or terminate these
plans has been reserved. In the event of termination, all amounts
contributed under the plans must be paid to the participants or their
beneficiaries.
4
(Continued)
29
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(6) Acquisition
In November 1992, the Company issued 611,144 shares of its common stock
valued at approximately $7,028,000 for all of the outstanding common
stock of two affiliated companies, Publix Food Stores, Inc. and Publix
Market, Inc.
The merger was accounted for as a combination of companies under common
control and therefore treated in a manner similar to the
pooling-of-interests method. Acquired assets of approximately
$6,022,000 and liabilities of approximately $3,916,000 were recorded at
historical amounts. The acquisition was considered immaterial and thus
the fiscal year 1992 financial statements include the assets,
liabilities, results of operations and cash flows from the acquisition
date to year end.
(7) Income Taxes
As discussed in Note 1, the Company adopted Statement 109 at the
beginning of fiscal year 1993. The cumulative effect of this accounting
change resulted in a reduction of deferred Federal and state income
taxes and an increase in net earnings of approximately $11,853,000.
The provision for income taxes consists of the following:
Current Deferred Total
------- -------- -----
(Amounts in thousands)
1993:
Federal $ 89,580 (340) 89,240
State 15,861 (203) 15,658
-------- ----- -------
$105,441 (543) 104,898
======== ===== =======
1992:
Federal $ 72,271 1,895 74,166
State 12,721 335 13,056
-------- ----- ------
$ 84,992 2,230 87,222
======== ===== ======
1991:
Federal $ 64,291 4,304 68,595
State 12,733 691 13,424
-------- ----- ------
$ 77,024 4,995 82,019
======== ===== ======
5
(Continued)
30
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
Income tax expense amounted to $104,898,000 for 1993 (an effective rate
of 36.3%), $87,222,000 for 1992 (an effective rate of 34.4%) and
$82,019,000 for 1991 (an effective rate of 34.2%). The actual expense
for 1993, 1992 and 1991 differs from the "expected" tax expense for
those years (computed by applying the U.S. Federal corporate tax rate of
35% for 1993 and 34% for 1992 and 1991 to earnings before income taxes)
as follows:
1993 1992 1991
---- ---- ----
(Amounts in thousands)
Computed "expected" tax expense $101,048 86,250 81,622
State income taxes (net of
Federal income tax benefit) 10,178 8,617 8,860
Tax exempt interest (5,065) (5,418) (4,911)
Effect of change in tax rate on
deferred tax assets/liabilities 970 --- ---
Other, net (2,233) (2,227) (3,552)
-------- ------ ------
$104,898 87,222 82,019
======== ====== ======
The significant components of deferred income taxes and their tax
effects for 1993, 1992 and 1991 are as follows:
1993 1992 1991
---- ---- ----
(Amounts in thousands)
Depreciation $15,451 10,885 9,507
Self-insurance reserves (7,251) (4,500) (412)
Purchase allowances 1,297 1,264 1,264
Effect of change in tax rate on
deferred tax assets/liabilities 970 --- ---
Other, net (11,010) (5,419) (5,364)
------- ------ ------
$ (543) 2,230 4,995
======= ====== ======
The "Omnibus Budget Reconciliation Act of 1993" included various rule
changes and increased the maximum corporate income tax rate from 34% to
35%, effective January 1, 1993. The impact of the new tax law increased
the Company's 1993 income tax expense by $3,484,000. This included
$2,514,000 attributable to the new tax rate on current income and
$970,000 resulting from an adjustment of deferred tax balances.
6
(Continued)
31
PUBLIX SUPER MARKETS, INC.
Notes to 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 25, 1993 are as follows:
1993
----
(Amounts in thousands)
Deferred tax assets:
Self-insurance reserves $ 46,047
Inventory uniform capitalization 5,958
Other 11,669
--------
Total deferred tax assets $ 63,674
========
Deferred tax liabilities:
Difference in tax basis of property,
plant and equipment, net $101,784
--------
Total deferred tax liabilities $101,784
========
As of December 25, 1993, the Company had net noncurrent deferred tax
liabilities of $63,409,000 and current deferred tax assets of
$25,299,000. The Company expects the results of future operations to
generate sufficient taxable income to allow utilization of deferred tax
assets.
(8) Fair Value of Financial Instruments
The following methods and assumptions were used by the Company in
estimating the fair value for its financial instruments:
Cash and cash equivalents: The carrying amount for cash and cash
equivalents approximates fair value.
Investment securities: The fair value for marketable debt and equity
securities are based on quoted market prices.
Long-term debt, including current installments: The carrying amount for
long-term debt approximates fair value based on current interest rates.
The carrying amount and fair value of the Company's financial
instruments as of December 25, 1993 and December 26, 1992 are as
follows:
1993 1992
------------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- ------- ------
(Amounts in thousands)
Cash and cash equivalents $198,997 198,997 293,473 293,473
Investment securities:
Short-term investments 59,763 60,064 50,366 50,426
Long-term investments 199,385 202,118 126,765 130,767
Long-term debt, including
current installments 6,940 6,940 8,890 8,890
7
(Continued)
32
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(9) Commitments and Contingencies
(a) Operating Leases
The Company conducts a major portion of its retail operations
from leased store and shopping center premises generally under 20
year leases. Contingent rentals paid to lessors of certain store
facilities are determined on the basis of a percentage of sales
in excess of stipulated minimums plus, in certain cases,
reimbursement of taxes and insurance.
Total rental expense, net of sublease rental income, for the
years ended December 25, 1993, December 26, 1992 and December 28,
1991 is as follows:
1993 1992 1991
---- ---- ----
(Amounts in thousands)
Minimum rentals $85,967 74,796 65,137
Contingent rentals 10,731 10,267 10,151
Sublease rental income (2,253) (1,728) (1,698)
------- ------ ------
$94,445 83,335 73,590
======= ====== ======
As of December 25, 1993, future minimum lease payments for all
noncancelable operating leases and related subleases are as
follows:
Minimum Sublease
rental rental
Year commitments income Net
---- ----------- ------ ---
(Amounts in thousands)
1994 $ 91,984 1,281 90,703
1995 91,003 975 90,028
1996 90,500 658 89,842
1997 89,589 557 89,032
1998 88,171 422 87,749
Thereafter 910,160 1,211 908,949
---------- ----- ---------
$1,361,407 5,104 1,356,303
========== ===== =========
The Company also owns shopping centers which are leased to
tenants for fixed monthly rentals. Contingent rentals received
from certain tenants are determined on the basis of a percentage
of sales in excess of stipulated minimums plus, in certain cases,
taxes. Contingent rentals were estimated at December 25, 1993
and are included in trade receivables. Rental income was
approximately $7,624,000 in 1993, $7,034,000 in 1992 and
$6,454,000 in 1991. The approximate amounts of minimum future
rental payments to be received under operating leases are
$5,927,000, $4,845,000, $3,985,000, $2,874,000 and $2,212,000 for
the years 1994 through 1998, respectively, and $9,061,000
thereafter.
(b) Lines of Credit
The Company has committed lines of credit for $75,000,000
available for short-term borrowings, with interest rates at or
below the prime rate. There were no amounts outstanding as of
December 25, 1993 or December 26, 1992. The Company pays no fees
related to these lines.
8
(Continued)
33
PUBLIX SUPER MARKETS, INC.
Notes to Financial Statements
(c) Litigation
On January 19, 1993, the Equal Employment Opportunity Commission
("EEOC") applied to the United States District Court, Southern
District of Florida in Miami, for an order to show cause why an
administrative subpoena previously issued by the EEOC to the
Company should not be enforced (EEOC v. Publix Super Markets,
Inc., Case No. 93-0091). The application, among other things,
alleged that information previously supplied by the Company to
the EEOC did not fully comply with the subpoena and that the EEOC
was entitled to require the Company to compile additional
information and produce additional documents. The matter was
resolved by a Consent Order, with which the Company complied,
resulting in an order on June 17, 1993 dismissing the action.
This application arose out of a notice of charge issued by the
EEOC on March 25, 1992, In the Matter of: Kemp v. Publix Super
Markets, Inc., Charge No. 150-92-1508, alleging that the Company
had engaged in past violations and was engaged in continuing
violations of Title VII of the Civil Rights Act, as amended, by
discriminating against women with respect to job assignments and
promotions because of their sex. As currently amended, the
charge covers employment practices by the Company in the State of
Florida as a whole.
On December 6, 1993, the EEOC sought to expand the scope of its
investigation to include allegations of race discrimination. The
EEOC has requested the Company to compile information and produce
documents relating to these allegations. The Company has
objected to the expansion and the EEOC has agreed to substantial
reductions in the information requested and further discussions
as to additional reductions in the information requested are
pending.
The Company denies the allegations of the charge and the
subsequent attempted expansion of the charge. The EEOC has
advised that the charge does not in any respect constitute a
final finding of a violation, but that the EEOC has a statutory
duty to conduct a full and impartial investigation for the
purpose of determining whether the facts and circumstances afford
the EEOC reasonable cause to believe that the Company's
employment patterns and practices constitute discrimination on
the basis of sex and race.
The EEOC's investigation of the charge remains at the stage of
considering whether there is reasonable cause to believe the
allegations of the charge. At this early stage, the likelihood
of an adverse finding of the Company's liability and an estimate
of the amount of any exposure for any such liability cannot be
determined.
The Company is also a party in various legal claims and actions
considered in the normal course of business. Management believes
that the ultimate disposition of these matters will not have a
material effect on the Company's financial condition.
9
34
Schedule V
PUBLIX SUPER MARKETS, INC.
Property, Plant and Equipment
Years Ended December 25, 1993, December 26, 1992
and December 28, 1991
(Amounts in thousands)
Other
Balance at Retire- changes- Balance
beginning ments increase at end
Classification of period Additions or sales (decrease) of period
-------------- --------- --------- -------- ---------- ---------
Year ended December 25, 1993:
Land $ 54,052 --- 464 2,199 (2) 55,787
Buildings and improvements 350,679 31 1,752 (262)(1) 396,220
47,524 (2)
Furniture, fixtures and equipment 1,066,996 52,066 7,838 (33,184)(1) 1,210,354
132,314 (2)
Leasehold improvements 164,523 66 607 (942)(1) 189,263
26,223 (2)
Construction in progress 55,629 268,004 --- (208,260)(2) 115,373
---------- --------- -------- --------- ---------
$1,691,879 320,167 10,661 (34,388) 1,966,997
========== ========= ======== ========= =========
Year ended December 26, 1992:
Land $ 49,693 261 17 4,115 (2) 54,052
Buildings and improvements 337,781 1,577 3,638 12,221 (2) 350,679
(676)(1)
3,414 (3)
Furniture, fixtures and equipment 1,007,076 51,765 27,322 67,464 (2) 1,066,996
(32,099)(1)
112 (3)
Leasehold improvements 132,700 408 3,465 35,493 (2) 164,523
(1,149)(1)
536 (3)
Construction in progress 26,336 148,586 --- (119,293)(2) 55,629
---------- --------- -------- --------- ---------
$1,553,586 202,597 34,442 (29,862) 1,691,879
========== ========= ======== ========= =========
(Continued)
35
Schedule V
PUBLIX SUPER MARKETS, INC.
Property, Plant and Equipment
Years Ended December 25, 1993, December 26, 1992
and December 28, 1991
(Amounts in thousands)
Other
Balance at Retire- changes- Balance
beginning ments increase at end
Classification of period Additions or sales (decrease) of period
-------------- --------- --------- -------- ---------- ---------
Year ended December 28, 1991:
Land $ 44,754 --- 273 5,212 (2) 49,693
Buildings and improvements 322,085 --- --- 15,696 (2) 337,781
Furniture, fixtures and equipment 931,247 72,969 11,279 (26,360)(1) 1,007,076
40,499 (2)
Leasehold improvements 109,974 --- 2,388 25,114 (2) 132,700
Construction in progress 26,843 86,014 --- (86,521)(2) 26,336
---------- --------- -------- --------- ---------
$1,434,903 158,983 13,940 (26,360) 1,553,586
========== ========= ======== ========= =========
Notes:
(1) Fully depreciated assets written off.
(2) Transfer from construction in progress.
(3) Accumulated depreciation on fixed assets of acquired companies.
2
36
Schedule VI
PUBLIX SUPER MARKETS, INC.
Accumulated Depreciation of Property, Plant and Equipment
Years Ended December 25, 1993, December 26, 1992
and December 28, 1991
(Amounts in thousands)
Other
Balance at Retire- changes- Balance
beginning ments increase at end
Classification of period Additions or sales (decrease) of period
-------------- --------- --------- -------- ---------- ---------
Year ended December 25, 1993:
Buildings and improvements $ 109,215 12,865 901 (262)(1) 120,917
Furniture, fixtures and equipment 622,227 97,448 6,145 (33,184)(1) 680,346
Leasehold improvements 51,649 5,941 89 (942)(1) 56,559
--------- --------- -------- --------- ---------
$ 783,091 116,254 7,135 (34,388) 857,822
========= ========= ======== ========= =========
Year ended December 26, 1992:
Buildings and improvements $ 95,773 12,625 1,921 (676)(1) 109,215
3,414 (2)
Furniture, fixtures and equipment 572,254 100,280 18,320 (32,099)(1) 622,227
112 (2)
Leasehold improvements 49,276 4,915 1,929 (1,149)(1) 51,649
536 (2)
--------- --------- -------- --------- ---------
$ 717,303 117,820 22,170 (29,862) 783,091
========= ========= ======== ========= =========
Year ended December 28, 1991:
Buildings and improvements $ 83,456 12,317 --- --- 95,773
Furniture, fixtures and equipment 502,462 103,124 6,972 (26,360)(1) 572,254
Leasehold improvements 46,235 4,144 1,103 --- 49,276
--------- --------- -------- --------- ---------
$ 632,153 119,585 8,075 (26,360) 717,303
========= ========= ======== ========= =========
Note:
(1) Accumulated depreciation on fully depreciated assets written off.
(2) Accumulated depreciation on fixed assets of acquired companies.
37
Schedule VIII
PUBLIX SUPER MARKETS, INC.
Valuation and Qualifying Accounts
Years Ended December 25, 1993, December 26, 1992
and December 28, 1991
(Amounts in thousands)
Balance at Additions Deductions Balance at
beginning charged to from end of
Description of year income reserves year
----------- ------- ------ -------- ----
Year ended December 25, 1993:
Reserves not deducted from assets:
Self-insurance reserves:
-Current $32,108 85,020 68,210 48,918
-Noncurrent 45,438 5,096 --- 50,534
------- ------ ------ ------
$77,546 90,116 68,210 99,452
======= ====== ====== ======
Year ended December 26, 1992:
Reserves not deducted from assets:
Self-insurance reserves:
-Current $22,995 76,502 67,389 32,108
-Noncurrent 43,204 2,234 --- 45,438
------- ------ ------ ------
$66,199 78,736 67,389 77,546
======= ====== ====== ======
Year ended December 28, 1991:
Reserves not deducted from assets:
Self-insurance reserves:
-Current $17,573 58,524 53,102 22,995
-Noncurrent 45,524 (2,320) --- 43,204
------- ------ ------ ------
$63,097 56,204 53,102 66,199
======= ====== ====== ======
38
Schedule IX
PUBLIX SUPER MARKETS, INC.
Short-term Borrowings
Years Ended December 25, 1993, December 26, 1992
and December 28, 1991
Weighted Maximum amount Average amount Weighted average
Balance at average outstanding outstanding interest
end of interest during the during the rate during
Category period rate year year (1) the year (2)
-------- ------ ---- ---- -------- ------------
Year ended December 25, 1993:
Lines of credit --- N/A 24,000,000 250,000 3.24%
Year ended December 26, 1992:
Lines of credit --- --- --- --- ---
Year ended December 28, 1991:
Lines of credit --- --- --- --- ---
Notes:
(1) Computed based on the daily balance outstanding during the year.
(2) Computed by dividing interest expense for the year by the average
amount outstanding for the year.
39
PUBLIX SUPER MARKETS, INC.
Index to Exhibits
EXHIBIT 3A Restated Articles of Incorporation of the Company as
incorporated by reference to the exhibits to the Annual
Report of the Company on Form 10-K, as amended, for the year
ended December 26, 1987 (restated in electronic format).
Articles of Amendment of the Restated Articles of
Incorporation of the Company filed with the Secretary of the
State of Florida, effective June 9, 1993.
EXHIBIT 27 Financial Data Schedule for the year ended December 25, 1993.