Publix supermarket stockholders

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 d. Commission File Number PUBLIX SUPER MARKETS, INC. Exact name of Registrant as specified in its charter. Address of principal executive offices.

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule of the Securities Act. Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule of Regulation S-T during the preceding 12 months.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Indicate by check mark whether the Registrant is a shell company as defined in Rule 12b-2 of the Act. Documents Incorporated By Reference.

Quantitative and Qualitative Disclosures About Market Risk. Financial Statements and Supplementary Data. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Directors, Executive Officers and Corporate Governance. Executive Officers of the Company. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Certain Relationships, Related Transactions and Director Independence. Principal Accounting Fees and Services. Exhibits, Financial Statement Schedules. Publix Super Markets, Inc. The Company was founded in and later merged into another corporation that was originally incorporated in The Company has no other significant lines of business or industry segments.

The Company sells grocery including dairy, produce, deli, bakery, meat and seafood , health and beauty care, general merchandise, pharmacy, floral and other products and services. The percentage of consolidated sales by merchandise category for , and was as follows: The Company receives the food and nonfood products it distributes from many sources. These products are delivered to the supermarkets through Company distribution centers or directly from the suppliers and 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 supplier or relatively few suppliers.

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 operated 1, supermarkets at the end of , compared with 1, at the beginning of the year. In , 28 supermarkets were opened including 10 replacement supermarkets and supermarkets were remodeled.

Nine supermarkets were closed during the period. Replacement supermarkets opened in replaced six of the supermarkets closed during the same period, two of which were replaced on site, and four supermarkets closed in that were replaced on site. Two of the remaining supermarkets closed in will be replaced on site in subsequent periods and one supermarket will not be replaced.

New supermarkets added 0. At the end of , the Company had supermarkets located in Florida, in Georgia, 61 in Alabama, 54 in South Carolina, 38 in Tennessee and 11 in North Carolina. Also, at the end of , the Company had seven supermarkets under construction in Florida, seven in North Carolina, three in South Carolina, one in Alabama and one in Tennessee. The Company is engaged in the highly competitive retail food industry. Normal operating fluctuations in these balances can result in changes to cash flows from operating activities presented in the consolidated statements of cash flows that are not necessarily indicative of long-term operating trends.

There are no unusual industry practices or requirements relating to working capital items. The historical influx of winter residents to Florida and increased purchases of products during the traditional Thanksgiving, Christmas and Easter holidays typically result in seasonal sales increases between November and April of each year.

The Company had , employees at the end of The Company considers its employee relations to be good. Patent and Trademark Office. Due to the importance of its intellectual property to its business, the Company actively defends and enforces its rights to such property. The Company may be subject to liability under applicable environmental laws for cleanup of contamination at its facilities. Compliance with these laws had no material effect on capital expenditures, results of operations or the competitive position of the Company.

Increased competition and low profit margins could adversely affect the Company. The retail food industry in which the Company operates is highly competitive with low profit margins. As a result of the highly competitive environment, traditional supermarkets, including the Company, face business challenges.

There has been a trend in recent years for traditional supermarkets to lose market share to nontraditional competitors. The success of the Company, in particular its ability to retain its customers, depends on its ability to meet the business challenges created by this highly competitive environment. There can be no assurance that the Company will be able to meet these challenges. In addition, the Company believes it will face increased competition in the future from existing and potentially new competitors and its financial condition and results of operations could be impacted by the pricing, purchasing, advertising or promotional decisions made by its competitors as well as competitor format innovation and location additions.

General economic and other conditions that impact consumer spending could adversely affect the Company. Adverse economic conditions, including high unemployment, home foreclosures and weakness in the housing market, declines in the stock market and the instability of the credit markets, could cause a reduction in consumer spending.

While there has been a trend toward lower unemployment and fuel prices in recent periods which has contributed to a better economic climate, there is continued uncertainty about the strength of the economic recovery. If the economy does not continue to improve or if it weakens, or if fuel prices increase, consumers may reduce consumer spending. Other conditions that could also affect consumer spending include increases in tax, interest and inflation rates, increases in energy costs, increases in health care costs, the impact of natural disasters or acts of terrorism, and other factors.

Increased operating costs could adversely affect the Company. Consequently, uncertain labor markets, government mandated increases in the minimum wage or other benefits, increased wage rates by retailers and other labor market competitors, an increased proportion of full-time employees, increased costs of health care due to health insurance reform or other factors could result in an increase in labor costs. The Company has implemented several strategic business and technology initiatives as part of the execution of these core strategies.

The Company believes these core strategies and related strategic initiatives differentiate it from its competition and present opportunities for sustained market share and financial growth. Failure to identify and obtain or retain suitable supermarket sites could adversely affect the Company.

Similarly, its business could be adversely affected if it is unable to renew the leases on its supermarkets on commercially reasonable terms. Failure to maintain the privacy and security of confidential customer and business information and the resulting unfavorable publicity could adversely affect the Company. The Company receives, retains and transmits confidential information about its customers, employees and suppliers and entrusts certain of that information to third party service providers.

The Company depends upon the secure transmission of confidential information, including customer payments, over external networks. Additionally, the use of individually identifiable data by the Company and its third party service providers is subject to federal, state and local laws and regulations.

Disruptions in information technology systems could adversely affect the Company. The Company is dependent on complex information technology systems to operate its business, enhance customer service, improve the efficiency of its supply chain and increase employee efficiency. Certain of these information technology systems are hosted by third party service providers. Unexpected changes in the insurance market or factors affecting self-insurance reserve estimates could adversely affect the Company.

The Company is self-insured for property, plant and equipment losses. There is no assurance that the Company will be able to continue to maintain its insurance coverage or obtain comparable insurance coverage on commercially reasonable terms.

Self-insurance reserves are determined based on actual claims experience and an estimate of claims incurred but not reported including, where necessary, actuarial studies. Actuarial projections of losses are subject to variability caused by, but not limited to, such factors as future interest and inflation rates, future economic conditions, claims experience, litigation trends and benefit level changes.

Product liability claims, product recalls and the resulting unfavorable publicity could adversely affect the Company. The distribution and sale of grocery, drug and other products purchased from suppliers or manufactured by the Company entails an inherent risk of product liability claims, product recall and the resulting adverse publicity. Such products may contain contaminants that may be inadvertently sold by the Company. These contaminants may, in certain cases, result in illness, injury or death if processing at the consumer level, if applicable, does not eliminate the contaminants.

There can be no assurance that such claims will not be asserted against the Company or that the Company will not be obligated to perform product recalls in the future. Unfavorable changes in, failure to comply with or increased costs to comply with environmental laws and regulations could adversely affect the Company. The Company is subject to federal, state and local laws and regulations that govern activities that may have adverse environmental effects and impose liabilities for the costs of contamination cleanup and damages arising from sites of past spills, disposals or other releases of hazardous materials.

Under current environmental laws, the Company may be held responsible for the remediation of environmental conditions regardless of whether the Company leases, subleases or owns the supermarkets or other facilities and regardless of whether such environmental conditions were created by the Company or a prior owner or tenant. The costs of investigation, remediation or removal of environmental conditions may be substantial. In addition, the increased focus on climate change, waste management and other environmental issues may result in new environmental laws or regulations that could negatively affect the Company directly or indirectly through increased costs on its suppliers.

Unfavorable changes in, failure to comply with or increased costs to comply with laws and regulations could adversely affect the Company. In addition to environmental laws and regulations, the Company is subject to federal, state and local laws and regulations relating to, among other things, product labeling and safety, zoning, land use, workplace safety, public health, accessibility and restrictions on the sale of various products, including alcoholic beverages, tobacco and drugs.

The Company is also subject to laws governing its relationship with employees, including minimum wage requirements, overtime, labor, working conditions, disabled access and work permit requirements. Unfavorable results of legal proceedings could adversely affect the Company. The Company is subject from time to time to various lawsuits, claims and charges arising in the normal course of business, including employment, personal injury, commercial and other matters. Some lawsuits also contain class action allegations.

The Company estimates its exposure to these legal proceedings and establishes reserves for the estimated liabilities. Assessing and predicting the outcome of these matters involves substantial uncertainties. At year end, the Company operated Current supermarket prototypes range from 28, to 61, square feet. Supermarkets are often located in strip shopping centers where the Company is the anchor tenant. 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 new leases. Both the building and land are owned at locations. The building is owned while the land is leased at 56 other locations. The Company supplies its supermarkets from eight primary distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Florida and Lawrenceville, Georgia.

The Company operates six manufacturing facilities, including three dairy plants located in Lakeland and Deerfield Beach, Florida and Lawrenceville, Georgia, two bakery plants located in Lakeland, Florida and Atlanta, Georgia and a deli plant located in Lakeland, Florida. The Company is subject from time to time to various lawsuits, claims and charges arising in the normal course of business. The Company believes its recorded reserves are adequate in light of the probable and estimable liabilities.

The estimated amount of reasonably possible losses for lawsuits, claims and charges, individually and in the aggregate, is considered to be immaterial. In addition, common stock is provided to employees through the Employee Stock Ownership Plan ESOP. The Company currently repurchases common stock subject to certain terms and conditions.

The ESPP, Directors Plan, k Plan and ESOP each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company. The Company serves as the registrar and stock transfer agent for its common stock. As part of the process to determine the stock value, an independent valuation is obtained.

Approximate Number of Equity Security Holders. In the third quarter of , the Company began paying dividends quarterly rather than semiannually. Payment of dividends is within the discretion of the Board of Directors and depends on, among other factors, net earnings, capital requirements and the financial condition of the Company. However, the Company intends to continue to pay comparable dividends to stockholders in the future.

Purchases of Equity Securities by the Issuer. Issuer Purchases of Equity Securities. Shares of common stock repurchased by the Company during the three months ended December 26, were as follows amounts are in thousands, except per share amounts: Average Price Paid per Share. Common stock is made available for sale by the Company only to its current employees and members of its Board of Directors through the ESPP and Directors Plan and to participants of the k Plan.

In addition, common stock is provided to employees through the ESOP. The amount of common stock offered to the Company for repurchase is not within the control of the Company, but is at the discretion of the stockholders. The Company does not believe that these repurchases of its common stock are within the scope of a publicly announced plan or program although the terms of the plans discussed above have been communicated to the participants. Thus, the Company does not believe that it has made any repurchases during the three months ended December 26, required to be disclosed in the last two columns of the table.

After the end of a quarter, however, shares continue to be traded at the prior valuation until the new valuation is received. For comparative purposes, a performance graph based on the fiscal year end valuation market price as of March 1, is provided in the Proxy Statement. Past stock performance shown below is no guarantee of future performance. Comparison of Five-Year Cumulative Return Based Upon Fiscal Year End Trading Price.

Companies included in the Peer Group are Ahold, Delhaize Group, Kroger, Supervalu and Weis Markets. Comparable store sales percent change. Earnings before income tax expense. Net earnings as a percent of sales. Weighted average shares outstanding. Basic and diluted earnings per share. Long-term debt including current portion. Common stock related to ESOP.

Fiscal year includes 53 weeks. All other years include 52 weeks. Gross profit represents sales less cost of merchandise sold as reported in the consolidated statements of earnings.

The Company is engaged in the retail food industry, operating supermarkets in Florida, Georgia, Alabama, South Carolina, Tennessee and North Carolina. During , the Company opened 15 supermarkets in Florida, five in North Carolina, three in Alabama, three in South Carolina and two in Georgia.

Replacement supermarkets opened in replaced six of the supermarkets closed during the same period. In the normal course of operations, the Company replaces supermarkets and closes supermarkets that are not meeting performance expectations.

The impact of future supermarket closings is not expected to be material. Income is earned by selling merchandise at price levels that produce sales in excess of the cost of merchandise sold and operating and administrative expenses.

The Company has generally been able to increase revenues and net earnings from year to year. Further, the Company has been able to meet its cash requirements from internally generated funds without the need for debt financing. The Company sells a variety of merchandise to generate revenues. This merchandise includes grocery including dairy, produce, deli, bakery, meat and seafood , health and beauty care, general merchandise and other products and services.

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Merchandise includes a mix of nationally advertised and private label brands as well as unbranded merchandise such as produce, meat and seafood. In addition, the Company competes with other companies for additional retail site locations.

The Company also competes with retailers and other labor market competitors in attracting and retaining quality employees. Fiscal years , and include 52 weeks. The increase in sales for as compared with was primarily due to a 4. Sales for supermarkets that are replaced on site are classified as new supermarket sales since the replacement period for the supermarket is generally 9 to 12 months. Comparable store sales for increased primarily due to product cost inflation and increased customer counts resulting from a better economic climate in The increase in sales for as compared with was primarily due to a 5.

Gross profit sales less cost of merchandise sold as a percentage of sales was After excluding the LIFO reserve effect, the increase in gross profit as a percentage of sales for as compared with was primarily due to changes in promotional activities and pricing strategies. After excluding the LIFO reserve effect, the decrease in gross profit as a percentage of sales for as compared with was primarily due to increases in promotional activities and product cost increases, some of which were not passed on to customers.

Operating and administrative expenses. Operating and administrative expenses as a percentage of sales were The decrease in operating and administrative expenses as a percentage of sales for as compared with was primarily due to a decrease in rent as a percentage of sales due to the acquisition of shopping centers with the Company as the anchor tenant. The decrease in operating and administrative expenses as a percentage of sales for as compared with was primarily due to a decrease in rent as a percentage of sales due to the acquisition of shopping centers with the Company as the anchor tenant and the adoption of the Accounting Standards Update ASU discussed in Recently Issued Accounting Standards below.

The increase in investment income for as compared with was primarily due to an increase in realized gains on the sale of equity securities. The increase in investment income for as compared with was primarily due to an increase in dividend income and realized gains on the sale of equity securities.

The effective income tax rate was The decrease in the effective income tax rate for as compared with was primarily due to a state income tax settlement and investment related tax credits. The decrease in the effective income tax rate for as compared with was primarily due to an increase in qualified inventory donations and investment related tax credits partially offset by an increase in income tax expense due to the adoption of the ASU discussed in Recently Issued Accounting Standards below.

Net earnings as a percentage of sales were 6. The increase in net earnings as a percentage of sales for as compared with was primarily due to the increase in gross profit as a percentage of sales and the decrease in operating and administrative expenses as a percentage of sales, as noted above.

Net earnings as a percentage of sales for as compared with remained unchanged. Liquidity and Capital Resources. This increase was primarily due to the Company generating cash in excess of the amount needed for operations, capital expenditures, common stock repurchases and dividend payments.

Net cash provided by operating activities. The increase in net cash provided by operating activities for as compared with was primarily due to the timing of income tax payments. The increase in net cash provided by operating activities for as compared with was primarily due to the increase in net earnings and the timing of payments for merchandise, partially offset by the timing of income tax payments. Net cash used in investing activities. The primary use of net cash in investing activities for was funding capital expenditures and net increases in investment securities.

These expenditures were incurred in connection with the opening of 28 new supermarkets including 10 replacement supermarkets and remodeling supermarkets. Expenditures were also incurred for supermarkets and remodels in progress, new or enhanced information technology hardware and applications and the acquisition of shopping centers with the Company as the anchor tenant.

These expenditures were incurred in connection with the opening of 32 new supermarkets including 14 replacement.

Expenditures were also incurred for supermarkets and remodels in progress, the construction of new warehouses, new or enhanced information technology hardware and applications and the acquisition of shopping centers with the Company as the anchor tenant.

Net cash used in financing activities. The increase in net cash used in financing activities for as compared with was primarily due to an increase in net common stock repurchases.

The Company expects to continue to repurchase its common stock, as offered by its stockholders from time to time, at its then current value for amounts similar to those in prior years. However, with the exception of certain shares distributed from the ESOP, such purchases are not required and the Company retains the right to discontinue them at any time. The shopping center acquisitions are financed with internally generated funds and assumed debt, if prepayment penalties for the debt are determined to be significant.

This capital program is subject to continuing change and review. In , the cash requirements for operations, capital expenditures, common stock repurchases and dividend payments are expected to be financed by internally generated funds or liquid assets. Payments Due by Period. Amounts are in thousands. Purchase obligations 2 3 4.

Accrued postretirement benefit cost 6. For a more detailed description of the operating lease obligations, refer to Note 9 a Commitments and Contingencies - Operating Leases in the Notes to Consolidated Financial Statements. Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction.

Purchase obligations exclude agreements that are cancelable within 30 days without penalty. The actual amounts to be paid are variable and have been estimated based on current costs. For a more detailed description of the postretirement benefit obligations, refer to Note 5 Postretirement Benefits in the Notes to Consolidated Financial Statements.

For a more detailed description of the long-term debt obligations, refer to Note 4 Consolidation of Joint Ventures and Long-Term Debt in the Notes to Consolidated Financial Statements. Recently Issued Accounting Standards.

In February , the Financial Accounting Standards Board FASB issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet.

The ASU is effective for reporting periods beginning after December 15, with early adoption permitted. The ASU is effective for reporting periods beginning after December 15, The extent of the effect on results of operations will vary with the changes in the fair values of equity securities. In May , the FASB issued an ASU on the recognition of revenue from contracts with customers. The ASU requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts.

The ASU is effective for reporting periods beginning after December 15, with early adoption permitted only for reporting periods beginning after December 15, In January , the FASB issued an ASU permitting companies to make an accounting policy election to account for qualified affordable housing investments using the proportional amortization method if certain criteria are met. Under this method, the investment is amortized in proportion to the tax credits received and the net investment performance is recognized in the statements of earnings as a component of income tax expense.

The ASU was effective for reporting periods beginning after December 15, with early adoption permitted. The Company elected to early adopt the ASU. The preparation of these financial statements 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.

The Company believes the following critical accounting policies reflect its more significant judgments and estimates used in the preparation of its consolidated financial statements. Inventories are valued at the lower of cost or market. The cost of the remaining inventories was determined using the first-in, first-out FIFO method. The FIFO cost of inventory approximates replacement or current cost. The FIFO method is used to value manufactured, seasonal, certain perishable and other miscellaneous inventory items because of fluctuating costs and inconsistent product availability.

The Company also reduces inventory for estimated losses related to shrink. The Company evaluates whether AFS securities are other-than-temporarily impaired OTTI based on criteria that include the extent to which cost exceeds market value, the duration of the market decline, the credit rating of the issuer or security, the failure of the issuer to make scheduled principal or interest payments and the financial health and prospects of the issuer or security.

If market or issuer conditions decline, the Company may incur future impairments. Debt securities with unrealized losses are considered OTTI if the Company intends to sell the debt security or if the Company will be required to sell the debt security prior to any anticipated recovery. If the Company determines that a debt security is OTTI under these circumstances, the impairment recognized in earnings is measured as the difference between the amortized cost and the current fair value.

A debt security is also determined to be OTTI if the Company does not expect to recover the amortized cost of the debt security. However, in this circumstance, if the Company does not intend to sell the debt security and will not be required to sell the debt security, the impairment recognized in earnings equals the estimated credit loss as measured by the difference between the present value of expected cash flows and the amortized cost of the debt security.

Debt securities held by the Company at year end primarily consisted of corporate, state and municipal bonds with high credit ratings; therefore, the Company believes the credit risk is low. The Company believes a basis point increase in interest rates would result in an immaterial unrealized loss on its debt securities.

Since the Company does not intend to sell its debt securities or will likely not be required to sell its debt securities prior to any anticipated recovery, such a hypothetical temporary unrealized loss would impact comprehensive earnings, but not net earnings or cash flows.

Equity securities held by the Company are subject to equity price risk that results from fluctuations in quoted market prices as of the balance sheet date. Market price fluctuations may result from perceived changes in the underlying economic characteristics of the issuer, the relative price of alternative investments and general market conditions.

An equity security is determined to be OTTI if the Company does not expect to recover the cost of the equity security. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the net book value of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the net book value of an asset to the future net undiscounted cash flows expected to be generated by the asset. An impairment loss is recorded for the excess of the net book value over the fair value of the asset.

The fair value is estimated based on expected discounted future cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell and are no longer depreciated. Long-lived assets, including buildings and improvements, leasehold improvements, and furniture, fixtures and equipment, are evaluated for impairment at the supermarket level.

These factors could cause the Company to conclude that a potential impairment exists, and the applicable impairment tests could result in a determination that the value of long-lived assets is impaired, resulting in a write-down of the long-lived assets. The Company attempts to select supermarket sites that will achieve the forecasted operating results. There were no material changes in the estimates or assumptions related to the impairment of long-lived assets in Cost of Merchandise Sold.

Cost of merchandise sold includes costs of inventory and costs related to in-store production. These allowances and credits are recognized as earned in accordance with the underlying agreement with the vendor and completion of the earnings process.

Short-term vendor agreements with advance payment provisions are recorded as a current liability and recognized over the appropriate period as earned according to the underlying agreements.

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Long-term vendor agreements with advance payment provisions are recorded as a noncurrent liability and recognized over the appropriate period as earned according to the underlying agreements.

The Company is self-insured for health care claims and property, plant and equipment losses. Historically, it has been infrequent for incurred claims to exceed these self-insurance limits.

These reserves are determined based on actual claims experience and an estimate of claims incurred but not reported including, where necessary, actuarial studies. The Company believes that the use of actuarial studies to determine self-insurance reserves represents a consistent method of measuring these subjective estimates.

The causes of variability include, but are not limited to, such factors as future interest and inflation rates, future economic conditions, claims experience, litigation trends and benefit level changes.

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, the following: These factors include changes in the rate of inflation, changes in federal, state and local laws and regulations, adverse determinations with respect to litigation or other claims, ability to recruit and retain employees, increases in operating costs including, but not limited to, labor costs, credit card fees and utility costs, particularly electric rates, ability to construct new supermarkets 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. Except as may be required by applicable law, the Company assumes no obligation to publicly update these forward-looking statements. The Company does not utilize financial instruments for trading or other speculative purposes, nor does it utilize leveraged financial instruments.

Cash equivalents and short-term investments are subject to three market risks, namely interest rate risk, credit risk and secondary market risk. Most of the cash equivalents and short-term investments are held in money market investments and debt securities that mature in less than one year.

Due to the quality of the short-term investments held, the Company does not expect the valuation of these investments to be significantly impacted by future market conditions. Long-term investments consist of debt and equity securities that are classified as AFS and carried at fair value. The Company evaluates whether AFS securities are OTTI based on criteria that include the extent to which cost exceeds market value, the duration of the market decline, the credit rating of the issuer or security, the failure of the issuer to make scheduled principal or interest payments and the financial health and prospects of the issuer or security.

Debt securities are subject to both interest rate risk and credit risk. Debt securities at year end primarily consisted of corporate, state and municipal bonds with high credit ratings; therefore, the Company believes the credit risk is low.

The Company believes a basis point increase in long-term interest rates would result in an immaterial unrealized loss on its debt securities. Equity securities are subject to equity price risk that results from fluctuations in quoted market prices as of the balance sheet date.

Index to Consolidated Financial Statements and Schedule. Report of Independent Registered Public Accounting Firm. Consolidated Statements of Earnings — Years ended December 26, , December 27, Consolidated Statements of Comprehensive Earnings — Years ended December 26, ,.

Consolidated Statements of Cash Flows — Years ended December 26, , December 27, and. Notes to Consolidated Financial Statements. The following consolidated financial statement schedule of the Company for the years ended. Schedule II — Valuation and Qualifying Accounts. All other schedules are omitted as the required information is inapplicable or the information is.

The Board of Directors and Stockholders. Publix Super Markets, Inc.: We have audited the accompanying consolidated balance sheets of Publix Super Markets, Inc. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule listed in the accompanying index.

Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board United States.

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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Publix Super Markets, Inc. Also in our opinion, the related 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.

Cash and cash equivalents. Property, plant and equipment: Furniture, fixtures and equipment. Net property, plant and equipment. See accompanying notes to consolidated financial statements. Contributions to retirement plans.

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Current portion of long-term debt. Federal and state income taxes. Accrued postretirement benefit cost. Common stock related to Employee Stock Ownership Plan ESOP. Authorized 1,, shares; issued. Accumulated other comprehensive earnings. Consolidated Statements of Earnings. Cost of merchandise sold. Total costs and expenses. Other nonoperating income, net. Consolidated Statements of Comprehensive Earnings. Unrealized loss gain on available-for-sale AFS securities.

Reclassification adjustment for net realized gain on AFS. Adjustment to postretirement benefit plan obligation net. Consolidated Statements of Cash Flows. Cash flows from operating activities: Cash received from customers.

Cash paid to employees and suppliers. Dividends and interest received. Other operating cash receipts. Other operating cash payments. Cash flows from investing activities: Payment for capital expenditures. Proceeds from sale of property, plant and equipment. Proceeds from sale and maturity of investments. Cash flows from financing activities: Payment for acquisition of common stock. Proceeds from sale of common stock. Repayments of long-term debt. Net decrease increase in cash and cash equivalents.

Cash and cash equivalents at beginning of year. Cash and cash equivalents at end of year. Reconciliation of net earnings to net cash provided by operating activities: Adjustments to reconcile net earnings to net cash.

Increase in LIFO reserve. Retirement contributions paid or payable in. Loss on disposal and impairment of property,. Gain on AFS securities. Net amortization of investments. Change in operating assets and liabilities providing requiring cash: Prepaid expenses and other noncurrent assets. Accounts payable and accrued expenses. Common Stock Related to ESOP. Amounts are in thousands, except per share amounts. Balances at December 29, Contribution of 12, shares to retirement plans.

Acquisition of 21, shares from stockholders. Sale of 9, shares to stockholders. Retirement of 11, shares. Change for ESOP related shares. Balances at December 28, Contribution of 10, shares to retirement plans.

Sale of 8, shares to stockholders. Retirement of 12, shares. Balances at December 27, Contribution of 8, shares to retirement plans. Retirement of 13, shares. Balances at December 26, The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and certain joint ventures in which the Company has a controlling financial interest. All significant intercompany balances and transactions are eliminated in consolidation.

The Company considers all liquid investments with maturities of three months or less to be cash equivalents. Trade receivables primarily include amounts due from vendor allowances, debit and credit card sales and third party insurance pharmacy billings.

Debt and equity securities are classified as available-for-sale AFS and are carried at fair value.

The Company evaluates whether AFS securities are other-than-temporarily impaired OTTI based on criteria that include the extent to which cost exceeds market value, the duration of the market value decline, the credit rating of the issuer or security, the failure of the issuer to make scheduled principal or interest payments and the financial health and prospects of the issuer or security.

Declines in the value of AFS securities determined to be OTTI are recognized in earnings and reported as OTTI losses. Interest and dividend income, amortization of premiums, accretion of discounts and realized gains and losses on AFS securities are included in investment income. Interest income is accrued as earned. Dividend income is recognized as income on the ex-dividend date of the security. The cost of AFS securities sold is based on the FIFO method.

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 the related leases, if shorter, as follows: Maintenance and repairs are charged to operating expenses as incurred. Expenditures for renewals and betterments are capitalized.

The gain or loss realized on disposed assets or assets to be disposed of is recorded as operating and administrative expenses in the consolidated statements of earnings.

Comprehensive earnings include net earnings and other comprehensive earnings. Included in other comprehensive earnings for the Company are unrealized gains and losses on AFS securities and adjustments to the postretirement benefit plan obligation. Revenue is recognized at the point of sale for retail sales. Customer returns are immaterial. Vendor coupons that are reimbursed are accounted for as sales.

Coupons and other sales incentives offered by the Company that are not reimbursed are recorded as a reduction of sales. The Company records sales net of applicable sales taxes. Other operating income is recognized on a net revenue basis as earned. Other operating income includes income generated from other activities, primarily lottery commissions, licensee sales commissions, automated teller transaction fees, mall gift card commissions, vending machine commissions, money transfer fees and coupon redemption income.

Other Nonoperating Income, net. Other nonoperating income, net includes rent received from tenants in owned shopping centers, net of related expenses, and other miscellaneous nonoperating income. 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.

The Company recognizes accrued interest and penalties related to income tax liabilities as a component of income tax expense. In , the Company began accounting for qualified affordable housing investments using the proportional amortization method. Under this method, the investment is amortized in proportion to the tax credits received and the net investment performance is recorded as income tax expense.

Common Stock and Earnings Per Share. Basic and diluted earnings per share are calculated by dividing net earnings by the weighted average shares outstanding. Basic and diluted earnings per share are the same because the Company does not have options or other stock compensation programs that impact the calculation of diluted earnings per share.

All shares owned by the Employee Stock Ownership Plan ESOP are included in the earnings per share calculations. Dividends paid to the ESOP, as well as dividends on all other common stock shares, are reflected as a reduction of retained earnings. All common stock shares, including ESOP and k Plan shares, receive one vote per share and have the same dividend rights.

The preparation of financial statements in conformity with U. The fair value of AFS securities is based on market prices using the following measurement categories: Level 1 — Fair value is determined by using quoted prices in active markets for identical investments.

AFS securities that are included in this category are primarily mutual funds, exchange traded funds and equity securities. Level 2 — Fair value is determined by using other than quoted prices.

By using observable inputs for example, benchmark yields, interest rates, reported trades and broker dealer quotes , the fair value is determined through processes such as benchmark curves, benchmarking of like securities and matrix pricing of corporate, state and municipal bonds by using pricing of similar bonds based on coupons, ratings and maturities. AFS securities that are included in this category are primarily debt securities tax exempt and taxable bonds.

Level 3 — Fair value is determined by using other than observable inputs. Fair value is determined by using the best information available in the circumstances and requires significant management judgment or estimation.

No AFS securities are currently included in this category. Due in one year or less. Due after one year through five years. Due after five years through ten years. Due after ten years. Unrealized losses related to debt securities are primarily due to interest rate volatility impacting the market value of certain bonds. The Company continues to receive scheduled principal and interest payments on these debt securities.

Unrealized losses related to equity securities are primarily due to temporary equity market fluctuations that are expected to recover. From time to time, the Company enters into Joint Ventures JV , in the legal form of limited liability companies, with certain real estate developers to partner in the development of shopping centers with the Company as the anchor tenant. The Company consolidates certain of these JVs in which it has a controlling financial interest. The Company evaluates a JV using specific criteria to determine whether the Company has a controlling financial interest and is the primary beneficiary of the JV.

Generally, most major JV decision making is shared between all members. In particular, the use and sale of JV assets, business plans and budgets are generally required to be approved by all members. However, the Company, through its anchor tenant operating lease agreement, has the power to direct the activities that most significantly influence the economic performance of the JV owned shopping center. The assets are owned by and the liabilities are obligations of the JVs, not the Company, except for a portion of the long-term debt of certain JVs guaranteed by the Company.

Total earnings attributable to noncontrolling interests for , and were immaterial. Maturities of assumed shopping center loans range from January through January and have fixed interest rates ranging from 4.

The Company provides postretirement life insurance benefits for certain salaried and hourly full-time employees who meet the eligibility requirements. At retirement, such employees also must be at least age 55 with at least 10 years of full-time service to be eligible to receive postretirement life insurance benefits.

Change in benefit obligation: Benefit obligation as of beginning of year. Benefit obligation as of end of year. Change in fair value of plan assets: Fair value of plan assets as of beginning of year. Fair value of plan assets as of end of year. Unfunded status of the plan as of end of year.

The estimated future benefit payments are expected to be paid as follows: Net periodic postretirement benefit cost consists of the following components: Amortization of actuarial loss. Net periodic postretirement benefit cost.

The net periodic postretirement benefit cost is based on assumptions determined at the prior year end measurement date. Following are the actuarial assumptions that were used in the calculation of the year end benefit obligation: Rate of compensation increase. Following are the actuarial assumptions that were used in the calculation of the net periodic postretirement benefit cost: The Company determined the discount rate using a yield curve methodology based on high quality bonds with a rating of AA or better.

The Company has a trusteed, noncontributory ESOP for the benefit of eligible employees. ESOP contributions can be made in Company common stock or cash. Shares are distributed from the ESOP primarily to separated vested participants and certain eligible participants who elect to diversify their account balances.

The Company has a k Plan for the benefit of eligible employees. The k Plan is a voluntary defined contribution plan. The Company may make a discretionary annual matching contribution to eligible participants of this plan as determined by the Board of Directors. The match, which is determined as of the last day of the plan year and paid in the subsequent plan year, is in common stock of the Company. The Company intends to continue its retirement plans; 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. Total income taxes for , and were allocated as follows: Other comprehensive losses earnings. The provision for income taxes consists of the following: Federal tax at statutory tax rate.

State income taxes net of federal tax benefit. Reserves not currently deductible. Total deferred tax assets. Property, plant and equipment, primarily due. Total deferred tax liabilities. The Company believes that the outcome of any examination will not have a material effect on its financial condition, results of operations or cash flows.

Income tax expense for includes the net effect of this settlement. The Company had no unrecognized tax benefits in Accumulated Other Comprehensive Earnings. A reconciliation of the changes in accumulated other comprehensive earnings net of income taxes for , and is as follows: Unrealized gain on AFS securities.

Net realized gain on AFS securities reclassified to investment income. Amortization of actuarial gain reclassified to operating and administrative expenses. Net other comprehensive earnings. Amortization of actuarial loss reclassified to operating and administrative expenses.

Net other comprehensive earnings losses. Unrealized loss on AFS securities. Net other comprehensive losses earnings. The Company conducts a major portion of its retail operations from leased premises.

Initial terms of the leases are typically 20 years, followed by renewal options at five year intervals, and may include rent escalation clauses. Minimum rentals represent fixed lease obligations, including insurance and maintenance to the extent they are fixed in the lease.

Contingent rentals represent variable lease obligations, including real estate taxes, insurance, maintenance and, for certain premises, additional rentals based on a percentage of sales in excess of stipulated minimums excess rent. The Company recognizes rent expense for operating leases with rent escalation clauses on a straight-line basis over the applicable lease term. The Company estimates excess rent, where applicable, based on annual sales projections and uses the straight-line method to amortize the cost to rent expense.

The annual sales projections are reviewed periodically and adjusted if necessary. Additionally, the Company has operating leases for certain transportation and other equipment. Total rental expense for , and is as follows: The Company also owns shopping centers which are leased to tenants for minimum monthly rentals plus, in certain instances, contingent rentals.

Minimum rentals represent fixed lease obligations, including insurance and maintenance. Contingent rentals represent variable lease obligations, including real estate taxes, insurance, maintenance and, for certain premises, excess rent. Following is a summary of the quarterly results of operations for and All quarters have 13 weeks. Valuation and Qualifying Accounts. Year Ended December 26, Reserves not deducted from assets: Year Ended December 27, Year Ended December 28, Disclosure Controls and Procedures.

Internal Control over Financial Reporting. Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a f and Rule 15d f under the Securities Exchange Act of Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework Certain information concerning the executive officers of the Company is set forth on the following page.

Business Experience During Last Five Years. Senior Vice President, General Counsel and Secretary of the Company. Vice Chairman of the Company and Trustee of the Employee Stock Ownership Plan ESOP to July , Vice Chairman and Trustee on Committee of Trustees of the ESOP thereafter.

Vice President of the Company to March , Senior Vice President thereafter. Chief Executive Officer of the Company. Senior Vice President and Chief Information Officer of the Company. Senior Vice President of the Company. President of the Company. Chief Financial Officer and Treasurer of the Company to July , Chief Financial Officer, Treasurer and Trustee on Committee of Trustees of the ESOP thereafter.

Officers of the Company. Vice President of the Company. Director of Real Estate Strategy of the Company to January ,. Regional Director of Retail Operations of the Company to. January , Vice President thereafter. Vice President and Assistant Secretary of the Company. Director of Information Systems of the Company to January ,. Regional Director of Retail Operations of the Company to January , Vice President thereafter. Business Development Director of Grocery Retail Support of the Company to March , Vice President thereafter.

Regional Director of Retail Operations of the Company to March , Vice President thereafter. Vice President of the Company to January , Senior Vice President to January , Vice President thereafter.

Director of Human Resources of the Company to January ,. Director of Manufacturing Operations of the Company to March , Vice President thereafter. Director of Warehousing of the Company to May , Vice President thereafter. The terms of all officers expire in May or upon the election of their successors. Information regarding this item is incorporated by reference from the Proxy Statement. 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 K.

Indemnification Agreement is incorporated by reference to the form attached as an exhibit to the Current Report on Form 8-K dated July 1, between the Company and the Trustees on the Committee of Trustees of the ESOP. Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm. Certification Pursuant to Section of the Sarbanes-Oxley Act of Certification Pursuant to 18 U. Section , as Adopted Pursuant to Section of the Sarbanes-Oxley Act of Pursuant to the requirements of the Securities Exchange Act of , this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Vice Chairman and Director. Chief Executive Officer and Director. Chairman of the Board and Director. Chief Financial Officer and Treasurer. Principal Financial and Accounting Officer. September 27, through October 31, November 1, through November 28, November 29, through December 26, All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

Authorized 1,, shares; issued and outstanding , shares in and , shares in Adjustments to reconcile net earnings to net cash provided by operating activities: Retirement contributions paid or payable in common stock. Loss on disposal and impairment of property, plant and equipment. Accumu- lated Other Compre- hensive Earnings. Total temporarily impaired AFS securities. Property, plant and equipment, primarily due to depreciation. Director of Real Estate Strategy of the Company to January , Vice President thereafter.

Director of Information Systems of the Company to January , Vice President thereafter. Director of Human Resources of the Company to January , Vice President thereafter.