UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 25, 1997
OR
[ ] 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 1-3657
WINN-DIXIE STORES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0514290
(State of other jurisdiction of ( IRS Employer
incorporation or organization) Identification No.)
5050 Edgewood Court, Jacksonville, Florida 32254-3699
(Address of principal executive offices) (Zip Code)
Area Code (904) 783-5000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- - -------------------------------------- --------------------------
Common Stock Par Value $1.00 Per Share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing sale price of common stock on June 25,
1997 as reported on the New York Stock Exchange was approximately
$3,506,003,211. Shares of common stock held by each executive officer and
director and by principal shareholders filing Schedules 13D and 13G have been
excluded in that such persons may be deemed to be affiliates. The
determination of affiliate status is not necessarily a conclusive
determination for other purposes.
As of June 25, 1997 registrant had outstanding 148,875,899 shares of
common stock.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant's Proxy
Statement in respect to the 1997 Annual Meeting of Shareholders are
incorporated by reference in Part III hereof, as more specifically described
herein.
<PAGE>
TABLE OF CONTENTS
Page Number
PART I
Business 1
Properties 5
Legal Proceedings 6
Submission of Matters to a Vote of Security Holders 6
Executive Officers of the Registrant 7
PART II
Market for the Registrant's Common Equity and Related Shareholder Matters 8
Selected Financial Data 8
Management's Discussion and Analysis of Financial Condition and Results of
Operations 8
Quantitative and Qualitative Disclosure About Market Risk 8
Financial Statements and Supplementary Data 8
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 8
PART III
The information required by Part III is hereby incorporated by reference
to Winn-Dixie Stores, Inc.'s definitive proxy statement to be filed on or
before August 26,1997 in connection with its Annual Meeting of Shareholders 8
PART IV
Exhibits, Financial Statement Schedules and Reports on Form 8-K 9
Signatures 13
<PAGE>
PART I
ITEM 1: BUSINESS
Business
General
Winn-Dixie Stores, Inc., organized in Florida on December 26, 1928, is a
major food retailer with 1,174 stores in fourteen states and the Bahama
Islands. According to published reports of sales at June 25, 1997, the
Company is one of the nation's largest supermarket retailers.
All of the Company's subsidiaries except Bahamas Supermarkets Limited
are wholly-owned. Except where the context indicates otherwise, the term
"Company" includes the parent company and all of its subsidiaries,
collectively.
Financial information on industry segments and lines of business is
omitted because, apart from the principal business of operating retail
self-service food stores, the Company has no other lines of business or
industry segments.
Store Formats and Business Strategy
The business of the Company is the operation of a chain of retail
self-service food stores which sell groceries, meats, seafood, fresh produce,
deli/bakery, pharmaceuticals and general merchandise items. The Company's
stores offer broad lines of merchandise, including nationally advertised and
private label brands and unbranded merchandise (principally meats, seafood and
produce), and generally operate on the basis of competitive pricing. Food
items sold include dry groceries, dairy products, baked goods, meats, poultry,
fish, fresh fruit, vegetables, frozen foods and other items commonly marketed
by retail food stores. The Company's stores also sell many general
merchandise items, such as magazines, soaps, paper products, health and
cosmetic products, hardware and numerous small household items. Many
locations have ancillary departments such as pharmacies, photo labs, dry
cleaners and in-store banks. At June 25, 1997, the Company operated 1,174
retail stores of which 424 were located in Florida, 130 in North Carolina, 123
in Georgia, 96 in Alabama, 79 in South Carolina, 76 in Louisiana, 69 in Texas,
61 in Kentucky, 34 in Virginia, 24 in Tennessee, 20 in Ohio, 16 in
Mississippi, 13 in the Bahamas, 7 in Oklahoma and 2 in Indiana. Such stores
were operated under the names of "Winn-Dixie" (501), "Marketplace" (636),
"Thriftway" (26), "The City Meat Markets" (10) and "Buddies" (1).
Support and Other Services
The following table shows the locations of the Company's distribution
centers and its manufacturing and processing plants, as well as the principal
products produced in the plants:
1
<PAGE>
ITEM 1: BUSINESS, continued
LOCATION FACILITIES
______________________________________________________________________________
ALABAMA Montgomery Distribution center; Plants: milk bottling and
frozen pizza
FLORIDA Jacksonville Two distribution centers; Plants: detergents;
paper bags; and coffee, tea and spices
Madison Plant: meat processing
Miami Distribution center; Plant: milk bottling
Orlando Distribution center
Bartow Plant: egg processing
Plant City Plants: ice cream and milk bottling
Pompano Distribution center
Sarasota Distribution center
Tampa Distribution center
GEORGIA Atlanta Distribution center
Fitzgerald Plants: jams, jellies, mayonnaise, salad
dressing, peanut butter and condiments; canned
and bottled carbonated beverages
Gainesville Plants: oleomargarine; natural cheese cutting
and wrapping, processed cheese and pimento
cheese
Valdosta Plants: crackers and cookies; and snacks
KENTUCKY Louisville Distribution center
LOUISIANA New Orleans Distribution center
Hammond Distribution center; Plant: milk bottling
NORTH CAROLINA Charlotte Distribution center
Raleigh Distribution center
High Point Plants: milk bottling and cultured products
SOUTH CAROLINA Greenville Distribution center; Plants: ice cream and milk
bottling
TEXAS Fort Worth Distribution center; Plant: milk bottling
BAHAMAS Nassau Distribution center
2
<PAGE>
ITEM 1: BUSINESS, continued
An insignificant portion of the production of the manufacturing plants
is sold to others.
Types of products produced by the Company for sale in its stores are
described above. Services provided by the Company such as check cashing are
incidental to the total business.
The Company has not publicly announced, or otherwise made public,
information about any new product or industry segment which would require
the investment of a material amount of the assets of the Company or which
otherwise is material.
Sources of available raw materials are factors which do not affect the
Company in any different manner than they affect other manufacturers and
processors of the goods identified.
Patents and trademarks owned by the Company are not of material
importance to its operations.
Seasonality does not materially affect the business of the Company.
However, due to the influx of winter residents to the Sunbelt, Florida in
particular, and increased purchases of food items for the Thanksgiving and
Christmas holiday seasons, there is a seasonal sales increase during the
period of November - April each fiscal year.
The Company and other food retailers have no unusual working capital
requirements.
The business of the Company is not dependent upon a single or a few
customers. The Company does not sell goods or services in an amount which
equals 10 percent or more of the Company's consolidated sales to any single
customer or group of customers under common control or to any affiliated group
of customers.
Backlog ordering is not a factor in the business of the Company.
No portion of the business of the Company is subject to renegotiation of
profits or termination of contracts or subcontracts at the election of any
government.
Marketing and Competition
In all areas in which the Company operates, the business is highly
competitive with local and national food chain stores, as well as with
independent stores and markets. Many factors enter into the competition,
including price, quality of goods and services, product mix and convenience.
3
<PAGE>
ITEM 1: BUSINESS, continued
The retail food industry is extremely competitive. Each division faces
somewhat different competitive conditions. The following table lists the
major competitors for each division.
Division Major Competitors
______________________________________________________________________________
Jacksonville Publix, Albertson's, Wal-Mart Supercenter, Food Lion, SuperK
Tampa Publix, Albertson's, Food Lion/Kash N Karry, Wal-Mart
Supercenter, U-Save
Montgomery Bruno, Delchamps, Wal-Mart Supercenter
Miami Publix, Sedano's, Albertson's
Orlando Publix, Albertson's, Goodings, Food Lion, Wal-Mart Supercenter,
Super K
Raleigh Food Lion, Harris-Teeter, Kroger, Hannaford, U-Krops
Charlotte Food Lion, Harris-Teeter, Bi-Lo, Super K, Publix
Atlanta Kroger, Ingles, A&P, Cub, Publix, Harris-Teeter, Wal-Mart
Supercenter
Midwest Kroger, Wal-Mart Supercenter, Biggs, Meijers
New Orleans Delchamps, Schwegmans, Albertson's
Fort Worth Kroger, Albertson's, Minyards, Food Lion, Randall's, Wal-Mart
Supercenter
Bahamas Super Value
Additionally, local chains and wholesaler-supported independents are
well represented in all regions.
Winn-Dixie is considered a major competitor in all geographic areas in
which it competes.
The Company did not spend a material amount on Company-sponsored
research and development activities or on Company-sponsored research
activities relating to the development of new products, services or
techniques, or the improvement of existing products, services or techniques
during any of the years in the three-year period ended June 25, 1997.
Government Regulation
The Company's compliance with federal, state and local provisions
regulating the discharge of materials into the environment, or otherwise
relating to the protection of the environment has not had, and is not expected
to have, a material effect on its capital expenditures, earnings or
competitive position.
Associates
At the end of fiscal 1997, the Company had 54,000 full-time and 82,000
part-time associates.
4
<PAGE>
ITEM 1: BUSINESS, continued
Bahamas
All sales are to customers within the United States and the Bahama
Islands. The Company exports an insignificant amount of merchandise to its
subsidiaries in the Bahamas which operate 13 retail food stores as outlined
above.
ITEM 2: PROPERTIES
Stores
All of the retail stores operated by the Company are on premises
occupied on a rental basis. See "Note 8 of the Notes to Consolidated
Financial Statements," page F-20, included herein.
Support Properties
The warehousing and distribution centers are rented under leases due to
expire as follows: Orlando - 2022; Atlanta - 2019; Charlotte - 2019;
Greenville - 2019; Jacksonville (Edgewood) - 2019; Louisville - 2019; Sarasota
- - - 2019; Miami - 2018; Montgomery - 2018; New Orleans - 2018; Raleigh - 2018;
Tampa - 2018; Fort Worth - 2016; Hammond - 2016; Jacksonville (Commonwealth)
- - - 2011; Nassau - 2011 and Pompano - 2003. All of these contain renewal
options, which vary from lease to lease.
A new distribution center for our Raleigh, North Carolina division and a
new perishable warehouse for our Montgomery, Alabama division are under
construction. These new facilities will be leased. The current distribution
center in Raleigh will be closed and offered for sale upon completion of the
new facility.
The Deep South plant in Orlando, Florida, is no longer in operation and
has been replaced with a new facility. This property is now owned in fee by
the Company and is under contract for sale.
The Company's Valdosta cracker and cookie, and snacks bakeries; Fort
Worth dairy plant; Madison meat processing plant; Plant City ice cream and
milk bottling plants; Miami reclaim center; and Gainesville oleomargarine and
cheese processing and packaging plants are owned in fee.
The Company's Greenville ice cream and milk bottling plants;
Jacksonville coffee, tea and spices processing, detergent and bag plants;
Montgomery milk bottling plant; and Hammond milk bottling plant are situated
at the leased warehousing and distribution center locations in those cities.
The Bartow egg processing plant; High Point milk bottling and cultured
products plants; Miami milk bottling plant; Montgomery frozen pizza plant; and
the Fitzgerald jam, jellies, mayonnaise, salad dressing, peanut butter and
condiments and canned and bottled carbonated beverage plants are rented under
leases.
All of the above support properties are considered to be in excellent
condition.
5
<PAGE>
ITEM 3: LEGAL PROCEEDINGS
There are pending against the Company various claims and lawsuits
arising in the normal course of business, including suits charging violations
of certain civil rights laws. In addition, the Company is a party to various
proceedings arising under federal, state or local regulations protecting the
environment. Management is of the opinion that any liability which might
result from any such claim, lawsuit or proceeding will not have a material
adverse effect on the Company's consolidated earnings or financial position.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the quarter ended June 25, 1997.
6
<PAGE>
Executive Officers of the Registrant
Set forth below is certain information concerning the executive officers
of the Company:
YEAR YEAR FIRST
AGE IN APPOINTED EMPLOYED
YEARS AT TO CURRENT BY
NAME 06-25-97 OFFICE HELD POSITION WINN-DIXIE
- - ------------------------------------------------------------------------------
A. Dano Davis 52 Chairman of the Board 1988 1968
and Principal Executive Officer
James Kufeldt 58 President 1988 1961
C. H. McKellar 59 Executive Vice President 1988 1957
H. E. Hess 57 Senior Vice President 1988 1958
T. E. McDonald 60 Senior Vice President 1986 1955
R. A. Sevin 54 Senior Vice President 1997 1961
C. E. Winge 52 Senior Vice President 1988 1963
R. P. McCook 44 Financial Vice President 1984 1984
and Principal Financial Officer
L. H. May 52 Vice President 1989 1964
E. E. Zahra, Jr. 50 Vice President and General Counsel 1995 1995
D. H. Bragin 53 Treasurer 1985 1961
R. J. Brocato 53 Vice President 1993 1963
W. C. Calkins 58 Vice President 1987 1958
J. W. Critchlow 50 Vice President 1988 1967
R. J. Ehster 56 Vice President 1983 1958
D. G. Lafever 48 Vice President 1990 1966
R. C. Lunn 45 Vice President 1997 1969
H. E. Miller 65 Vice President 1984 1956
L. J. Sadlowski 56 Vice President 1983 1961
J. A. Schlosser 48 Vice President 1997 1967
M. A. Sellers 43 Vice President 1997 1973
B. B. Tripp 60 Vice President 1987 1954
All of the officers listed above, with the exception of E. E. Zahra,
Jr., have been employed for the past five years in either the same capacity as
listed, or in a position with the Company which was consistent in occupation
with the present assignment. Prior to becoming General Counsel, Mr. Zahra was
the managing partner of the Jacksonville office of LeBoeuf, Lamb, Greene &
MacRae L.L.P., an international law firm.
Officers are elected annually by the Board of Directors and serve for a
one-year period or until their successors are elected. No officers have
employment contracts with the Company.
7
<PAGE>
PART II
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
The principal market on which the Company's common stock is traded is
the New York Stock Exchange. The number of record holders of the Company's
common stock as of June 25, 1997 was 55,202.
Information required by this Item concerning sales prices of the
Company's common stock and the frequency and amount of dividends is hereby
incorporated by reference to "Note 11 of the Notes to Consolidated Financial
Statements," page F-23 included herein.
ITEM 6: SELECTED FINANCIAL DATA
The information required by this Item is on page F-1 included herein.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is on page F-2 included herein.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information required by this Item is on page F-17 included herein.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data are as set forth in the
"Index to Consolidated Financial Statements, Supporting Schedules and
Supplemental Data" on page 15 included herein.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have been no disagreements on accounting and financial disclosure
between the Company and its auditors within the 24 months prior to June 25,
1997.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
8
<PAGE>
ITEM 11: EXECUTIVE COMPENSATION
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by these Items are incorporated herein by
reference to the Company's definitive proxy statement to be filed on, or
before, August 26, 1997 in connection with its Annual Meeting of Shareholders.
PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Financial Statements and Schedules:
(a) Exhibit and Financial Statements and Schedules
(1) Financial Statements:
See "Index to Consolidated Financial Statements, Supporting
Schedules and Supplemental Data" on page 15 included herein.
(2) Financial Statement Schedules:
See "Index to Consolidated Financial Statements, Supporting
Schedules and Supplemental Data" on page 15 included herein.
9
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
continued
Exhibits:
Certain of the following exhibits which have heretofore been filed with
the Securities and Exchange Commission under the Securities Act of 1933 or the
Securities Exchange Act of 1934 and which are designated in prior filings as
noted below, are hereby incorporated by reference and made a part hereof:
Exhibit
Number Description of Exhibit Incorporated by Reference From
- - ------ ---------------------- ------------------------------
3.1 Restated Articles of Incorporation as Previously filed as Exhibit 3.1
filed with the Secretary of State of to Form 10-K for the year ended
Florida. June 30, 1993,which Exhibit is
herein incorporated by
reference.
3.1.1 Amendment adopted October 7, 1992, Previously filed as Exhibit
to Restated Articles of Incorporation. 3.1.1 to Form 10-K for the year
ended June 30,1993, which
Exhibit is herein incorporated
by reference.
3.1.2 Amendment adopted October 5, 1994, to Previously filed as Exhibit
Restated Articles of Incorporation. 3.1.2 to Form 10-Q for the
quarter ended January 11, 1995,
which Exhibit is herein
incorporated by reference.
3.2 Restated By-Laws of the Registrant Previously filed as Exhibit 3.2
as amended through June 21, 1995. to Form 10-K for the year ended
June 28, 1995, which Exhibit is
herein incorporated by
reference.
9.1 Agreement of Shareholders of D.D.I., Previously filed as Exhibit 9.1
Inc. (formerly Vadis Investments, to Form 10-K for the year ended
Inc.) dated April 19, 1989. June 30, 1993, which Exhibit is
herein incorporated by
reference.
10.1 Annual Officer Incentive Previously filed as Exhibit
Compensation Plan as amended, 10.2 to Form 10-K for the year
effective June 17,1991. ended June 30,1993, which
Exhibit is herein incorporated
by reference.
10.2 Long-term Officer Incentive Previously filed as Exhibit
Compensation Plan as amended, 10.3 to Form 10-K for the year
effective June 27,1991. ended June 30,1993, which
Exhibit is herein incorporated
by reference.
10
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
continued
Exhibit
Number Description of Exhibit Incorporated by Reference From
- - ------ ---------------------- ------------------------------
10.2.1 Restricted Stock Plan, effective Previously filed as Exhibit
June 29, 1995. 10.2.1 to Form 10-Q for the
quarter ended January 10,1996,
which Exhibit is herein
incorporated by reference.
10.3 Key Employee Stock Option Plan Previously filed as Exhibit
effective January 24, 1990, as 10.5 to Form 10-K for the year
amended through October 7, 1992. ended June 30,1993, which
Exhibit is herein incorporated
by reference.
10.3.1 Amendment adopted June 22, 1994 Previously filed as Exhibit
to Key Employee Stock Option Plan 10.5.1 to Form 10-Q for the
quarter ended January 11,1995,
which Exhibit is herein
incorporated by reference.
10.3.2 Amendment adopted July 25, 1994 Previously filed as Exhibit
to Key Employee Stock Option Plan. 10.5.2 to Form 10-Q for the
quarter ended January 11,1995,
which Exhibit is herein
incorporated by reference.
10.4 Supplemental Retirement Plan dated Previously filed as Exhibit
July 1, 1994. 10.6 to Form 10-K for the year
ended June 29, 1994, which
Exhibit is herein incorporated
by reference.
10.5 Management Security Plan as amended Previously filed as Exhibit
and restated effective June 30, 1982. 10.5 to Form 10-K for the year
ended June 26, 1996, which
Exhibit is herein incorporated
by reference.
10.5.1 Amendment effective May 1, 1992 to Previously filed as Exhibit
Management Security Plan. 10.5.1 to Form 10-K for the
year ended June 26, 1996,
which Exhibit is herein
incorporated by reference.
10.6 Senior Corporate Officer's Previously filed as Exhibit
Management Security Plan as amended 10.6 to Form 10-K for the
and restated effective June 30, 1982. year ended June 26, 1996,
which Exhibit is herein
incorporated by reference.
11
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
continued
Exhibit
Number Description of Exhibit Incorporated by Reference From
- - ------- ---------------------- ------------------------------
10.6.1 Amendment effective May 1, 1992 to Previously filed as Exhibit
Senior Corporate Officer's Management 10.6.1 to Form 10-K for the
Security Plan. year ended June 26,1996,
which Exhibit is herein
incorporated by reference.
11.1 Computation of Earnings Per Share.
21.1 Subsidiaries of Winn-Dixie Stores, Inc.
23.1 Consent of KPMG Peat Marwick LLP.
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the
quarter ended June 25, 1997.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WINN-DIXIE STORES, INC.
By A. DANO DAVIS
-------------
A. Dano Davis, Chairman
Date August 4, 1997
--------------
Pursuant to the requirements of the Securities Exchange Act of 1934 this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
A. DANO DAVIS Chairman (Principal August 4, 1997
------------- Executive Officer) and Director
(A. Dano Davis )
JAMES KUFELDT President and Director August 4, 1997
-------------
(James Kufeldt)
RICHARD P. MCCOOK Financial Vice President August 4, 1997
----------------- (Principal Financial Officer)
(Richard P. McCook)
DAVID H. BRAGIN Treasurer August 4, 1997
--------------- (Principal Accounting Officer)
(David H. Bragin)
ROBERT D. DAVIS Director August 4, 1997
---------------
(Robert D. Davis)
13
<PAGE>
SIGNATURES, continued
T. WAYNE DAVIS Director August 4, 1997
--------------
(T. Wayne Davis)
CHARLES H. MCKELLAR Director August 4, 1997
-------------------
(Charles H. McKellar)
RADFORD D. LOVETT Director August 4, 1997
-----------------
(Radford D. Lovett)
CHARLES P. STEPHENS Director August 4, 1997
-------------------
(Charles P. Stephens)
ARMANDO M. CODINA Director August 4, 1997
-----------------
(Armando M. Codina)
DAVID F. MILLER Director August 4, 1997
---------------
(David F. Miller)
CARLETON T. RIDER Director August 4, 1997
-----------------
(Carleton T. Rider)
JULIA B. NORTH Director August 4, 1997
--------------
(Julia B. North)
14
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS,
SUPPORTING SCHEDULES AND SUPPLEMENTAL DATA
Selected Financial Data F-1
Management's Discussion and Analysis of Financial Condition and
Results of Operations F-2
Consolidated Financial Statements and Supplemental Data:
Independent Auditors' Report F-5
Report of Management F-6
Consolidated Statements of Earnings, Years ended
June 25, 1997, June 26, 1996 and June 28, 1995 F-7
Consolidated Balance Sheets, June 25, 1997 and June 26, 1996 F-8
Consolidated Statements of Cash Flows, Years ended
June 25, 1997, June 26, 1996 and June 28, 1995 F-9
Consolidated Statements of Shareholders' Equity, Years ended
June 25, 1997, June 26, 1996 and June 28, 1995 F-10
Notes to Consolidated Financial Statements F-11
Financial Statement Schedules:
Independent Auditors' Report on Financial Statement Schedules S-1
II Consolidated Valuation and Qualifying Accounts, Years ended
June 25, 1997, June 26, 1996 and June 28, 1995 S-2
All other schedules are omitted either because they are not applicable or
because information required therein is shown in the Financial Statements or
Notes thereto.
15
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
1997 1996 1995 1994 1993<F2>
------ ------ ------ ------ ------
Dollars in millions except per share data
<S> <C> <C> <C> <C> <C>
Sales
Net sales $ 13,219 12,955 11,788 11,082 10,832
Percent increase 2.0 9.9 6.4 2.3 4.8
Average annual sales per store $ 11.3 11.0 10.0 9.6 9.4
Earnings Summary
Gross profit $ 3,316 3,093 2,723 2,534 2,446
Percent of sales 25.1 23.9 23.1 22.9 22.6
LIFO charge (credit) $ 3 10 7 (2) 1
Operating and
administrative expenses $ 3,094 2,803 2,462 2,270 2,197
Percent of sales 23.4 21.6 20.9 20.5 20.3
Net earnings $ 204 256 232 216 236
Per share $ 1.36 1.69 1.56 1.45 1.56
Percent of net earnings to sales 1.5 2.0 2.0 2.0 2.2
Percent of net earnings
to average equity 15.3 19.9 20.3 21.2 24.6
EBITDA $ 632.8 656.9 569.3 520.2 522.9
EBITDAR $ 1,015.6 1,009.7 890.7 809.2 797.2
Dividends
Dividends paid $ 144.2 134.0 116.5 107.4 100.5
Percent of net earnings 70.5 52.4 50.2 49.7 42.5
Per share (present rate $1.02) $ .96 .885 .78 .72 .66
Common Stock (WIN)
Total shares outstanding (000,000) 148.9 151.7 151.1 148.4 150.0
NYSE-Stock price range
Common - High $ 42.38 38.38 28.94 33.88 39.88
Low $ 29.88 28.06 21.32 21.75 20.82
Financial Data
Cash flow information:
Net cash provided by
operating activities $ 413.9 556.9 414.2 436.3 213.0
Net cash used in investing
activities $ 477.7 387.9 379.3 214.7 81.4
Net cash provided by (used
in) financing activities $ 45.7 (167.3) (35.9) (212.4)(128.7)
Capital expenditures, net $ 423.1 362.0 371.6 277.7 194.8
Depreciation and amortization $ 291.2 248.3 200.9 157.4 141.1
Working capital $ 195.4 388.7 414.9 486.2 540.0
Current ratio 1.1 1.4 1.4 1.6 1.6
Total assets $ 2,921 2,649 2,472 2,145 2,058
Obligations under capital leases$ 54 61 78 85 87
Shareholders' equity $ 1,337 1,342 1,231 1,056 980
Book value per share $ 8.98 8.85 8.14 7.12 6.54
Stores
In operation at year-end 1,174 1,178 1,175 1,159<F1>1,151
Opened and acquired during year 83 61 108 60 40
Closed or sold during year 87 58 92 66 78
Enlarged or remodeled during year 79 128 86 87 73
New/enlarged/remodeled in last
five years 805 743 654 535 475
Percent to total stores
in operation 68.6 63.1 55.7 46.2 41.3
Year-end retail square
footage (000,000) 47.8 45.7 43.8 40.7 39.0
Average store size at
year-end (000) 40.7 38.8 37.3 35.1 33.9
Other Year-end Data
Associates (000) 136 126 123 112 105
Shareholder accounts (000) 55.2 56.3 44.8 39.5 41.4
Shareholders per store 47 48 38 34 36
Taxes
Federal, state and local $ 285 288 261 261 255
Per share $ 1.89 1.90 1.75 1.75 1.68
<F1> Includes 14 stores from Bahamas consolidation
<F2> 53 Weeks
F-1
</TABLE>
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Sales for 1997 were $13.2 billion, compared to $13.0 billion for 1996
and $11.8 billion for 1995. This reflects a 2.0%, 9.9% and 6.4% increase in
sales per year for 1997, 1996 and 1995, respectively. Average weekly store
sales increased 1.8%, 8.4% and 6.8% for each of the last three fiscal years,
while comparable store sales decreased 0.9% in 1997, and increased 4.4% and
3.0% per year for 1996 and 1995, respectively. Fourth quarter sales were $3.1
billion, $3.0 billion and $2.9 billion for 1997, 1996 and 1995, respectively.
For the fourth quarter, average store sales increased 1.2% in 1997, 4.5% in
1996 and 9.5% in 1995. Comparable store sales for the fourth quarter
decreased 1.8% in 1997, and increased 1.7% and 3.8% in 1996 and 1995,
respectively.
In fiscal year 1997, the Company continued to increase its average
store size by opening and acquiring 83 stores averaging 49,700 square feet,
enlarging or remodeling 79 stores and closing 87 smaller stores, averaging
29,300 square feet.
As a percent of sales, gross profit margins were 25.1%, 23.9% and 23.1%
in fiscal 1997, 1996 and 1995, respectively. The increase in gross profit
margins is a result of an improved inventory mix in our larger stores. In
addition, the 1997 increase also reflects an increase in retail prices
necessitated by rising store operating expenses attributed to our larger
stores. Approximately 90% of the Company's inventories are valued under the
LIFO (last-in, first-out) method. The LIFO calculations resulted in a pre-tax
decrease in gross profit of $2.7 million in 1997, $9.9 million in 1996 and
$7.3 million in 1995.
Operating and administrative expenses, as a percent of sales, were
23.4%, 21.6% and 20.9% in fiscal 1997, 1996 and 1995, respectively. Our major
increases in operating and administrative expenses are due to a higher payroll
percentage in our larger stores, occupancy cost and depreciation expense.
Cash discounts and other income amounted to $119.4 million, $118.0
million and $106.9 million in 1997, 1996 and 1995, respectively. The increase
in 1997, 1996 and 1995 is due to an increase in cash discounts resulting from
an increase in purchases of merchandise for resale and gains from the disposal
of capital assets. Investment income amounted to $0.3 million, $0.6 million
and $0.5 million in fiscal 1997, 1996 and 1995, respectively. The decrease in
investment income in 1997 is a result of a decrease in funds available for
investment.
Interest expense totaled $22.1 million, $21.2 million and $14.3 million
in fiscal 1997, 1996 and 1995, respectively. Interest expense primarily
reflects a computation of interest on capital lease obligations and short-term
borrowings. The 1997 and 1996 increase in interest expense is due to an
increase in short-term borrowings.
F-2
<PAGE>
Results of Operations, continued
Earnings before income taxes were $319.4 million, $387.3 million and
$354.0 million in fiscal 1997, 1996 and 1995, respectively. The 1997 decrease
in pre-tax earnings is primarily a result of the increase in operating
expenses as previously mentioned. The 1996 increase in pre-tax earnings is
primarily a result of an increase in operating income. The effective income
tax rates were 36.0%, 34.0% and 34.4% for fiscal 1997, 1996 and 1995,
respectively.
Net earnings amounted to $204.4 million, or $1.36 per share for 1997,
$255.6 million, or $1.69 per share for 1996 and $232.2 million, or $1.56 per
share for 1995. The LIFO calculations decreased net earnings by $1.6 million,
or $0.01 per share in 1997, $6.0 million, or $0.04 per share for 1996 and $4.6
million, or $0.03 per share in 1995.
Liquidity and Capital Resources
The Company's financial condition remains sound and strong at year end.
Cash and cash equivalents amounted to $14.1 million, $32.2 million and $30.4
million at the end of fiscal years 1997, 1996 and 1995, respectively. Cash
provided by operating activities amounted to $413.9 million in 1997, $556.9
million in 1996 and $414.2 million in 1995.
Net capital expenditures totaled $423.1 million, $362.0 million and
$371.6 million in fiscal 1997, 1996 and 1995, respectively. These
expenditures were for new store locations, store enlargements and remodelings,
and the expansion of warehouse facilities. Total capital investment in
Company retail and support facilities, including operating leases, is
estimated to be $750 million in 1997 and projected to be $850 million in 1998.
The Company has no material construction or purchase commitments outstanding
as of June 25, 1997.
Working capital amounted to $195.4 million and $388.7 million at the end
of fiscal years 1997 and 1996, respectively. Inventories on a FIFO
(first-in, first-out) basis increased $72.7 million in 1997 and $29.4 million
in 1996. The increase in inventories is primarily due to the increase in the
total retail square footage through new openings and store enlargements, and
the enlargement of our Orlando, Florida distribution center in 1997.
The Company has an authorized $500.0 million commercial paper program.
In support of this program, or as an independent source of funds, the Company
also has $445.0 million of short-term lines of credit. These lines of credit
are available at any time during the year and are renewable on an annual
basis. The Company had no short-term borrowings against bank lines of credit
as of June 25, 1997 or June 26, 1996. There was $380.0 million in commercial
paper outstanding at the end of 1997, compared to $110.0 million in commercial
paper outstanding at the end of 1996. The average interest rate on the
commercial paper outstanding on June 25, 1997 was 5.7% as compared to 5.5% on
June 26, 1996.
Excluding capital lease obligations, the Company had no outstanding
long-term debt as of June 25, 1997 or June 26, 1996.
F-3
<PAGE>
Liquidity and Capital Resources, continued
The Company's cash flow from operations and available credit facilities
are considered adequate to fund both the short-term and long-term capital
needs of the Company.
The Company is a party to various proceedings arising under federal,
state and local regulations protecting the environment. Management is of the
opinion that any liability which might result from any such proceedings will
not have a material adverse effect on the Company's consolidated earnings or
financial position.
Impact of Inflation
Winn-Dixie's primary costs, inventory and labor, increase with
inflation. Recovery of these costs has to come from improved operating
efficiencies and, to the extent permitted by our competition, through improved
gross profit margins.
Cautionary Statement Regarding Forward-Looking Information and Statements
This Annual Report on Form 10-K contains certain information that
constitutes "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act, which involves risks and uncertainties.
Actual results may differ materially from the results described in the
forward-looking statements. When used in this document, the words,
"estimate," "project," "intend" and "believe" and other similar expressions,
as they relate to the Company, are intended to identify such forward-looking
statements. Such statements reflect the current views of the Company and are
subject to certain risks and uncertainties that include, but are not limited
to, growth, competition, inflation, pricing and margin pressures, law and
taxes. Please refer to discussions of these and other factors in this Annual
Report and other Company filings with the Security and Exchange Commission.
The Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise.
F-4
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and the Board of Directors
Winn-Dixie Stores, Inc.:
We have audited the accompanying consolidated balance sheets of
Winn-Dixie Stores, Inc. and subsidiaries as of June 25, 1997 and June 26,
1996, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the years in the three-year period ended
June 25, 1997. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Winn-Dixie
Stores, Inc. and subsidiaries at June 25, 1997 and June 26, 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended June 25, 1997, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
July 28, 1997
F-5
<PAGE>
REPORT OF MANAGEMENT
The Company is responsible for the preparation, integrity and
objectivity of the consolidated financial statements and related information
appearing in the Annual Report. The consolidated financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis and include amounts that are based on
management's best estimates and judgments.
Management is also responsible for maintaining a system of internal
controls that provides reasonable assurance that the accounting records
properly reflect the transactions of the Company, that assets are safeguarded
and that the consolidated financial statements present fairly the financial
position and operating results. As part of the Company's controls, the
internal audit staff conducts examinations in each of the retail and
manufacturing divisions of the Company.
The Audit Committee of the Board of Directors, composed entirely of
outside directors, meets periodically to review the results of audit reports
and other accounting and financial reporting matters with the independent
certified public accountants and the internal auditors.
A. Dano Davis Richard P. McCook
Chairman of the Board Financial Vice President
and Principal Executive Officer and Principal Financial Officer
F-6
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended June 25, 1997, June 26, 1996 and June 28, 1995
1997 1996 1995
---- ---- ----
Amounts in thousands except per share data
<S> <C> <C> <C>
Net sales $ 13,218,715 12,955,488 11,787,843
Cost of sales, including warehousing
and delivery expense 9,902,862 9,862,244 9,064,536
---------- ---------- ----------
Gross profit on sales 3,315,853 3,093,244 2,723,307
Operating and administrative expenses 3,093,767 2,802,712 2,461,883
---------- ---------- ----------
Operating income 222,086 290,532 261,424
Cash discounts and other income, net 119,435 118,038 106,901
---------- ---------- ----------
341,521 408,570 368,325
--------- ---------- ----------
Interest:
Interest on capital lease obligations 7,055 8,199 10,086
Other interest 15,024 13,046 4,244
--------- ---------- ----------
Total interest 22,079 21,245 14,330
--------- ---------- ----------
Earnings before income taxes 319,442 387,325 353,995
Income taxes 114,999 131,691 121,808
--------- ---------- ----------
Net earnings $ 204,443 255,634 232,187
========= ========== ==========
Earnings per share $ 1.36 1.69 1.56
========= ========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
F-7
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
June 25, 1997 and June 26, 1996
1997 1996
---- ----
Amounts in thousands
<S> <C> <C>
Assets
- - ------
Current Assets:
Cash and cash equivalents $ 14,116 32,208
Trade and other receivables, less allowance for
doubtful items of $1,699,000
($1,860,000 in 1996) 175,679 158,445
Merchandise inventories at lower of cost or
market less LIFO reserve of $224,999,000
($222,341,000 in 1996) 1,249,215 1,179,126
Prepaid expenses 148,961 131,161
--------- ---------
Total current asset 1,587,971 1,500,940
Investments and other assets:
Cash surrender value of life insurance, net 88,081 55,769
Other assets 94,547 70,322
--------- --------
Total investments and other assets 182,628 126,091
--------- --------
Deferred income taxes 22,129 22,732
Net property, plant and equipment 1,128,681 998,849
--------- --------
$ 2,921,409 2,648,612
========= =========
Liabilities and Shareholders' Equity
- - ------------------------------------
Current Liabilities:
Accounts payable $ 604,034 599,297
Short-term borrowings 380,000 110,000
Reserve for insurance claims and self-insurance 60,219 61,760
Accrued wages and salaries 98,771 84,691
Accrued rent 76,528 62,237
Accrued expenses 137,115 148,715
Current obligations under capital leases 3,023 2,974
Income taxes 32,923 42,554
--------- ---------
Total current liabilities 1,392,613 1,112,228
--------- ---------
Obligations under capital leases 54,026 60,853
Defined benefit plan 33,452 29,533
Reserve for insurance claims and self-insurance 94,783 97,209
Other liabilities 9,041 6,493
-------- --------
Shareholders' equity:
Common stock of $1 par value. Authorized
200,000,000 shares; issued 148,875,899
shares in 1997 and 151,684,943 shares
in 1996 148,876 151,685
Retained earnings 1,188,618 1,190,611
--------- ---------
Total shareholders' equity 1,337,494 1,342,296
--------- ---------
Commitments and contingent liabilities (Notes 6, 8 and 9)
$ 2,921,409 2,648,612
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
F-8
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended June 25, 1997, June 26, 1996 and June 28, 1995
1997 1996 1995
---- ---- ----
Amounts in thousands
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 204,443 255,634 232,187
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 291,236 248,287 200,931
Deferred income taxes (17,988) (7,698) 10,360
Defined benefit plan 3,919 3,371 3,310
Reserve for insurance claims and self-insurance (3,967) (3,788) (3,170)
Stock compensation plans 10,086 5,725 2,323
Change in cash from:
Receivables (17,234) (6,533) 14,101
Merchandise inventories (70,089) (19,542) (69,900)
Prepaid expenses (314) (14,037) (1,392)
Accounts payable 3,914 42,199 23,474
Income taxes (9,631) 23,223 (10,456)
Other current accrued expenses 19,533 30,104 12,449
------- ------- -------
Net cash provided by operating activities 413,908 556,945 414,217
Cash flows from investing activities:
Purchases of property, plant and equipment, net (423,105)(361,961)(371,563)
Increase in investments and other assets (54,548) (25,915) (7,762)
--------- -------- --------
Net cash used in investing activities (477,653)(387,876)(379,325)
--------- ------- ---------
Cash flows from financing activities:
Increase (decrease) in short-term borrowing s 270,000 (20,000) 120,500
Payment on notes payable - - (17,008)
Payments on capital lease obligations (2,713) (3,077) (3,111)
Purchase of common stock (94,500) (51,581) (34,896)
Proceeds of sales under associates'stock
purchase plan 13,111 40,205 15,297
Dividends paid (144,165)(134,042) (116,506)
Other 3,920 1,220 (205)
--------- --------- ---------
Net cash provided by (used in)
financing activities 45,653 (167,275) (35,929)
--------- --------- ---------
Increase (decrease) in cash and cash equivalents (18,092) 1,794 ( 1,037)
Cash and cash equivalents at the beginning
of the yea r 32,208 30,414 31,451
--------- --------- ---------
Cash and cash equivalents at end of the year $ 14,116 32,208 30,414
========= ========= =========
Supplemental cash flow information:
Interest paid $ 17,840 14,569 16,213
Interest and dividends received $ 1,183 8,049 1,510
Income taxes paid $ 142,684 114,572 121,904
========= ========= ========
See accompanying notes to consolidated financial statements.
</TABLE>
F-9
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended June 25, 1997, June 26, 1996 and June 28, 1995
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Amounts in thousands
Common stock:
Beginning of year $ 151,685 75,561 74,176
Add par value of common stock issued for stock
compensation plans and acquisition 140 2,149 2,044
Add par value of common stock issued in
connection with 2-for-1 stock split - 75,580 -
Deduct par value of common stock acquired 2,949 1,605 659
------- ------- ------
End of year 148,876 151,685 75,561
Retained earnings:
Beginning of year 1,190,611 1,155,031 981,509
Net earnings 204,443 255,634 232,187
Deduct excess of cost over par value of common
stock acquired 91,551 49,976 34,237
Deduct cash dividends on common stock of $0.96,
$0.885 and $0.78 per share in 1997, 1996 and
1995, respectively 144,165 134,042 116,506
Deduct par value of common stock issued in
connection with 2-for-1 stock split - 75,580 -
Add excess of value or proceeds over par value
of common stock and compensation costs recorded
for stock compensation plans and acquisition 9,946 53,129 100,962
Add (deduct) associates' stock loans,
net of payments 13,111 (14,330) (8,839)
Unrealized gain on marketable securities 1,964 - -
Other 4,259 745 (45)
--------- --------- ---------
End of year 1,188,618 1,190,611 1,155,031
--------- --------- ---------
Total shareholders' equity $ 1,337,494 1,342,296 1,230,592
========= ========== =========
See accompanying notes to consolidated financial statements.
</TABLE>
F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies and Other Information
(a) Fiscal Year: The fiscal year ends on the last Wednesday in June.
Fiscal years ended 1997, 1996 and 1995 comprised 52 weeks.
(b) Basis of Consolidation: The consolidated financial statements
include the accounts of Winn-Dixie Stores, Inc. and its subsidiaries
which operate as a major food retailer in fourteen states and the
Bahama Islands.
(c) Acquisition: On March 26, 1995, the Company acquired Thriftway,
Inc., a twenty-five store supermarket chain operating in Ohio and
Kentucky in a stock-for-stock transaction which is not reflected in the
statement of cashflows. This acquisition has been accounted for using
the purchase method.
(d) Cash and Cash Equivalents: Cash equivalents consist of highly
liquid investments with a maturity of three months or less when
purchased. Cash and cash equivalents are stated at cost plus accrued
interest, which approximates market.
(e) Inventories: Inventories are stated at the lower of cost or
market. The "dollar value" last-in, first-out (LIFO) method is used to
determine the cost of approximately 90% of inventories consisting
primarily of merchandise in stores and distribution warehouses.
Manufacturing and produce inventories are valued at the lower of
first-in, first-out (FIFO) cost or market. Elements of cost included in
manufacturing inventories consist of material, direct labor and plant
overhead.
(f) Marketable Securities: Included in investments and other assets
was $19,400,000 at June 25, 1997, consisting principally of marketable
equity securities categorized as available-for-sale. Available-for-sale
securities are recorded at fair value. Unrealized holding gains and
losses, net of the related tax effect, are excluded from earnings and
reported as a separate of component of shareholders' equity until
realized. A decline in the fair value of available-for-sale securities
below cost that is deemed other than temporary is charged to earnings,
resulting in the establishment of a new cost basis for the security.
Realized gains and losses are included in earnings and are derived using
the specific identification method for determining the cost of
securities sold.
(g) Financial Instruments: Interest rate swaps are accounted for
under the accrual method. Net interest paid or received on these
instruments is included in operating and administrative expense. See
Note 6(b) for additional information on interest rate swap agreements.
F-11
<PAGE>
1. Summary of Significant Accounting Policies and Other Information,
continued
(h) Income Taxes: Deferred tax assets and liabilities are recognized
for the estimated 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 the enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered
or settled.
(i) Self-insurance: Self-insurance reserves are established for
automobile and general liability, workers' compensation and property
loss costs based on claims filed and claims incurred but not reported,
with a maximum per occurrence of $2,000,000 for automobile and general
liability and $1,000,000 for workers' compensation. Self- insurance
reserves are established for property losses with a maximum annual
aggregate of $5,000,000 and a $100,000 per occurrence deductible after
the aggregate is obtained. The Company is insured for insurance costs
in excess of these limits.
(j) Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and
liabilities at 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.
(k) Property, Plant and Equipment: Property, plant and equipment are
stated at historical cost. Depreciation is provided over the estimated
useful lives by the straight-line method or by methods that produce
results similar to the straight-line method. Amortization of
improvements to leased premises is provided principally by the
straight-line method over the periods of the leases or the estimated
useful lives of the improvements, whichever is less.
The Company reviews its property, plant and equipment for
impairment whenever events or changes in circumstances indicate the
carrying value of an asset may not be recoverable. Recoverability is
measured by comparison of the carrying amount to the net cash flows
expected to be generated by the asset.
(l) Store Opening and Closing Costs: The costs of opening new stores
and closing of old stores are charged to earnings in the year incurred.
F-12
<PAGE>
1. Summary of Significant Accounting Policies and Other Information,
continued
(m) Earnings Per Share: The number of shares used in the calculation
for 1997, 1996 and 1995 amounted to 150,288,694, 151,577,205 and
149,434,006, respectively, which is the weighted average number of
shares of common stock outstanding during each year. All share and per
share amounts have been retroactively restated to reflect the 2-for-1
stock split effected on November 10, 1995.
During February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 128, "Earnings
Per Share," (SFAS 128). SFAS 128 governs the computation, presentation,
and disclosure requirements for earnings per share (EPS) for entities
with publicly held common stock. SFAS 128 was issued to simplify the
computation of EPS and replaces the Primary and Fully Diluted EPS
calculations currently in use with calculations of Basic and Diluted
EPS. SFAS 128 is effective for financial statements for both interim
and annual periods ending after December 15, 1997, and earlier
application is not permitted. The Company will begin to calculate its
EPS in compliance with SFAS 128 in the quarter ending January 7, 1998.
The adoption of this Statement will not materially affect the Company's
earnings per share.
(n) Stock-Based Compensation: During fiscal year 1996, the Company
adopted Statement of Financial Accounting Standard No. 123, "Accounting
for Stock-Based Compensation" (SFAS 123), which establishes a fair value
based method of accounting for stock-based compensation plans. Prior to
fiscal year 1996, the Company followed the intrinsic value method set
forth in APB Opinion 25, "Accounting for Stock Issued to Employees."
Since the Company historically recorded compensation expense under APB
Opinion 25 for its performance based plans, the adoption of this
Standard in 1996 had no material effect on the Company's financial
statements (see Note 7).
(o) Reclassification: Certain prior year amounts have been
reclassified to conform with the current year's presentation.
2. Accounts Receivable
Accounts receivable at year-end were as follows:
1997 1996
---- ----
Amounts in thousands
Trade and other receivables $ 76,471 78,698
Construction advances 100,907 81,607
-------- -------
177,378 160,305
Less: Allowance for doubtful items 1,699 1,860
-------- -------
$ 175,679 158,445
F-13
<PAGE>
3. Inventories
At June 25, 1997, inventories valued by the LIFO method would have been
$224,999,000 higher ($222,341,000 higher at June 26, 1996) if they were stated
at the lower of FIFO cost or market. If the FIFO method inventory valuation
had been used for the year ended June 25, 1997, reported net earnings would
have been $1,624,000 or $0.01 per share higher ($6,022,000 or $0.04 per share
higher in 1996 and $4,625,000 or $0.03 per share higher in 1995).
4. Property, Plant and Equipment
Property, plant and equipment consists of the following:
1997 1996
---- ----
Amounts in thousands
Land $ 8,862 2,459
Buildings 32,442 25,962
Furniture, fixtures, machinery and equipment 2,149,817 1,915,937
Transportation equipment 124,419 117,242
Improvements to leased premises 435,837 397,464
Construction in progress 62,224 49,493
--------- ---------
2,813,601 2,508,557
Less: Accumulated depreciation and amortization 1,723,198 1,553,990
--------- ---------
1,090,403 954,567
Leased property under capital leases, less accumulated
amortization of $37,090,000 ($37,373,000 in 1996) 38,278 44,282
--------- ---------
Net property, plant and equipment $ 1,128,681 998,849
The Company had no non-cash additions to leased property for 1997 or
1996.
F-14
<PAGE>
5. Income Taxes
The provision for income taxes consisted of:
Current Deferred Total
Amounts in thousands
1997
Federal $ 115,347 (17,440) 97,907
State 17,640 (548) 17,092
------- -------- -------
$ 132,987 (17,988) 114,999
======= ========= =======
1996
Federal $ 117,136 (7,523) 109,613
State 22,251 (173) 22,078
------- ------- -------
$ 139,387 (7,696) 131,691
======= ======= =======
1995
Federal $ 89,648 9,326 98,974
State 21,800 1,034 22,834
------- ------- -------
$ 111,448 10,360 121,808
======= ======= =======
The following reconciles the above provision to the Federal statutory
income tax rate:
1997 1996 1995
---- ---- ----
Federal statutory income tax rate 35.0 % 35.0 % 35.0 %
State and local income taxes, net of federal
income tax benefits 3.1 3.5 4.3
Other tax credits (0.6) (0.2) (1.1)
Life insurance (2.1) (3.1) (2.1)
Other, net 0.6 (1.2) (1.7)
------ ----- -----
36.0 % 34.0 % 34.4 %
The effective tax rate for 1997 reflects a change made by the Health
Insurance Portability and Accountability Act of 1996 whereby certain
deductions for interest relating to indebtedness with respect to certain
corporate owned life insurance (COLI) policies are being phased out over a
three-year period.
In addition to the provision for income taxes presented above, the
Company recorded deferred taxes of $1,105,000 in 1997 related to the
unrealized gain on marketable securities.
F-15
<PAGE>
5. Income Taxes, continued
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred
liabilities at June 25, 1997, June 26, 1996 and June 28, 1995 are
presented below:
1997 1996 1995
------ ------ ------
Amounts in thousands
Deferred tax assets:
Reserve for insurance claims
and self-insurance $ 57,169 58,501 60,050
Reserve for vacant store leases 14,521 10,319 7,738
Unearned promotional allowance 12,520 7,568 3,642
Reserve for accrued vacations 10,145 9,278 8,827
State net operating loss carry forwards 7,410 6,962 7,174
Excess of book over tax depreciation 11,033 10,026 9,088
Excess of book over tax rent expense 1,482 1,133 923
Excess of book over tax retirement expense 12,565 10,750 8,046
Uniform capitalization of inventory 6,797 5,181 4,602
Other, net 31,366 25,464 14,824
------- ------- -------
Total gross deferred tax assets 165,008 145,182 124,914
Less: Valuation allowance 7,314 6,896 6,487
------- ------- -------
Net deferred tax assets 157,694 138,286 118,427
------- ------- -------
Deferred tax liabilities:
Excess of tax over book depreciation (16,312) (18,514) (16,036)
Bahamas subsidiary foreign earnings (10,680) (11,506) (11,535)
Unrealized gain on marketable securities (1,105) - -
Other, net (17,879) (13,429) (3,717)
------- ------- -------
Total gross deferred tax liabilities (45,976) (43,449) (31,288)
------- ------- -------
Net deferred tax assets $ 111,718 94,837 87,139
======= ======= =======
Current deferred income taxes of $89,589,000 and $72,105,000 for 1997
and 1996, respectively, are included in the prepaid expenses in the
accompanying consolidated balance sheets.
The Company believes the results of future operations will generate
sufficient taxable income to realize the deferred tax assets.
F-16
<PAGE>
6. Financing
(a) Credit Arrangements: The Company has available a $500.0 million
commercial paper program. As of June 25, 1997, there was $380.0
million outstanding as compared to $110.0 million outstanding on
June 26, 1996. The average interest rate on the commercial paper
outstanding on June 25, 1997 was 5.7% as compared to 5.5% on June
26, 1996. The Company also has short-term lines of credit totaling
$445.0 million. The lines of credit are available when needed
during the year and are renewable on an annual basis. The Company
is not required to maintain compensating bank balances in
connection with these lines of credit. There were no short-term
borrowings against bank lines of credit as of June 25, 1997 or
June 26, 1996.
The carrying amount of short-term borrowings approximates fair
value because of their short-term maturity. As such, the Company
is not exposed to a significant amount of interest rate risk.
(b) Interest Rate Swap: The Company has entered into interest rate
swap agreements to reduce the impact of changes in rental payments
on retail locations, distribution facilities and manufacturing
facilities that have a lease term of 25 years and whose primary rent
expense fluctuates with the commercial paper (CP) interest rate.
At June 25, 1997, the Company had outstanding four interest rate
swap agreements, having a notional principal amount of $50.0
million each, with an investment bank. These agreements
effectively change the Company's exposure on its leased real estate
with floating rental payments to fixed rental payments based on a
7.59% interest rate. The interest rate swap agreements mature on
June 30,1998, 2001, 2002 and 2003. In addition, the table below
reflects an additional interest rate swap agreement, having a
notional principal amount of $50.0 million, that does not become
effective until the termination date of the interest rate swap
agreement that matures on June 30, 1998. The Company is exposed
to credit loss in the event of nonperformance by the other party
to these interest rate swap agreements. However, the Company does
not anticipate nonperformance by the counterpart.
Since current short-term interest rates at June 25, 1997, are below the
7.59% rate of these contracts, the estimated negative value of these
swaps was approximately $10.9 million.
The table below presents notional amounts and interest rates by
contractual maturity dates. Notional amounts are used to calculate the
contractual payments to be exchanged under the contracts. Weighted
average variable receive rates are based on implied forward rates in the
yield curve at the reporting date.
F-17
<PAGE>
6. Financing, continued
Expected Maturity Dates
---------------------------------
There-
1998 1999 2000 2001 2002 after Total
---- ---- ---- ---- ---- ------- -----
Amounts in millions
Interest Rate Swaps
Variable to Fixed $ 50 50 50 100 250
Average Pay Rate % 8.00 7.46 7.35 7.57 7.59
Average Receive Rate % 5.96 6.30 6.37 6.43 6.30
7. Stock Compensation Plans
The Company has an employee stock purchase plan, long-term incentive
stock compensation plans and a performance based stock option plan.
Under SFAS 123, purchase discounts for the employee stock purchase plan
and the fair value at date of grant for the long-term incentive stock
compensation plans and the performance based stock option plan are
charged to compensation cost over the vesting or performance period.
The fair value of each grant under the performance based stock option
plan was estimated on the date of the grant using the Black-Scholes
option pricing model under the following assumptions: risk-free interest
rate of 7.0%; dividend yield of 2.8%; expected lives of 7years; and
volatility of .225.
The compensation costs that have been charged against income for these
stock compensation plans was $10.1 million in 1997 and $5.7 million in
1996. In 1995, the Company accounted for these programs under APB
Opinion 25 and compensation cost of $2.3 million was recorded.
(a) Stock Purchase Plan: The Company has a stock purchase plan in
effect for associates. Under the terms of this Plan, the Company may
grant options to purchase shares of the Company's common stock at a
price not less than the greater of 85% of the fair value at the date of
grant or $1.00. During fiscal year 1995, 602,546 shares (pre-split) of
common stock were sold to associates at an aggregate price of
$25,909,478. During fiscal year 1996, 1,069,251 shares (pre-split) of
common stock were sold to associates at an aggregate price of
$54,531,801. On October 2, 1996, the shareholders approved an amendment
to the Revised Winn-Dixie Stock Purchase Plan for Employees, so as to
make an additional 2,000,000 shares of the Company's common stock
available for sale. There are 2,392,626 shares of the Company's common
stock available for the grant of options under the Plan.
Loans to associates for the purchase of the Company's common stock
are reported in the financial statements as a reduction of Shareholders'
Equity, rather than as a current asset. Loans outstanding were
$11,882,000 and $24,945,000 at June 25, 1997 and June 26, 1996,
respectively.
F-18
<PAGE>
7. Stock Compensation Plans, continued
(b) Stock Compensation Plans: The Company has long-term incentive
stock compensation plans. Under these programs the Company issues
restricted shares of the Company's common stock to eligible management
associates. Restricted shares issued and the weighted average fair
value on the grant date are as follows: 150,338 shares ($35.21) in 1997;
42,076 shares ($27.88) in 1996; and 48,708 shares ($22.44) in 1995. The
vesting of these shares are contingent upon certain specified goals
being attained over a three year period.
(c) Stock Option Plan: Under the Company's Key Employee Stock Option
Plan, 2,000,000 shares of the Company's common stock were made available
for grant at an exercise price of no less than the market value at date
of grant. Options granted under this performance based stock option
plan are earned over a two year period, if certain performance goals are
attained. The options for 226,000 shares granted in 1992 at an exercise
price of $21.063 have been earned and will expire on December 31, 1998.
The options for 466,000 shares granted in 1994 at an exercise price of
$22.438 have also been earned and expire on January 15, 2001. The
options for 8,000 shares granted in 1995 at an exercise price of $27.938
have been earned and expire on January 15, 2001.
On July 29, 1996, the Compensation Committee approved the grant of
options for 237,000 shares, effective June 19, 1996, at an exercise
price of $34.625 ($9.84 fair value of option). Of these options
granted, 118,500 would have been exercisable on June 25, 1997 but were
not earned. These options will now become exercisable on June 24, 1998,
if earned. The remaining 118,500 shares will become exercisable on June
30, 1999, if earned. These options expire on January 15, 2003.
Changes in options under these plans during the years ended June
25, 1997, June 26, 1996 and June 28, 1995, were as follows:
F-19
<PAGE>
7. Stock Compensation Plans, continued
Weighted
Average
Number of Option Price
Shares Per Share
--------- ------------
Outstanding - June 29, 1994 956,000 $19.85
Granted 8,000 $27.94
Exercised (58,000) $15.43
Forfeited (30,000) $22.44
------- ------
Outstanding - June28, 1995 876,000 $20.13
Granted - $ -
Exercised (236,000) $14.94
Forfeited (10,000) $22.44
------- ------
Outstanding - June 26, 1996 630,000 $22.04
Granted 237,000 $34.63
Exercised (142,000) $21.97
Forfeited (22,000) $34.63
------- ------
Outstanding -June 25, 1997 703,000 $25.90
======= ======
Exercisable -June 25, 1997 488,000 $22.05
======= ======
Shares available for additional grant 713,000
=======
The number of shares exercisable and their weighted average exercise
price at the end of the year are as follows: 488,000 shares ($22.05) in
1997; 389,000 shares ($21.67) in 1996; and 650,000 shares ($19.26) in
1995. At June 25, 1997, the 703,000 options outstanding have a weighted
average contractual life of 4.1 years.
8. Leases
(a) Leasing Arrangements: There were 1,466 leases in effect on store
locations and other properties at June 25, 1997. Of these 1,466 leases,
44 store leases and 2 warehouse and manufacturing facility leases are
classified as capital leases. Substantially all store leases will
expire during the next twenty years and the warehouse and manufacturing
facility leases will expire during the next twenty-five years. However,
in the normal course of business, it is expected that these leases will
be renewed or replaced by leases on other properties.
The rental payments on substantially all store leases are based on
a minimum rental plus a contingent rental which is based on a percentage
of the store's sales in excess of stipulated amounts. Most of the
Company's leases contain renewal options for five-year periods at fixed
rentals.
F-20
<PAGE>
8. Leases, continued
(b) Leases: The following is an analysis of the leased property under
capital leases by major classes:
Asset balances at
June 25, 1997 June 26, 1996
------------- -------------
Amounts in thousands
Store facilities $ 59,646 65,933
Warehouses and manufacturing facilities 15,722 15,722
------- -------
75,368 81,655
Less: Accumulated amortization 37,090 37,373
------- -------
$ 38,278 44,282
======= =======
The following is a schedule by year of future minimum lease payments
under capital and operating leases, together with the present value of
the net minimum lease payments as of June 25, 1997.
Capital Operating
------- ---------
Amounts in thousands
Fiscal Year:
1998 $ 10,111 292,491
1999 9,764 284,431
2000 9,633 280,631
2001 9,638 275,793
2002 9,699 271,404
Later years 61,347 2,592,409
------- ---------
Total minimum lease payments 110,192 3,997,159
=========
Less: Amount representing estimated taxes,
maintenance and insurance costs included in
total minimum lease payments 2,286
-------
Net minimum lease payments 107,906
Less: Amount representing interest 50,857
-------
Present value of net minimum lease payments $ 57,049
=======
Rental payments under operating leases including, where applicable, real
estate taxes and other expenses are as follows:
1997 1996 1995
---- ---- ----
Amounts in thousands
Minimum rentals $ 276,259 254,705 218,921
Contingent rentals 2,618 3,320 3,323
------- ------- -------
$ 278,877 258,025 222,244
======= ======= =======
F-21
<PAGE>
9. Commitments and Contingent Liabilities
(a) Associate Benefit Programs: The Company has noncontributory,
trusteed profit sharing retirement programs which are in effect for
eligible associates and may be amended or terminated at any time.
Charges to earnings for contributions to the programs amounted to
$62,250,000, $62,200,000 and $55,250,000 in 1997, 1996 and 1995,
respectively.
In addition to providing profit sharing benefits, the Company
makes group insurance available to early retirees from the time they
retire until age 65 when they qualify for Medicare/Medicaid. Currently,
the early retiree group constitutes 116 associates. This group of
retirees bear the entire costs of this plan, which is maintained totally
separate from the Company's regular group insurance plan. The Company
reserves the right to modify these benefits.
(b) Defined Benefit Plan: The Company has a Management Security Plan
(MSP), which is a non-qualified defined benefit plan providing
disability, death and retirement benefits to 636 qualified active
associates of the Company and 382 former participants. Total MSP cost
charged to operations was $5,485,000, $4,942,000 and $4,979,000 in 1997,
1996 and 1995, respectively. The projected benefit obligation at June
25, 1997 was approximately $38,103,000. The effective discount rate
used in determining the net periodic MSP cost was 8.0% for 1997, 1996
and 1995.
Life insurance policies, which are not considered as MSP assets
for liability accrual computations, were purchased to fund the MSP
payments. These insurance policies are shown on the balance sheet at
their cash surrender values, net of policy loans aggregating
$170,479,000 and $154,438,000 at June 25, 1997 and June 26, 1996,
respectively.
The Company holds life insurance on a broad-based group of qualified
associates. These insurance policies are shown on the balance sheet
at their cash surrender value, net of policy loans aggregating
$302,055,000 at June 25, 1997 and $459,583,000 at June 26, 1996.
(c) Supplemental Retirement Plan: The Company has a deferred
compensation Supplemental Retirement Plan in effect for eligible
management associates. At June 25, 1997, the Company's liability under
this program was $7.6 million.
(d) Litigation: There are pending against the Company various claims
and lawsuits arising in the normal course of business, including suits
charging violations of certain civil rights laws. In addition, the
Company is a party to various proceedings arising under federal, state
or local regulations protecting the environment. Management is of the
opinion that any liability which might result from any such claim,
lawsuit or proceeding will not have a material adverse effect on the
Company's consolidated earnings or financial position.
F-22
<PAGE>
10. Related Party Transactions
The Company is self-insured for purposes of employee group life,
medical, accident and sickness insurance, with American Heritage Life
Insurance Company, a related party, providing administrative services
and expenses for medical and accident claims. American Heritage Life
Insurance Company also financed the development and expansion of certain
retail stores. Total payments aggregating $29,995,000, $25,001,000 and
$13,442,000 were made in 1997, 1996 and 1995, respectively.
11. Quarterly Results of Operations (Unaudited)
The following is a summary of the unaudited quarterly results of
operations for the years ended June 25, 1997, June 26, 1996 and June 28,
1995:
<TABLE>
<CAPTION>
Quarters Ended
Sept. 18 Jan. 8 April 2 June 25
1997 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
--------- --------- --------- ---------
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,985,702 4,057,174 3,114,029 3,061,810
Gross profit on sales $ 740,723 989,319 790,258 795,553
Net earnings $ 47,033 47,687 57,343 52,380
Earnings per share $ 0.31 0.32 0.38 0.35
Net LIFO charge (credit)$ 3,666 3,666 3,055 (8,763)
Net LIFO charge (credit)
per share $ 0.02 0.02 0.01 (0.04)
Dividends per share $ 0.16 0.32 0.24 0.24
Market price range $ 36.13-32.75 35.38-31.13 34.13-29.88 42.38-32.00
</TABLE>
<TABLE>
<CAPTION>
Quarters Ended
Sept. 20 Jan. 10 April 3 June 26
1996 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
--------- --------- --------- ---------
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,934,958 3,972,563 3,035,323 3,012,644
Gross profit on sales $ 677,559 946,312 742,820 726,553
Net earnings $ 45,877 72,460 63,252 74,045
Earnings per share $ 0.30 0.48 0.42 0.49
Net LIFO charge (credit)$ 3,666 2,444 1,833 (1,921)
Net LIFO charge (credit)
per share $ 0.03 0.01 0.01 (0.01)
Dividends per share $ 0.140 0.295 0.225 0.225
Market price range $ 30.50-28.06 37.50-29.69 38.38-33.63 35.63-31.88
</TABLE>
F-23
<PAGE>
11. Quarterly Results of Operations (Unaudited), continued
<TABLE>
<CAPTION>
Quarters Ended
Sept. 21 Jan. 11 April 5 June 28
1995 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
--------- --------- --------- ---------
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,590,364 3,537,824 2,775,842 2,883,813
Gross profit on sales $ 590,546 809,912 642,018 680,831
Net earnings $ 40,045 67,472 56,936 67,734
Earnings per share $ 0.27 0.45 0.38 0.45
Net LIFO charge (credit)$ 1,690 2,253 2,816 (2,134)
Net LIFO charge (credit)
per share $ 0.01 0.01 0.02 (0.01)
Dividends per share $ 0.13 0.26 0.195 0.195
Market price range $ 26.82-21.32 27.25-24.50 28.57-25.94 28.94-27.32
</TABLE>
During 1997, 1996 and 1995, the fourth quarter results reflect a change
from the estimate of inflation used in the calculation of LIFO inventory to
the actual rate experienced by the Company of 1.9% to 0.2%, 1.2% to 0.8% and
1.6% to 0.6%, respectively.
<TABLE>
<CAPTION>
Fourth Quarter Results of Operations
------------------------------------
June 25, June 26, June 28,
1997 1996 1995
(12 weeks) (12 weeks) (12 weeks)
--------- --------- ---------
Amounts in thousands
<S> <C> <C> <C>
Net sales $ 3,061,810 3,012,644 2,883,813
Cost of sales 2,266,257 2,286,091 2,202,982
--------- --------- ---------
Gross profit on sales 795,553 726,553 680,831
Operating and administrative expenses 738,958 647,429 607,460
--------- --------- ---------
Operating income 56,595 79,124 73,371
Cash discounts and other income, net 29,957 30,473 25,749
Interest expense (4,707) (1,640) (2,083)
--------- --------- ---------
Earnings before income taxes 81,845 107,957 97,037
Income taxes 29,465 33,912 29,303
--------- --------- ---------
Net earnings $ 52,380 74,045 67,734
========= ========= =========
</TABLE>
The effective tax rate during the fourth quarter of fiscal 1995 reflects
the final settlement with the Internal Revenue Service of transactions
pursuant to Section 1804(e)(4) of the Tax Reform Act of 1986 whereby certain
subsidiaries of the Company were able to utilize the benefits of the net
operating losses of certain unaffiliated corporations.
F-24
<PAGE>
INDEPENDENT AUDITORS' REPORT
ON FINANCIAL STATEMENT SCHEDULES
The Shareholders and Board of Directors
Winn-Dixie Stores, Inc.:
Under date of July 28, 1997, we reported on the consolidated balance sheets of
Winn-Dixie Stores, Inc. and subsidiaries as of June 25, 1997 and June 26,
1996, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the years in the three-year period ended
June 25, 1997, as contained in the annual report on Form 10-K for the year
1997. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedules as listed in the accompanying index on page 15 of the
annual report on Form 10-K for the year 1997. These financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such consolidated financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
July 28, 1997
S-1
<PAGE>
Schedule II
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Consolidated Valuation and Qualifying Accounts
Years Ended June 25, 1997, June 26, 1996 and June 28, 1995
(Amounts in thousands)
Balance at Additions Deductions Balance
beginning charged to from at end
Description of year income reserves of year
- - ------------------- --------- ---------- ---------- --------
Year ended June 25, 1997:
Reserves deducted from assets
to which they apply:
Allowance for doubtful receivables $ 1,860 14,318 14,479 1,699
======= ======= ======= ======
Reserves not deducted from assets:
Reserves for insurance claims
and self-insurance:
-Current $ 61,760 81,194 82,735 60,219
-Noncurrent 97,209 - 2,426 94,783
-------- ------- ------- -------
$158,969 81,194 85,161 155,002
======== ======= ======= ========
Year ended June 26, 1996:
Reserves deducted from assets
to which they apply:
Allowance for doubtful receivables $ 1,105 20,150 19,395 1,860
======= ======= ======= ======
Reserves not deducted from assets:
Reserves for insurance claims and
self-insurance:
-Current $ 59,373 85,744 83,357 61,760
-Noncurrent 103,384 2,039 8,214 97,209
------- ------- ------- -------
$162,757 87,783 91,571 158,969
======= ======= ======= =======
Year ended June 28, 1995:
Reserves deducted from assets
to which they apply:
Allowance for doubtful receivables $ 834 12,783 12,512 1,105
======= ======= ======= ======
Reserves not deducted from assets:
Reserves for insurance claims and
self-insurance:
-Current $ 60,510 81,323 82,460 59,373
-Noncurrent 105,417 - 2,033 103,384
------- ------- ------- -------
$ 165,927 81,323 84,493 162,757
======= ======= ======= =======
S-2
<PAGE>
Exhibit 11.1
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
Years ended June 25, 1997, June 26, 1996 and June 28, 1995
(Dollars in thousands except per share data)
June 25, 1997 June 26, 1996 June 28, 1995
------------- ------------- -------------
Average number of shares of
common stock outstanding 150,288,694 151,577,205 149,434,006
=========== =========== ===========
Net earnings $ 204,443 255,634 232,187
=========== =========== ===========
Earnings per share $ 1.36 1.69 1.56
=========== =========== ===========
<PAGE>
Exhibit 21.1
WINN-DIXIE STORES, INC.
SUBSIDIARIES OF REGISTRANT
The Registrant (Winn-Dixie Stores, Inc.) has no parents.
The following list includes all of the subsidiaries of the Registrant
except nineteen wholly-owned inactive domestic subsidiaries of the Registrant
and/or its subsidiaries.
All of the subsidiaries listed below are included in the Consolidated
Financial Statements. The Consolidated Financial Statements also include the
nineteen presently inactive domestic subsidiaries mentioned above.
Each of the following subsidiaries is owned by the Registrant except
that two subsidiaries, the names of which are indented, are owned by the
subsidiary named immediately above each indentation. All subsidiaries are
wholly-owned except for Bahamas Supermarkets Limited, which is owned
approximately 78% by W-D (Bahamas) Limited.
Subsidiary State of Incorporation
------------------------- ----------------------
Astor Products, Inc. Florida
Deep South Products, Inc. Florida
Dixie Packers, Inc. Florida
Fairway Food Stores Co., Inc. Florida
Monterey Canning Co. California
W-D (Bahamas) Limited Bahama Islands
Bahamas Supermarkets Limited Bahama Islands
The City Meat Markets Limited Bahama Islands
Winn-Dixie Atlanta, Inc. Florida
Winn-Dixie Charlotte, Inc. Florida
Winn-Dixie Louisiana, Inc. Florida
Winn-Dixie Midwest, Inc. Florida
Winn-Dixie Montgomery, Inc. Kentucky
Winn-Dixie Raleigh, Inc. Florida
Winn-Dixie Texas, Inc. Texas
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITOR'S CONSENT
The Shareholders and the Board of Directors
Winn-Dixie Stores, Inc.:
We consent to the incorporation by reference in the Registration Statement
Nos. 33-42278 and 33-50039 on Form S-8 of Winn-Dixie Stores, Inc. of our
reports dated July 28, 1997, relating to the consolidated balance sheets of
Winn-Dixie Stores Inc. and subsidiaries as of June 25, 1997 and June 26,
1996; and the related consolidated statements of earnings, shareholders'
equity, and cash flows and related financial statement schedules for each
of the years in the three year period ended June 25, 1997, which reports
appear in the June 25, 1997 annual report on Form 10-K of Winn-Dixie Stores,
Inc.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
August 4, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-25-1997
<PERIOD-END> JUN-25-1997
<CASH> 14,116,000
<SECURITIES> 0
<RECEIVABLES> 175,679,000
<ALLOWANCES> 0
<INVENTORY> 1,249,215,000
<CURRENT-ASSETS> 1,587,971,000
<PP&E> 1,128,681,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,941,409,000
<CURRENT-LIABILITIES> 1,392,613,000
<BONDS> 0
0
0
<COMMON> 148,876,000
<OTHER-SE> 1,188,618,000
<TOTAL-LIABILITY-AND-EQUITY> 2,921,409,000
<SALES> 13,218,715,000
<TOTAL-REVENUES> 13,338,150,000
<CGS> 9,902,862,000
<TOTAL-COSTS> 12,996,629,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,079,000
<INCOME-PRETAX> 319,442,000
<INCOME-TAX> 114,999,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 204,443,000
<EPS-PRIMARY> 1.36
<EPS-DILUTED> 0
</TABLE>
