SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 [FEE REQUIRED]
For fiscal year ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number : 1-13536
A. Full title of the plan and the address of the
plan, if different from that of the issuer named below:
Federated Department Stores, Inc. Retirement Income and
Thrift Incentive Plan.
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Federated Department Stores, Inc.
151 West 34th Street
New York, New York 10001
and
7 West Seventh Street
Cincinnati, Ohio 45202
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Financial Statements
December 31, 1995 and 1994
With Independent Auditors' Report Thereon
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
December 31, 1995 and 1994
Index
Independent Auditors' Report
Statements of Net Assets Available for Benefits, with Fund Information -
December 31, 1995 and 1994
Statements of Changes in Net Assets Available for Benefits,
with Fund Information -
Years Ended December 31, 1995 and 1994
Notes to Financial Statements
Independent Auditors' Report
Pension and Profit Sharing Committee
Federated Department Stores, Inc.
Retirement Income and Thrift Incentive Plan:
We have audited the accompanying statements of net assets
available for benefits of Federated Department Stores, Inc.
Retirement Income and Thrift Incentive Plan as of December
31, 1995 and 1994, and the related statements of changes in
net assets available for benefits for the years then ended.
These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an
opinion on these 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 financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan as of December 31, 1995
and 1994 and the changes in net assets available for
benefits for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion
on the basic financial statements taken as a whole. The Fund
Information in the statements of net assets available for
benefits and the statements of changes in net assets
available for benefits is presented for purposes of
additional analysis rather than to present the net assets
available for benefits and changes in net assets available
for benefits of each fund. The Fund Information has been
subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
KPMG Peat Marwick LLP
Cincinnati, Ohio
June 14, 1996
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1995
<CAPTION>
Stability
Diversified Income Thrift Incentive Fund
Fund Fund Fund A Fund B Fund C Fund D Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3)-
Participation in Master Trust $143,822,947 $12,830,469 $230,187,959 $151,535,258 $90,648,217 $15,264,151 $644,289,001
Receivables:
Employer contributions - - - - - 33,739 33,739
Employee contributions - - 1,762,832 1,314,502 896,929 63,592 4,037,855
Total receivables - - 1,762,832 1,314,502 896,929 97,331 4,071,594
Net assets available for benefits $143,822,947 $12,830,469 $231,950,791 $152,849,760 $91,545,146 $15,361,482 $648,360,595
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1994
<CAPTION>
Stability
Diversified Income Thrift Incentive Fund
Fund Fund Fund A Fund B Fund C Fund D Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
U.S. Government securities $ 37,482,271 $12,097,406 $102,606,959 $ - $ - $ - $152,186,636
Corporate debt instruments 16,453,437 3,718,138 95,806,892 - - - 115,978,467
Corporate stock - preferred 315,600 - - - - - 315,600
Corporate stock - common 55,883,987 - - 775 - 758,970 56,643,732
Common/collective trusts 27,092,475 51,599 14,300,294 122,693,047 66,624,540 21,379 230,783,334
Certificates of deposit - - 2,999,716 - - - 2,999,716
Other investments - - 4,965,980 - - - 4,965,980
137,227,770 15,867,143 220,679,841 122,693,822 66,624,540 780,349 563,873,465
Insurance contracts,
at contract value - - 26,608,364 - - - 26,608,364
Total investments 137,227,770 15,867,143 247,288,205 122,693,822 66,624,540 780,349 590,481,829
Receivables:
Employer contributions - - - - - 7,793,520 7,793,520
Employee contributions - - 554,606 447,770 258,126 4,045 1,264,547
Accrued interest and dividends 879,736 232,909 2,267,142 5,211 76 107 3,385,181
Securities sold 242,214 - - - - - 242,214
Total receivables 1,121,950 232,909 2,821,748 452,981 258,202 7,797,672 12,685,462
Cash 8,990 - 12,146 1 - 1 21,138
Total assets 138,358,710 16,100,052 250,122,099 123,146,804 66,882,742 8,578,022 603,188,429
Accrued liabilities:
Securities purchased 328,397 - - - - - 328,397
Other accrued liabilities 166,442 13,922 145,320 136,453 8,179 1,651 471,967
Total liabilities 494,839 13,922 145,320 136,453 8,179 1,651 800,364
Net assets available for benefits $137,863,871 $16,086,130 $249,976,779 $123,010,351 $66,874,563 $8,576,371 $602,388,065
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1995
<CAPTION>
Stability
Diversified Income Thrift Incentive Fund
Fund Fund Fund A Fund B Fund C Fund D Total
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Net investment income -
Plan interest in Master Trust
investment income (Note 3) $ 33,434,616 $ 1,220,110 $ 19,879,755 $ 37,022,253 $24,872,815 $ 2,032,764 $118,462,313
Contributions:
Employer - - 24,155 11,702 4,674 5,034,217 5,074,748
Employee - - 13,111,812 14,579,661 9,578,634 542,517 37,812,624
Total contributions - - 13,135,967 14,591,363 9,583,308 5,576,734 42,887,372
Total additions 33,434,616 1,220,110 33,015,722 51,613,616 34,456,123 7,609,498 161,349,685
Deductions -
Distributions 25,989,769 5,886,209 51,438,577 20,217,307 10,480,554 1,364,739 115,377,155
Interfund transfers (1,485,771) 1,410,438 396,867 (1,556,900) 695,014 540,352 -
Net increase (decrease) 5,959,076 (3,255,661) (18,025,988) 29,839,409 24,670,583 6,785,111 45,972,530
Net assets available for benefits:
Beginning of year 137,863,871 16,086,130 249,976,779 123,010,351 66,874,563 8,576,371 602,388,065
End of year $143,822,947 $12,830,469 $231,950,791 $152,849,760 $91,545,146 $15,361,482 $648,360,595
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1994
<CAPTION>
Stability
Diversified Income Thrift Incentive Fund
Fund Fund Fund A Fund B Fund C Fund D Total
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Net investment income (loss):
Interest $ 4,040,110 $ 857,447 $ 14,555,550 $ 5,292,939 $ 337,176 $ 2,203 $ 25,085,425
Dividends 2,173,662 - - - 1,552,720 - 3,726,382
Net depreciation in fair value of
investments (note 3) (10,006,227) (328,118) (6,633,050) (5,260,250) (1,065,213) (114,622) (23,407,480)
Net investment income (loss) (3,792,455) 529,329 7,922,500 32,689 824,683 (112,419) 5,404,327
Contributions:
Employer - - - - - 7,793,520 7,793,520
Employee - - 17,919,930 14,758,669 8,502,675 136,521 41,317,795
Total contributions - - 17,919,930 14,758,669 8,502,675 7,930,041 49,111,315
Total additions (3,792,455) 529,329 25,842,430 14,791,358 9,327,358 7,817,622 54,515,642
Deductions:
Distributions 19,066,038 7,057,4244 5,097,364 15,206,122 6,796,213 45,239 93,268,400
Administrative expenses (note 6) 631,212 47,296 562,641 686,153 58,706 2,829 1,988,837
Total deductions 19,697,250 7,104,720 45,660,005 15,892,275 6,854,919 48,068 95,257,237
Interfund transfers (526,189) 526,189 (3,643,407) 1,659,526 1,177,064 806,817 -
Net increase (decrease) (24,015,894) (6,049,202) (23,460,982) 558,609 3,649,503 8,576,371 (40,741,595)
Net assets available for benefits:
Beginning of year 161,879,765 22,135,332 273,437,761 122,451,742 63,225,060 - 643,129,660
End of year $137,863,871 $16,086,130 $249,976,779 $123,010,351 $66,874,563 $8,576,371 $602,388,065
The accompanying notes are an integral part of these financial statements.
</TABLE>
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements
December 31, 1995 and 1994
1. Description of the Plan
The following brief description of the Federated Department
Stores, Inc. Retirement Income and Thrift Incentive Plan (the
"Plan") is provided for general information purposes only.
Participants should refer to the Plan document for more
complete information.
General
The Plan is sponsored by Federated Department Stores, Inc.
("Company"). The Plan consists of two parts: a retirement
income plan and a thrift incentive plan. The Plan was adopted
in 1953 and is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") and U.S. tax
law.
Eligibility and Vesting
Employees are generally eligible for participation in the Plan
after one year of service of at least 1,000 hours.
Participants are immediately 100% vested in their own and the
Company's contributions.
Participant Accounts
An account is maintained for each participant in the Plan
which shows the participant's separate interest in the
Retirement Income and Thrift Incentive portions of the Plan.
At the end of each year, the Company's contributions are
allocated to individual accounts for participants who did not
make a withdrawal of basic (first 5%) savings during the year,
in the proportion that each participant's basic savings made
and not withdrawn during the year bears to the aggregate
amounts of basic savings made and not withdrawn by all
participants during the year. Additional voluntary
contributions (any contributions in excess of 5% of
compensation) do not participate in the Company's allocation.
Company contributions are made at year end only to persons who
are active participants on the last day of the year. At the
end of each month, investment earnings for each fund are
allocated to individual accounts on amounts not withdrawn
during the month in the proportion that each such
participant's interest at the beginning of the month bears to
the total of all such participants' interests in that fund at
the beginning of such month less withdrawals.
Retirement Income
Retirement Income interests represent Company contributions to
the Retirement Income portion of the Plan prior to January 1,
1984 and the earnings on such contributions. A defined
benefit pension plan (the "Pension Plan") was adopted as of
January 1, 1984. With the Pension Plan in place, the Company
continues to make contributions to the Thrift Incentive
portion of the Plan as described below and has the right to
make additional contributions to the Retirement Income portion
of the Plan.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements - Continued
December 31, 1995 and 1994
Thrift Incentive
The Thrift Incentive portion of the Plan provides for
voluntary contributions by participating employees and for
Company contributions matching a portion of the participant's
contributions.
Participants may elect to contribute to the Thrift Incentive
portion of the Plan an amount equal to 1% to 10% (subject to
certain limitations) of the participant's eligible
compensation. Alternatively, a participant may elect to make
these contributions (subject to certain limitations) on a pre-
tax basis pursuant to Section 401(k) of the Internal Revenue
Code. Contributions up to 5% of eligible compensation are
basic savings which are eligible for matching Company
contributions. For 1984 and subsequent years, the Company's
annual contribution is an amount equal to the greater of 2% of
the Company's income before federal income taxes from
participating divisions or the amount necessary to match 20%
of participants' basic savings. The Company contributed 20.0%
and 27.3% of participants' basic savings for years ended
December 31, 1995 and 1994, respectively.
Participants are permitted to make withdrawals of their after-
tax contributions to the Thrift Incentive portion of the Plan
at any time. Withdrawals of pre-tax contributions are subject
to the hardship rules of Section 401 of the Internal Revenue
Code. At termination, participants may elect to receive the
balance of their account either in a lump sum or an annuity
contract.
2. Summary of Significant Accounting Policies
a) Master Trust
Effective January 1, 1995, the Plan entered into the Federated
Department Stores, Inc. Defined Contribution Plan Master Trust
(the "Master Trust") Agreement with its trustee. Under the terms
of the Master Trust, the trustee serves as trustee custodian for
the Master Trust which was established for the investment of
assets of the Plan and of the Federated Savings Plan for
Employees of Lazarus PA, Inc., ("Lazarus PA Plan") also sponsored
by the Company.
The Federated Department Stores, Inc. Pension and Profit
Sharing Committee selects a diversified group of investment
managers who determine purchases and sales of investments
for their respective portions of the assets allocated to
them to manage in the Master Trust.
b) Basis of Presentation
The accompanying financial statements of the Plan have been
prepared on the accrual basis of accounting.
c) Investments
The fair value of the Plan's participation in the Master
Trust is based on the beginning of year value of the Plan's
participation in the Master Trust plus allocated investment
income, plus actual contributions, less actual distributions
and allocated administrative expenses.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements - Continued
December 31, 1995 and 1994
Other investments are reported at fair value as determined
by quoted market prices on an active market. Corporate
bonds are valued based on yields currently available on
comparable securities of issuers with similar credit
ratings. Purchases and sales of securities are recorded on
a trade-date basis. Realized gains and losses on the sale
of securities are reported on the average cost method.
Cash equivalents include highly liquid temporary cash
investments.
Dividend income is recorded on the ex-dividend date. Income
from other investments is recorded as earned on an accrual
basis.
d) Insurance Contracts
Insurance contracts are valued at contract value, which
represents contributions made under the contract, plus
interest earned, less benefits paid and expenses charged.
e) Use of Estimates
The Plan administrator has made a number of estimates and
assumptions relating to the preparation of these financial
statements. Actual results could differ from these
estimates.
3. Investments
All of the Plan's investments were transferred to the Master
Trust on January 1, 1995 which was established for the
investment of assets of the Plan and of the Lazarus PA Plan.
Each participating plan has an undivided interest in the
Master Trust. The assets of the Master Trust are held by the
trustee. At December 31, 1995, the Plan's interest in the net
assets of the Master Trust was approximately 99.1%.
Investment income and administrative expense relating to the
Master Trust are allocated to the individual plans based upon
monthly balances invested by each plan.
In 1994, the Company was a party to a trust agreement with a
trustee with respect to the operation of the Plan and the
establishment and management of the trust fund.
The trustee under both the Master Trust and previously, in
accordance with the trust agreement, invests all contributions
to the Plan among several investment funds. The funds are:
Diversified Fund - This fund is composed of employer
contributions to the Retirement Income portion of the Plan
and certain amounts transferred when certain plans were
merged, together with the net earnings thereon. All
amounts in this fund are invested in corporate equity and
fixed-income securities, government fixed-income securities
and common/collective trusts.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements - Continued
December 31, 1995 and 1994
Stability Income Fund - This fund consists of balances in the
Retirement Income portion of the Plan of participants who were at
least 60 years of age prior to December 31, 1986, or who have
attained age 55 and who have completed at least ten years of
service and have elected to transfer all or part of their balance
out of the Diversified Fund. All amounts in this fund are
invested in short-term, fixed-income corporate and government
bonds.
Thrift Incentive Funds - These funds include Company and
participants' contributions to the Thrift Incentive portion
of the Plan, together with the net earnings thereon. The
amounts in these funds are invested in four separate
investment options as directed by the participants. Fund A
is invested in fixed-income investments and insurance
contracts. Fund B is composed of common/collective trusts
which invest in a varying mixture of equity securities and
fixed income instruments. Fund C is invested in an equity
index fund consisting of Standard and Poor's 500 stock
investments. Fund D was established on April 1, 1994 and
is invested in the common stock of the Company. Company
contributions are directed to Fund D. Prior to the
establishment of Fund D, Company contributions were
directed to Fund A. Participants may elect to redirect the
value of Company contributions to other investment options
permitted pursuant to the Plan provisions.
The following table presents the fair values or contract values
of investments and total net assets for the Master Trust at
December 31, 1995:
Assets:
Investments at fair value:
Cash and cash equivalents $ 23,449
U. S. Government securities 110,496,670
Corporate debt instruments 75,797,493
Preferred stock 133,239
Common stock 72,016,207
Foreign government securities 4,967,180
Common/collective trusts 278,246,438
Total investments at fair value 541,680,676
Insurance contracts at contract value 111,880,590
Total investments 653,561,266
Receivables:
Securities sold 282,364
Accrued interest, dividend
and other income 2,313,919
Total receivables 2,596,283
Total assets 656,157,549
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements - Continued
December 31, 1995 and 1994
Accrued liabilities:
Due to broker for securities
purchased 5,651,352
Accrued administrative expenses 501,650
Total accrued liabilities 6,153,002
Total net assets $650,004,547
Net investment income for the Master Trust for the years ended
December 31, 1995 is as follows:
Net appreciation in fair value of investments:
Certificates of deposit $ (5,610)
U.S. Government securities 8,514,007
Corporate debt instruments 1,564,391
Preferred stock 9,323
Common stock 19,583,368
Foreign government securities 13,001
Common/collective trusts 60,910,182
Net appreciation in fair
value of investments 90,588,662
Interest 24,425,834
Dividends 4,337,912
Other 2,856,868
Total investment income 122,209,276
Administrative expenses (2,561,490)
Net investment income $119,647,786
The following table presents the fair value of investments held
as of December 31, 1994 by the trustee that represent five
percent or more of the Plan's total net assets.
EB Opening Stock Index Fund $ 84,945,457
EB Opening Asset Allocation Fund 61,371,782
MGT Comm Fund Large Company Fund 30,701,526
(Continued)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Notes to Financial Statements - Continued
December 31, 1995 and 1994
Net appreciation (depreciation) in the fair value of investments
for the year ended December 31, 1994 was as follows:
U. S. Government securities $(12,120,589)
Corporate debt instruments (2,558,302)
Corporate stock-preferred 17,002
Corporate stock-common (2,069,940)
Common/collective trusts (6,669,546)
Certificates of deposit 11,135
Other investments (17,240)
Net depreciation in fair
value of investments $(23,407,480)
4. Plan Termination
Although the Company has not expressed any intent to terminate
the Plan, it may do so at any time. In the event the Plan is
terminated, the Company would have no further obligation to
make contributions, and all sums credited to individual
accounts (after expenses) would be distributed to
participants.
5. Federal Income Taxes
The Plan obtained its latest determination letter on July 31,
1987, in which the Internal Revenue Service stated that the
Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. While the Plan has
been amended since receiving such determination letter, the
Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance
with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in
the Plan's financial statements.
6. Administrative Expenses
Various expenses, including trust, investment, consulting,
actuarial, recordkeeping, legal and audit fees are paid for by
the Plan.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the members of the Pension and Profit Sharing Committee (which is the
administrative committee for the Federated Department Stores, Inc.
Retirement Income and Thrift Incentive Plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Dated: July 1, 1996 By: /s/ John R. Sims
John R. Sims
Chairman of the Pension and Profit
Sharing Committee
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Federated Department Stores, Inc.
We consent to incorporation by reference in this Registration Statement
No. 33-88240 on Form S-8 of Federated Department Stores, Inc. of our
report dated June 14, 1996, relating to the statements of net assets
available for benefits of Federated Department Stores, Inc. Retirement
Income and Thrift Incentive Plan as of December 31, 1995 and 1994, and
the related statements of changes in net assets available for benefits
for the years then ended, which report appears in the December 31, 1995
Annual Report on Form 11-K of Federated Department Stores, Inc. Retirement
Income and Thrift Incentive Plan.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Cincinnat, Ohio
June 25, 1996
