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 Savings
Plan for Employees of Lazarus PA, Inc.
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 SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Financial Statements
December 31, 1995 and 1994
With Independent Auditors' Report Thereon
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
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.
Federated Savings Plan for Employees of Lazarus PA, Inc.
We have audited the accompanying statements of net assets
available for benefits of the Federated Savings Plan for
Employees of Lazarus PA, Inc. 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 audit.
We conducted our audit 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 audit provides 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 audit was 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 plan benefits
and changes in net assets available for plan benefits of each
fund. The Fund Information has been subjected to the auditing
procedures applied in the audit 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 SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1995
<CAPTION>
Loan
Fund A Fund B Fund C Fund D Fund Total
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Participation in Master Trust $ 1,981,324 $ 1,621,860 $ 1,649,816 $ 462,546 $ - $ 5,715,546
Participants' loans - - - - 85,896 85,896
Total investments 1,981,324 1,621,860 1,649,816 462,546 85,896 5,801,442
Receivables:
Employer contributions - - - 6,114 - 6,114
Employee contributions 48,583 46,086 39,827 9,697 - 144,193
Total receivables 48,583 46,086 39,827 15,811 - 150,307
Net assets available for benefits $ 2,029,907 $ 1,667,946 $ 1,689,643 $ 478,357 $ 85,896 $ 5,951,749
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Statement of Net Assets Available For Benefits, with Fund Information
December 31, 1994
<CAPTION>
Clearing Money Managed Index Small
Account Market Income Equity Cap Delaware Loan
Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Money market funds $ 51,003 $1,016,628 $1,767,642 $1,716,091 $1,608,741 $ - $ 1,893 $6,161,998
Other mutual funds - - 10,398 32,823 82,284 344,450 - 469,955
Participants' loans - - - - - - 174,455 174,455
Total investments 51,003 1,016,628 1,778,040 1,748,914 1,691,025 344,450 176,348 6,806,408
Investment income receivable 610 8,626 545 530 497 8,286 43 19,137
Due (to) from other funds (51,613) 3,163 (78,951) 31,998 14,999 130,195 (49,791) -
Total assets - 1,028,417 1,699,634 1,781,442 1,706,521 482,931 126,600 6,825,545
Liabilities:
Accrued liabilities - 638 1,147 1,147 1,105 213 - 4,250
Net assets available for benefits $ - $1,027,779 $1,698,487 $1,780,295 $1,705,416 $ 482,718 $ 126,600 $6,821,295
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1995
<CAPTION>
Fund A Fund B Fund C Fund D
<S> <C> <C> <C> <C>
Additions:
Contributions:
Employee $ 264,593 $ 231,360 $ 210,060 $ 51,355
Employer 221 338 853 106,514
Total contributions 264,814 231,698 210,913 157,869
Net investment income (loss):
Plan interest in Master Trust
investment income (note 3) 213,533 403,422 475,257 93,261
Investment income (loss) - - - -
Total investment income (loss) 213,533 403,422 475,257 93,261
Total additions 478,347 635,120 686,170 251,130
Deductions -
Participant withdrawals 2,417,867 193,638 245,688 65,680
Transfer of assets from PNC to
Master Trust 4,540,250 977,603 950,206 229,196
Interfund transfers, net (570,823) 248,861 298,955 63,711
Net increase (decrease) 2,029,907 1,667,946 1,689,643 478,357
Net assets available for benefits:
Beginning of year - - - -
End of year $ 2,029,907 $ 1,667,946 $ 1,689,643 $ 478,357
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1995
<CAPTION>
Money Managed Index Small
Market Income Equity Cap Delaware Loan
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employee $ - $ - $ - $ - $ - $ - $ 757,368
Employer - - - - - - 107,926
Total contributions - - - - - - 865,294
Net investment income (loss):
Plan interest in Master Trust
investment income (note 3) - - - - - - 1,185,473
Investment income (loss) (2,806) 1,659 1,639 1,557 511 - 2,560
Total investment income (loss) (2,806) 1,659 1,639 1,557 511 - 1,188,033
Total additions (2,806) 1,659 1,639 1,557 511 - 2,053,327
Deductions -
Participant withdrawals - - - - - - 2,922,873
Transfer of assets from PNC to
Master Trust (1,024,973) (1,700,146) (1,781,934) (1,706,973) (483,229) - -
Interfund transfers, net - - - - - (40,704) -
Net increase (decrease) (1,027,779) (1,698,487) (1,780,295) (1,705,416) (482,718) (40,704) -
Net assets available for benefits:
Beginning of year 1,027,779 1,698,487 1,780,295 1,705,416 482,718 126,600 6,821,295
End of year $ - $ - $ - $ - $ - $ 85,896 $5,951,749
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1994
<CAPTION>
Money Managed Index Small
Market Income Equity Cap Delaware Loan
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employee $ 139,453 $ 169,381 $ 284,632 $ 209,056 $ 90,465 $ - $ 892,987
Employer 1,920 3,848 4,359 3,820 1,645 - 15,592
Total contributions 141,373 173,229 288,991 212,876 92,110 - 908,579
Investment income (loss):
Investment income 34,012 117,797 65,803 80,360 16,135 9,720 323,827
Net depreciation in fair value
of investments - (220,745) (51,617) (119,480) (12,806) - (404,648)
Total investment income (loss) 34,012 (102,948) 14,186 (39,120) 3,329 9,720 (80,821)
Total additions 175,385 70,281 303,177 173,756 95,439 9,720 827,758
Deductions:
Participant withdrawals 261,667 367,568 470,247 454,613 122,484 4,066 1,680,645
Administrative expenses (note 6) 8,852 16,573 14,888 15,278 3,633 - 59,224
Total deductions 270,519 384,141 485,135 469,891 126,117 4,066 1,739,869
Interfund transfers, net (72,771) (55,643) (51,781) 45,805 132,978 1,412 -
Net increase (decrease) (167,905) (369,503) (233,739) (250,330) 102,300 7,066 (912,111)
Net assets available for benefits:
Beginning of year 1,195,684 2,067,990 2,014,034 1,955,746 380,418 119,534 7,733,406
End of year $1,027,779 $1,698,487 $1,780,295 $1,705,416 $482,718 $ 126,600 $6,821,295
The accompanying notes are an integral part of these financial statements.
</TABLE>
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements
December 31, 1995 and 1994
1.Description of Plan
The following brief description of Federated Savings Plan for
Employees of Lazarus PA, Inc. (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.
(the "Company") which acquired Joseph Horne Co., Inc.
("Horne's"), the former sponsor of the Plan, on May 26, 1994.
The Plan, established as of July 1, 1987, is a defined
contribution plan and is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan was amended and restated as of January 1, 1995 (the
"Amendment Date") to adopt provisions substantially similar to
the thrift incentive provisions of the The Federated
Department Stores, Inc. Retirement Income and Thrift Incentive
Plan ("RITI"), also sponsored by the Company, and to change
the name of the plan from the Joseph Horne Co., Inc. Thrift
Incentive Plan to the current name.
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 fully vested in the value of their own and
the Company's contributions at all times. Prior to the
Amendment Date, participants became vested in their allocated
share of employer contributions in 20% increments after two
years and became fully vested after six years of credited
service.
Participant Accounts
An account is maintained for each participant in the Plan
which shows the participant's separate interest in 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.
Participants may elect to contribute to 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
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements - Continued
December 31, 1995 and 1994
the Internal Revenue Code. Contributions up to 5% of eligible
compensation are basic savings which are eligible for matching
Company contributions. 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% of participants' basic
savings for year ended December 31, 1995.
Participants are permitted to make withdrawals of their after-
tax contributions to 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.
Prior to the Amendment Date, plan participants could make
regular pre-tax contributions of 2% to 6% of their salaries or
wages. Participants directed their contributions to one or
several investment fund options subject to allocation
limitations set forth in the Plan. Changes in allocation of
future contributions and transfers of presently invested
contributions between funds were permitted pursuant to the
Plan provisions. The employer could match participants'
contributions and credit the participants accounts on a
monthly basis, reduced by forfeitures of nonvested Plan
participants. After January 1994, Horne's elected to
discontinue its employer contribution.
Loans
Prior to the Amendment Date, loans could be granted subject to
specified limitations and only against that portion of a
participant's account that was vested. Loans are
collateralized by the vested portion of the participant's
account and repayments are made through payroll deductions.
All loans bear interest at the prime rate plus two percentage
points on the first day of the calendar quarter in which the
note was signed.
After the Amendment Date, no new participant loans can be
granted from the Plan.
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 the
Company's 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 RITI. As part of the Master Trust formation,
all of the assets held by the PNC Bank Corp. ("PNC"), the
former trustee, were liquidated and transferred to the
Master Trust.
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.
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements - Continued
December 31, 1995 and 1994
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.
Other investments, except for loans, are reported at fair
value as determined by quoted market prices on an active
market. 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.
Outstanding loans in the loan fund are stated at amortized
cost.
Dividend income is recorded on the ex-dividend date. Income
from other investments is recorded as earned on an accrual
basis.
d) 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 RITI. 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 .9%.
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 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.
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements - Continued
December 31, 1995 and 1994
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 current fund
options are Funds A, B, C and D. 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 is invested in the common
stock of the Company. Company contributions are directed to Fund
D. 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
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
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements - Continued
December 31, 1995 and 1994
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,
except for loans, held as of December 31, 1994 that represent
five percent or more of the Plan's net assets.
PNC money market fund $6,161,998
Delaware fund 344,450
Net depreciation in the fair value of investments for the year
ended December 31, 1994 was as follows:
PNC managed income fund $ (220,745)
PNC index equity fund (51,617)
PNC small cap value fund (119,480)
Delaware fund (12,806)
$ (404,648)
(Continued)
FEDERATED SAVINGS PLAN FOR EMPLOYEES OF LAZARUS PA, INC.
Notes to Financial Statements - Continued
December 31, 1995 and 1994
4.Plan Termination
Although it has not expressed any intent to do so, the Company
has the right under the Plan to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination,
participants will become 100 % vested in their accounts, 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 Tax
The Plan obtained its latest determination letter on July 20,
1988, 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 believed that
the Plan was designed and being operated in compliance with
the applicable requirements of the Internal Revenue Code. The
Plan has since received a favorable determination letter dated
April 12, 1996 which states that the Plan, as then designed,
was in compliance with applicable provisions of the Internal
Revenue Code and, therefore, is exempt from Federal income
tax. 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 Savings Plan for Employees of
Lazarus PA, Inc.) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
FEDERATED SAVINGS PLAN FOR EMPLOYEES
OF LAZARUA PA, INC.
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 Savings Plan for Employees of
Lazarus PA, Inc. 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 Savings Plan for Employees of
Lazarus PA, Inc.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Cincinnat, Ohio
June 25, 1996
