SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from___ to ___
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. Profit Sharing 401 (k) Investment 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.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Financial Statements
December 31, 1999 and 1998
With Independent Auditors' Report Thereon
Independent Auditors' Reports
Pension and Profit Sharing Committee
Federated Department Stores, Inc.
Profit Sharing 401(k) Investment Plan:
We have audited the accompanying statements of net assets available for
benefits of the Federated Department Stores, Inc. Profit Sharing 401(k)
Investment Plan (the "Plan") as of December 31, 1999 and 1998, 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 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
report 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, 1999 and 1998, 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 LLP
Cincinnati, Ohio
June 26, 2000
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Index
Independent Auditors' Report
Statements of Net Assets Available for Benefits, with Fund Information -
December 31, 1999 and 1998
Statements of Changes in Net Assets Available for Benefits, with Fund
Information -
Years Ended December 31, 1999 and 1998
Notes to Financial Statements
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1999
(in thousands)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E Fund F Fund L Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (Note 3):
Master Trust investments $413,902 $307,087 $422,071 $ 54,687 $ 26,012 $ 83,438 $ - $1,307,197
Participant loans - - - - - - 19,061 19,061
Total investments 413,902 307,087 422,071 54,687 26,012 83,438 19,061 1,326,258
Receivables:
Employer contributions - - - - - 28,432 - 28,432
Interest 33 4 - - - 69 - 106
Total receivables 33 4 - - - 28,501 - 28,538
Total assets 413,935 307,091 422,071 54,687 26,012 111,939 19,061 1,354,796
Liabilities:
Trustee and management
fees payable 218 278 165 98 15 29 - 803
Total liabilities 218 278 165 98 15 29 - 803
Net assets available for benefits $413,717 $306,813 $421,906 $54,589 $ 25,997 $111,910 $ 19,061 $1,353,993
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
(in thousands)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E Fund F Fund L Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (Note 3):
Master Trust investments $424,606 $314,086 $339,728 $ 52,553 $ 13,876 $ 52,762 $ - $1,197,611
Participant loans - - - - - - 16,360 16,360
Total investments 424,606 314,086 339,728 52,553 13,876 52,762 16,360 1,213,971
Receivables:
Employer contributions - - - - - 24,492 - 24,492
Participant contributions 386 264 310 95 24 49 - 1,128
Interest - 145 - - - - - 145
Forfeitures - - - - - 457 - 457
Total receivables 386 409 310 95 24 24,998 - 26,222
Total assets 424,992 314,495 340,038 52,648 13,900 77,760 16,360 1,240,193
Liabilities:
Trustee and management
fees payable 269 277 177 99 13 30 - 865
Total liabilities 269 277 177 99 13 30 - 865
Net assets available for benefits $424,723 $314,218 $339,861 $52,549 $13,887 $77,730 $16,360 $1,239,328
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1999
(in thousands)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E Fund F Fund L Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Net investment income (Note 3):
Net appreciation in fair value
of investments $ - $ 15,865 $ 67,179 $ 6,866 $ 4,841 $ 15,437 $ - $ 110,188
Interest and dividends 27,008 7,518 5,966 - 1,480 121 1,510 43,603
Total investment income 27,008 23,383 73,145 6,866 6,321 15,558 1,510 153,791
Less administrative expenses (2,057) (1,737) (823) (392) (201) (165) - (5,375)
Net investment income 24,951 21,646 72,322 6,474 6,120 15,393 1,510 148,416
Contributions:
Employer - - - - - 28,456 - 28,456
Participant 22,955 24,647 31,228 7,856 2,419 4,351 - 93,456
Total contributions 22,955 24,647 31,228 7,856 2,419 32,807 - 121,912
Total additions 47,906 46,293 103,550 14,330 8,539 48,200 1,510 270,328
Deductions:
Distributions 69,262 34,500 36,889 5,017 1,262 6,857 1,876 155,663
Interfund transfers 10,350 (19,198) 15,384 (7,273) 4,833 (7,163) 3,067 -
Net increase (decrease) (11,006) (7,405) 82,045 2,040 12,110 34,180 2,701 114,665
Net assets available for benefits:
Beginning of year 424,723 314,218 339,861 52,549 13,887 77,730 16,360 1,239,328
End of year $413,717 $306,813 $421,906 $54,589 $25,997 $111,910 $19,061 $1,353,993
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
Year Ended December 31, 1998
(in thousands)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E Fund F Fund L Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Net investment income (Note 3):
Net appreciation (depreciation)
in fair value of investments $ - $ 49,808 $ 68,686 $ (1,765) $ 985 $ (2,953) $ - $ 114,761
Interest and dividends 28,441 7,645 5,406 - 624 229 1,111 43,456
Total investment income 28,441 57,453 74,092 (1,765) 1,609 (2,724) 1,111 158,217
Less administrative expenses (2,196) (1,611) (735) (484) (171) (144) - (5,341)
Net investment income 26,245 55,842 73,357 (2,249) 1,438 (2,868) 1,111 152,876
Contributions:
Employer 3 1 1 - - 24,494 - 24,499
Participant 24,390 20,829 25,954 8,998 2,175 3,789 - 86,135
Total contributions 24,393 20,830 25,955 8,998 2,175 28,283 - 110,634
Total additions 50,638 76,672 99,312 6,749 3,613 25,415 1,111 263,510
Deductions:
Distributions 67,842 31,990 30,196 4,747 716 5,819 1,242 142,552
Interfund transfers 7,687 (15,963) 7,921 (5,668) 1,847 (3,062) 7,238 -
Net increase (decrease) (9,517) 28,719 77,037 (3,666) 4,744 16,534 7,107 120,958
Net assets available for benefits:
Beginning of year 434,240 285,499 262,824 56,215 9,143 61,196 9,253 1,118,370
End of year $424,723 $314,218 $339,861 $ 52,549 $ 13,887 $ 77,730 $ 16,360 $1,239,328
The accompanying notes are an integral part of these financial statements.
</TABLE>
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
1. Description of the Plan
The following brief description of the Federated Department
Stores, Inc. Profit Sharing 401 (k) Investment 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.
(the "Company"). The Plan is a defined contribution plan and
is subject to the provisions of the Employee Retirement
Income Security Act of 1974 and U.S. tax law.
Eligibility
Employees are generally eligible for participation in the Plan
after one year of service of at least 1,000 hours and after
reaching a minimum age of 21.
Contributions
Participants may elect to contribute an amount equal to 1% to
15% (subject to certain limitations) of the participant's
eligible compensation. 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
or on an after-tax basis . Pre-tax contributions up to 5% of
eligible compensation are considered basic savings which are
eligible for matching Company contributions. Company
contributions are made as soon as administratively feasible
after year end only to persons who are active participants on
the last day of the year and who did not make a withdrawal of
basic savings during the year. The Company's contribution
formula is based on the Company's annual earnings and the
minimum Company contribution is the amount necessary to
produce a company match of 33 1/3% of an employee's basic
savings. The Plan also provides that the matching percentage
for eligible participants with 15 or more years of vesting
service at the start of the applicable Plan year is up to 1-1/2
times the matching percentage of eligible participants with
less than 15 years of service at the start of the applicable
Plan year. For the Plan year ended December 31, 1999, the
Company's matching percentage, including the allocation
of all forfeited nonvested amounts, was 49.3% of the
participants' basic savings for participants
with less than 15 years of vesting service at January 1, 1999
and 74.0% of the participants' basic savings for participants
with 15 or more years of vesting service at January 1, 1999.
For the Plan year ended December 31, 1998, the Company's
matching percentage was 48.4% of the participants' basic
savings for participants with less than 15 years of vesting
service at January 1, 1998 and 72.6% of the participants'
basic savings for participants with 15 or more years of
vesting service at January 1, 1998.
Forfeited nonvested accounts of participants who terminate
employment are applied to participants' accounts in accordance
with Plan provisions. During the 1999 Plan year, forfeited
nonvested accounts totaled $473,000. During the 1998 Plan
year, forfeited nonvested accounts totaled $457,000.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999 and 1998
Participant Accounts
Each participant's account is credited with the participant's
contributions and an allocation of each fund's earnings or
losses. Allocations are based on participant account
balances. As soon as administratively feasible after the end
of each year, the Company's applicable matching contributions
are credited to the eligible individual accounts.
Vesting
Participants are immediately 100% vested in their own
contributions and become 20% vested in the Company's
contributions after 3 years of service, with additional
vesting of 20% each year thereafter until fully vested. 100%
vesting is also achieved through normal retirement, death or
disability.
Participant Withdrawals
Participants may borrow from their accounts up to a maximum
amount equal to the lesser of $50,000 or 50% of their 401(k)
vested account balance. All loans must be repaid within five
years and are also subject to certain other conditions as to
security, a reasonable rate of interest and repayment
schedules. Loan transactions are treated as a transfer to
(from) the investment fund from (to) the Participant Loan Fund
(Fund L).
Participants are permitted to make withdrawals of their after-
tax contributions and earnings thereon 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 vested account either in the form of a lump sum
payment or in a variety of annuity forms.
2. Summary of Significant Accounting Policies
a) Master Trust
The Plan entered into the Federated Department Stores, Inc.
Defined Contribution Plan Master Trust (the "Master Trust")
Agreement with Chase Manhattan Bank (the "Trustee"). As of
December 31, 1999 and 1998, the Master Trust holds the assets of
the Plan exclusively. Under the terms of the Master Trust, the
Trustee serves as Trustee custodian for 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 the
respective portions of the assets in the Master Trust managed by
them.
b) Basis of Presentation
The accompanying financial statements of the Plan have been
prepared on the accrual basis of accounting.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999 and 1998
c) Investments
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.
Participant loans are valued at cost which approximates fair
value.
Cash equivalents include highly liquid fixed-income
securities with a maturity of one year or less.
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 and assumptions.
f) Reclassifications
Certain reclassifications were made to prior years' amounts
to conform with the classifications of such amounts
for the most recent year.
3. Investments
All of the Plan's investments are included in the Master Trust
and are held by the trustee.
The Trustee under the Master Trust, in accordance with the
trust agreement, invests all contributions to the Plan among
several investment funds. The funds are:
Fund A - Fixed Income Fund - consisting primarily of high
quality fixed-income and stable value products.
Fund B - Balanced Fund - consisting of common/collective
trusts which invest in a varying mixture of equity
securities and fixed income instruments.
Fund C - S&P 500 Stock Index Fund - consisting principally
of shares of companies included in the S&P 500 Composite
Stock Price Index.
(Continued)
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999 and 1998
Fund D - Small Cap Stock Fund - consisting principally of
small capitalization domestic equity securities.
Fund E - International Stock Fund - consisting of stocks of
companies not based in the United States.
Fund F - Federated Stock Fund - consisting principally of
the Company's registered common stock.
Company contributions are directed to Fund F. Participants
may elect to redirect the value of Company contributions to
other investment options permitted pursuant to 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, 1999 and 1998:
1999 1998
(in thousands)
Assets:
Investments at fair value:
Cash and cash equivalents $ 19,267 $ 7,730
U. S. government securities - 6,985
Common stock 82,961 52,745
Common/collective trusts 782,770 698,939
Registered investment companies 26,008 13,956
Total investments at fair value 911,006 780,355
Non interest bearing cash 88 8
Participant loans 19,061 16,360
Insurance contracts at contract value 396,103 417,248
Total investments 1,326,258 1,213,971
Receivables:
Employer contributions 28,432 24,492
Participant contributions - 1,128
Forfeitures - 457
Interest 106 145
Total receivables 28,538 26,222
Total assets 1,354,796 1,240,193
Liabilities:
Accrued administrative expenses 803 865
Total accrued liabilities 803 865
Total net assets $1,353,993 $1,239,328
(Continued)
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (k) INVESTMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999 and 1998
Net investment income for the Master Trust for the years ended December
31, 1999 and 1998 is as follows:
1999 1998
(in thousands)
Net appreciation (depreciation) in fair
value of investments:
U.S. government securities $ (448) $ 740
Common stock 15,437 (2,953)
Common/collective trusts 90,359 115,989
Registered investment companies 4,840 985
Net appreciation in fair value
of investments 110,188 114,761
Interest and dividends 43,603 43,456
Total investment income 153,791 158,217
Administrative expenses (5,375) (5,341)
Net investment income $ 148,416 $ 152,876
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 June 13,
1996, 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.
The Plan's testings, subject to the provisions of the Internal
Revenue Code, have not been completed for the current year.
However, the Plan's sponsor believes that the Plan is
currently in compliance.
6. Administrative Expenses
The Plan pays reasonable and necessary expenses incurred for
the ongoing administration of the Plan.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the members of the Pension and Profit
Sharing Committee (which is the administrative committee for
the Federated Department Stores, Inc. Profit Sharing 401 (k)
Investment Plan have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly
authorized.
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401 (K) INVESTMENT PLAN
Dated: June 28, 2000 By: \s\Karen M. Hoguet
Karen M. Hoguet
Chairman of the Pension and Profit
Sharing Committee
