<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities and Exchange Act of 1934
For the Plan Year Ended December 31, 1994
Commission File Number: 1-9223
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SERVICE MERCHANDISE COMPANY, INC.
P.O. Box 24600, Nashville, Tennessee 37202-4600
(mailing address)
7100 Service Merchandise Drive, Brentwood, Tennessee 37027
(address of principal executive office)
<PAGE> 2
Financial Statements and Schedules
Description Page
- ----------- ----
Financial Statements:
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Net Assets Available for Plan Benefits as of
December 31, 1994 and December 31, 1993 . . . . . . . . . . . . . . . . 4
Statements of Changes in Net Assets Available for Plan Benefits
for the Plan Years Ended December 31, 1994 and December 31, 1993 . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . 6-15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Supplemental Schedules:
Schedule I - Line 27a--Schedule of Assets Held for Investment
Purposes as of December 31, 1994 . . . . . . . . . . . . . . . . . . . . 17
Schedule II - Line 27d--Schedule of Reportable Transactions for the
Plan Year Ended December 31, 1994. . . . . . . . . . . . . . . . . . . . 18
Consent:
Independent Auditor's Consent (Exhibit 23) . . . . . . . . . . . . . . . . 19
NOTE: Other schedules not included have been omitted as they are not
applicable.
<PAGE> 3
DELOITTE &
TOUCHE LLP
Suite 2400
424 Church Street
Third National Financial Center
Nashville, Tennessee 37219-2396
INDEPENDENT AUDITORS' REPORT
Employee Benefit Plan Committee
Service Merchandise Company, Inc.
Nashville, Tennessee
We have audited the accompanying statements of net assets available
for Plan benefits of the Service Merchandise Company, Inc. Savings and
Investment Plan as of December 31, 1994 and 1993, and the related
statement of changes in net assets available for Plan 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 Plan
benefits of the Service Merchandise Company, Inc. Savings and
Investment Plan as of December 31, 1994 and 1993 and the changes in
its net assets available for Plan benefits for the years then ended,
in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of (1) assets held for investment purposes and (2)
reportable transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements
but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental
schedules, which are the responsibility of the Plan's management, have
been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
June 12, 1995
- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
<PAGE> 4
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
December 31,
------------------------
1994 1993
----------- -----------
<S> <C> <C>
Assets:
Investments - current value
(cost: $67,236,752 and $59,769,414, respectively) $59,738,992 $65,598,341
Receivables:
Loans to participants 4,409,231 4,551,495
Employee contributions 179,194 178,818
Employer contributions 68,960 70,274
Dividends and interest 5,793 5,893
----------- -----------
Total assets 64,402,170 70,404,821
----------- -----------
Liabilities:
Payable to Plan participants 241,962 360,493
----------- -----------
Total liabilities 241,962 360,493
----------- -----------
Net assets available for Plan benefits $64,160,208 $70,044,328
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE> 5
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
December 31,
------------------------
1994 1993
----------- -----------
<S> <C> <C>
Net assets available for Plan
benefits, beginning of year $70,044,328 $70,177,921
----------- -----------
Additions:
Employee contributions 9,408,232 9,183,749
Employer contributions 3,657,306 3,606,001
Dividend and interest income 3,205,407 2,470,076
Net depreciation in investments (13,755,377) (8,009,618)
----------- ----------
Total additions 2,515,568 7,250,208
----------- ----------
Deductions:
Payments to Plan participants 8,399,688 7,383,801
----------- ----------
Total deductions 8,399,688 7,383,801
----------- ----------
Net deductions (5,884,120) (133,593)
----------- ----------
Net assets available for Plan
benefits, end of year $64,160,208 $70,044,328
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE> 6
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
NOTE 1: Description of Plan
The Service Merchandise Company, Inc. Savings and Investment Plan
(the "Plan") is a qualified defined contribution plan, under Section
401(a) and 401(k) of the Internal Revenue Code, covering eligible
associates of Service Merchandise Company, Inc. (the "Company").
The Plan was created on July 1, 1983 and amended and restated February
6, 1991, effective January 1, 1989. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended.
The following brief description of the Plan is intended to give a
general summary of its principal provisions. Participants should
refer to the Plan agreement for more complete information.
Eligibility
All associates are eligible upon completing one year of qualified
service, as defined in the Plan agreement, and reaching a minimum age
of 21.
Contributions
Associates may contribute through salary deferral from 1% to 15%
of their annual salary. The Plan provides for a matching contribution
to be made by the Company based on the ratio of "net profit," as defined,
to net sales of the Company for the fiscal year corresponding with the
previous Plan year. "Net profit" is defined as the Company's net profit
1) excluding any additional interest and expenses attributable to the
Company's 1989 recapitalization and 2) excluding the provision for income
taxes and any extraordinary items.
Net Profit as Percentage of Company
Sales for Fiscal Year Corresponding Employer Match
with Previous Plan Year Percentage
----------------------------------- --------------
0% 0%
Greater than 0% but less than 1% 10%
1% or more but less than 2% 20%
2% or more but less than 3% 30%
3% or more but less than 4% 40%
4% or more 50%
The Company's maximum matching contribution is limited to the
first 6% of a participant's compensation, as defined in the Plan. In
accordance with the aforementioned calculation, the Company's matching
contribution was at the 50% level for the 1994 and 1993 Plan years and
will be at the 30% level for the 1995 Plan year.
<PAGE> 7
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
Vesting
Participants are immediately 100% vested in all associate and
Company contributions.
Participant Accounts
Each participant's account is credited with the participant's
contribution and Company's matching contribution. Plan earnings are
allocated based on the participant's pro-rata share of each investment
fund.
Investment Options
Under the Plan, participants have a variety of investment options
available. Except for the Service Merchandise Company, Inc. Common
Stock Fund, the funds are proprietary products of T. Rowe Price, the
investment manager and Plan trustee.
Participants may invest their account, in minimum whole
increments of 1%, in any of the following investment options:
Service Merchandise Company, Inc. Common Stock Fund: consists
exclusively of the Company's registered common stock.
New Income Fund: consists of investments in a variety of debt
securities such as corporate bonds, U.S. and Canadian Government
issues, certificates of deposit and commercial paper.
U.S. Treasury Fund: consists entirely of investments in United
States Treasury securities and other obligations directly
guaranteed by the U.S. Government.
Equity Income Fund: consists of investments in corporate equity
securities and bonds.
Capital Appreciation Fund: consists of investments in equity
securities of established companies offering above-average
prospects for capital appreciation.
Spectrum Growth Fund: consists of investments in a diversified
group of domestic and international T. Rowe Price funds which
invest principally in equity securities.
Balanced Fund: consists of 60% of investments in equity
securities of established companies and 40% in U.S. Government
and investment grade bonds.
<PAGE> 8
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
Earnings from the funds, consisting primarily of interest and
dividends, are automatically reinvested in their respective fund.
At December 31, 1994, there were a total of 7,367 participants in the
Plan. Employee participation, by fund, at December 31, 1994 was as
follows:
Service Merchandise Company, Inc.
Common Stock Fund 3,855
New Income Fund 2,554
U.S. Treasury Fund 3,635
Equity Income Fund 2,455
Capital Appreciation Fund 1,151
Spectrum Growth Fund 1,184
Balanced Fund 957
Payment of Benefits
Upon termination of employment prior to retirement, all participant
balances $3,500 or less are distributed in a lump-sum amount.
Balances above $3,500 may, at the participant's option, be distributed
in a lump-sum or held until retirement. As of December 31, 1994 and
1993, net assets available for benefits included benefits of
$1,293,467 and $2,745,576, respectively, due to participants who have
withdrawn from participation in the Plan and have not received their
benefit distribution.
Upon becoming permanently and totally disabled or upon retirement, the
participant has the option of receiving his or her balance as a lump-
sum, in installments, or as a combination.
Distributions upon the death of a participant are in a lump-sum
amount.
Tax Effect on Participants
Participants' contributions, subject to certain regulatory maximums,
are in tax deferred dollars. Company matching contributions and
investment earnings allocated to participants' accounts are not
taxable to the participant until the amounts are distributed from the
Plan.
<PAGE> 9
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
NOTE 2: Summary of Accounting Policies
Method of Accounting
The Plan's financial statements are prepared on the accrual basis
of accounting.
Investments
Investments are valued based on quoted market prices as of the
last business day of the Plan year.
Net Depreciation on Investments
Net depreciation on investments includes both realized and
unrealized depreciation. The net depreciation for the Plan year
ended December 31, 1994 was $13,755,377 as compared to $8,009,618
for the year ended December 31, 1993. In addition to the overall
stock market decline, this variance is primarily related to the
net depreciation in the Service Merchandise Company, Inc. Common
Stock Fund as the market price decreased to $4.75 at December 31,
1994 from $10.00 at December 31, 1993.
<TABLE>
NOTE 3: Share or Unit Values
Units of each investment fund are allocated daily based on
changes in market valuation and participant contributions;
Company contributions are allocated quarterly. The market value,
per share or unit, by fund was as follows:
<CAPTION>
Fund December 31, 1993 March 31, 1994 June 30, 1994 September 30,1994 December 31, 1994
- ---- ----------------- ----------------- ----------------- ------------------ -------------------
Shares Shares Shares Shares Shares
or Market or Market or Market or Market or Market
Units Value Units Value Units Value Units Value Units Value
----------------- ----------------- ----------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Service
Merchandise
Company, Inc.
Common Stock
Fund 2,045,065 $10.00 2,149,344 $8.00 2,259,505 $6.37 2,468,268 $6.37 2,591,211 $4.75
New Income Fund 1,297,186 $9.24 1,302,021 $8.83 1,290,590 $8.59 1,288,814 $8.49 1,263,569 $8.39
U.S. Treasury
Fund 16,101,525 $1.00 16,129,116 $1.00 16,618,392 $1.00 16,709,848 $1.00 17,211,268 $1.00
Equity Income
Fund 686,075 $16.65 694,813 $15.92 680,927 $16.09 685,776 $16.83 718,706 $15.98
Capital
Appreciation 165,708 $12.66 178,777 $12.56 191,122 $12.59 208,928 $13.30 240,636 $12.10
Spectrum Growth
Fund 150,784 $11.87 216,891 $11.49 214,051 $11.45 224,106 $12.22 273,875 $11.13
Balanced Fund 145,114 $12.02 152,337 $11.46 162,444 $11.22 174,540 $11.53 188,100 $11.14
</TABLE>
<PAGE> 10
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
<TABLE>
NOTE 4: Investments
The following table presents the fair values, as determined by quoted
market prices as of the last day of the Plan year, of the Plan's
investments.
<CAPTION>
December 31, December 31,
1994 1993
------------------------------------------------------------------------------
Number of Number of
Shares or Shares or
Units Units
of Current of Current
Description Participation Cost Value Participation Cost Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service Merchandise
Company, Inc.
Common Stock Fund 2,591,211 $18,979,124 $12,308,252 2,045,065 $15,828,100 $20,450,647
Service Merchandise
Company, Inc.
Common Stock - Cash - - 77,852 - - 5,085
New Income Fund 1,263,569 11,268,568 10,601,342 1,297,186 11,687,945 11,986,001
U.S. Treasury Fund 17,211,268 17,211,268 17,211,268 16,101,525 16,101,525 16,101,525
Equity Income Fund 718,706 11,452,160 11,484,918 686,075 10,806,167 11,423,145
Capital Appreciation Fund 240,636 2,975,182 2,911,694 165,708 1,980,798 2,097,858
Spectrum Growth Fund 273,875 3,199,227 3,048,228 150,784 1,716,401 1,789,808
Balanced Fund 188,100 2,151,223 2,095,438 145,114 1,648,478 1,744,272
----------- ----------- ----------- -----------
Total Investments $67,236,752 $59,738,992 $59,769,414 $65,598,341
=========== =========== =========== ===========
</TABLE>
The allocation by investment fund, of net assets available for benefits as of
December 31, 1994 and 1993 and changes in net assets available for benefits for
the year ended December 31, 1994 and 1993 are as follows on pages 11 through 14:
<PAGE> 11
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
TO INVESTMENT PROGRAMS
FOR THE PLAN YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Equity Capital Spectrum Participant
Common Income Treasury Income Appreciation Growth Balanced Loan
Stock Fund Fund Fund Fund Fund Fund Fund Fund Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments -
current value $12,386,104 $10,601,342 $17,211,268 $11,484,918 $2,911,694 $3,048,228 $2,095,438 - $59,738,992
Receivables:
Loans to
participants 9,082 5,691 11,251 5,621 1,225 1,612 1,056 $4,373,693 4,409,231
Employee
contributions 45,638 25,036 42,449 29,659 12,931 13,853 9,628 - 179,194
Employer
contributions 17,477 9,665 16,642 11,313 4,893 5,243 3,727 - 68,960
Dividends and
interest 1,585 944 1,739 910 186 267 162 - 5,793
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total assets 12,459,886 10,642,678 17,283,349 11,532,421 2,930,929 3,069,203 2,110,011 4,373,693 64,402,170
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Liabilities:
Payable to Plan
participants 50,559 42,775 43,479 59,729 16,843 12,228 16,349 - 241,962
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total liabilities 50,559 42,775 43,479 59,729 16,843 12,228 16,349 - 241,962
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net assets available
for Plan benefits $12,409,327 $10,599,903 $17,239,870 $11,472,692 $2,914,086 $3,056,975 $2,093,662 $4,373,693 $64,160,208
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE> 12
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS & INVESTMENT PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
TO INVESTMENT PROGRAMS
FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Equity Capital Spectrum Participant
Common Income Treasury Income Appreciation Growth Balanced Loan
Stock Fund Fund Fund Fund Fund Fund Fund Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments -
current value $20,455,732 $11,986,001 $16,101,525 $11,423,145 $2,097,858 $1,789,808 $1,744,272 - $65,598,341
Receivables:
Loans to
participants 9,793 5,848 10,185 5,614 935 950 941 $4,517,229 4,551,495
Employee
contributions 49,915 28,511 43,033 31,411 10,038 8,071 7,839 - 178,818
Employer
contributions 18,919 11,061 17,085 11,954 3,992 4,071 3,192 - 70,274
Dividends and
interest 1,801 935 1,690 964 133 197 173 - 5,893
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total assets 20,536,160 12,032,356 16,173,518 11,473,088 2,112,956 1,803,097 1,756,417 4,517,229 70,404,821
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Liabilities:
Payable to Plan
participants 107,920 61,822 56,923 74,060 18,937 18,991 21,840 - 360,493
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total liabilities 107,920 61,822 56,923 74,060 18,937 18,991 21,840 - 360,493
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net assets
available for
Plan benefits $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE> 13
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS TO INVESTMENT PROGRAMS
FOR THE PLAN YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Equity Capital Spectrum Participant
Common Income Treasury Income Appreciation Growth Balanced Loan
Stock Fund Fund Fund Fund Fund Fund Fund Fund Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets
available for
Plan benefits,
beginning
of year $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Additions:
Employee
contributions 2,448,197 1,392,561 2,243,375 1,582,592 623,104 639,195 479,208 - 9,408,232
Employer
contributions 954,490 549,240 899,614 599,794 226,833 243,302 184,033 - 3,657,306
Dividend and
interest income 89,619 871,659 658,466 997,708 236,038 235,780 116,137 - 3,205,407
Net depreciation
in investments (11,717,746) (1,088,224) - (455,765) (144,063) (208,432) (141,147) - (13,755,377)
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total additions (8,225,440) 1,725,236 3,801,455 2,724,329 941,912 909,845 638,231 - 2,515,568
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Deductions:
Payments to Plan
participants 1,415,147 1,232,373 2,228,621 1,939,428 387,064 505,294 199,512 492,249 8,399,688
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total deductions 1,415,147 1,232,373 2,228,621 1,939,428 387,064 505,294 199,512 492,249 8,399,688
Net transfer
between funds 2,047,755 (1,355,814) 387,427 (324,390) 344,132 979,531 32,667 (2,111,308) -
Participant loans
processed (426,081) (507,680) (836,986) (386,847) (78,913) (111,213) (112,301) 2,460,021 -
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net additions
(deductions) (8,018,913) (1,370,631) 1,123,275 73,664 820,067 1,272,869 359,085 (143,536) (5,884,120)
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net assets
available for
Plan benefits,
end of year $12,409,327 $10,599,903 $17,239,870 $11,472,692 $2,914,086 $3,056,975 $2,093,662 $4,373,693 $64,160,208
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE> 14
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS TO INVESTMENT PROGRAMS
FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Equity Capital Spectrum Participant
Common Income Treasury Income Appreciation Growth Balanced Loan
Stock Fund Fund Fund Fund Fund Fund Fund Fund Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for Plan benefits,
beginning of year $28,056,261 $12,129,853 $16,836,431 $7,632,081 $1,002,476 $351,323 $660,647 $3,508,849 $70,177,921
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Additions:
Employee
contributions 2,671,771 1,533,422 2,462,926 1,484,836 452,062 270,505 308,227 - 9,183,749
Employer
contributions 1,030,656 606,742 982,946 587,307 165,363 108,761 124,226 - 3,606,001
Dividend and
interest income 92,974 807,565 487,836 814,334 85,368 124,880 57,119 - 2,470,076
Net appreciation/
(depreciation)
in investments (9,198,749) 303,582 - 547,477 144,897 96,683 96,492 - (8,009,618)
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total additions (5,403,348) 3,251,311 3,933,708 3,433,954 847,690 600,829 586,064 - 7,250,208
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Deductions:
Payments to Plan
participants 2,180,328 1,520,514 1,995,697 931,604 89,255 243,160 67,327 355,916 7,383,801
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Total deductions 2,180,328 1,520,514 1,995,697 931,604 89,255 243,160 67,327 355,916 7,383,801
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net transfers
between funds 850,196 (1,363,714) (1,619,041) 1,779,160 375,996 1,119,592 600,913 (1,743,102) -
Participant loans
processed (894,541) (526,402) (1,038,806) (514,563) (42,888) (44,478) (45,720) 3,107,398 -
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net additions
(deductions) (7,628,021) (159,319) (719,836) 3,766,947 1,091,543 1,432,783 1,073,930 1,008,380 (133,593)
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- -----------
Net assets available
for Plan benefits,
end of year $20,428,240 $11,970,534 $16,116,595 $11,399,028 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE> 15
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN YEARS ENDED DECEMBER 31, 1994 AND 1993
NOTE 5: Loans to Participants
Participants may borrow from their account subject to certain
restrictions and limitations. Outstanding loans cannot exceed
50% of the participant's account balance and are subject to a
maximum of $50,000 and a minimum of $1,000. The Plan requires the
trustee to establish an interest rate on the date of loan
origination which is comparable to the interest rate charged by
lending institutions for loans made under similiar circumstances.
Currently, loans bear interest at 1% over the prime rate in
effect. Loan repayment periods generally range from one to five
years. At December 31, 1994, 1,956 participants had loans
outstanding from the Plan.
NOTE 6: Administration of the Plan
The Plan is administered by the Employee Benefit Plan Committee
appointed by the Company's Board of Directors. T. Rowe Price of
Baltimore, Maryland serves as trustee and investment manager.
Currently, trustee fees are paid directly by the Company.
NOTE 7: Plan Termination
Although it has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, Plan assets will be
distributed, if permissible, or transferred for the benefit of
participants in relation to their vested account balances.
NOTE 8: Tax Status
The Plan has received a determination letter indicating it is
qualified under Section 401(a) and meets the additional
requirements of Section 401(k) of the Internal Revenue Code. The
Plan is exempt from federal income tax under Section 501(a) of
the Internal Revenue Code.
In March of 1995, the Plan applied for a determination letter
with regard to the Plan Amendment and Restatement and anticipates
a favorable ruling on its application.
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
June 19,1995 By: /s/ Robert C. Eimers
----------------------
Robert C. Eimers
Committee Chairman
June 19,1995 By: /s/ Glen A. Bodzy
----------------------
Glen A. Bodzy
Committee Member
June 19,1995 By: /s/ S. Cusano
----------------------
S. Cusano
Committee Member
June 19,1995 By: /s/ Gary M. Witkin
----------------------
Gary M. Witkin
Committee Member
June 19,1995 By: /s/ Raymond Zimmerman
----------------------
Raymond Zimmerman
Committee Member
<PAGE> 17
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SCHEDULE I - LINE 27a --
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
<CAPTION>
(a) (b) (c) (d) (e)
Description of investment
Identity of issue, borrower, lessor, including maturity date, rate of interest, Current
of similiar party collateral, par or maturity value Cost Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Service Merchandise Company, Inc. Common Stock $18,979,124 $12,386,104
* T. Rowe Price New Income Fund 11,268,568 10,601,342
* T. Rowe Price U.S. Treasury Fund 17,211,268 17,211,268
* T. Rowe Price Equity Income Fund 11,452,160 11,484,918
* T. Rowe Price Capital Appreciation Fund 2,975,182 2,911,694
* T. Rowe Price Spectrum Growth Fund 3,199,227 3,048,228
* T. Rowe Price Balanced Fund 2,151,223 2,095,438
----------- -----------
Total investments $67,236,752 $59,738,992
=========== ===========
Loans to Participants Interest rate: Hi: 12 1/2% Low: 7% $4,409,231
===========
* Party-in-interest
</TABLE>
<PAGE> 18
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SCHEDULE II - LINE 27d
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Plan Year Ended December 31, 1994
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Description of
asset (include Current
interest rate Expense value of
and maturity incurred asset on
Identity of party in case Purchase Selling Lease with Cost of transaction Net
involved of a loan) Price Price rental transaction Asset date Gain/(Loss)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual transactions
None applicable.
Series of transactions
Service Merchandise
Company, Inc. Common Stock $6,005,520 - - - $6,005,520 $6,016,306 -
Service Merchandise
Company, Inc. Common Stock - $2,440,952 - - 2,854,496 2,440,952 $(413,544)
T. Rowe Price New Income Fund 3,171,434 - - - 3,171,434 3,171,739 -
T. Rowe Price New Income Fund - 3,468,174 - - 3,590,810 3,468,174 (122,636)
T. Rowe Price U.S. Treasury Fund 5,347,438 - - - 5,347,438 5,347,438 -
T. Rowe Price U.S. Treasury Fund - 4,237,695 - - 4,237,695 4,237,695 -
T. Rowe Price Equity Income Fund 3,942,830 - - - 3,942,830 3,938,855 -
T. Rowe Price Equity Income Fund - 3,421,314 - - 3,296,837 3,421,314 124,477
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DELOITTE & EXHIBIT 23
TOUCHE LLP
Suite 2400
424 Church Street
Third National Financial Center
Nashville, Tennessee 37219-2396
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement No. 33-50185 of Service Merchandise Company, Inc.
on Form S-8 of our report dated June 12, 1995, appearing in
this Annual Report on Form 11-K of the Service Merchandise
Company, Inc. Savings and Investment Plan for the year ended
December 31, 1994.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
June 19, 1995
- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
