<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the year ended December 31, 1997
[ ] OR TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________________ to ___________________
Commission file number 33-81011
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below.
U.S. Foodservice 401(k) Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
U.S. Foodservice
9830 Patuxent Woods Drive
Columbia, Maryland 21046
<PAGE>
EXHIBITS
Exhibit Description
Number of Exhibit
- ------- -----------
1 Consent of Price Waterhouse LLP, Independent
Accountants, Filed herewith.
SIGNATURES
----------
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
U.S. Foodservice
401(k) Retirement Savings Plan
By: JP Foodservice Distributors, Inc.
Plan Administrator
Dated: June 29, 1998 By: /s/ George T. Megas
----------------------------------------
George T. Megas
Vice President, Chief Accounting Officer
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT
SAVINGS PLAN
FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
DECEMBER 31, 1997 AND 1996
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Financial Statements: Page
<S> <C>
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits, with Fund Information 2-3
Statement of Changes in Net Assets Available for Benefits, with Fund Information 4-5
Notes to Financial Statements 6-10
Additional Information:
Schedule I - Schedule of Assets Held for Investment Purposes 11
Schedule II - Schedule of Reportable Transactions 12
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
June 18, 1998
To the Participants and Administrator
of the JP Foodservice, Inc. 401(k) Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets
available for benefits of the JP Foodservice, Inc. 401(k) Retirement
Savings Plan at December 31, 1997 and 1996, and the changes in net assets
available for benefits for the years then ended, in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally
accepted auditing standards which 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, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The additional information
included in the schedule of assets held for investment purposes and the
schedule of reportable transactions is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is additional information required by the Employee
Retirement Income Security Act of 1974. 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 schedule of assets held for investment purposes, the schedule of
reportable transactions and the Fund Information 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
in relation to the basic financial statements taken as a whole.
/s/ Price Waterhouse LLP
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
FUND INFORMATION
----------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY
CHARTER FIDELITY ADVISOR ADVISOR INVESCO
GUARANTEED ADVISOR GROWTH EQUITY INDUSTRIAL
LONG-TERM BALANCED OPPORTUNITIES GROWTH INCOME
FUND FUND FUND FUND FUND
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at fair value
CIGNA Charter Guaranteed Long-Term
Account $9,552,751
CIGNA Fidelity Advisor
Balanced Fund $1,563,963
CIGNA Fidelity Advisor
Growth
Opportunities Fund $6,685,791
CIGNA Fidelity Advisor Equity Growth
Fund $5,117,687
CIGNA INVESCO Industrial
Income Fund $5,866,946
CIGNA Founders Balanced
Fund
CIGNA Warburg Pincus
Advisor International
Equity Fund
JP Foodservice Common
Stock
Participant notes
receivable
Employer contributions
receivable
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits $9,552,751 $1,563,963 $6,685,791 $5,117,687 $5,866,946
========== ========== ========== ========== ==========
<CAPTION>
WARBURG
PINCUS
ADVISOR JP
FOUNDERS INTERNATIONAL FOODSERVICE PARTICIPANT
BALANCED EQUITY COMMON NOTES
FUND FUND STOCK RECEIVABLE TOTAL
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at fair value
CIGNA Charter Guaranteed Long-Term
Account $9,552,751
CIGNA Fidelity Advisor
Balanced Fund 1,563,963
CIGNA Fidelity Advisor
Growth
Opportunities Fund 6,685,791
CIGNA Fidelity Advisor Equity Growth
Fund 5,117,687
CIGNA INVESCO Industrial
Income Fund 5,866,946
CIGNA Founders Balanced
Fund $ 664,721 664,721
CIGNA Warburg Pincus
Advisor International
Equity Fund $1,400,548 1,400,548
JP Foodservice Common
Stock $11,538,638 11,538,638
Participant notes
receivable $209,240 209,240
Employer contributions
receivable 1,957,774 1,957,774
---------- ---------- ----------- -------- -----------
Net assets available for
benefits $ 664,721 $1,400,548 $13,496,412 $209,240 $44,558,059
========== ========== =========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
FUND INFORMATION
----------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY
CHARTER FIDELITY ADVISOR ADVISOR INVESCO
GUARANTEED ADVISOR GROWTH EQUITY INDUSTRIAL
LONG-TERM BALANCED OPPORTUNITIES GROWTH INCOME
FUND FUND FUND FUND FUND
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at fair value
CIGNA Charter Guaranteed Long-Term
Account $9,405,646
CIGNA Fidelity Advisor
Balanced Fund $1,133,363
CIGNA Fidelity Advisor
Growth
Opportunities Fund $4,443,052
CIGNA Fidelity Advisor Equity Growth
Fund $3,669,064
CIGNA INVESCO Industrial
Income Fund $4,477,163
CIGNA Founders Balanced
Fund
CIGNA Warburg Pincus
Advisor International
Equity Fund
JP Foodservice Common
Stock
Participant notes
receivable
Employer contributions
receivable
Cash equivalents 77,484 4,677 41,060 37,092 31,562
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits $9,483,130 $1,138,040 $4,484,112 $3,706,156 $4,508,725
========== ========== ========== ========== ==========
<CAPTION>
WARBURG
PINCUS
ADVISOR JP
FOUNDERS INTERNATIONAL FOODSERVICE PARTICIPANT
BALANCED EQUITY COMMON NOTES
FUND FUND STOCK RECEIVABLE TOTAL
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at fair value
CIGNA Charter Guaranteed Long-Term
Account $9,405,646
CIGNA Fidelity Advisor
Balanced Fund 1,133,363
CIGNA Fidelity Advisor
Growth
Opportunities Fund 4,443,052
CIGNA Fidelity Advisor Equity Growth
Fund 3,669,064
CIGNA INVESCO Industrial
Income Fund 4,477,163
CIGNA Founders Balanced
Fund $ 295,915 295,915
CIGNA Warburg Pincus
Advisor International
Equity Fund $1,417,886 1,417,886
JP Foodservice Common
Stock $ 7,197,195 7,197,195
Participant notes
receivable $ 24,546 24,546
Employer contributions
receivable 1,831,727 1,831,727
Cash equivalents 17,427 18,995 21,443 249,740
---------- ---------- ----------- ---------- -----------
Net assets available for
benefits $ 313,342 $1,436,881 $ 9,050,365 $ 24,546 $34,145,297
========== ========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997
FUND INFORMATION
----------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY
CHARTER FIDELITY ADVISOR ADVISOR INVESCO
GUARANTEED ADVISOR GROWTH EQUITY INDUSTRIAL
LONG-TERM BALANCED OPPORTUNITIES GROWTH INCOME
FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income
Interest $ 540,555
Net appreciation
(depreciation) in fair
value of investments $ 269,464 $1,348,152 $ 897,496 $1,171,911
---------- ---------- ---------- ---------- ----------
540,555 269,464 1,348,152 897,496 1,171,911
---------- ---------- ---------- ---------- ----------
Contributions
Employer
Employee 986,521 308,279 845,058 649,396 505,472
---------- ---------- ---------- ---------- ----------
986,521 308,279 845,058 649,396 505,472
---------- ---------- ---------- ---------- ----------
Total additions 1,527,076 577,743 2,193,210 1,546,892 1,677,383
Deductions from net assets
attributed to:
Benefit payments 904,621 103,755 249,058 339,387 322,334
Transaction charge 20,996 603 5,245 1,160 1,575
Participant notes
receivable terminated
due to withdrawal of
participant
---------- ---------- ---------- ---------- ----------
Total deductions 925,617 104,358 254,303 340,547 323,909
Change in forfeiture
reserve, net (30,342) (3,804) (13,559) (6,481) (20,984)
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 571,117 469,581 1,925,348 1,199,864 1,332,490
Interfund transfers, net (501,496) (43,658) 276,331 211,667 25,731
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 69,621 425,923 2,201,679 1,411,531 1,358,221
Net assets available for
benefits at beginning of
year 9,483,130 1,138,040 4,484,112 3,706,156 4,508,725
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits at end of year $9,552,751 $1,563,963 $6,685,791 $5,117,687 $5,866,946
========== ========== ========== ========== ==========
<CAPTION>
WARBURG
PINCUS
ADVISOR JP
FOUNDERS INTERNATIONAL FOODSERVICE PARTICIPANT
BALANCED EQUITY COMMON NOTES
FUND FUND STOCK RECEIVABLE TOTAL
---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income
Interest $ 6,988 $ 547,543
Net appreciation
(depreciation) in fair
value of investments $ 72,660 $ (85,286) $ 2,792,504 6,466,901
---------- ---------- ---------- ---------- ----------
72,660 (85,286) 2,792,504 6,988 7,014,444
---------- ---------- ---------- ---------- ----------
Contributions
Employer 1,957,774 1,957,774
Employee 188,952 335,068 442,013 4,260,759
---------- ---------- ---------- ---------- ----------
188,952 335,068 2,399,787 6,218,533
---------- ---------- ---------- ---------- ----------
Total additions 261,612 249,782 5,192,291 6,988 13,232,977
Deductions from net assets
attributed to:
Benefit payments 7,554 112,150 460,734 2,499,593
Transaction charge 249 846 15,702 46,376
Participant notes
receivable terminated
due to withdrawal of
participant 10,730 10,730
---------- ---------- ---------- ---------- ----------
Total deductions 7,803 112,996 476,436 10,730 2,556,699
Change in forfeiture
reserve, net (4,979) (183,367) (263,516)
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 253,809 131,807 4,532,488 (3,742) 10,412,762
Interfund transfers, net 97,570 (168,140) (86,441) 188,436 -
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 351,379 (36,333) 4,446,047 184,694 10,412,762
Net assets available for
benefits at beginning of
year 313,342 1,436,881 9,050,365 24,546 34,145,297
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits at end of year $ 664,721 $1,400,548 $13,496,412 $209,240 $44,558,059
========== ========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
----------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY
CHARTER FIDELITY ADVISOR ADVISOR INVESCO
GUARANTEED ADVISOR GROWTH EQUITY INDUSTRIAL
LONG-TERM BALANCED OPPORTUNITIES GROWTH INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income
Interest $ 527,537
Net appreciation in fair
value
of investments $ 88,453 $ 650,564 $ 449,633 $ 627,175
---------- ---------- ---------- ---------- ----------
527,537 88,453 650,564 449,633 627,175
---------- ---------- ---------- ---------- ----------
Contributions
Employer
Employee 1,028,434 250,017 634,380 544,749 451,665
---------- ---------- ---------- ---------- ----------
1,028,434 250,017 634,380 544,749 451,665
---------- ---------- ---------- ---------- ----------
Total additions 1,555,971 338,470 1,284,944 994,382 1,078,840
Deductions from net assets
attributed to:
Benefit payments 833,370 117,938 250,677 121,030 287,620
Transaction charge 17,226 567 4,146 606 1,050
Participant notes
receivable terminated
due to withdrawal of
participant
---------- ---------- ---------- ---------- ----------
Total deductions 850,596 118,505 254,823 121,636 288,670
Change in forfeiture
reserve, net (76,755) (8,689) (30,015) (18,488) (52,710)
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 628,620 211,276 1,000,106 854,258 737,460
Interfund transfers, net (372,573) (96,027) (258,387) 236,283 (97,918)
---------- ---------- ---------- ---------- ----------
Net increase 256,047 115,249 741,719 1,090,541 639,542
Net assets available for
benefits
at beginning of the year 9,227,083 1,022,791 3,742,393 2,615,615 3,869,183
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits
at end of the year $9,483,130 $1,138,040 $4,484,112 $3,706,156 $4,508,725
========== ========== ========== ========== ==========
<CAPTION>
WARBURG
PINCUS
ADVISOR JP
FOUNDERS INTERNATIONAL FOODSERVICE PARTICIPANT
BALANCED EQUITY COMMON NOTES
FUND FUND STOCK RECEIVABLE TOTAL
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income
Interest $ 469 $ 528,006
Net appreciation in fair
value
of investments $ 7,880 $ 119,429 $ 2,106,808 4,049,942
---------- ---------- ----------- ---------- ------------
7,880 119,429 2,106,808 469 4,577,948
---------- ---------- ----------- ---------- ------------
Contributions
Employer 1,831,727 1,831,727
Employee 34,428 276,905 337,877 3,558,455
---------- ---------- ----------- ---------- ------------
34,428 276,905 2,169,604 5,390,182
---------- ---------- ----------- ---------- ------------
Total additions 42,308 396,334 4,276,412 469 9,968,130
Deductions from net assets
attributed to:
Benefit payments 144,831 253,617 2,009,083
Transaction charge 804 10,292 34,691
Participant notes
receivable terminated
due to withdrawal of
participant 467 467
---------- ---------- ----------- ---------- ------------
Total deductions 145,635 263,909 467 2,044,241
Change in forfeiture
reserve, net (9,293) (33,397) (229,347)
---------- ---------- ----------- ---------- ------------
Net increase prior to
interfund transfers 42,308 241,406 3,979,106 2 7,694,542
Interfund transfers, net 271,034 27,440 265,604 24,544 -
---------- ---------- ----------- ---------- ------------
Net increase 313,342 268,846 4,244,710 24,546 7,694,542
Net assets available for
benefits
at beginning of the year - 1,168,035 4,805,655 - 26,450,755
---------- ---------- ----------- ---------- ------------
Net assets available for
benefits
at end of the year $ 313,342 $1,436,881 $ 9,050,365 $ 24,546 $34,145,297
========== ========== =========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the JP Foodservice, Inc. (the "Company")
401(k) Retirement Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan established effective September 1,
1989 and most recently amended on May 8, 1997, retroactively effective
January 1, 1993. Generally, non-union employees of JP Foodservice
Distributors, Inc. (the "Employer") and any successor organization to such
Employer which elects to continue the Plan become eligible to participate
30 days after their date of hire. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS
Participants may contribute an amount equal to not less than 1 percent nor
more than 15 percent of their compensation for the contribution period. The
Company will make a matching contribution in an amount equal to $1.00 for
each $1.00 contributed by an employee, up to a maximum of 2 percent of the
participant's compensation. The Company may also make a nonelective
contribution in an amount equal to 1 percent of the participant's
compensation. However, the amount of contribution may vary as determined by
the Company.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and allocation of the Company's contribution and Plan earnings. Earnings
are allocated by fund based on the ratio of a participant's account
invested in a particular fund to all participants' investments in that
fund. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's account.
VESTING
Participants are immediately vested in their voluntary contributions plus
actual earnings thereon. The balance of vesting in the participants'
accounts is based on years of service. A participant becomes 100 percent
vested after five years of service. However, if an active participant dies
prior to attaining the normal retirement age, the participant's account
becomes 100 percent vested.
6
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may currently direct
contributions among any of the following investment options:
. Charter Guaranteed Long-Term Fund (formerly "Guaranteed Long-Term Fund")
-Funds are invested in the CIGNA Charter Guaranteed Long-Term Account,
which provides a guaranteed rate of return reset semiannually.
. Fidelity Advisor Balanced Fund (formerly "Fidelity Advisor Income &
Growth Fund") -Funds are invested solely in units of the CIGNA Fidelity
Advisor Balanced Fund, which in turn invests solely in shares of the
Fidelity Advisor Balanced Fund.
. Fidelity Advisor Growth Opportunities Fund - Funds are invested solely in
units of the CIGNA Fidelity Advisor Growth Opportunities Fund, which in
turn invests solely in shares of the Fidelity Advisor Growth
Opportunities Fund.
. Fidelity Advisor Equity Growth Fund - Funds are invested solely in units
of the CIGNA Fidelity Advisor Equity Growth Fund, which in turn invests
solely in shares of the Fidelity Advisor Equity Growth Fund.
. INVESCO Industrial Income Fund - Funds are invested solely in units of
the CIGNA INVESCO Industrial Income Fund, which in turn invests solely in
shares of the INVESCO Industrial Income Fund.
. Founders Balanced Fund - Funds are invested solely in units of the CIGNA
Founders Balanced Fund, which in turn invests solely in shares of the
Founders Balanced Fund.
. Warburg Pincus Advisor International Equity Fund - Funds are invested
solely in units of the CIGNA Warburg Pincus Advisor International Equity
Fund, which in turn invests solely in shares of the Warburg Pincus
Advisor International Equity Fund.
. JP Foodservice Common Stock - Funds are invested solely in shares of JP
Foodservice, Inc. common stock.
Participants may change their investment options at any time with the
exception of participants' Company matching and nonelective contributions
which must be invested in JP Foodservice Common Stock.
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of his or her account, a distribution in
the form of an annuity, or a combination of both. The participant's vested
Company match may also be distributed in the form of Company stock.
Distributions are subject to the applicable provisions of the Plan
agreement.
7
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
PARTICIPANT NOTES RECEIVABLE
Effective July 1, 1996, participants may borrow up to the lesser of $50,000
or 50 percent of the vested portion of the their account balance, subject
to certain restrictions, in accordance with interest rates and collateral
requirements established by the Company.
CASH EQUIVALENTS
Contributions received prior to year end awaiting investment in the
appropriate investment option at December 31, 1996 are invested in the
CIGNA Charter Guaranteed Short-Term Account, which is recorded at fair
value, and are included as cash equivalents within the fund in which units
are subsequently purchased.
2. SUMMARY OF ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The Plan's financial statements are prepared on the accrual basis of
accounting, and reflect management's estimates and assumptions, such as
those regarding fair value, that affect the recorded amounts. Significant
estimates used are discussed throughout the notes to financial statements.
INVESTMENTS
Investments in pooled separate accounts (CIGNA Fidelity Advisor Balanced
Fund, CIGNA Fidelity Advisor Growth Opportunities Fund, CIGNA Fidelity
Advisor Equity Growth Fund, CIGNA INVESCO Industrial Income Fund, CIGNA
Founders Balanced Fund and CIGNA Warburg Pincus Advisor International
Equity Fund) are recorded at fair value, as determined by the unit values
as reported by the Connecticut General Life Insurance Company ("CG Life").
The investment in the CIGNA Charter Guaranteed Long-Term Account is non-
fully benefit responsive and is recorded at fair value. Participant notes
receivable are valued at cost which approximates fair value. The JP
Foodservice, Inc. common stock is recorded at its quoted market price.
CONTRIBUTIONS
Employee contributions are recorded in the period during which the Company
makes payroll deductions from the participants' earnings. Most Company
matching contributions are recorded at year end. The Company currently
makes all matching contributions into JP Foodservice, Inc. Common Stock.
8
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
BENEFITS
Benefit claims are recorded as expenses when they have been approved for
payment and paid by the Plan.
3. DEPOSIT WITH INSURANCE COMPANY
The Plan participates in a contract with CG Life via an investment in the
CIGNA Charter Guaranteed Long-Term Account. CG Life commingles the assets
of the CIGNA Charter Guaranteed Long-Term Account with other assets. For
the Plan's investment in the CIGNA Charter Guaranteed Long-Term Account the
Plan is credited with interest at the rate specified in the contract which
was 5.95% and 5.85% for the years ended December 31, 1997 and 1996,
respectively, net of asset charges. CG Life prospectively guaranteed the
interest rates credited for the CIGNA Charter Guaranteed Long-Term Account
for six months. As discussed in Note 2, the Charter Guaranteed Long-Term
Account is included in the financial statements at fair value which,
principally because of the periodic rate reset process, approximates
contract value.
4. INVESTMENTS
Investments that represent 5 percent or more of the Plan's net assets are
separately identified below.
<TABLE>
<CAPTION>
DECEMBER 31,
1997 1996
<S> <C> <C>
CIGNA Charter Guaranteed Long-Term Account $ 9,552,751 $9,405,646
interest rates, 5.95%; 5.85%
CIGNA Fidelity Advisor Growth Opportunities Fund 6,685,791 4,443,052
units, 107,992; 92,084
CIGNA Fidelity Advisor Equity Growth Fund 5,117,687 3,669,064
units, 85,594; 75,901
CIGNA INVESCO Industrial Income Fund 5,866,946 4,477,163
units, 269,621; 259,245
JP Foodservice Common Stock 11,538,638 7,197,195
shares, 312,362; 258,334
</TABLE>
5. PARTICIPANT NOTES RECEIVABLE
Under the terms of the Plan, effective July 1, 1996, participants may
borrow from their accounts up to the lesser of $50,000 or 50 percent of
their vested account balance. Loan transactions are treated as a transfer
to/from the investment fund from/to Participant Notes Receivable. A loan is
secured by the balance in the participant's account and bears interest at a
rate commensurate with market rates for similar loans, as defined (7.00% to
10.00% and 8.00% to 8.50% for the years ended December 31, 1997 and 1996,
respectively.)
9
<PAGE>
JP FOODSERVICE, INC.
401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. 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, participants will become 100 percent vested in their accounts.
7. INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated November 8, 1995, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
("IRC"). The Plan has been amended since receiving the determination
letter. However, the Plan's administrator believes that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
8. RECONCILIATION OF PLAN FINANCIAL STATEMENTS TO THE FORM 5500
Certain balances included on lines 31 and 32 of the Annual Return/Report of
Employee Benefit Plans (the "Form 5500") have been reclassified for
purposes of presentation in these financial statements to provide
additional disclosure.
9. FORFEITURES
The net change in forfeiture reserve represents the net change in the
available forfeiture reserve balance from the prior year plus the current
year forfeitures generated. Forfeitures result from nonvested benefit
payments remaining in the Plan for all terminated employees. Upon reaching
the break-in-service requirement, as defined in the Plan agreement,
forfeitures generated are added to the forfeiture reserve balance. The
forfeiture reserve of $11,518 and $0 at December 31, 1997 and 1996,
respectively, is included in the CIGNA Charter Guaranteed Long-Term Account
and is available to offset contributions, which would be otherwise payable
by the Company, in accordance with the Plan agreement. In 1997 and 1996
Company cash contributions were offset by $267,300 and $235,444,
respectively, from forfeited nonvested accounts.
10. SUBSEQUENT EVENTS
Effective January 1, 1998, employees of Valley Industries, Squeri Food
Service, Inc., Arrow Paper and Supply Co., Inc. and Mazo-Lerch Company,
which were previously acquired, became eligible to participate in the Plan,
subject to Plan provisions. During 1998, Sorrento Food Service, Inc. was
acquired by JP Foodservice, Inc. at which time employees became eligible to
participate in the Plan subject to Plan provisions. Effective February 26,
1998, JP Foodservice, Inc. changed its name to U.S. Foodservice.
10
<PAGE>
JP FOODSERVICE, INC. ADDITIONAL INFORMATION
401(K) RETIREMENT SAVINGS PLAN SCHEDULE I
LINE 27a FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT INCLUDING (e)
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
<S> <C> <C> <C> <C>
Connecticut General Life CIGNA Charter Guaranteed Long-Term
* Insurance Company Account
5.95% $ 9,552,751 $ 9,552,751
Connecticut General Life CIGNA Fidelity Advisor Balanced Fund
* Insurance Company $27.48/unit 1,205,034 1,563,963
Connecticut General Life CIGNA Fidelity Advisor Growth
* Insurance Company Opportunities Fund
$61.91/unit 4,278,210 6,685,791
Connecticut General Life CIGNA Fidelity Advisor Equity
* Insurance Company Growth Fund
$59.79/unit 3,561,998 5,117,687
Connecticut General Life CIGNA INVESCO Industrial
* Insurance Company Income Fund
$21.76/unit 3,700,485 5,866,946
Connecticut General Life Founders Balanced Fund
* Insurance Company $13.15/unit 597,940 664,721
Connecticut General Life CIGNA Warburg Pincus Advisor
* Insurance Company International Equity Fund
$22.23/unit 1,371,739 1,400,548
* JP Foodservice, Inc. JP Foodservice Common Stock
$36.94/share 6,132,076 11,538,638
* Participant Notes Receivable 7.00% - 10.00% 209,240 209,240
</TABLE>
* Indicates an identified person known to be a party-in-interest to the Plan.
11
<PAGE>
JP FOODSERVICE, INC. ADDITIONAL INFORMATION
401(K) RETIREMENT SAVINGS PLAN SCHEDULE II
LINE 27d FORM 5500 - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(b)
DESCRIPTION
OF ASSET (h)
(INCLUDE (f) CURRENT
INTEREST RATE EXPENSE (g) VALUE
(a) AND MATURITY (c) (d) (e) INCURRED COST OF ASSET ON (i)
IDENTITY OF PARTY IN CASE PURCHASE SELLING LEASE WITH OF TRANSACTION NET GAIN
INVOLVED OF A LOAN) PRICE PRICE RENTAL TRANSACTION ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Connecticut General Purchases
Life Insurance into CIGNA
Company Charter
Guaranteed
Long-Term
Account $ 2,323,402 N/A N/A N/A $ 2,323,402 $ 2,323,402 -
Connecticut General Sales from
Life Insurance CIGNA
Company Charter
Guaranteed
Long-Term
Account N/A $ 2,720,636 N/A N/A 2,720,636 2,720,636 -
Connecticut General Purchases
Life Insurance into CIGNA
Company Fidelity
Advisor
Growth
Opportunities
Fund 1,472,655 N/A N/A N/A 1,472,655 1,472,655 -
Connecticut General Sales from
Life Insurance CIGNA
Company Fidelity
Advisor
Growth
Opportunities Fund N/A 578,068 N/A N/A 392,457 578,068 $ 185,611
Connecticut General Purchases
Life Insurance into CIGNA
Company Fidelity
Advisor
Equity
Growth Fund 1,241,411 N/A N/A N/A 1,241,411 1,241,411 -
Connecticut General Sales from
Life Insurance CIGNA
Company Fidelity
Advisor
Equity
Growth Fund N/A 690,284 N/A N/A 494,206 690,284 196,078
JP Foodservice, Inc. Purchases
into JP
Foodservice
Common Stock 2,593,092 N/A N/A N/A 2,593,092 2,593,092 -
JP Foodservice, Inc. Sales from JP
Foodservice
Common Stock N/A 1,044,153 N/A N/A 702,005 1,044,153 342,148
</TABLE>
12
<PAGE>
EXHIBIT 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-81011) of JP Foodservice, Inc. of our report
dated June 18, 1998 appearing on page 1 of the Financial Statements of the JP
Foodservice, Inc. 401(k) Retirement Savings Plan for the year ended December 31,
1997 included in this Form 11-K.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Hartford, Connecticut
June 23, 1998
