UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 2006
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-00981
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PUBLIX SUPER MARKETS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Florida 59-0324412
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3300 Publix Corporate Parkway
Lakeland, Florida 33811
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (863) 688-1188
--------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer X Accelerated filer Non-accelerated filer
----- ----- -----
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes No X
----- -----
The number of shares outstanding of the Registrant's common stock, $1.00 par
value, as of July 28, 2006 was 848,644,313.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
-------------------------------
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts are in thousands, except par value and share amounts)
ASSETS
July 1, 2006 December 31, 2005
------------ -----------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 385,305 335,969
Short-term investments 128,598 119,303
Trade receivables 326,412 354,950
Merchandise inventories 1,047,731 1,109,543
Deferred tax assets 95,044 85,475
Prepaid expenses 21,213 42,521
----------- ----------
Total current assets 2,004,303 2,047,761
----------- ----------
Long-term investments 1,847,244 1,573,795
Other noncurrent assets 57,244 57,786
Property, plant and equipment 5,751,389 5,575,612
Less accumulated depreciation (2,685,242) (2,527,731)
----------- ----------
Net property, plant and equipment 3,066,147 3,047,881
----------- ----------
Total assets $ 6,974,938 6,727,223
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 892,143 913,521
Accrued contribution to retirement plans 223,211 349,805
Accrued self-insurance reserves 121,666 119,339
Accrued salaries and wages 145,711 98,629
Federal and state income taxes 9,151 148,352
Other 227,646 181,627
----------- ----------
Total current liabilities 1,619,528 1,811,273
----------- ----------
Deferred tax liabilities 255,770 283,979
Self-insurance reserves 245,831 242,449
Accrued postretirement benefit cost 68,613 68,088
Other noncurrent liabilities 115,452 115,660
Stockholders' equity:
Common stock of $1 par value. Authorized
1,000,000,000 shares; issued 860,766,515
shares at July 1, 2006 and 846,942,360
shares at December 31, 2005 860,767 846,942
Additional paid-in capital 513,883 302,178
Retained earnings 3,451,077 3,070,310
----------- ----------
4,825,727 4,219,430
Less 6,797,045 treasury shares
at July 1, 2006, at cost (115,880) ---
Accumulated other comprehensive losses (40,103) (13,656)
----------- ----------
Total stockholders' equity 4,669,744 4,205,774
----------- ----------
Total liabilities and stockholders'
equity $ 6,974,938 6,727,223
=========== ==========
See accompanying notes to condensed consolidated financial statements.
1
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except shares outstanding and per share amounts)
Three Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Revenues:
Sales $ 5,341,527 4,812,391
Other operating income 41,127 38,536
----------- -----------
Total revenues 5,382,654 4,850,927
----------- -----------
Costs and expenses:
Cost of merchandise sold 3,893,064 3,480,729
Operating and administrative expenses 1,109,827 1,021,704
----------- -----------
Total costs and expenses 5,002,891 4,502,433
----------- -----------
Operating profit 379,763 348,494
----------- -----------
Investment income, net 27,842 16,859
Other income, net 7,575 4,797
----------- -----------
Earnings before income tax expense 415,180 370,150
Income tax expense 151,175 135,246
----------- -----------
Net earnings $ 264,005 234,904
=========== ===========
Weighted average number of common
shares outstanding 856,937,371 868,919,625
=========== ===========
Basic and diluted earnings per common
share based on weighted average
shares outstanding $ .31 .27
=========== ===========
Cash dividends paid per common share $ .20 .14
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Net earnings $ 264,005 234,904
Other comprehensive losses:
Unrealized (loss) gain on investment
securities available-for-sale,
net of tax effect of ($13,444) and
$7,756 in 2006 and 2005, respectively (21,408) 12,350
Reclassification adjustment for net
realized loss (gain) on investment
securities available-for-sale, net
of tax effect of $239 and ($196)
in 2006 and 2005, respectively 381 (312)
----------- -----------
Comprehensive earnings $ 242,978 246,942
=========== ===========
See accompanying notes to condensed consolidated financial statements.
2
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except shares outstanding and per share amounts)
Six Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Revenues:
Sales $ 10,851,817 9,954,702
Other operating income 81,915 76,698
------------ -----------
Total revenues 10,933,732 10,031,400
------------ -----------
Costs and expenses:
Cost of merchandise sold 7,903,971 7,225,351
Operating and administrative expenses 2,232,481 2,069,548
------------ -----------
Total costs and expenses 10,136,452 9,294,899
------------ -----------
Operating profit 797,280 736,501
------------ -----------
Investment income, net 54,264 32,976
Other income, net 13,148 11,150
------------ -----------
Earnings before income tax expense 864,692 780,627
Income tax expense 312,280 286,617
------------ -----------
Net earnings $ 552,412 494,010
============ ===========
Weighted average number of common
shares outstanding 853,305,568 867,323,360
============ ===========
Basic and diluted earnings per common
share based on weighted average
shares outstanding $ .65 .57
============ ===========
Cash dividends paid per common share $ .20 .14
============ ===========
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Six Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Net earnings $ 552,412 494,010
Other comprehensive losses:
Unrealized (loss) gain on investment
securities available-for-sale,
net of tax effect of ($16,702) and
$1,731 in 2006 and 2005, respectively (26,594) 2,757
Reclassification adjustment for net
realized loss (gain) on investment
securities available-for-sale, net
of tax effect of $93 and ($1,516)
in 2006 and 2005, respectively 147 (2,415)
------------ -----------
Comprehensive earnings $ 525,965 494,352
============ ===========
See accompanying notes to condensed consolidated financial statements.
3
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)
Six Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Cash flows from operating activities:
Cash received from customers $ 10,899,969 9,996,791
Cash paid to employees and suppliers (9,537,394) (8,732,346)
Income taxes paid (471,740) (535,203)
Payment for self-insured claims (97,461) (90,701)
Dividends and interest received 56,096 32,590
Other operating cash receipts 75,600 70,176
Other operating cash payments (3,800) (3,219)
------------ ----------
Net cash provided by operating activities 921,270 738,088
------------ ----------
Cash flows from investing activities:
Payment for property, plant and
equipment (223,814) (152,189)
Proceeds from sale of property, plant
and equipment 8,632 9,406
Proceeds from sale-leasebacks 6,247 4,049
Payment for investment securities -
available-for-sale (AFS) (559,669) (504,669)
Proceeds from sale and maturity of
investment securities - AFS 234,610 138,970
Net (payments to) proceeds from joint
ventures and other investments (5,086) 4,014
Other, net 4,414 (4,833)
------------ ----------
Net cash used in investing activities (534,666) (505,252)
------------ ----------
Cash flows from financing activities:
Payment for acquisition of common stock (282,717) (309,320)
Proceeds from sale of common stock 117,225 57,474
Dividends paid (171,645) (121,949)
Other (131) (131)
------------ -----------
Net cash used in financing activities (337,268) (373,926)
------------ ----------
Net increase (decrease) in cash and cash equivalents 49,336 (141,090)
Cash and cash equivalents at beginning of period 335,969 370,288
------------ ----------
Cash and cash equivalents at end of period $ 385,305 229,198
============ ==========
See accompanying notes to condensed consolidated financial statments. (Continued)
4
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts are in thousands)
Six Months Ended
July 1, 2006 June 25, 2005
------------ -------------
(Unaudited)
Reconciliation of net earnings to net cash
provided by operating activities
Net earnings $ 552,412 494,010
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 193,159 184,157
Retirement contributions paid or payable
in common stock 141,350 146,582
Deferred income taxes (21,169) (24,965)
Loss on sale of property, plant and
equipment 6,116 652
Amortization of deferred income from
sale-leasebacks (2,510) (928)
Loss (gain) on sale of investments 240 (3,931)
Self-insurance reserves in excess of
current payments 5,709 17,823
Postretirement accruals in excess of (less than)
current payments 525 (131)
Decrease in advance purchase
allowances (717) (1,092)
Other, net (5,380) 1,529
Change in cash from:
Trade receivables 28,538 24,130
Merchandise inventories 61,812 66,323
Prepaid expenses 21,308 (7,965)
Accounts payable and accrued expenses 79,078 65,515
Federal and state income taxes (139,201) (223,621)
------------ ---------
Total adjustments 368,858 244,078
------------ ---------
Net cash provided by operating activities $ 921,270 738,088
============ =========
See accompanying notes to condensed consolidated financial statements.
5
PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed consolidated financial statements included
herein are unaudited; however, in the opinion of management, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are necessary for the fair statement of results for the
interim period. These condensed consolidated financial statements should be
read in conjunction with the fiscal 2005 Form 10-K Annual Report of the
Company.
2. Due to the seasonal nature of the Company's business, the results for the
three months and six months ended July 1, 2006 are not necessarily
indicative of the results for the entire 2006 fiscal year.
3. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
4. On April 18, 2006, the Company's stockholders approved an increase in the
number of authorized shares of common stock from 300 million shares to 1
billion shares to allow for a 5-for-1 stock split effective July 1, 2006.
All applicable data, including share and per share amounts, in the
accompanying condensed consolidated financial statements have been
retroactively restated to give effect to the stock split.
5. In November 2004, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard No. 151, "Inventory Costs,"
(SFAS 151) effective for fiscal years beginning after June 15, 2005.
SFAS 151 amends Accounting Research Bulletin No. 43, Chapter 4, "Inventory
Pricing," to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs and wasted material. SFAS 151 requires
that those items be recognized as current period charges and requires that
allocation of fixed production overhead to the cost of conversion be based
on the normal capacity of the production facilities. The adoption of
SFAS 151 did not have a material effect on the Company's financial
condition, results of operations or cash flows.
6. In December 2004, the FASB issued a revision to Statement of Financial
Accounting Standard No. 123, "Share-Based Payment," (SFAS 123(R)) effective
for fiscal years beginning after June 15, 2005. SFAS 123(R) requires all
stock-based compensation awards to be recorded at fair value as an expense
in the Company's consolidated financial statements. The adoption of
SFAS 123(R) had no effect on the Company's financial condition, results of
operations or cash flows.
7. In May 2005, the FASB issued Statement of Financial Accounting Standard
No. 154, "Accounting Changes and Error Corrections," (SFAS 154) effective
for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005. SFAS 154 replaces Accounting Principles
Board Opinion 20, "Accounting Changes," and Statement of Financial
Accounting Standard No. 3 "Reporting Accounting Changes in Interim
Financial Statements." Among other changes, SFAS 154 requires
retrospective application to prior periods' financial statements for
changes in accounting principle, unless it is impractical to determine
either the period-specific effects or the cumulative effect of the change.
SFAS 154 also requires that a change in depreciation, amortization, or
depletion method for long-lived non-financial assets be accounted for as a
change in accounting estimate effected by a change in accounting principle.
The adoption of SFAS 154 will only affect the Company's financial condition
or results of operations if it has such changes or corrections of errors
in the future.
6
8. In June 2006, the FASB issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109,"
(FIN 48) effective for fiscal years beginning after December 15, 2006.
FIN 48 clarifies the accounting for uncertainty in tax positions. FIN 48
requires financial statement recognition of the impact of a tax position
when it is more likely than not, based on its technical merits, that the
position will be sustained upon examination and the cumulative effect of
the change in accounting principle is to be recorded as an adjustment to
opening retained earnings. The adoption of FIN 48 is not expected to have a
material effect on the Company's financial condition, results of operations
or cash flows.
9. In June 2006, the FASB ratified Emerging Issues Task Force Issue No. 06-3,
"How Sales Taxes Collected From Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That Is, Gross
Versus Net Presentation)," (EITF 06-3) effective for periods beginning
after December 15, 2006. EITF 06-3 allows taxes assessed by various
governmental authorities that are directly imposed on revenue-producing
transactions between a seller and a customer, such as sales and some excise
taxes, to be presented on either a gross or net basis. If such taxes are
significant, the accounting policy should be disclosed as well as the
amount of taxes included in revenue if presented on a gross basis. The
Company records sales net of applicable sales taxes. As a result, the
adoption of EITF 06-3 will not have an effect on the presentation of the
Company's financial statements.
7
PUBLIX SUPER MARKETS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations
---------------------
Overview
--------
The Company is primarily engaged in the retail food industry, operating
stores in Florida, Georgia, South Carolina, Alabama and Tennessee. As of
July 1, 2006, the Company operated 882 supermarkets, five convenience stores
and 14 liquor stores. In addition, the Company has a majority position in the
Crispers restaurant chain. As of July 1, 2006, Crispers operated 36 restaurants,
all located in Florida.
Liquidity and Capital Resources
-------------------------------
Cash and cash equivalents, short-term investments and long-term
investments totaled $2,361.1 million as of July 1, 2006, as compared with
$2,029.1 million as of December 31, 2005.
Net cash provided by operating activities
-----------------------------------------
Net cash provided by operating activities was $921.3 million for the six
months ended July 1, 2006, as compared with $738.1 million for the six months
ended June 25, 2005. As a result of hurricane Wilma that occurred during the
fourth quarter of 2005, the Company received an extension on its Federal income
tax payment due December 15, 2005 until February 28, 2006. The delay in this tax
payment decreased net cash provided by operating activities by $95.0 million
during the six months ended July 1, 2006. During 2004, the Company experienced
an unprecedented four major hurricanes in six weeks. As a result, the Company
received an extension on its Federal income tax payments due September 15, 2004
and December 15, 2004 until December 30, 2004. The delay in these tax payments
decreased net cash provided by operating activities by $190.0 million during the
six months ended June 25, 2005. Any net cash in excess of the amount needed for
current operations is invested in short-term and long-term investments.
Net cash used in investing activities
-------------------------------------
Net cash used in investing activities was $534.7 million for the six
months ended July 1, 2006, as compared with $505.3 million for the six months
ended June 25, 2005. The primary use of net cash in investing activities was
funding capital expenditures and purchasing investments. During the six months
ended July 1, 2006, capital expenditures totaled $223.8 million. These
expenditures were incurred in connection with the opening of seven net new
supermarkets (13 new supermarkets opened and six supermarkets closed) and
remodeling 15 supermarkets. Net new supermarkets added an additional 0.3 million
square feet in the six months ended July 1, 2006, a 0.8% increase. Expenditures
were also incurred for new or enhanced information technology applications.
During the six months ended June 25, 2005, capital expenditures totaled $152.2
million. These expenditures were primarily incurred in connection with the
opening of four net new supermarkets (11 new supermarkets opened and seven
supermarkets closed) and remodeling or expanding 21 supermarkets. Net new
supermarkets added an additional 0.2 million square feet in the six months ended
June 25, 2005, a 0.6% increase. Significant expenditures were also incurred in
the expansion of warehouses and new or enhanced information technology
applications.
Capital expenditure projection
------------------------------
Capital expenditures for the remainder of 2006, primarily consisting of
new supermarkets, remodeling and expanding certain existing supermarkets,
expansion of warehouses, installation of generators at hurricane prone
locations, and new or enhanced information technology applications, are expected
to be approximately $251.2 million. This capital program is subject to
continuing change and review. In the normal course of operations, the Company
replaces supermarkets and closes supermarkets that are not meeting performance
expectations. The impact of future supermarket closings is not expected to be
material.
8
Net cash used in financing activities
-------------------------------------
Net cash used in financing activities was $337.3 million for the six
months ended July 1, 2006, as compared with $373.9 million for the six months
ended June 25, 2005. The primary use of net cash in financing activities was
funding net common stock repurchases and payment of an annual cash dividend. The
Company currently repurchases common stock at the stockholders' request in
accordance with the terms of the Company's Employee Stock Purchase Plan,
401(k)Plan, Employee Stock Ownership Plan and Non-Employee Directors Stock
Purchase Plan. Net common stock repurchases totaled $165.5 million for the six
months ended July 1, 2006, as compared with $251.8 million for the six months
ended June 25, 2005. The amount of common stock offered to the Company for
repurchase is not within the control of the Company, but is at the discretion of
the stockholders. The Company expects to continue to repurchase its common
stock, as offered by its stockholders from time to time, at its then currently
appraised value for amounts similar to those in prior years. However, such
purchases are not required and the Company retains the right to discontinue them
at any time.
Dividends
---------
The Company paid an annual cash dividend on its common stock of $0.20
per share or $171.6 million on June 1, 2006 to stockholders of record as of the
close of business April 21, 2006. In 2005, the Company paid an annual cash
dividend on its common stock of $0.14 per share or $121.9 million.
Cash requirements
-----------------
In 2006, the cash requirements for current operations, capital
expenditures and common stock repurchases are expected to be financed by
internally generated funds or liquid assets. Based on the Company's financial
position, it is expected that short-term and long-term borrowings would be
readily available to support the Company's liquidity requirements if needed.
Results of Operations
---------------------
Sales
-----
Sales for the three months ended July 1, 2006, were $5.3 billion as
compared with $4.8 billion for the three months ended June 25, 2005, an increase
of $529.1 million or an 11.0% increase. The Company estimates that its sales
increased approximately $120.0 million or 2.5% from net new supermarkets and
approximately $409.1 million or 8.5% in comparable store sales (supermarkets
open for the same weeks in both periods, including replacement supermarkets)
since the beginning of the second quarter of 2005. Additionally, sales for the
second quarter of 2006 included approximately $62.0 million of sales or 1.3% due
to the later Easter holiday which was in the first quarter of 2005.
Sales for the six months ended July 1, 2006 were $10.9 billion, as
compared with $10.0 billion for the six months ended June 25, 2005, an increase
of $897.1 million or a 9.0% increase. This reflects an increase of approximately
$230.1 million or 2.3% from net new supermarkets and an increase of
approximately $667.0 million or 6.7% in comparable store sales.
Gross profit
------------
Gross profit, as a percentage of sales, was 27.1% and 27.7% for the
three months ended July 1, 2006 and June 25, 2005, respectively. These gross
profit percentages were 27.2% and 27.4% for the six months ended July 1, 2006
and June 25, 2005, respectively. The decreases in gross profit as a percentage
of sales for the three months and six months ended July 1, 2006 were primarily
due to an increase in the LIFO reserve and aggressive promotional pricing.
9
Operating and administrative expenses
-------------------------------------
Operating and administrative expenses, as a percentage of sales, were
20.8% and 21.2% for the three months ended July 1, 2006 and June 25, 2005,
respectively. The operating and administrative expenses, as a percentage of
sales, were 20.6% and 20.8% for the six months ended July 1, 2006 and
June 25, 2005, respectively. The decreases in operating and administrative
expenses as a percentage of sales during the three and six months ended
July 1, 2006 were primarily due to decreases in payroll and employee benefit
costs which were partially offset by increases in utilities and other operating
expenses.
Investment income, net
----------------------
Investment income, net was $27.8 million and $16.9 million for the three
months ended July 1, 2006 and June 25, 2005, respectively. Investment income,
net was $54.3 million and $33.0 million for the six months ended July 1, 2006
and June 25, 2005, respectively. The increase in investment income, net was
primarily due to higher investment balances as well as higher interest rates
during the three and six months ended July 1, 2006.
Income taxes
------------
The effective income tax rates were 36.4% and 36.5% for the three months
ended July 1, 2006 and June 25, 2005, respectively. The effective income tax
rates were 36.1% and 36.7% for the six months ended July 1, 2006 and
June 25, 2005, respectively. The effective income tax rates differ from the
expected U.S. Federal statutory rate of 35.0% in both periods due to the impact
of state income taxes, partially offset by the Federal benefit of state income
taxes, tax exempt interest and dividends paid to ESOP participants.
Net earnings
------------
Net earnings were $264.0 million or $0.31 per share and $234.9 million
or $0.27 per share for the three months ended July 1, 2006 and June 25, 2005,
respectively. Net earnings were $552.4 million or $0.65 per share and
$494.0 million or $0.57 per share for the six months ended July 1, 2006 and
June 25, 2005, respectively.
Forward-Looking Statements
--------------------------
From time to time, certain information provided by the Company,
including written or oral statements made by its representatives, may contain
forward-looking information as defined in Section 21E of the Securities Exchange
Act of 1934. Forward-looking information includes statements about the future
performance of the Company, which is based on management's assumptions and
beliefs in light of the information currently available to them. When used, the
words "plan," "estimate," "project," "intend," "believe" and other similar
expressions, as they relate to the Company, are intended to identify such
forward-looking statements. These forward-looking statements are subject to
uncertainties and other factors that could cause actual results to differ
materially from those statements including, but not limited to: competitive
practices and pricing in the food and drug industries generally and particularly
in the Company's principal markets; results of programs to control or reduce
costs, improve buying practices and control shrink; results of programs to
increase sales, including private-label sales, improve perishable departments
and improve pricing and promotional efforts; changes in the general economy;
changes in consumer spending; changes in population, employment and job growth
in the Company's principal markets; and other factors affecting the Company's
business in or beyond the Company's control. These factors include changes in
the rate of inflation, changes in state and Federal legislation or regulation,
adverse determinations with respect to litigation or other claims, ability to
recruit and retain employees, increases in operating costs including, but not
limited to, labor costs, credit card fees and utility costs, particularly
electric utility costs, ability to construct new supermarkets or complete
remodels as rapidly as planned and stability of product costs. Other factors and
assumptions not identified above could also cause the actual results to differ
materially from those set forth in the forward-looking statements. The Company
assumes no obligation to update publicly these forward-looking statements.
10
Item 3. Quantitative and Qualitative Disclosures About Market Risk
---------------------------------------------------------------------
The Company does not utilize financial instruments for trading or other
speculative purposes, nor does it utilize leveraged financial instruments. There
have been no material changes in the market risk factors from those disclosed in
the Company's Form 10-K for the year ended December 31, 2005.
Item 4. Controls and Procedures
----------------------------------
As of the end of the period covered by this quarterly report, the
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Company's periodic Securities and
Exchange Commission filings. There have been no changes in the Company's
internal control over financial reporting during the quarter ended July 1, 2006,
that have materially affected, or are reasonably likely to materially affect,
the internal control over financial reporting.
11
PUBLIX SUPER MARKETS, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
----------------------------
As reported in the Company's Form 10-K for the year ended
December 31, 2005, the Company is a party in various legal claims and
actions considered in the normal course of business. In the opinion of
management, the ultimate resolution of these legal proceedings will not have
a material adverse effect on the Company's financial condition, results of
operations or cash flows.
Item 1A. Risk Factors
-----------------------
There have been no material changes in the risk factors from those
disclosed in the Company's Form 10-K for the year ended December 31, 2005.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
----------------------------------------------------------------------
Issuer Purchases of Equity Securities
-------------------------------------
Shares of common stock repurchased by the Company during the three
months ended July 1, 2006 were as follows:
Total
Number of Approximate
Shares Dollar Value
Purchased as of Shares
Total Average Part of Publicly that May Yet Be
Number of Price Announced Purchased Under
Shares Paid per Plans or the Plans or
Period Purchased Share Programs(1) Programs(1)
------ --------- ----- ----------- -----------
April 2, 2006
through
May 6, 2006 1,727,655 $17.10 N/A N/A
May 7, 2006
through
June 3, 2006 1,925,260 17.63 N/A N/A
June 4, 2006
through
July 1, 2006 3,177,615 17.65 N/A N/A
--------- ------
Total 6,830,530 $17.51 N/A N/A
========= ======
(1) Common stock is made available for sale only to the Company's
current employees through the Company's Employee Stock Purchase
Plan (ESPP) and 401(k) Plan. In addition, common stock is made
available under the Employee Stock Ownership Plan (ESOP). Common
stock is also made available for sale to members of the Company's
Board of Directors through the Non-Employee Directors Stock
Purchase Plan (Directors Plan). The Company currently repurchases
common stock subject to certain terms and conditions. The ESPP,
401(k) Plan, ESOP and Directors Plan each contain provisions
prohibiting any transfer for value without the owner first
offering the common stock to the Company.
12
The Company's common stock is not traded on any public stock
exchange. The amount of common stock offered to the Company for
repurchase is not within the control of the Company, but is at the
discretion of the stockholders. The Company does not believe that
these repurchases of its common stock are within the scope of a
publicly announced plan or program (although the terms of the
plans discussed above have been communicated to the participants).
Thus, the Company does not believe that it has made any
repurchases during the three months ended July 1, 2006 required to
be disclosed in the last two columns of the table.
Item 3. Defaults Upon Senior Securities
------------------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
--------------------------------------------------------------
Not Applicable.
Item 5. Other Information
--------------------------
Not Applicable.
Item 6. Exhibits
-------------------
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PUBLIX SUPER MARKETS, INC.
Date: August 10, 2006 /s/ John A. Attaway, Jr.
--------------------------------------------
John A. Attaway, Jr., Secretary
Date: August 10, 2006 /s/ David P. Phillips
--------------------------------------------
David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
14