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Equity Condensed Consolidated Statement of
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(Exact name of Registrant as specified in its charter)
iFlorida
i59-0324412
(State
of incorporation)
(I.R.S. Employer Identification No.)
i3300 Publix Corporate Parkway
iLakeland,
iFlorida
i33811
(Address of principal executive offices)
(Zip
Code)
i(863)i688-1188
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
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 and (2) has been subject to such filing requirements for the past 90 days.
iYes X No
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months.
iYes X No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,”“accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer Accelerated filer iNon-accelerated filer X
Smaller reporting company i Emerging
growth company i
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the
Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
See
accompanying notes to condensed consolidated financial statements.
7
PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1)iiBasis
of Presentation/
The accompanying unaudited condensed consolidated financial statements of Publix Super Markets, Inc. and subsidiaries (Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. Accordingly, the accompanying statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments that are of a normal and recurring nature necessary to present fairly the
Company’s financial position and results of operations. Due to the seasonal nature of the Company’s business, the results of operations for the three and nine months ended September 24, 2022 are not necessarily indicative of the results for the entire 2022 fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2021 (Annual Report).
The preparation of financial statements in conformity with GAAP 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.
On April 1, 2022, the Company filed Articles of Amendment to its Restated Articles of Incorporation in order to effect a i5-for-1
stock split of the Company’s common stock, par value $i1.00 per share (Common Stock), and an increase in the number of authorized shares of Common Stock from i1,000,000,000
to i4,000,000,000, effective as of the close of business April 14, 2022. The Articles of Amendment were approved by the Company’s Board of Directors on April 1, 2022. All applicable data, including share and per share amounts, in the condensed consolidated financial statements and accompanying notes have been retroactively adjusted to give effect to the stock split.
(2)iFair
Value of Financial Instruments
The fair value of certain of the Company’s financial instruments, including cash and cash equivalents, trade receivables and accounts payable, approximates their respective carrying amounts due to their short-term maturity.
The fair value of investments is based on market prices using the following measurement categories:
Level 1 – Fair value is determined by using quoted prices in active markets for identical investments. Investments included in this category are equity securities (exchange traded funds).
Level 2 – Fair value is determined by using other than quoted prices. By using observable inputs (for example, benchmark yields, interest rates, reported trades and broker
dealer quotes), the fair value is determined through processes such as benchmark curves, benchmarking of similar securities and matrix pricing of corporate, government-sponsored agency, state and municipal bonds by using pricing of similar bonds based on coupons, ratings and maturities. Investments included in this category are primarily debt securities (taxable and tax exempt bonds), including restricted investments in taxable bonds held as collateral.
Level 3 – Fair value is determined by using other than observable inputs. Fair value is determined by using the best information available in the circumstances and requires significant management judgment or estimation. No investments are currently included in this category.
The
Company maintains restricted investments primarily for the benefit of the Company’s insurance carrier related to self-insurance reserves. These investments are held as collateral and not used for claim payments.
There
are i456 debt securities contributing to the total unrealized losses of $i886,111,000
as of September 24, 2022. Unrealized losses related to debt securities are primarily due to increases in interest rates that occurred since the debt securities were purchased. The Company continues to receive scheduled principal and interest payments on these debt securities.
(b)Equity Securities
Equity securities are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings (fair value adjustment). The fair value of equity securities was $i2,479,761,000
and $i3,557,705,000 as of September 24, 2022 and December 25, 2021, respectively.
(c)Investment Income (Loss)
Net realized gain or loss on investments represents the difference between the cost and the proceeds from the sale of debt and equity securities. The net realized gain or loss on investments excludes the net gain or loss on the sale of equity securities previously recognized
through the fair value adjustment, which is presented separately in the following table.
Fair
value adjustment, due to net unrealized (loss) gain, on equity securities held at end of period
(i556,315)
i72,945
(i1,495,275)
i986,756
Net
gain on sale of equity securities previously recognized through fair value adjustment
i—
i—
i—
(i9,441)
$
(i497,394)
i130,328
(i1,323,618)
i1,153,309
/
10
PUBLIX
SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(4)iConsolidation of Joint Ventures and Long-Term Debt
From time to time,
the Company enters into a joint venture (JV), in the legal form of a limited liability company, with real estate developers to partner in the development of a shopping center with the Company as the anchor tenant. The Company consolidates certain of these JVs in which it has a controlling financial interest. As of September 24, 2022, the carrying amounts of the assets and liabilities of the consolidated JVs were $i181,818,000
and $i74,669,000, respectively. As of December 25, 2021, the carrying amounts of the assets and liabilities of the consolidated JVs were $i194,493,000 and $i76,027,000,
respectively. The assets are owned by and the liabilities are obligations of the JVs, not the Company, except for a portion of the long-term debt of certain JVs guaranteed by the Company. The JVs are financed with capital contributions from the members, loans and/or the cash flows generated by the JV owned shopping centers once in operation. Total earnings attributable to noncontrolling interests for 2022 and 2021 were immaterial. The Company’s involvement with these JVs does not have a significant effect on the Company’s financial condition, results of operations or cash flows.
The
Company’s long-term debt results primarily from the consolidation of loans of certain JVs and loans assumed in connection with the acquisition of certain shopping centers with the Company as the anchor tenant. iiNo/
loans were assumed during the nine months ended September 24, 2022 or September 25, 2021. Maturities of JV loans range from iJanuary 2023 through iApril 2027 and have variable interest rates based on a London Interbank Offered
Rate (LIBOR) index or Secured Overnight Financing Rate (SOFR) index plus i200 to i250 basis points. Maturities of assumed shopping center loans range from iNovember
2022 through iJanuary 2027 and have fixed interest rates ranging from i3.7% to i7.5%.
(5)iRetirement
Plan
The Company has a trusteed, noncontributory Employee Stock Ownership Plan (ESOP) for the benefit of eligible employees. Since the Company’s common stock is not traded on an established securities market, the ESOP includes a put option for shares of the Company’s common stock distributed from the ESOP. Shares are distributed from the ESOP primarily to separated vested participants and certain eligible participants who elect to diversify their account balances. Under the Company’s administration of the ESOP’s put option, if the owners of distributed shares desire to sell their shares, the
Company is required to purchase the shares at fair value for a specified time period after distribution of the shares from the ESOP. The fair value of distributed shares subject to the put option totaled $i705,491,000 and $i608,089,000
as of September 24, 2022 and December 25, 2021, respectively. The cost of the shares held by the ESOP totaled $i3,430,042,000 and $i3,217,039,000
as of September 24, 2022 and December 25, 2021, respectively. Due to the Company’s obligation under the put option, the distributed shares subject to the put option and the shares held by the ESOP are classified as temporary equity in the mezzanine section of the condensed consolidated balance sheets and totaled $i4,135,533,000 and $i3,825,128,000
as of September 24, 2022 and December 25, 2021, respectively. The fair value of the shares held by the ESOP totaled $i10,845,578,000 and $i10,855,152,000
as of September 24, 2022 and December 25, 2021, respectively.
11
PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(6)iAccumulated
Other Comprehensive Earnings (Losses)
i
A reconciliation of the changes in accumulated other comprehensive earnings (losses) net of income taxes for the three months ended September 24, 2022 and September 25, 2021 is as follows:
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the changes in accumulated other comprehensive earnings (losses) net of income taxes for the nine months ended September 24, 2022 and September 25, 2021 is as follows:
iThe Company was impacted by Hurricane Ian which made landfall in southwest Florida on iSeptember 28, 2022. As a result, temporary supermarket closings occurred
due to weather conditions and evacuations of certain areas. The impact of the hurricane is not expected to have a material adverse effect on the Company’s financial condition or results of operations./
13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The objective of this section is to provide a summary of material information
relevant to enhancing the stockholders’ understanding of the financial condition and results of operations of the Company. Following is an analysis of the financial condition and results of operations of the Company for the three and nine months ended September 24, 2022 as compared with the three and nine months ended September 25, 2021. This information should be read in conjunction with the Company’s condensed consolidated financial statements and accompanying notes and the Annual Report.
Overview
The
Company is engaged in the retail food industry and as of September 24, 2022 operated 1,305 supermarkets in Florida, Georgia, Alabama, South Carolina, Tennessee, North Carolina and Virginia. The Company plans to expand its retail operations into Kentucky in 2023. The Company has no other significant lines of business or industry segments. For the nine months ended September 24, 2022, 21 supermarkets were opened (including seven replacement supermarkets) and 81 supermarkets were remodeled. Nine supermarkets were closed during the period. The replacement supermarkets that opened during the nine months ended September 24, 2022 replaced one supermarket closed
in the same period and six supermarkets closed in a previous period. Eight supermarkets closed in 2022 will be replaced on site in a subsequent period. 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.
Results of Operations
Sales
Sales for the three months ended September 24, 2022 were $13.0 billion as compared with $11.9 billion for the three months ended September 25, 2021, an increase of $1,091.3 million or 9.2%. The increase in sales for the three months ended September 24,
2022 as compared with the three months ended September 25, 2021 was primarily due to new supermarket sales and a 7.6% increase in comparable store sales (supermarkets open for the same weeks in both periods, including replacement supermarkets). Comparable store sales for the three months ended September 24, 2022 increased primarily due to the impact of inflation on product costs. Sales for supermarkets that are replaced on site are classified as new supermarket sales since the replacement period for the supermarket is generally 9 to 12 months.
Sales for the nine months ended September 24, 2022 were $39.2 billion as compared with $35.4 billion for the nine months ended September 25, 2021, an increase of $3,772.1 million or
10.7%. The increase in sales for the nine months ended September 24, 2022 as compared with the nine months ended September 25, 2021 was primarily due to new supermarket sales and a 9.0% increase in comparable store sales. Comparable store sales for the nine months ended September 24, 2022 increased primarily due to the impact of inflation on product costs.
Gross profit
Gross profit (sales less cost of merchandise sold) as a percentage of sales was 25.9% and 26.9% for the three months ended September 24, 2022 and September 25, 2021, respectively. Gross profit as a percentage of sales was 26.8% and 27.7% for the nine months ended September 24,
2022 and September 25, 2021, respectively. The decrease in gross profit as a percentage of sales for the three and nine months ended September 24, 2022 as compared with the three and nine months ended September 25, 2021 was primarily due to the impact of inflation on product costs which was not passed on to customers.
Operating and administrative expenses
Operating and administrative expenses as a percentage of sales were 19.5% and 20.0% for the three months ended September 24, 2022 and September 25, 2021, respectively. Operating and administrative expenses as a percentage of sales were 19.2% and 19.8% for the nine months ended September 24,
2022 and September 25, 2021, respectively. The decrease in operating and administrative expenses as a percentage of sales for the three and nine months ended September 24, 2022 as compared with the three and nine months ended September 25, 2021 was primarily due to decreases in payroll costs as a percentage of sales and facility costs as a percentage of sales.
14
Operating profit
Operating profit as a percentage of sales was 7.2% and 7.6% for the three months ended September 24, 2022 and September 25,
2021, respectively. Operating profit as a percentage of sales was 8.4% and 8.7% for the nine months ended September 24, 2022 and September 25, 2021, respectively. The decrease in operating profit as a percentage of sales for the three and nine months ended September 24, 2022 as compared with the three and nine months ended September 25, 2021 was primarily due to the decrease in gross profit as a percentage of sales, partially offset by the decrease in operating and administrative expenses as a percentage of sales.
Investment income (loss)
Investment loss for the three months ended September 24, 2022 was $497.4 million as compared
with investment income for the three months ended September 25, 2021 of $130.3 million. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, investment income would have been $58.9 million and $57.4 million for the three months ended September 24, 2022 and September 25, 2021, respectively. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, the increase in investment income for the three months ended September 24, 2022 as compared with the three months ended September 25, 2021 was primarily due to an increase in interest and dividend income, partially offset by a net realized
loss on investments in 2022 as compared with a net realized gain on investments in 2021.
Investment loss for the nine months ended September 24, 2022 was $1,323.6 million as compared with investment income for the nine months ended September 25, 2021 of $1,153.3 million. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, investment income would have been $171.7 million and $176.0 million for the nine months ended September 24, 2022 and September 25, 2021, respectively. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, the decrease in investment income for the nine months
ended September 24, 2022 as compared with the nine months ended September 25, 2021 was primarily due to a net realized loss on investments in 2022 as compared with a net realized gain on investments in 2021, partially offset by an increase in interest and dividend income.
Income tax expense
The effective income tax rate was 13.9% and 19.3% for the three months ended September 24, 2022 and September 25, 2021, respectively. The effective income tax rate was 19.4% and 21.4% for the nine months ended September 24, 2022 and September 25, 2021, respectively. The decrease in the effective income
tax rate for the three and nine months ended September 24, 2022 as compared with the three and nine months ended September 25, 2021 was primarily due to the increased impact of permanent deductions and credits relative to earnings before income tax expense, partially offset by an increase in state income tax rates.
Net earnings
Net earnings were $394.1 million or $0.12 per share and $856.9 million or $0.25 per share for the three months ended September 24, 2022 and September 25, 2021, respectively. Net earnings as a percentage of sales were 3.0% and 7.2% for the three months ended September 24, 2022 and September 25,
2021, respectively. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, net earnings would have been $808.9 million or $0.24 per share and 6.2% as a percentage of sales for the three months ended September 24, 2022 and $802.5 million or $0.23 per share and 6.7% as a percentage of sales for the three months ended September 25, 2021. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, the decrease in net earnings as a percentage of sales for the three months ended September 24, 2022 as compared with the three months ended September 25, 2021 was primarily due to the decrease in operating profit as a percentage of sales.
Net
earnings were $1,640.5 million or $0.48 per share and $3,361.4 million or $0.97 per share for the nine months ended September 24, 2022 and September 25, 2021, respectively. Net earnings as a percentage of sales were 4.2% and 9.5% for the nine months ended September 24, 2022 and September 25, 2021, respectively. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, net earnings would have been $2,755.6 million or $0.81 per share and 7.0% as a percentage of sales for the nine months ended September 24, 2022 and $2,632.6 million or $0.76 per share and 7.4% as
a percentage of sales for the nine months ended September 25, 2021. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, the decrease in net earnings as a percentage of sales for the nine months ended September 24, 2022 as compared with the nine months ended September 25, 2021 was primarily due to the decrease in operating profit as a percentage of sales.
15
Non-GAAP Financial Measures
In addition to reporting financial results
for the three and nine months ended September 24, 2022 and September 25, 2021 in accordance with GAAP, the Company presents net earnings and earnings per share excluding the impact of equity securities being measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings (fair value adjustment). These measures are not in accordance with, or an alternative to, GAAP. The Company excludes the impact of the fair value adjustment since it is primarily due to temporary equity market fluctuations that do not reflect the Company’s operations. The
Company believes this information is useful in providing period-to-period comparisons of the results of operations. Following is a reconciliation of net earnings to net earnings excluding the impact of the fair value adjustment for the three and nine months ended September 24, 2022 and September 25, 2021:
(Amounts are in millions,
except per share amounts)
Net earnings
$
394.1
856.9
1,640.5
3,361.4
Fair value adjustment, due to net unrealized loss (gain), on equity securities
held at end of period
556.3
(72.9)
1,495.3
(986.7)
Net gain on sale of equity securities previously recognized through fair value adjustment
—
—
—
9.4
Income
tax (benefit) expense (1)
(141.5)
18.5
(380.2)
248.5
Net earnings excluding impact of fair value adjustment
$
808.9
802.5
2,755.6
2,632.6
Weighted
average shares outstanding
3,366.1
3,444.4
3,394.4
3,453.6
Earnings per share excluding impact of fair value adjustment
$
0.24
0.23
0.81
0.76
(1)Income
tax (benefit) expense is based on the Company’s combined federal and state statutory income tax rates.
16
Liquidity and Capital Resources
Cash and cash equivalents, short-term investments and long-term investments totaled $12,806.1 million as of September 24, 2022, as compared with $14,783.4 million as ofDecember 25, 2021 and $14,528.5 million as of September 25, 2021. The decrease from the third quarter of 2021 to
the third quarter of 2022 was primarily due to the decrease in the fair value of investments.
Net cash provided by operating activities
Net cash provided by operating activities was $4,087.1 million and $4,126.7 million for the nine months ended September 24, 2022 and September 25, 2021, respectively. The decrease in net cash provided by operating activities for the nine months ended September 24, 2022 as compared with the nine months ended September 25, 2021 was primarily due to the increase in inventories and the payment in 2022 of payroll taxes that were deferred under various coronavirus tax relief provisions in 2020, partially offset by the decrease in income taxes paid.
Net
cash used in investing activities
Net cash used in investing activities was $1,395.6 million and $2,238.6 million for the nine months ended September 24, 2022 and September 25, 2021, respectively. The primary use of net cash in investing activities for the nine months ended September 24, 2022 was funding capital expenditures and net increases in investments. Capital expenditures for the nine months ended September 24, 2022 totaled $1,286.3 million. These expenditures were incurred in connection with the opening of 21 supermarkets (including seven replacement supermarkets) and the remodeling of 81 supermarkets. Expenditures were also incurred for new supermarkets and remodels in progress, construction or expansion of warehouses
and new or enhanced information technology hardware and software. For the nine months ended September 24, 2022, the payment for investments, net of the proceeds from the sale and maturity of investments, was $129.7 million.
Net cash used in financing activities
Net cash used in financing activities was $2,224.0 million and $1,390.1 million for the nine months ended September 24, 2022 and September 25, 2021, respectively. The primary use of net cash in financing activities was funding net common stock repurchases and dividend payments. Net common stock repurchases totaled $1,331.2 million and $634.7 million for the nine months ended September 24, 2022 and September 25,
2021, respectively. The Company currently repurchases common stock at the stockholders’ request in accordance with the terms of the Company’s Employee Stock Purchase Plan (ESPP), Non-Employee Directors Stock Purchase Plan (Directors Plan), 401(k) Plan and ESOP. 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 current value. However,
with the exception of certain shares distributed from the ESOP, such purchases are not required and the Company retains the right to discontinue them at any time.
Dividends
The Company paid quarterly dividends on its common stock totaling $864.2 million or $0.254 per share and $732.9 million or $0.212 per share during the nine months ended September 24, 2022 and September 25, 2021, respectively.
Capital expenditures projection
Capital expenditures for the remainder of 2022 are expected to be approximately $600 million, primarily related
to new supermarkets, remodeling existing supermarkets, construction or expansion of warehouses, new or enhanced information technology hardware and software and the acquisition or development of shopping centers in which the Company operates. The shopping center acquisitions are financed with internally generated funds and assumed debt, if prepayment penalties for the debt are determined to be significant. This capital program is subject to continuing change and review.
Cash requirements
In 2022, cash requirements for operations, capital expenditures, common stock repurchases and dividend payments 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 available to support the Company’s liquidity requirements, if needed.
17
Forward-Looking Statements
Certain information provided by the Company in this Quarterly Report on Form 10-Q (Quarterly Report) may be forward-looking information as defined in Section 21E of the Securities Exchange Act of 1934 (Exchange Act). Forward-looking information includes statements about the future performance of the
Company and 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,”“expect,”“believe,”“will” 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 increase sales, including private label sales; results of programs to control or reduce costs; changes
in buying, pricing and promotional practices; changes in shrink management; supply chain disruptions; changes in the general economy, including an economic downturn associated with inflation, the coronavirus pandemic, international conflicts or other disruptions; changes in consumer spending; changes in population, employment and job growth in the Company’s principal markets; impacts of a public health crisis, geopolitical conditions or other significant catastrophic events; impacts of an intrusion into, compromise of or disruption in the Company’s information technology systems; and other factors affecting the Company’s business within or beyond the
Company’s control. These factors include changes in the rate of inflation; changes in federal, state and local laws and regulations; adverse determinations with respect to litigation or other claims; ability to recruit and retain employees; ability to construct new supermarkets or complete remodels as rapidly as planned; increases in product costs; and increases in operating costs including, but not limited to, labor, fuel and energy costs and debit and credit card fees. 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. Except as may be required by applicable law, the Company assumes no obligation to publicly update these forward-looking statements.
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 Annual Report.
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 this evaluation, the Chief Executive Officer and Chief Financial Officer each concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that such information has been accumulated and communicated to the
Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure. There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation that occurred during the quarter ended September 24, 2022 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.
18
PART
II. OTHER INFORMATION
Item 1. Legal Proceedings
As reported in the Annual Report, the Company is subject from time to time to various lawsuits, claims and charges arising in the normal course of business. The Company believes its recorded reserves are adequate in light of the probable and estimable liabilities. The estimated amount of reasonably possible losses for lawsuits, claims and charges, individually and in the aggregate, is considered to be immaterial. 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 Annual Report.
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 September 24, 2022 were as follows (amounts are in thousands, except per share amounts):
(1)Common
stock is made available for sale by the Company only to its current employees and members of its Board of Directors through the ESPP and Directors Plan and to participants of the 401(k) Plan. In addition, common stock is provided to employees through the ESOP. The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, Directors Plan, 401(k) Plan and ESOP each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company.
The Company’s common stock is not traded on an established securities market. 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 September 24, 2022 required to be disclosed in the last two columns of the table.
101 The following financial information from this Quarterly Report is formatted in Extensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Earnings, (iii) Condensed
Consolidated Statements of Comprehensive Earnings, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).
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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.