Annual Report (Form 10-K), fiscal year 1994




Item 2. Properties. - - ------ ----------
As a part of the leveraged buyout transaction in which the Company was incorporated in 1981, Fred Meyer Real Estate Properties, Ltd., whose name was changed in 1991 to Real Estate Properties Limited Partnership ("Properties"), acquired the real estate assets of the corporation that was the predecessor to the Company.
In 1986, the Company amended and restated 76 leases relating to 71 stores, its distribution center, and four other facilities. The leases provide, among other things: (1) fixed rent expense in the aggregate for accounting purposes over the initial term of the leases at levels below rent expense under the prior leases for the fiscal year ended January 30, 1988; (2) initial lease terms generally averaging 20 years; (3) future rent from certain unrelated subtenants to be paid to the Company; and (4) seven five-year renewal options under leases for the 36 leased properties owned by Metropolitan Life Insurance Company (the "Institutional Investor") at rents for the first five option periods below the average rents during the initial term, and an option for the Company to purchase any of the leased properties at the end of the initial term and at the end of each option period. Properties sold to the Institutional Investor its interest in 36 of the 76 properties which were leased to the Company. The Institutional Investor is also an investor in Properties and FMI Associates. At March 1, 1994, FMI Associates beneficially owned 38.2 percent of the Company's common stock.
Twenty locations are owned by the Company and its subsidiaries. The balance of the Company's locations are leased from the Institutional Investor, Properties or third parties. All of the Company's stores and its distribution and processing facilities are in good condition. Additionally, the Company owns fifteen parcels of land. Ten are being held for development of future stores, and three in California and two in Washington are being held for sale.
The following table as of January 29, 1994, summarizes the remaining lease years, assuming the exercise of all options, for store locations and the Company's distribution facilities, warehouses, and plants.
The executive officers of the Company are elected annually for one year and hold office until their successors are elected and qualified. There are no family relationships among the executive officers of the Company.
Mr. Miller became Chairman of the Board and Chief Executive Officer of the Company in August of 1991. Prior to that time he was employed by Albertson's, where his most recent positions were Executive Vice President of Retail Operations from 1989 to 1991, and Senior Vice President and Regional Manager from 1985 to 1989. Mr. Miller has 30 years of experience in the retail food industry.
Mr. Green became President and Chief Operating Officer in 1972, and has been with the Company since 1947. He has held many positions with the Company prior to his election to President.
Mr. Baltzell served as Vice President, Food Operations of the Company from 1982 until his election as Senior Vice President, Store Operations Division in June 1989.
Mr. Bladholm served as Vice President, Distribution Centers and Plants from 1984 until his election as Vice President, Distribution Centers, Plants, and Transportation in 1990. He was elected Senior Vice President, Distribution Centers, Plants, and Transportation on April 14, 1992.
Mr. Cooke became Vice President, General Counsel and Secretary of the Company in August 1992. He was elected Senior Vice President in April 1993. From 1982 to 1992, he was an officer of Pan American World Airways, Inc., serving as Senior Vice President and General Counsel from 1990 to 1992. From 1973 to 1980, he was associated with the law firm Simpson Thacher and Bartlett.
Mr. Dayoob served as Vice President, Jewelry Division of the Company from 1979 until his election as Senior Vice President, Photo Electronics and Jewelry Division in June 1989. This Division was renamed the Home Electronics and Jewelry Group in 1990. The Home Electronics Division was merged into the General Group in 1993.
Mr. Lerew became Senior Vice President, Food Group in October 1991. Prior to that time he was employed by Albertson's, where his most recent positions were Senior Vice President and Regional Manager in 1991, Senior Vice President of Corporate Merchandising from 1990 to 1991, and Vice
President, Western Washington Division, from 1987 to 1990. Mr. Lerew has more than 25 years of experience in the retail food industry.
Mr. Lovett became Senior Vice President, Human Resources of the Company in February of 1992. Prior to that time he was employed by Eagle Food Centers, where he was Senior Vice President of Human Resources and Vice President of Industrial Relations. Mr. Lovett has 22 years of experience in labor negotiations and human resource management.
Mr. McEvoy became Senior Vice President, Chief Information Officer in charge of the Company's Information Services in July 1991. For the year prior to that, he worked for IBM United States as a business advisor in the retail industry. From 1987 to 1990, he was Senior Vice President for Management Information Systems (MIS) for J.B. Ivey. He held the same position from 1983 to 1987 with John Wanamaker. He also held various MIS and financial positions with Hecht's from 1969 to 1983. Mr. McEvoy has 23 years of experience in the retail industry.
Mr. Myhr served as Vice President, Sales Promotion of the Company from 1982 until his election as Senior Vice President, Strategic Marketing in June 1989. He now serves as Senior Vice President, Sales Promotion and Marketing.
Ms. Perrin served as Vice President, Government Affairs from 1985 until her election as Vice President, Public Affairs in 1988. She was elected Senior Vice President, Public Affairs in April 1992.
Ms. Sammons served as Vice President within the Soft Goods Division of the Company from 1980 until her election as Senior Vice President, Soft Goods Division in January 1986. In June 1989, she was elected Senior Vice President, General Merchandise Division. This Division was renamed the General Group in 1990.
Mr. Thrasher served as Vice President, Corporate Treasurer of the Company from 1982 until his election as Vice President - Finance, Chief Financial Officer, and Secretary in June 1987. He was elected Senior Vice President - Finance effective March 1989.
Mr. Wippel became Vice President, Corporate Facilities in June 1992. He was elected Senior Vice President in April 1993. Prior to that, he was employed by Albertson's, where his most recent positions were Vice President of Real Estate from 1990 to 1992 and Director of Real Estate from 1988 to 1990.
PART II
Item 5.



Item 5. Market for the Registrant's Common - - ------ Stock and Related Stockholder Matters. -------------------------------------
The information required by this item is included under "Common Stock Information" on page 20 of the Company's 1993 Annual Report to Shareholders and is incorporated herein by reference.
Item 6.

Item 6. Selected Financial Data. - - ------ -----------------------
The information required by this item is included under "Selected Financial Data" on pages 16 and 17 of the Company's 1993 Annual Report to Shareholders and is incorporated herein by reference.
Item 7.

Item 7. Management's Discussion and - - ------ Analysis of Financial Condition and Results of Operations. -------------------------
The information required by this item is included under "Management's Discussion and Analysis" on pages 18 through 20 of the Company's 1993 Annual Report to Shareholders and is incorporated herein by reference.
Item 8.


Item 8. Financial Statements and Supplementary Data. - - ------ ------------------------------------------- The information required by this item is incorporated by reference from the Company's 1993 Annual Report to Shareholders as listed in Item 14 of Part IV of this Report.
Item 9.

Item 9. Changes in and Disagreements with Accountants - - ------ on Accounting and Financial Disclosure. --------------------------------------
Not applicable.
PART III
Item 10.



Item 10. Directors and Executive - - ------- Officers of the Registrant. --------------------------
Information with respect to directors of the Company is included under "Election of Directors" in the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders and is incorporated herein by reference. Information with respect to executive officers of the Company is included under Item 4(a) of Part I of this Report.
Item 11.

Item 11. Executive Compensation. - - ------- ----------------------
Information with respect to executive compensation is included under "Executive Compensation" in the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders and is incorporated herein by reference, except for items appearing under the subheadings "Compensation Committee Report on Executive Compensation" and "Comparison of Five Year Cumulative Total Return" which are not incorporated herein.
Item 12.

Item 12. Security Ownership of Certain - - ------- Beneficial Owners and Management. --------------------------------
Information with respect to security ownership of certain beneficial owners and management is included under "Voting Securities and Principal Shareholders" and "Election of Directors" in the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions. - - ------- -------------------- Information required by this item is included under "Certain Transactions" in the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement - - ------- Schedules, and Reports on Form 8-K. ----------------------------------
(a)(1) Financial Statements.
The following documents are included in the Company's 1993 Annual
Report to Shareholders at the pages indicated and are incorporated herein by reference:
(a)(2) Financial Statement Schedules. -----------------------------
The following schedules and related independent auditors' report are filed herewith:
Independent Auditors' Report Schedule II - Notes Receivable from Related Parties Schedule V - Property, Plant, and Equipment Schedule VI - Accumulated Depreciation and Amortization of Property, Plant, and Equipment Schedule X - Supplementary Income Statement Information
All other schedules are omitted as the required information is inapplicable or is presented in the financial statements or related notes thereto.