Document_and_Entity_Informatio
Document and Entity Information | 4 Months Ended | |
24-May-14 | Jun. 27, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'KROGER CO | ' |
Entity Central Index Key | '0000056873 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 24-May-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 488,919,932 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 4 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | 24-May-14 | 25-May-13 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' |
Sales | $32,961 | $29,997 |
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below | 26,065 | 23,817 |
Operating, general and administrative | 5,168 | 4,593 |
Rent | 217 | 189 |
Depreciation and amortization | 581 | 519 |
Operating profit | 930 | 879 |
Interest expense | 147 | 129 |
Earnings before income tax expense | 783 | 750 |
Income tax expense | 274 | 266 |
Net earnings including noncontrolling interests | 509 | 484 |
Net earnings attributable to noncontrolling interests | 8 | 3 |
Net earnings attributable to The Kroger Co. | $501 | $481 |
Net earnings attributable to The Kroger Co. per basic common share (in dollars per share) | $0.99 | $0.93 |
Average number of common shares used in basic calculation (in shares) | 501 | 514 |
Net earnings attributable to The Kroger Co. per diluted common share (in dollars per share) | $0.98 | $0.92 |
Average number of common shares used in diluted calculation (in shares) | 507 | 520 |
Dividends declared per common share (in dollars per share) | $0.17 | $0.15 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 4 Months Ended | |||
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ||
Net earnings including noncontrolling interests | $509 | $484 | ||
Other comprehensive income | ' | ' | ||
Unrealized gain on available for sale securities, net of income tax | -1 | [1] | 3 | [1] |
Amortization of amounts included in net periodic pension expense, net of income tax | 8 | [2] | 19 | [2] |
Unrealized loss on cash flow hedging activities, net of income tax | ' | -19 | [3] | |
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax | ' | 1 | ||
Total other comprehensive income | 7 | 4 | ||
Comprehensive income | 516 | 488 | ||
Comprehensive income attributable to noncontrolling interests | 8 | 3 | ||
Comprehensive income attributable to The Kroger Co. | $508 | $485 | ||
[1] | Amount is net of tax of $(1) for the first quarter of 2014 and $2 for the first quarter of 2013. | |||
[2] | Amount is net of tax of $4 for the first quarter of 2014 and $11 for the first quarter of 2013. | |||
[3] | Amount is net of tax of $(12) for the first quarter of 2013. |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 4 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' |
Unrealized gain on available for sale securities, income tax | ($1) | $2 |
Amortization of amounts included in net periodic pension expense, income tax | 4 | 11 |
Unrealized loss on cash flow hedging activities, income tax | ' | ($12) |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | 24-May-14 | Feb. 01, 2014 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and temporary cash investments | $265 | $401 |
Store deposits in-transit | 937 | 958 |
Receivables | 1,108 | 1,116 |
FIFO inventory | 6,773 | 6,801 |
LIFO reserve | -1,125 | -1,150 |
Prepaid and other current assets | 410 | 704 |
Total current assets | 8,368 | 8,830 |
Property, plant and equipment, net | 17,030 | 16,893 |
Intangibles, net | 698 | 702 |
Goodwill | 2,135 | 2,135 |
Other assets | 682 | 721 |
Total Assets | 28,913 | 29,281 |
Current liabilities | ' | ' |
Current portion of long-term debt including obligations under capital leases and financing obligations | 1,652 | 1,657 |
Trade accounts payable | 5,257 | 4,881 |
Accrued salaries and wages | 1,101 | 1,150 |
Deferred income taxes | 248 | 248 |
Other current liabilities | 2,666 | 2,769 |
Total current liabilities | 10,924 | 10,705 |
Long-term debt including obligations under capital leases and financing obligations | ' | ' |
Face-value of long-term debt including obligations under capital leases and financing obligations | 9,665 | 9,654 |
Adjustment to reflect fair-value interest rate hedges | -1 | -1 |
Long-term debt including obligations under capital leases and financing obligations | 9,664 | 9,653 |
Deferred income taxes | 1,325 | 1,381 |
Pension and postretirement benefit obligations | 900 | 901 |
Other long-term liabilities | 1,330 | 1,246 |
Total Liabilities | 24,143 | 23,886 |
Commitments and contingencies (see Note 8) | ' | ' |
SHAREOWNERS' EQUITY | ' | ' |
Preferred shares, $100 per share, 5 shares authorized and unissued | ' | ' |
Common shares, $1 par per share, 1,000 shares authorized; 959 shares issued in 2014 and 2013 | 959 | 959 |
Additional paid-in capital | 3,595 | 3,549 |
Accumulated other comprehensive loss | -457 | -464 |
Accumulated earnings | 11,398 | 10,981 |
Common shares in treasury, at cost, 474 shares in 2014 and 451 shares in 2013 | -10,746 | -9,641 |
Total Shareowners' Equity - The Kroger Co. | 4,749 | 5,384 |
Noncontrolling interests | 21 | 11 |
Total Equity | 4,770 | 5,395 |
Total Liabilities and Equity | $28,913 | $29,281 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | 24-May-14 | Feb. 01, 2014 |
In Millions, except Per Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Preferred shares, per share (in dollars per share) | $100 | $100 |
Preferred shares, shares authorized | 5 | 5 |
Preferred shares, shares unissued | 5 | 5 |
Common shares, par per share (in dollars per share) | $1 | $1 |
Common shares, shares authorized | 1,000 | 1,000 |
Common shares, shares issued | 959 | 959 |
Common shares in treasury, shares | 474 | 451 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 4 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 |
Cash Flows from Operating Activities: | ' | ' |
Net earnings including noncontrolling interests | $509 | $484 |
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities: | ' | ' |
Depreciation | 581 | 519 |
LIFO charge | 28 | 17 |
Stock-based employee compensation | 40 | 24 |
Expense for Company-sponsored pension plans | 12 | 25 |
Deferred income taxes | -56 | -14 |
Other | 24 | 38 |
Changes in operating assets and liabilities net of effects from acquisitions of businesses: | ' | ' |
Store deposits in-transit | 21 | 104 |
Receivables | 20 | 88 |
Inventories | -25 | 53 |
Prepaid expenses | 288 | 276 |
Trade accounts payable | 402 | 279 |
Accrued expenses | -109 | -226 |
Income taxes receivable and payable | -28 | 89 |
Other | 73 | -139 |
Net cash provided by operating activities | 1,780 | 1,617 |
Cash Flows from Investing Activities: | ' | ' |
Payments for property and equipment, including payments for lease buyouts | -730 | -618 |
Proceeds from sale of assets | 9 | 6 |
Other | 18 | -14 |
Net cash used by investing activities | -703 | -626 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of long-term debt | 17 | 2 |
Dividends paid | -84 | -78 |
Payments on long-term debt | -14 | -409 |
Net payments of commercial paper | -5 | -545 |
Excess tax benefits on stock-based awards | 12 | 7 |
Proceeds from issuance of capital stock | 33 | 95 |
Treasury stock purchases | -1,143 | -146 |
Increase (decrease) in book overdrafts | -29 | 93 |
Other | ' | -1 |
Net cash used by financing activities | -1,213 | -982 |
Net increase (decrease) in cash and temporary cash investments | -136 | 9 |
Cash and temporary cash investments: | ' | ' |
Beginning of year | 401 | 238 |
End of quarter | 265 | 247 |
Reconciliation of capital investments: | ' | ' |
Payments for property and equipment, including payments for lease buyouts | -730 | -618 |
Payments for lease buyouts | 17 | 6 |
Changes in construction-in-progress payables | 4 | -28 |
Total capital investments, excluding lease buyouts | -709 | -640 |
Disclosure of cash flow information: | ' | ' |
Cash paid during the quarter for interest | 134 | 114 |
Cash paid during the quarter for income taxes | $351 | $181 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Gain (Loss) | Accumulated Earnings | Noncontrolling Interest |
In Millions, unless otherwise specified | |||||||
Balances at Feb. 02, 2013 | $4,214 | $959 | $3,451 | ($9,237) | ($753) | $9,787 | $7 |
Balances (in shares) at Feb. 02, 2013 | ' | 959 | ' | 445 | ' | ' | ' |
Issuance of common stock: | ' | ' | ' | ' | ' | ' | ' |
Stock options exercised | 95 | ' | ' | 95 | ' | ' | ' |
Stock options exercised (in shares) | ' | ' | ' | -4 | ' | ' | ' |
Restricted stock issued | -2 | ' | -3 | 1 | ' | ' | ' |
Treasury stock activity: | ' | ' | ' | ' | ' | ' | ' |
Treasury stock purchases, at cost | -19 | ' | ' | -19 | ' | ' | ' |
Stock options exchanged | -127 | ' | ' | -127 | ' | ' | ' |
Stock options exchanged (in shares) | ' | ' | ' | 4 | ' | ' | ' |
Share-based employee compensation | 24 | ' | 24 | ' | ' | ' | ' |
Other comprehensive gain net of income tax of $3 in 2014 and $1 in 2013 | 4 | ' | ' | ' | 4 | ' | ' |
Other | 1 | ' | 11 | -6 | ' | ' | -4 |
Cash dividends declared ($0.165 in 2014 and $0.150 in 2013 per common share) | -78 | ' | ' | ' | ' | -78 | ' |
Net earnings including noncontrolling interests | 484 | ' | ' | ' | ' | 481 | 3 |
Balances at May. 25, 2013 | 4,596 | 959 | 3,483 | -9,293 | -749 | 10,190 | 6 |
Balances (in shares) at May. 25, 2013 | ' | 959 | ' | 445 | ' | ' | ' |
Balances at Feb. 01, 2014 | 5,395 | 959 | 3,549 | -9,641 | -464 | 10,981 | 11 |
Balances (in shares) at Feb. 01, 2014 | ' | 959 | ' | 451 | ' | ' | ' |
Issuance of common stock: | ' | ' | ' | ' | ' | ' | ' |
Stock options exercised | 33 | ' | ' | 33 | ' | ' | ' |
Stock options exercised (in shares) | ' | ' | ' | -2 | ' | ' | ' |
Restricted stock issued | -5 | ' | -9 | 4 | ' | ' | ' |
Treasury stock activity: | ' | ' | ' | ' | ' | ' | ' |
Treasury stock purchases, at cost | -1,094 | ' | ' | -1,094 | ' | ' | ' |
Treasury stock purchases, at cost (in shares) | ' | ' | ' | 24 | ' | ' | ' |
Stock options exchanged | -49 | ' | ' | -49 | ' | ' | ' |
Stock options exchanged (in shares) | ' | ' | ' | 1 | ' | ' | ' |
Share-based employee compensation | 40 | ' | 40 | ' | ' | ' | ' |
Other comprehensive gain net of income tax of $3 in 2014 and $1 in 2013 | 7 | ' | ' | ' | 7 | ' | ' |
Other | 18 | ' | 15 | 1 | ' | ' | 2 |
Cash dividends declared ($0.165 in 2014 and $0.150 in 2013 per common share) | -84 | ' | ' | ' | ' | -84 | ' |
Net earnings including noncontrolling interests | 509 | ' | ' | ' | ' | 501 | 8 |
Balances at May. 24, 2014 | $4,770 | $959 | $3,595 | ($10,746) | ($457) | $11,398 | $21 |
Balances (in shares) at May. 24, 2014 | ' | 959 | ' | 474 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Parenthetical) (USD $) | 4 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | 24-May-14 | 25-May-13 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY | ' | ' |
Other comprehensive gain, income tax | $3 | $1 |
Cash dividends declared per common share (in dollars per share) | $0.17 | $0.15 |
ACCOUNTING_POLICIES
ACCOUNTING POLICIES | 4 Months Ended |
24-May-14 | |
ACCOUNTING POLICIES | ' |
ACCOUNTING POLICIES | ' |
1. ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | |
The accompanying financial statements include the consolidated accounts of The Kroger Co., its wholly-owned subsidiaries, and the Variable Interest Entities (“VIEs”) in which the Company is the primary beneficiary. The February 1, 2014 balance sheet was derived from audited financial statements and, due to its summary nature, does not include all disclosures required by generally accepted accounting principles (“GAAP”). Significant intercompany transactions and balances have been eliminated. References to the “Company” in these Consolidated Financial Statements mean the consolidated company. | |
In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal, recurring adjustments that are necessary for a fair presentation of results of operations for such periods but should not be considered as indicative of results for a full year. The financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted, pursuant to SEC regulations. Accordingly, the accompanying Consolidated Financial Statements should be read in conjunction with the financial statements in the Annual Report on Form 10-K of The Kroger Co. for the fiscal year ended February 1, 2014. | |
The unaudited information in the Consolidated Financial Statements for the first quarters ended May 24, 2014 and May 25, 2013, includes the results of operations of the Company for the 16-week periods then ended. | |
Certain revenue transactions previously reported in sales and merchandise costs in the Consolidated Statements of Operations are now reported net within sales. Prior quarter amounts have been revised or reclassified to conform to the current year presentation. These amounts were not material to the prior periods. | |
MERGER
MERGER | 4 Months Ended | ||||
24-May-14 | |||||
MERGER | ' | ||||
MERGER | ' | ||||
2. MERGER | |||||
On January 28, 2014, the Company closed its merger with Harris Teeter Supermarkets, Inc. (“Harris Teeter”) and there have not been any changes in the Company’s preliminary purchase price allocation in the first quarter of 2014. | |||||
As of May 24, 2014, the fair value step up adjustment to Harris Teeter inventory as of the merger date is recorded in the LIFO reserve. This resulted in a $53 decrease in LIFO reserve, when compared to fiscal year end 2013. | |||||
Pro forma results of operations, assuming the transaction had taken place at the beginning of 2012, are included in the following table. The pro forma information includes historical results of operations of Harris Teeter and adjustments for interest expense that would have been incurred due to financing the acquisition, depreciation and amortization of the assets acquired and excludes the pre-acquisition transaction related expenses incurred by Harris Teeter and the Company. The pro forma information does not include efficiencies, cost reductions, synergies and investments in lower prices for our customers expected to result from the merger. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the merger been completed at the beginning of the 2012. | |||||
First Quarter Ended | |||||
May 25, 2013 | |||||
Sales | $ | 31,342 | |||
Net earnings including noncontrolling interests | 518 | ||||
Net earnings attributable to noncontrolling interests | 3 | ||||
Net earnings attributable to The Kroger Co. | $ | 515 |
DEBT_OBLIGATIONS
DEBT OBLIGATIONS | 4 Months Ended | |||||||
24-May-14 | ||||||||
DEBT OBLIGATIONS | ' | |||||||
DEBT OBLIGATIONS | ' | |||||||
3. DEBT OBLIGATIONS | ||||||||
Long-term debt consists of: | ||||||||
May 24, | February 1, | |||||||
2014 | 2014 | |||||||
0.76% to 8.00% Senior notes due through 2043 | $ | 9,083 | $ | 9,083 | ||||
5.00% to 12.75% Mortgages due in varying amounts through 2034 | 63 | 64 | ||||||
0.27% Commercial paper due through May 2014 | 1,245 | 1,250 | ||||||
Other | 398 | 383 | ||||||
Total debt, excluding capital leases and financing obligations | 10,789 | 10,780 | ||||||
Less current portion | (1,611 | ) | (1,616 | ) | ||||
Total long-term debt, excluding capital leases and financing obligations | $ | 9,178 | $ | 9,164 |
BENEFIT_PLANS
BENEFIT PLANS | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
BENEFIT PLANS | ' | |||||||||||||
BENEFIT PLANS | ' | |||||||||||||
4. BENEFIT PLANS | ||||||||||||||
The following table provides the components of net periodic benefit costs for the Company-sponsored pension plans and other post-retirement benefits for the first quarters of 2014 and 2013. | ||||||||||||||
First Quarter Ended | ||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Components of net periodic benefit cost: | ||||||||||||||
Service cost | $ | 14 | $ | 15 | $ | 4 | $ | 5 | ||||||
Interest cost | 56 | 48 | 4 | 5 | ||||||||||
Expected return on plan assets | (74 | ) | (69 | ) | — | — | ||||||||
Amortization of: | ||||||||||||||
Prior service cost | — | — | (2 | ) | (1 | ) | ||||||||
Actuarial loss | 16 | 31 | (2 | ) | — | |||||||||
Net periodic benefit expense | $ | 12 | $ | 25 | $ | 4 | $ | 9 | ||||||
The Company is not required and does not expect to make any contributions to the Company-sponsored defined benefit pension plans in 2014. | ||||||||||||||
The Company contributed $56 and $48 to employee 401(k) retirement savings accounts in the first quarters of 2014 and 2013, respectively. | ||||||||||||||
During the first quarter of 2014, the Company incurred a charge of $56 (after-tax) due to commitments and withdrawal liabilities arising from the restructuring of certain multiemployer pension plan obligations. | ||||||||||||||
The Company also contributes to various multi-employer pension plans based on obligations arising from most of its collective bargaining agreements. These plans provide retirement benefits to participants based on their service to contributing employers. The Company recognizes expense in connection with these plans as contributions are funded. | ||||||||||||||
EARNINGS_PER_COMMON_SHARE
EARNINGS PER COMMON SHARE | 4 Months Ended | |||||||||||||||||
24-May-14 | ||||||||||||||||||
EARNINGS PER COMMON SHARE | ' | |||||||||||||||||
EARNINGS PER COMMON SHARE | ' | |||||||||||||||||
5. EARNINGS PER COMMON SHARE | ||||||||||||||||||
Net earnings attributable to The Kroger Co. per basic common share equal net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding. Net earnings attributable to The Kroger Co. per diluted common share equal net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding, after giving effect to dilutive stock options. The following table provides a reconciliation of net earnings attributable to The Kroger Co. and shares used in calculating net earnings attributable to The Kroger Co. per basic common share to those used in calculating net earnings attributable to The Kroger Co. per diluted common share: | ||||||||||||||||||
First Quarter Ended | First Quarter Ended | |||||||||||||||||
May 24, 2014 | May 25, 2013 | |||||||||||||||||
Earnings | Shares | Per Share | Earnings | Shares | Per Share | |||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||
Net earnings attributable to The Kroger Co. per basic common share | $ | 497 | 501 | $ | 0.99 | $ | 477 | 514 | $ | 0.93 | ||||||||
Dilutive effect of stock options | 6 | 6 | ||||||||||||||||
Net earnings attributable to The Kroger Co. per diluted common share | $ | 497 | 507 | $ | 0.98 | $ | 477 | 520 | $ | 0.92 | ||||||||
The Company had undistributed and distributed earnings to participating securities totaling $4 for each of the first quarters of 2014 and 2013. | ||||||||||||||||||
The Company had options outstanding for approximately 2 million shares during the first quarter of 2014 that were excluded from the computation of earnings per diluted common share because their inclusion would have had an anti-dilutive effect on earnings per share. In the first quarter of 2013, the Company did not have any anti-dilutive options outstanding that were excluded from the computations of earnings per diluted common share. | ||||||||||||||||||
RECENTLY_ADOPTED_ACCOUNTING_ST
RECENTLY ADOPTED ACCOUNTING STANDARDS | 4 Months Ended |
24-May-14 | |
RECENTLY ADOPTED ACCOUNTING STANDARDS | ' |
RECENTLY ADOPTED ACCOUNTING STANDARDS | ' |
6. RECENTLY ADOPTED ACCOUNTING STANDARDS | |
In July 2013, the Financial Accounting Standards Board (“FASB’) amended Accounting Standards Codification (“ASC”) 740, “Income Taxes.” The amendment provides guidance on the financial statement presentation of an unrecognized tax benefit, as either a reduction of a deferred tax asset or as a liability, when a net operating loss carryforward, similar tax loss, or a tax credit carryforward exists. This amendment became effective for the Company beginning February 2, 2014, and was adopted prospectively in accordance with the standard. The adoption of this amendment did not have an effect on net income and did not have a significant effect on the Company’s consolidated balance sheet. |
RECENTLY_ISSUED_ACCOUNTING_STA
RECENTLY ISSUED ACCOUNTING STANDARDS | 4 Months Ended |
24-May-14 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | ' |
RECENTLY ISSUED ACCOUNTING STANDARDS | ' |
7. RECENTLY ISSUED ACCOUNTING STANDARDS | |
In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers”, which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance will be effective for the Company in the first quarter of its fiscal year ending January 27, 2018. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company’s Consolidated Financial Statements. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 4 Months Ended |
24-May-14 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
8. COMMITMENTS AND CONTINGENCIES | |
The Company continuously evaluates contingencies based upon the best available evidence. | |
The Company believes that allowances for loss have been provided to the extent necessary and that its assessment of contingencies is reasonable. To the extent that resolution of contingencies results in amounts that vary from the Company’s estimates, future earnings will be charged or credited. | |
Litigation — Various claims and lawsuits arising in the normal course of business, including suits charging violations of certain antitrust, wage and hour, or civil rights laws, are pending against the Company. Some of these suits purport or have been determined to be class actions and/or seek substantial damages. Any damages that may be awarded in antitrust cases will be automatically trebled. Although it is not possible at this time to evaluate the merits of all of these claims and lawsuits, nor their likelihood of success, the Company is of the belief that any resulting liability will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. | |
The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where it is reasonably possible to estimate and where an adverse outcome is probable. Nonetheless, assessing and predicting the outcomes of these matters involve substantial uncertainties. Management currently believes that the aggregate range of loss for the Company’s exposure is not material to the Company. It remains possible that despite management’s current belief, material differences in actual outcomes or changes in management’s evaluation or predictions could arise that could have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
9. FAIR VALUE MEASUREMENTS | ||||||||||||||
GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of the fair value hierarchy defined in the standards are as follows: | ||||||||||||||
Level 1 — Quoted prices are available in active markets for identical assets or liabilities; | ||||||||||||||
Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable; | ||||||||||||||
Level 3 — Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability. | ||||||||||||||
For items carried at (or adjusted to) fair value in the consolidated financial statements, the following tables summarize the fair value of these instruments at May 24, 2014 and February 1, 2014: | ||||||||||||||
May 24, 2014 Fair Value Measurements Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets | Observable Inputs | Unobservable | ||||||||||||
for Identical | (Level 2) | Inputs | ||||||||||||
Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Trading Securities | $ | 55 | $ | — | $ | — | $ | 55 | ||||||
Available-for-Sale Securities | 27 | — | — | 27 | ||||||||||
Warrants | — | 14 | — | 14 | ||||||||||
Long-Lived Assets | — | — | 6 | 6 | ||||||||||
Interest Rate Hedges | — | (2 | ) | — | (2 | ) | ||||||||
Total | $ | 82 | $ | 12 | $ | 6 | $ | 100 | ||||||
The table above includes Harris Teeter assets at fair value as of May 24, 2014. | ||||||||||||||
February 1, 2014 Fair Value Measurements Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets | Observable Inputs | Unobservable | ||||||||||||
for Identical | (Level 2) | Inputs | ||||||||||||
Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Available-for-Sale Securities | $ | 36 | $ | — | $ | — | $ | 36 | ||||||
Warrants | — | 16 | — | 16 | ||||||||||
Long-Lived Assets | — | — | 29 | 29 | ||||||||||
Interest Rate Hedges | — | (2 | ) | — | (2 | ) | ||||||||
Total | $ | 36 | $ | 14 | $ | 29 | $ | 79 | ||||||
In the first quarter of 2014, unrealized losses on the Level 1 available-for-sale securities totaled $(2). | ||||||||||||||
The Company values warrants using the Black-Sholes option-pricing model. The Black-Sholes option-pricing model is classified as a Level 2 input. | ||||||||||||||
The Company values interest rate hedges using observable forward yield curves. These forward yield curves are classified as Level 2 inputs. | ||||||||||||||
Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of goodwill, other intangible assets, long-lived assets, and in the valuation of store lease exit costs. The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each fiscal year, and as circumstances indicate the possibility of impairment. See Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 for further discussion related to the Company’s carrying value of goodwill. Long-lived assets and store lease exit costs were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. See Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended February 1, 2014 for further discussion of the Company’s policies regarding the valuation of long-lived assets and store lease exit costs. For the first quarter of 2014, long-lived assets with a carrying amount of $14 were written down to their fair value of $6 resulting in an impairment charge of $8. For the first quarter of 2013, long-lived assets with a carrying amount of $28 were written down to their fair value of $9 resulting in an impairment charge of $19. In fiscal year 2013, long-lived assets with a carrying amount of $68 were written down to their fair value of $29, resulting in an impairment charge of $39. | ||||||||||||||
Fair Value of Other Financial Instruments | ||||||||||||||
Current and Long-term Debt | ||||||||||||||
The fair value of the Company’s long-term debt, including current maturities, was estimated based on the quoted market prices for the same or similar issues adjusted for illiquidity based on available market evidence. If quoted market prices were not available, the fair value was based on the net present value of the future cash flow using the forward interest rate yield curve in effect at May 24, 2014, and February 1, 2014, which is a Level 3 measurement technique. At May 24, 2014, the fair value of total debt was $11,686 compared to a carrying value of $10,789. At February 1, 2014, the fair value of total debt was $11,547 compared to a carrying value of $10,780. | ||||||||||||||
Cash and Temporary Cash Investments, Store Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Trade Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities | ||||||||||||||
The carrying amounts of these items approximated fair value. | ||||||||||||||
Other Assets | ||||||||||||||
The fair values of these investments were estimated based on quoted market prices for those or similar investments, or estimated cash flows, if appropriate. At May 24, 2014 and February 1, 2014, the carrying and fair value of long-term investments for which fair value is determinable was $111 and $51, respectively. The increase in fair value of long-term investments for which fair value is determinable is mainly due to our merger with Harris Teeter. At May 24, 2014 and February 1, 2014, the carrying value of notes receivable for which fair value is determinable was $90 and $87, respectively. |
OTHER_COMPREHENSIVE_INCOME_LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||
10. OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
The following table represents the changes in AOCI by component for the first quarters of 2013 and 2014: | ||||||||||||||
Cash Flow | Available for sale | Pension and | Total(1) | |||||||||||
Hedging | Securities(1) | Postretirement | ||||||||||||
Activities(1) | Defined Benefit | |||||||||||||
Plans(1) | ||||||||||||||
Balance at February 2, 2013 | $ | (14 | ) | $ | 7 | $ | (746 | ) | $ | (753 | ) | |||
OCI before reclassifications(2) | (19 | ) | 3 | — | (16 | ) | ||||||||
Amounts reclassified out of AOCI | 1 | — | 19 | 20 | ||||||||||
Net current-period OCI | (18 | ) | 3 | 19 | 4 | |||||||||
Balance at May 25, 2013 | $ | (32 | ) | $ | 10 | $ | (727 | ) | $ | (749 | ) | |||
Balance at February 1, 2014 | $ | (25 | ) | $ | 12 | $ | (451 | ) | $ | (464 | ) | |||
OCI before reclassifications(2) | — | (1 | ) | — | (1 | ) | ||||||||
Amounts reclassified out of AOCI | — | — | 8 | 8 | ||||||||||
Net current-period OCI | — | (1 | ) | 8 | 7 | |||||||||
Balance at May 24, 2014 | $ | (25 | ) | $ | 11 | $ | (443 | ) | $ | (457 | ) | |||
(1) All amounts are net of tax. | ||||||||||||||
(2) Net of tax of $(1) for available for sale securities for the first quarter of 2014 and $(12) and $2 for cash flow hedging activities and available for sale securities, respectively, for the first quarter of 2013. | ||||||||||||||
The following table represents the items reclassified out of AOCI and the related tax effects for the first quarters of 2013 and 2014: | ||||||||||||||
First Quarter Ended | First Quarter Ended | |||||||||||||
May 24, 2014 | May 25, 2013 | |||||||||||||
Gains on cash flow hedging activities | ||||||||||||||
Amortization of unrealized gains and losses on cash flow hedging activities(1) | $ | — | $ | 1 | ||||||||||
Tax (expense) / benefit | — | — | ||||||||||||
Net of tax | — | 1 | ||||||||||||
Pension and postretirement defined benefit plan items | ||||||||||||||
Amortization of amounts included in net periodic pension expense(2) | 12 | 30 | ||||||||||||
Tax expense | (4 | ) | (11 | ) | ||||||||||
Net of tax | 8 | 19 | ||||||||||||
Total reclassifications, net of tax | $ | 8 | $ | 20 | ||||||||||
(1) Reclassified from AOCI into interest expense. | ||||||||||||||
(2) Reclassified from AOCI into merchandise costs and operating, general and administrative expense. These components are included in the computation of net periodic pension expense (see Note 4 to the Company’s Consolidated Financial Statements for additional details). | ||||||||||||||
INCOME_TAXES
INCOME TAXES | 4 Months Ended |
24-May-14 | |
INCOME TAXES | ' |
INCOME TAXES | ' |
11. INCOME TAXES | |
The effective income tax rate was 35.0% and 35.5% for the first quarters of 2014 and 2013, respectively. The 2014 effective income tax rate is equal to the federal statutory rate due to favorable federal items offset by the effect of state income taxes. The 2013 effective income tax rate differed from the federal statutory rate primarily due to the effect of state income taxes. |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 4 Months Ended |
24-May-14 | |
SUBSEQUENT EVENT | ' |
SUBSEQUENT EVENT | ' |
12. SUBSEQUENT EVENT | |
On June 30, 2014, the Company entered into an amended and restated $2,750 unsecured revolving credit facility (the “Amended and Restated Credit Agreement”), with a termination date of June 30, 2019, unless extended as permitted under the Amended and Restated Credit Agreement. The Company has the ability to increase the size of the Amended and Restated Credit Agreement by up to an additional $750, subject to certain conditions. This credit facility amended and restated the Company’s $2,000 credit facility that would otherwise have terminated on January 25, 2017. | |
Borrowings under the Amended and Restated Credit Agreement bear interest at the Company’s option, at either (i) LIBOR plus a market rate spread, based on the Company’s Leverage Ratio or (ii) the base rate, defined as the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate, and (c) one-month LIBOR plus 1.0%, plus a market rate spread based on the Company’s Leverage Ratio. The Company will also pay a Commitment Fee based on the Leverage Ratio and Letter of Credit fees equal to a market rate spread based on the Company’s Leverage Ratio. | |
The Amended and Restated Credit Agreement contains covenants, which, among other things, require the maintenance of a Leverage Ratio of not greater than 3.50:1.00 and a Fixed Charge Coverage Ratio of not less than 1.70:1.00. The Company may repay the Amended and Restated Credit Agreement in whole or in part at any time without premium or penalty. The Amended and Restated Credit Agreement is not guaranteed by the Company’s subsidiaries. |
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 4 Months Ended |
24-May-14 | |
ACCOUNTING POLICIES | ' |
Basis of Presentation and Principles of Consolidation | ' |
Basis of Presentation and Principles of Consolidation | |
The accompanying financial statements include the consolidated accounts of The Kroger Co., its wholly-owned subsidiaries, and the Variable Interest Entities (“VIEs”) in which the Company is the primary beneficiary. The February 1, 2014 balance sheet was derived from audited financial statements and, due to its summary nature, does not include all disclosures required by generally accepted accounting principles (“GAAP”). Significant intercompany transactions and balances have been eliminated. References to the “Company” in these Consolidated Financial Statements mean the consolidated company. | |
In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal, recurring adjustments that are necessary for a fair presentation of results of operations for such periods but should not be considered as indicative of results for a full year. The financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted, pursuant to SEC regulations. Accordingly, the accompanying Consolidated Financial Statements should be read in conjunction with the financial statements in the Annual Report on Form 10-K of The Kroger Co. for the fiscal year ended February 1, 2014. | |
The unaudited information in the Consolidated Financial Statements for the first quarters ended May 24, 2014 and May 25, 2013, includes the results of operations of the Company for the 16-week periods then ended. | |
Certain revenue transactions previously reported in sales and merchandise costs in the Consolidated Statements of Operations are now reported net within sales. Prior quarter amounts have been revised or reclassified to conform to the current year presentation. These amounts were not material to the prior periods. | |
MERGER_Tables
MERGER (Tables) | 4 Months Ended | ||||
24-May-14 | |||||
MERGER | ' | ||||
Schedule of pro forma results of operations | ' | ||||
First Quarter Ended | |||||
May 25, 2013 | |||||
Sales | $ | 31,342 | |||
Net earnings including noncontrolling interests | 518 | ||||
Net earnings attributable to noncontrolling interests | 3 | ||||
Net earnings attributable to The Kroger Co. | $ | 515 |
DEBT_OBLIGATIONS_Tables
DEBT OBLIGATIONS (Tables) | 4 Months Ended | |||||||
24-May-14 | ||||||||
DEBT OBLIGATIONS | ' | |||||||
Schedule of long-term debt | ' | |||||||
May 24, | February 1, | |||||||
2014 | 2014 | |||||||
0.76% to 8.00% Senior notes due through 2043 | $ | 9,083 | $ | 9,083 | ||||
5.00% to 12.75% Mortgages due in varying amounts through 2034 | 63 | 64 | ||||||
0.27% Commercial paper due through May 2014 | 1,245 | 1,250 | ||||||
Other | 398 | 383 | ||||||
Total debt, excluding capital leases and financing obligations | 10,789 | 10,780 | ||||||
Less current portion | (1,611 | ) | (1,616 | ) | ||||
Total long-term debt, excluding capital leases and financing obligations | $ | 9,178 | $ | 9,164 |
BENEFIT_PLANS_Tables
BENEFIT PLANS (Tables) | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
BENEFIT PLANS | ' | |||||||||||||
Schedule of components of net periodic benefit cost | ' | |||||||||||||
First Quarter Ended | ||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Components of net periodic benefit cost: | ||||||||||||||
Service cost | $ | 14 | $ | 15 | $ | 4 | $ | 5 | ||||||
Interest cost | 56 | 48 | 4 | 5 | ||||||||||
Expected return on plan assets | (74 | ) | (69 | ) | — | — | ||||||||
Amortization of: | ||||||||||||||
Prior service cost | — | — | (2 | ) | (1 | ) | ||||||||
Actuarial loss | 16 | 31 | (2 | ) | — | |||||||||
Net periodic benefit expense | $ | 12 | $ | 25 | $ | 4 | $ | 9 |
EARNINGS_PER_COMMON_SHARE_Tabl
EARNINGS PER COMMON SHARE (Tables) | 4 Months Ended | |||||||||||||||||
24-May-14 | ||||||||||||||||||
EARNINGS PER COMMON SHARE | ' | |||||||||||||||||
Schedule of earnings per common and diluted shares | ' | |||||||||||||||||
First Quarter Ended | First Quarter Ended | |||||||||||||||||
May 24, 2014 | May 25, 2013 | |||||||||||||||||
Earnings | Shares | Per Share | Earnings | Shares | Per Share | |||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||
Net earnings attributable to The Kroger Co. per basic common share | $ | 497 | 501 | $ | 0.99 | $ | 477 | 514 | $ | 0.93 | ||||||||
Dilutive effect of stock options | 6 | 6 | ||||||||||||||||
Net earnings attributable to The Kroger Co. per diluted common share | $ | 497 | 507 | $ | 0.98 | $ | 477 | 520 | $ | 0.92 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
Summary of fair value measurements | ' | |||||||||||||
May 24, 2014 Fair Value Measurements Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets | Observable Inputs | Unobservable | ||||||||||||
for Identical | (Level 2) | Inputs | ||||||||||||
Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Trading Securities | $ | 55 | $ | — | $ | — | $ | 55 | ||||||
Available-for-Sale Securities | 27 | — | — | 27 | ||||||||||
Warrants | — | 14 | — | 14 | ||||||||||
Long-Lived Assets | — | — | 6 | 6 | ||||||||||
Interest Rate Hedges | — | (2 | ) | — | (2 | ) | ||||||||
Total | $ | 82 | $ | 12 | $ | 6 | $ | 100 | ||||||
February 1, 2014 Fair Value Measurements Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets | Observable Inputs | Unobservable | ||||||||||||
for Identical | (Level 2) | Inputs | ||||||||||||
Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Available-for-Sale Securities | $ | 36 | $ | — | $ | — | $ | 36 | ||||||
Warrants | — | 16 | — | 16 | ||||||||||
Long-Lived Assets | — | — | 29 | 29 | ||||||||||
Interest Rate Hedges | — | (2 | ) | — | (2 | ) | ||||||||
Total | $ | 36 | $ | 14 | $ | 29 | $ | 79 |
OTHER_COMPREHENSIVE_INCOME_LOS1
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 4 Months Ended | |||||||||||||
24-May-14 | ||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||
Schedule of changes in AOCI by component | ' | |||||||||||||
Cash Flow | Available for sale | Pension and | Total(1) | |||||||||||
Hedging | Securities(1) | Postretirement | ||||||||||||
Activities(1) | Defined Benefit | |||||||||||||
Plans(1) | ||||||||||||||
Balance at February 2, 2013 | $ | (14 | ) | $ | 7 | $ | (746 | ) | $ | (753 | ) | |||
OCI before reclassifications(2) | (19 | ) | 3 | — | (16 | ) | ||||||||
Amounts reclassified out of AOCI | 1 | — | 19 | 20 | ||||||||||
Net current-period OCI | (18 | ) | 3 | 19 | 4 | |||||||||
Balance at May 25, 2013 | $ | (32 | ) | $ | 10 | $ | (727 | ) | $ | (749 | ) | |||
Balance at February 1, 2014 | $ | (25 | ) | $ | 12 | $ | (451 | ) | $ | (464 | ) | |||
OCI before reclassifications(2) | — | (1 | ) | — | (1 | ) | ||||||||
Amounts reclassified out of AOCI | — | — | 8 | 8 | ||||||||||
Net current-period OCI | — | (1 | ) | 8 | 7 | |||||||||
Balance at May 24, 2014 | $ | (25 | ) | $ | 11 | $ | (443 | ) | $ | (457 | ) | |||
(1) All amounts are net of tax. | ||||||||||||||
(2) Net of tax of $(1) for available for sale securities for the first quarter of 2014 and $(12) and $2 for cash flow hedging activities and available for sale securities, respectively, for the first quarter of 2013. | ||||||||||||||
Schedule of items reclassified out of AOCI and the related tax effects | ' | |||||||||||||
First Quarter Ended | First Quarter Ended | |||||||||||||
May 24, 2014 | May 25, 2013 | |||||||||||||
Gains on cash flow hedging activities | ||||||||||||||
Amortization of unrealized gains and losses on cash flow hedging activities(1) | $ | — | $ | 1 | ||||||||||
Tax (expense) / benefit | — | — | ||||||||||||
Net of tax | — | 1 | ||||||||||||
Pension and postretirement defined benefit plan items | ||||||||||||||
Amortization of amounts included in net periodic pension expense(2) | 12 | 30 | ||||||||||||
Tax expense | (4 | ) | (11 | ) | ||||||||||
Net of tax | 8 | 19 | ||||||||||||
Total reclassifications, net of tax | $ | 8 | $ | 20 | ||||||||||
(1) Reclassified from AOCI into interest expense. | ||||||||||||||
(2) Reclassified from AOCI into merchandise costs and operating, general and administrative expense. These components are included in the computation of net periodic pension expense (see Note 4 to the Company's Consolidated Financial Statements for additional details). |
MERGER_Details
MERGER (Details) (Harris Teeter, USD $) | 4 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 |
Harris Teeter | ' | ' |
Merger | ' | ' |
Decrease in LIFO reserve | $53 | ' |
Pro forma results of operations | ' | ' |
Sales | ' | 31,342 |
Net earnings including noncontrolling interests | ' | 518 |
Net earnings attributable to noncontrolling interests | ' | 3 |
Net earnings attributable to The Kroger Co. | ' | $515 |
DEBT_OBLIGATIONS_Details
DEBT OBLIGATIONS (Details) (USD $) | 4 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | 24-May-14 | Feb. 01, 2014 |
Debt | ' | ' |
Total debt, excluding capital leases and financing obligations | $10,789 | $10,780 |
Less current portion | -1,611 | -1,616 |
Total long-term debt, excluding capital leases and financing obligations | 9,178 | 9,164 |
Commercial paper due through May 2014 | ' | ' |
Debt | ' | ' |
Total debt, excluding capital leases and financing obligations | 1,245 | 1,250 |
Interest rate (as a percent) | 0.27% | 0.27% |
Senior notes due through 2043 | ' | ' |
Debt | ' | ' |
Total debt, excluding capital leases and financing obligations | 9,083 | 9,083 |
Interest rate, minimum range (as a percent) | 0.76% | 0.76% |
Interest rate, maximum range (as a percent) | 8.00% | 8.00% |
Mortgages due in varying amounts through 2034 | ' | ' |
Debt | ' | ' |
Total debt, excluding capital leases and financing obligations | 63 | 64 |
Interest rate, minimum range (as a percent) | 5.00% | 5.00% |
Interest rate, maximum range (as a percent) | 12.75% | 12.75% |
Other | ' | ' |
Debt | ' | ' |
Total debt, excluding capital leases and financing obligations | $398 | $383 |
BENEFIT_PLANS_Details
BENEFIT PLANS (Details) (USD $) | 4 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 |
Amortization of: | ' | ' |
Cost of other defined contribution plans | $56 | $48 |
Multiemployer pension plan charge (after-tax) | 56 | ' |
Pension Benefits | ' | ' |
Components of net periodic benefit cost: | ' | ' |
Service cost | 14 | 15 |
Interest cost | 56 | 48 |
Expected return on plan assets | -74 | -69 |
Amortization of: | ' | ' |
Actuarial loss | 16 | 31 |
Net periodic benefit expense | 12 | 25 |
Other Benefits | ' | ' |
Components of net periodic benefit cost: | ' | ' |
Service cost | 4 | 5 |
Interest cost | 4 | 5 |
Amortization of: | ' | ' |
Prior service cost | -2 | -1 |
Actuarial loss | -2 | ' |
Net periodic benefit expense | $4 | $9 |
EARNINGS_PER_COMMON_SHARE_Deta
EARNINGS PER COMMON SHARE (Details) (USD $) | 4 Months Ended | |
In Millions, except Share data, unless otherwise specified | 24-May-14 | 25-May-13 |
EARNINGS PER COMMON SHARE | ' | ' |
Net earnings attributable to The Kroger Co. per basic common share | $497 | $477 |
Average number of common shares used in basic calculation | 501,000,000 | 514,000,000 |
Net earnings attributable to The Kroger Co. per basic common share (in dollars per share) | $0.99 | $0.93 |
Dilutive effect of stock options (in shares) | 6,000,000 | 6,000,000 |
Net earnings attributable to The Kroger Co. per diluted common share | 497 | 477 |
Average number of common shares used in diluted calculation | 507,000,000 | 520,000,000 |
Net earnings attributable to The Kroger Co. per diluted common share (in dollars per share) | $0.98 | $0.92 |
Undistributed and distributed earnings to participating securities | $4 | $4 |
Shares excluded from the earnings per share calculation due to anti-dilutive effect on earnings per share | 2,000,000 | ' |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 4 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 | Feb. 01, 2014 |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Asset impairment charge | $8 | $19 | $39 |
Carrying Value | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Total debt | 10,789 | ' | 10,780 |
Other assets | 111 | ' | 51 |
Notes receivable | 90 | ' | 87 |
Carrying Value | Before impairment | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Long-Lived Assets | 14 | 28 | 68 |
Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Total | 6 | ' | 29 |
Fair value | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Long-Lived Assets | 6 | 9 | 29 |
Total | 100 | ' | 79 |
Total debt | 11,686 | ' | 11,547 |
Other assets | 111 | ' | 51 |
Notes receivable | 90 | ' | 87 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Trading Securities | 55 | ' | ' |
Available-for-Sale Securities | 27 | ' | 36 |
Total | 82 | ' | 36 |
Unrealized losses on Available-for-Sale Securities | -2 | ' | ' |
Recurring | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Warrants | 14 | ' | 16 |
Total | 12 | ' | 14 |
Recurring | Significant Other Observable Inputs (Level 2) | Interest Rate Hedges | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Interest Rate Hedges | -2 | ' | -2 |
Recurring | Fair value | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Trading Securities | 55 | ' | ' |
Available-for-Sale Securities | 27 | ' | 36 |
Warrants | 14 | ' | 16 |
Recurring | Fair value | Interest Rate Hedges | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Interest Rate Hedges | -2 | ' | -2 |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair value of financial instruments carried at fair value | ' | ' | ' |
Long-Lived Assets | $6 | ' | $29 |
OTHER_COMPREHENSIVE_INCOME_LOS2
OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 4 Months Ended | 4 Months Ended | |||||||
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 | 25-May-13 | 24-May-14 | Feb. 01, 2014 | 24-May-14 | 25-May-13 | 24-May-14 | 25-May-13 |
Cash Flow Hedging Activities | Cash Flow Hedging Activities | Cash Flow Hedging Activities | Available for sale Securities | Available for sale Securities | Pension and Postretirement Defined Benefit Plans | Pension and Postretirement Defined Benefit Plans | |||
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ($464) | ($753) | ($14) | ($25) | ($25) | $12 | $7 | ($451) | ($746) |
OCI before reclassifications | -1 | -16 | -19 | ' | ' | -1 | 3 | ' | ' |
Amounts reclassified out of AOCI | 8 | 20 | 1 | ' | ' | ' | ' | 8 | 19 |
Total other comprehensive income | 7 | 4 | -18 | ' | ' | -1 | 3 | 8 | 19 |
Balance at the end of the period | -457 | -749 | -32 | -25 | -25 | 11 | 10 | -443 | -727 |
OCI before reclassifications, tax | ' | ' | ($12) | ' | ' | ($1) | $2 | ' | ' |
OTHER_COMPREHENSIVE_INCOME_LOS3
OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) (USD $) | 4 Months Ended | |
In Millions, unless otherwise specified | 24-May-14 | 25-May-13 |
Reclassification out of AOCI and the related tax effects | ' | ' |
Tax expense | ($274) | ($266) |
Net earnings attributable to The Kroger Co. | 501 | 481 |
Reclassification out of AOCI | ' | ' |
Reclassification out of AOCI and the related tax effects | ' | ' |
Net earnings attributable to The Kroger Co. | 8 | 20 |
Reclassification out of AOCI | Gains on cash flow hedging activities | ' | ' |
Reclassification out of AOCI and the related tax effects | ' | ' |
Amortization of unrealized gains and losses on cash flow hedging activities | ' | 1 |
Net earnings attributable to The Kroger Co. | ' | 1 |
Reclassification out of AOCI | Pension and postretirement defined benefit plan items | ' | ' |
Reclassification out of AOCI and the related tax effects | ' | ' |
Amortization of amounts included in net periodic pension expense | 12 | 30 |
Tax expense | -4 | -11 |
Net earnings attributable to The Kroger Co. | $8 | $19 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 4 Months Ended | |
24-May-14 | 25-May-13 | |
INCOME TAXES | ' | ' |
Effective income tax rate (as a percent) | 35.00% | 35.50% |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (Subsequent event, Unsecured revolving credit facility, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Subsequent event | ' |
Maximum borrowing capacity | 2,750 |
Additional borrowing capacity | 750 |
Maximum borrowing capacity prior to amended and restated credit agreement | 2,000 |
Maximum leverage ratio (as a percent) | 3.5 |
Minimum fixed charge coverage ratio (as a percent) | 1.7 |
LIBOR plus a market rate spread based on the company's leverage ratio | ' |
Subsequent event | ' |
Debt instrument variable basis rate | 'LIBOR plus a market rate spread based on the company's leverage ratio |
Federal Funds Rate | ' |
Subsequent event | ' |
Debt instrument variable basis rate | 'Federal Funds Rate |
Interest rate margin (as a percent) | 0.50% |
Bank of America prime rate | ' |
Subsequent event | ' |
Debt instrument variable basis rate | 'Bank of America prime rate |
One-month LIBOR plus 1.0 percent plus a market rate spread based on the company's leverage ratio | ' |
Subsequent event | ' |
Debt instrument variable basis rate | 'One-month LIBOR plus 1.0 percent plus a market rate spread based on the company's leverage ratio |
Interest rate margin (as a percent) | 1.00% |