The Kroger Co. (KR) 10-Q 28 Jun 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	4 Months Ended
	May 25, 2019	Jun. 25, 2019
Document and Entity Information Abstract
Entity Registrant Name	KROGER CO
Entity Central Index Key	0000056873
Document Type	10-Q
Document Period End Date	May 25, 2019
Amendment Flag	false
Current Fiscal Year End Date	--02-01
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		798,798,567
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Sales	$ 37,251	$ 37,722
Operating expenses
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below	28,983	29,419
Operating, general and administrative	6,314	6,257
Rent	274
Rent		276
Depreciation and amortization	779	741
Operating profit	901	1,029
Other income (expense)
Interest expense	(197)	(192)
Non-service component of company-sponsored pension plan costs	3	(10)
Mark to market gain on Ocado securities	106	36
Gain on sale of businesses	176	1,771
Net earnings before income tax expense	989	2,634
Income tax expense	226	616
Net earnings including noncontrolling interests	763	2,018
Net loss attributable to noncontrolling interests	(9)	(8)
Net earnings attributable to The Kroger Co.	$ 772	$ 2,026
Net earnings attributable to The Kroger Co. per basic common share	$ 0.96	$ 2.39
Average number of common shares used in basic calculation	798	839
Net earnings attributable to The Kroger Co. per diluted common share	$ 0.95	$ 2.37
Average number of common shares used in diluted calculation	805	846

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions		4 Months Ended
		May 25, 2019	May 26, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings including noncontrolling interests		$ 763	$ 2,018
Other comprehensive income (loss)
Realized gains and losses on available for sale securities, net of income tax	[1]		(4)
Change in pension and other postretirement defined benefit plans, net of income tax	[2]	7	15
Unrealized gains and losses on cash flow hedging activities, net of income tax	[3]	(8)	4
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax	[4]	1	1
Cumulative effect of accounting change	[5]	(146)
Total other comprehensive (loss) income		(146)	16
Comprehensive income		617	2,034
Comprehensive loss attributable to noncontrolling interests		(9)	(8)
Comprehensive income attributable to The Kroger Co.		$ 626	$ 2,042
[1]	Amount is net of tax of ($1) for the first quarter of 2018.
[2]	Amount is net of tax of $3 for the first quarter of 2019 and $4 for the first quarter of 2018.
[3]	Amount is net of tax of ($9) for the first quarter of 2019 and $1 for the first quarter of 2018.
[4]	Amount is net of tax of $1 for the first quarters of 2019 and 2018.
[5]	Amount is net of tax of $1 for the first quarters of 2019 and 2018. Related to the adoption of Accounting Standards Update (“ASU”) 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," (see Note 5 for additional details).

CONSOLIDATED STATEMENTS OF CO_2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Realized gains and losses on available for sale securities, income tax		$ (1)
Change in pension and other postretirement defined benefit plans, income tax	$ 3	4
Unrealized gains and losses on cash flow hedging activities, income tax	(9)	1
Amortization of unrealized gains and losses on cash flow hedging activities, income tax	$ 1	$ 1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	May 25, 2019	Feb. 02, 2019
Current assets
Cash and temporary cash investments	$ 409	$ 429
Store deposits in-transit	1,066	1,181
Receivables	1,560	1,589
FIFO inventory	7,998	8,123
LIFO reserve	(1,291)	(1,277)
Assets held for sale		166
Prepaid and other current assets	420	592
Total current assets	10,162	10,803
Property, plant and equipment, net	21,661	21,635
Operating lease assets	6,819
Intangibles, net	1,123	1,258
Goodwill	3,087	3,087
Other assets	1,467	1,335
Total Assets	44,319	38,118
Current liabilities
Current portion of long-term debt including obligations under finance leases	1,453
Current portion of long-term debt including obligations under finance leases		3,157
Current portion of operating lease liabilities	682
Trade accounts payable	6,423	6,059
Accrued salaries and wages	1,078	1,227
Liabilities held for sale		51
Other current liabilities	3,939	3,780
Total current liabilities	13,575	14,274
Long-term debt including obligations under finance leases	12,016
Long-term debt including obligations under finance leases		12,072
Noncurrent operating lease liabilities	6,420
Deferred income taxes	1,484	1,562
Pension and postretirement benefit obligations	485	494
Other long-term liabilities	1,807	1,881
Total Liabilities	35,787	30,283
Commitments and contingencies see Note 7
SHAREHOLDERS’ EQUITY
Preferred shares, $100 par per share, 5 shares authorized and unissued
Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2019 and 2018	1,918	1,918
Additional paid-in capital	3,287	3,245
Accumulated other comprehensive loss	(492)	(346)
Accumulated earnings	20,481	19,681
Common shares in treasury, at cost, 1,119 shares in 2019 and 1,120 shares in 2018	(16,613)	(16,612)
Total Shareholders’ Equity - The Kroger Co.	8,581	7,886
Noncontrolling interests	(49)	(51)
Total Equity	8,532	7,835
Total Liabilities and Equity	$ 44,319	$ 38,118

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions	May 25, 2019	Feb. 02, 2019
CONSOLIDATED BALANCE SHEETS
Preferred shares, per share (in dollars per share)	$ 100	$ 100
Preferred shares, shares authorized	5	5
Common shares, par per share (in dollars per share)	$ 1	$ 1
Common shares, shares authorized	2,000	2,000
Common shares, shares issued	1,918	1,918
Common shares in treasury, shares	1,119	1,120

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
Cash Flows from Operating Activities:
Net earnings including noncontrolling interests	$ 763	$ 2,018
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization	779	741
Operating lease asset amortization	197
LIFO charge	15	15
Stock-based employee compensation	48	45
Expense for company-sponsored pension plans	11	27
Deferred income taxes	(73)	17
Gain on sale of businesses	(176)	(1,771)
Gain on sale of assets	(57)
Mark to market gain on Ocado securities	(106)	(36)
Other	(29)
Changes in operating assets and liabilities net of effects from mergers and disposals of businesses:
Store deposits in-transit	115	108
Receivables	33	(123)
Inventories	124	134
Prepaid and other current assets	86	307
Trade accounts payable	364	345
Accrued expenses	(18)	43
Income taxes receivable and payable	63	558
Operating lease liabilities	(146)
Proceeds from contract associated with sale of business	295
Other	(20)	(60)
Net cash provided by operating activities	2,268	2,368
Cash Flows from Investing Activities:
Payments for property and equipment	(901)	(758)
Proceeds from sale of assets	117	47
Purchases of stores		(44)
Net proceeds from sale of businesses	326	2,142
Other	(6)	(38)
Net cash (used) provided by investing activities	(464)	1,349
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	9	1,010
Payments on long-term debt including obligations under finance leases	(1,013)	(214)
Net payments on commercial paper	(700)	(2,120)
Dividends paid	(113)	(110)
Proceeds from issuance of capital stock	12	10
Treasury stock purchases	(15)	(1,809)
Other	(4)	(140)
Net cash used by financing activities	(1,824)	(3,373)
Net (decrease) increase in cash and temporary cash investments	(20)	344
Cash and temporary cash investments:
Beginning of year	429	347
End of period	409	691
Reconciliation of capital investments:
Payments for property and equipment	(901)	(758)
Changes in construction-in-progress payables	25	(91)
Total capital investments	(876)	(849)
Disclosure of cash flow information:
Cash paid during the year for interest	115	124
Cash paid during the year for income taxes	$ 231	$ 36

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY - USD ($) shares in Millions, $ in Millions	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Accumulated Earnings	Noncontrolling Interest	Total
Balances at Feb. 03, 2018	$ 1,918	$ 3,161	$ (14,684)	$ (471)	$ 17,007	$ (26)	$ 6,905
Balances (in shares) at Feb. 03, 2018	1,918		1,048
Issuance of common stock:
Stock options exercised			$ 10				10
Stock options exercised (in shares)			(1)
Restricted stock issued		(6)	$ 5				(1)
Treasury stock activity:
Treasury stock purchases, at cost		(134)	$ (1,792)				(1,926)
Treasury stock purchases, at cost (in shares)			74
Stock options exchanged			$ (17)				(17)
Stock options exchanged (in shares)			1
Share-based employee compensation		45					45
Other comprehensive income (loss), net of income tax of $5 and ($5) in 2018 and 2019, respectively				16			16
Other		(7)	$ 2			5
Cash dividends declared ($0.125 and $0.14 in 2018 and 2019, respectively, per common share)					(109)		(109)
Net earnings (loss) including non-controlling interests					2,026	(8)	2,018
Balances at May. 26, 2018	$ 1,918	3,059	$ (16,476)	(455)	18,924	(29)	6,941
Balances (in shares) at May. 26, 2018	1,918		1,122
Balances at Feb. 02, 2019	$ 1,918	3,245	$ (16,612)	(346)	19,681	(51)	7,835
Balances (in shares) at Feb. 02, 2019	1,918		1,120
Issuance of common stock:
Stock options exercised			$ 12				12
Stock options exercised (in shares)			(1)
Restricted stock issued		(14)	$ 10				(4)
Treasury stock activity:
Stock options exchanged			(15)				(15)
Share-based employee compensation		48					48
Other comprehensive income (loss), net of income tax of $5 and ($5) in 2018 and 2019, respectively				(146)			(146)
Other		8	(8)		(5)	11	6
Cash dividends declared ($0.125 and $0.14 in 2018 and 2019, respectively, per common share)					(113)		(113)
Net earnings (loss) including non-controlling interests					772	(9)	763
Balances at May. 25, 2019	$ 1,918	$ 3,287	$ (16,613)	$ (492)	20,481	$ (49)	8,532
Balances (in shares) at May. 25, 2019	1,918		1,119
Treasury stock activity:
Cumulative effect of accounting change					$ 146		$ 146

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Parenthetical) - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
Other comprehensive gain (loss), income tax expense (benefit)	$ (5)	$ 5
Cash dividends declared per common share (in dollars per share)	$ 0.14	$ 0.125

ACCOUNTING POLICIES

ACCOUNTING POLICIES	4 Months Ended
	May 25, 2019
ACCOUNTING POLICIES
ACCOUNTING POLICIES	1. Basis of Presentation and Principles of Consolidation The accompanying financial statements include the consolidated accounts of The Kroger Co., its wholly-owned subsidiaries and other consolidated entities. The February 2, 2019 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 adjustments, all of which are of a normal, recurring nature that are necessary for a fair statement 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 Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019. The unaudited information in the Consolidated Financial Statements for the first quarters ended May 25, 2019 and May 26, 2018, includes the results of operations of the Company for the 16-week periods then ended. Products and services related primarily to Kroger Personal Finance and Media, which were historically accounted for as an offset to operating, general and administrative expenses (“OG&A”) , are now classified as a component of sales, except for certain amounts in Media, which are netted against merchandise costs. These prior-year amounts have been reclassified to conform to current-year presentation. Refer to Note 5 for a description of changes to the Consolidated Balance Sheet for recently adopted accounting standards regarding the recognition of lease agreements and reclassification of stranded tax effects. Fair Value Measurements Fair value measurements are classified and disclosed in one of the following three categories: 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. The Company records 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 at approximated fair value. Certain other investments and derivatives are recorded as Level 1, 2 or 3 instruments. Refer to Note 2 for the disclosure of debt instrument fair values.

DEBT OBLIGATIONS

DEBT OBLIGATIONS	4 Months Ended
	May 25, 2019
DEBT OBLIGATIONS
DEBT OBLIGATIONS	2. Long-term debt consists of: May 25, February 2, 2019 2019 1.50% to 8.00% Senior Notes due through 2048 $ 12,101 $ 12,097 5.63% to 12.75% Mortgages due in varying amounts through 2027 14 14 2.60% to 2.63% Commercial paper borrowings due through May 2019 100 800 3.37% Term Loan due 2019 — 1,000 Other 446 440 Total debt, excluding obligations under finance leases 12,661 14,351 Less current portion (1,405) (3,103) Total long-term debt, excluding obligations under finance leases $ 11,256 $ 11,248 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 upon the net present value of the future cash flow using the forward interest rate yield curve in effect at May 25, 2019 and February 2, 2019. At May 25, 2019, the fair value of total debt was $12,856 compared to a carrying value of $12,661. At February 2, 2019, the fair value of total debt was $14,190 compared to a carrying value of $14,351.

BENEFIT PLANS

BENEFIT PLANS	4 Months Ended
	May 25, 2019
COMPANY-SPONSORED BENEFIT PLANS
COMPANY-SPONSORED BENEFIT PLANS	3. The following table provides the components of net periodic benefit cost for the company-sponsored defined benefit pension plans and other post-retirement benefit plans for the first quarters of 2019 and 2018. First Quarter Ended Pension Benefits Other Benefits May 25, May 26, May 25, May 26, 2019 2018 2019 2018 Components of net periodic benefit cost: Service cost $ 11 $ 15 $ 2 $ 2 Interest cost 41 43 2 2 Expected return on plan assets (56) (54) — — Amortization of: Prior service cost — — (3) (3) Actuarial loss (gain) 16 25 (3) (3) Net periodic benefit cost $ 12 $ 29 $ (2) $ (2) The Company is not required to make any contributions to its company-sponsored pension plans in 2019, but may make contributions to the extent such contributions are beneficial to the Company. The Company did not make any contributions to its company-sponsored pension plans in the first quarter of 2019 or 2018. The Company contributed $88 and $89 to employee 401(k) retirement savings accounts in the first quarters of 2019 and 2018, respectively. 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. During the first quarter of 2019, the Company incurred a charge of $59, $44 net of tax, due to obligations related to withdrawal liabilities for certain local unions of the Central States multi-employer pension fund. The charge was recorded in the OG&A caption in the Consolidated Statements of Operations.

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE	4 Months Ended
	May 25, 2019
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE	4. 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 25, 2019 May 26, 2018 Per Per Earnings Shares Share Earnings Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Net earnings attributable to The Kroger Co. per basic common share $ 764 798 $ 0.96 $ 2,005 839 $ 2.39 Dilutive effect of stock options 7 7 Net earnings attributable to The Kroger Co. per diluted common share $ 764 805 $ 0.95 $ 2,005 846 $ 2.37 The Company had combined undistributed and distributed earnings to participating securities totaling $8 in the first quarter of 2019 and $21 in the first quarter of 2018. The Company had options outstanding for approximately 16 million shares during the first quarter of 2019 and 17 million shares in the first quarter of 2018 that were excluded from the computations of net earnings per diluted common share because their inclusion would have had an anti-dilutive effect on net earnings per share.

RECENTLY ADOPTED ACCOUNTING STA

RECENTLY ADOPTED ACCOUNTING STANDARDS	4 Months Ended
	May 25, 2019
RECENTLY ADOPTED ACCOUNTING STANDARDS
RECENTLY ADOPTED ACCOUNTING STANDARDS	5. On February 3, 2019, the Company adopted ASU 2016-02, “Leases,” which provides guidance for the recognition of lease agreements. The Company adopted the standard using the modified retrospective approach, which provides a method for recording existing leases at adoption that approximates the results of a full retrospective approach. In addition, the Company elected the transition package of practical expedients permitted within the standard, which allowed it to carry forward the historical lease classification, and applied the transition option which does not require application of the guidance to comparative periods in the year of adoption. The adoption of the standard resulted in the recognition of operating lease assets and operating lease liabilities of approximately $6,800 and $7,000, respectively, as of February 3, 2019. Included in the measurement of the new lease assets is the reclassification of certain balances including those historically recorded as prepaid or deferred rent and favorable and unfavorable leasehold interests. Several other asset and liability line items in the Consolidated Balance Sheets were also impacted by immaterial amounts. The adoption of this standard also resulted in a change in naming convention for leases classified historically as capital leases. These leases are now referred to as finance leases. The adoption of this standard did not materially affect the Company’s consolidated net earnings or cash flows. In February 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This amendment allows companies to reclassify stranded tax effects resulting from the Tax Act from accumulated other comprehensive income (AOCI) to retained earnings. The Company adopted ASU 2018-02 on February 3, 2019, which resulted in a decrease to AOCI and an increase to accumulated earnings of $146, primarily related to deferred taxes previously recorded for pension and other postretirement benefits and cash flow hedges. The adoption of this standard did not have an effect on the Company’s consolidated results of operations or cash flows.

LEASES AND LEASE-FINANCED TRANS

LEASES AND LEASE-FINANCED TRANSACTIONS	4 Months Ended
	May 25, 2019
LEASES AND LEASE-FINANCED TRANSACTIONS
LEASES AND LEASE-FINANCED TRANSACTIONS	6. The Company leases certain store real estate, warehouses, distribution centers, office space and equipment. While the Company’s current strategy emphasizes ownership of store real estate, the Company operates in leased facilities in approximately half of its store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. The following table provides supplemental balance sheet classification information related to leases: May 25, February 2, Classification 2019 2019 Assets Operating Operating lease assets $ 6,819 $ — Finance Property, plant and equipment, net (1) 641 721 Total leased assets $ 7,460 $ 721 Liabilities Current Operating Current portion of operating lease liabilities $ 682 $ — Finance Current portion of long-term debt including obligations under finance leases 48 54 Noncurrent Operating Noncurrent operating lease liabilities 6,420 — Finance Long-term debt including obligations under finance leases 760 824 Total lease liabilities $ 7,910 $ 878 (1) Finance lease assets are recorded net of accumulated amortization of $287 and $345 as of May 25, 2019 and February 2, 2019. The following table provides the components of lease cost: First Quarter Ended Lease Cost Classification May 25, 2019 Operating lease cost (1) Rent Expense $ 311 Sublease income Rent Expense (37) Finance lease cost Amortization of leased assets Depreciation and Amortization 15 Interest on lease liabilities Interest Expense 14 Net lease cost $ 303 (1) Includes short-term leases and variable lease costs, which are immaterial. Maturities of operating and finance lease liabilities are listed below. Amounts in the table include options to extend lease terms that are reasonably certain of being exercised. Operating Finance Leases Leases Total Remainder of 2019 $ 700 $ 63 $ 763 2020 888 84 972 2021 824 84 908 2022 706 80 786 2023 635 79 714 Thereafter 6,645 787 7,432 Total lease payments 10,398 1,177 $ 11,575 Less amount representing interest 3,296 Present value of lease liabilities (1) $ 7,102 $ 808 (1) Includes the current portion of $682 for operating leases and $48 for finance leases. Total future minimum rentals under non-cancellable subleases at May 25, 2019 were $274. The following table provides the weighted-average lease term and discount rate for operating and finance leases: May 25, 2019 Weighted-average remaining lease term (years) Operating leases Finance leases Weighted-average discount rate Operating leases % Finance leases % The following table provides supplemental cash flow information related to leases: First Quarter Ended May 25, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 239 Operating cash flows from finance leases $ 14 Financing cash flows from finance leases $ 9 Leased assets obtained in exchange for new operating lease liabilities $ 257 Leased assets obtained in exchange for new finance lease liabilities $ 33 Net gain recognized from sale and leaseback transactions (1) $ 51 (1) During the first quarter of 2019, the Company entered into sale leaseback transactions related to eight properties, which resulted in total proceeds of $102. The Company adopted new lease accounting guidance in the first quarter of 2019 as discussed in Note 1 and Note 5, and as required, the following disclosure is provided for periods prior to adoption. M inimum annual rentals and payments under capital leases and lease-financed transactions for the five years subsequent to February 2, 2019 and in the aggregate are listed below. Amounts in the table below only include payments through the noncancelable lease term. Lease- Capital Operating Financed Leases Leases Transactions 2019 $ 103 $ 948 $ 5 2020 89 880 6 2021 86 773 5 2022 82 649 5 2023 81 556 5 Thereafter 766 3,197 17 Total 1,207 $ 7,003 $ 43 Less estimated executory costs included in capital leases — Net minimum lease payments under capital leases 1,207 Less amount representing interest 372 Present value of net minimum lease payments under capital leases $ 835

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	4 Months Ended
	May 25, 2019
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	7. 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, as well as product liability cases, 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 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.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	4 Months Ended
	May 25, 2019
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	8. The following table represents the changes in AOCI by component for the first quarters of 2019 and 2018: Pension and Cash Flow Postretirement Hedging Available for sale Defined Benefit Activities (1) Securities (1) Plans (1) Total(1) Balance at February 3, 2018 $ 24 $ 4 $ (499) $ (471) OCI before reclassifications (2) 4 (4) — — Amounts reclassified out of AOCI (3) 1 — 15 16 Net current-period OCI 5 (4) 15 16 Balance at May 26, 2018 $ 29 $ — $ (484) $ (455) Balance at February 2, 2019 $ 6 $ — $ (352) $ (346) Cumulative effect of accounting change (4) (5) — (141) (146) OCI before reclassifications (2) (8) — — (8) Amounts reclassified out of AOCI (3) 1 — 7 8 Net current-period OCI (12) — (134) (146) Balance at May 25, 2019 $ (6) $ — $ (486) $ (492) (1) All amounts are net of tax. (2) Net of tax of $ 1 for cash flow hedging activities and ($1) for available for sale securities for the first quarter of 2018. Net of tax of ($9) for cash flow hedging activities for the first quarter of 2019. (3) Net of tax of $1 for cash flow hedging activities and $4 for pension and postretirement defined benefit plans for the first quarter of 2018. Net of tax of $1 for cash flow hedging activities and $3 for pension and postretirement defined benefit plans for the first quarter of 2019. (4) Related to the adoption of ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," (see Note 5 for additional details). The following table represents the items reclassified out of AOCI and the related tax effects for the first quarters of 2019 and 2018: First Quarter Ended May 25, May 26, 2019 2018 Cash flow hedging activity items Amortization of gains and losses on cash flow hedging activities (1) $ 2 $ 2 Tax expense (1) (1) Net of tax 1 1 Pension and postretirement defined benefit plan items Amortization of amounts included in net periodic pension cost (2) 10 19 Tax expense (3) (4) Net of tax 7 15 Total reclassifications, net of tax $ 8 $ 16 (1) Reclassified from AOCI into interest expense. (2) Reclassified from AOCI into non-service component of company-sponsored pension plan costs. These components are included in the computation of net periodic pension cost (see Note 3 for additional details).

INCOME TAXES

INCOME TAXES	4 Months Ended
	May 25, 2019
INCOME TAXES
TAXES BASED ON INCOME	9. The effective income tax rate was 22.8% and 23.4% for the first quarters of 2019 and 2018, respectively. The effective income tax rate for the first quarter of 2019 and 2018 differed from the federal statutory rate due to the effect of state income taxes partially offset by the utilization of tax credits and deductions.

HELD FOR SALE AND DISPOSAL OF B

HELD FOR SALE AND DISPOSAL OF BUSINESS	4 Months Ended
	May 25, 2019
HELD FOR SALE AND DISPOSAL OF BUSINESS
HELD FOR SALE AND DISPOSAL OF BUSINESS	10. Certain assets and liabilities, related to the Company’s Turkey Hill Dairy and You Technology businesses, were classified as held for sale in the Consolidated Balance Sheet as of February 2, 2019. On March 13, 2019, the Company completed the sale of its You Technology business to Inmar for total consideration of $565, including $396 of cash and $64 of preferred equity received upon closing. The Company is also entitled to receive other cash payments of $105 over five years. The transaction includes a long-term service agreement for Inmar to provide the Company digital coupon services. The sale resulted in a gain of $70, $52 net of tax, which is included in “Gain on sale of businesses” in the Consolidated Statement of Operations. The Company recorded the fair value of the long-term service agreement of $358 in “Other current liabilities” and “Other long-term liabilities” in the Consolidated Balance Sheets and such amount is being recorded as sales over the 10-year agreement. On April 26, 2019 the Company completed the sale of its Turkey Hill Dairy business to an affiliate of Peak Rock Capital for total proceeds of $225. The sale resulted in a gain of $106, $80 net of tax, which is included in “Gain on sale of businesses” in the Consolidated Statements of Operations.

ACCOUNTING POLICIES (Policies)

ACCOUNTING POLICIES (Policies)	4 Months Ended
	May 25, 2019
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 other consolidated entities. The February 2, 2019 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 adjustments, all of which are of a normal, recurring nature that are necessary for a fair statement 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 Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019. The unaudited information in the Consolidated Financial Statements for the first quarters ended May 25, 2019 and May 26, 2018, includes the results of operations of the Company for the 16-week periods then ended. Products and services related primarily to Kroger Personal Finance and Media, which were historically accounted for as an offset to operating, general and administrative expenses (“OG&A”) , are now classified as a component of sales, except for certain amounts in Media, which are netted against merchandise costs. These prior-year amounts have been reclassified to conform to current-year presentation. Refer to Note 5 for a description of changes to the Consolidated Balance Sheet for recently adopted accounting standards regarding the recognition of lease agreements and reclassification of stranded tax effects.
Fair Value Measurements	Fair Value Measurements Fair value measurements are classified and disclosed in one of the following three categories: 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. The Company records 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 at approximated fair value. Certain other investments and derivatives are recorded as Level 1, 2 or 3 instruments. Refer to Note 2 for the disclosure of debt instrument fair values.

DEBT OBLIGATIONS (Tables)

DEBT OBLIGATIONS (Tables)	4 Months Ended
	May 25, 2019
DEBT OBLIGATIONS
Schedule of long-term debt	May 25, February 2, 2019 2019 1.50% to 8.00% Senior Notes due through 2048 $ 12,101 $ 12,097 5.63% to 12.75% Mortgages due in varying amounts through 2027 14 14 2.60% to 2.63% Commercial paper borrowings due through May 2019 100 800 3.37% Term Loan due 2019 — 1,000 Other 446 440 Total debt, excluding obligations under finance leases 12,661 14,351 Less current portion (1,405) (3,103) Total long-term debt, excluding obligations under finance leases $ 11,256 $ 11,248

BENEFIT PLANS (Tables)

BENEFIT PLANS (Tables)	4 Months Ended
	May 25, 2019
COMPANY-SPONSORED BENEFIT PLANS
Schedule of components of net periodic benefit cost	First Quarter Ended Pension Benefits Other Benefits May 25, May 26, May 25, May 26, 2019 2018 2019 2018 Components of net periodic benefit cost: Service cost $ 11 $ 15 $ 2 $ 2 Interest cost 41 43 2 2 Expected return on plan assets (56) (54) — — Amortization of: Prior service cost — — (3) (3) Actuarial loss (gain) 16 25 (3) (3) Net periodic benefit cost $ 12 $ 29 $ (2) $ (2)

EARNINGS PER COMMON SHARE (Tabl

EARNINGS PER COMMON SHARE (Tables)	4 Months Ended
	May 25, 2019
EARNINGS PER COMMON SHARE
Schedule of earnings per common and diluted shares	First Quarter Ended First Quarter Ended May 25, 2019 May 26, 2018 Per Per Earnings Shares Share Earnings Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Net earnings attributable to The Kroger Co. per basic common share $ 764 798 $ 0.96 $ 2,005 839 $ 2.39 Dilutive effect of stock options 7 7 Net earnings attributable to The Kroger Co. per diluted common share $ 764 805 $ 0.95 $ 2,005 846 $ 2.37

LEASES AND LEASE-FINANCED TRA_2

LEASES AND LEASE-FINANCED TRANSACTIONS (Tables)	4 Months Ended
	May 25, 2019
LEASES AND LEASE-FINANCED TRANSACTIONS
Schedule of supplemental balance sheet classification	May 25, February 2, Classification 2019 2019 Assets Operating Operating lease assets $ 6,819 $ — Finance Property, plant and equipment, net (1) 641 721 Total leased assets $ 7,460 $ 721 Liabilities Current Operating Current portion of operating lease liabilities $ 682 $ — Finance Current portion of long-term debt including obligations under finance leases 48 54 Noncurrent Operating Noncurrent operating lease liabilities 6,420 — Finance Long-term debt including obligations under finance leases 760 824 Total lease liabilities $ 7,910 $ 878 (1) Finance lease assets are recorded net of accumulated amortization of $287 and $345 as of May 25, 2019 and February 2, 2019.
Schedule of components of lease cost	First Quarter Ended Lease Cost Classification May 25, 2019 Operating lease cost (1) Rent Expense $ 311 Sublease income Rent Expense (37) Finance lease cost Amortization of leased assets Depreciation and Amortization 15 Interest on lease liabilities Interest Expense 14 Net lease cost $ 303 (1) Includes short-term leases and variable lease costs, which are immaterial.
Schedule of maturities of operating and finance lease liabilities	Operating Finance Leases Leases Total Remainder of 2019 $ 700 $ 63 $ 763 2020 888 84 972 2021 824 84 908 2022 706 80 786 2023 635 79 714 Thereafter 6,645 787 7,432 Total lease payments 10,398 1,177 $ 11,575 Less amount representing interest 3,296 Present value of lease liabilities (1) $ 7,102 $ 808 (1) Includes the current portion of $682 for operating leases and $48 for finance leases.
Schedule of weighted-average lease term and discount rate	May 25, 2019 Weighted-average remaining lease term (years) Operating leases Finance leases Weighted-average discount rate Operating leases % Finance leases %
Schedule of supplemental cash flow information	First Quarter Ended May 25, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 239 Operating cash flows from finance leases $ 14 Financing cash flows from finance leases $ 9 Leased assets obtained in exchange for new operating lease liabilities $ 257 Leased assets obtained in exchange for new finance lease liabilities $ 33 Net gain recognized from sale and leaseback transactions (1) $ 51 (1) During the first quarter of 2019, the Company entered into sale leaseback transactions related to eight properties, which resulted in total proceeds of $102.
Schedule of minimum annual rentals and payments under capital leases and lease-financed transactions	Lease- Capital Operating Financed Leases Leases Transactions 2019 $ 103 $ 948 $ 5 2020 89 880 6 2021 86 773 5 2022 82 649 5 2023 81 556 5 Thereafter 766 3,197 17 Total 1,207 $ 7,003 $ 43 Less estimated executory costs included in capital leases — Net minimum lease payments under capital leases 1,207 Less amount representing interest 372 Present value of net minimum lease payments under capital leases $ 835

ACCUMULATED OTHER COMPREHENSI_2

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	4 Months Ended
	May 25, 2019
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Schedule of changes in AOCI by component	Pension and Cash Flow Postretirement Hedging Available for sale Defined Benefit Activities (1) Securities (1) Plans (1) Total(1) Balance at February 3, 2018 $ 24 $ 4 $ (499) $ (471) OCI before reclassifications (2) 4 (4) — — Amounts reclassified out of AOCI (3) 1 — 15 16 Net current-period OCI 5 (4) 15 16 Balance at May 26, 2018 $ 29 $ — $ (484) $ (455) Balance at February 2, 2019 $ 6 $ — $ (352) $ (346) Cumulative effect of accounting change (4) (5) — (141) (146) OCI before reclassifications (2) (8) — — (8) Amounts reclassified out of AOCI (3) 1 — 7 8 Net current-period OCI (12) — (134) (146) Balance at May 25, 2019 $ (6) $ — $ (486) $ (492) (1) All amounts are net of tax. (2) Net of tax of $ 1 for cash flow hedging activities and ($1) for available for sale securities for the first quarter of 2018. Net of tax of ($9) for cash flow hedging activities for the first quarter of 2019. (3) Net of tax of $1 for cash flow hedging activities and $4 for pension and postretirement defined benefit plans for the first quarter of 2018. Net of tax of $1 for cash flow hedging activities and $3 for pension and postretirement defined benefit plans for the first quarter of 2019. (4) Related to the adoption of ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," (see Note 5 for additional details).
Schedule of items reclassified out of AOCI and the related tax effects	First Quarter Ended May 25, May 26, 2019 2018 Cash flow hedging activity items Amortization of gains and losses on cash flow hedging activities (1) $ 2 $ 2 Tax expense (1) (1) Net of tax 1 1 Pension and postretirement defined benefit plan items Amortization of amounts included in net periodic pension cost (2) 10 19 Tax expense (3) (4) Net of tax 7 15 Total reclassifications, net of tax $ 8 $ 16 (1) Reclassified from AOCI into interest expense. (2) Reclassified from AOCI into non-service component of company-sponsored pension plan costs. These components are included in the computation of net periodic pension cost (see Note 3 for additional details).

ACCOUNTING POLICIES - DESCRIPTI

ACCOUNTING POLICIES - DESCRIPTION OF BUSINESS AND INVENTORIES (Details)	4 Months Ended
	May 25, 2019	May 26, 2018
Fiscal Year
Length of fiscal period	112 days	112 days

DEBT OBLIGATIONS - TABULAR (Det

DEBT OBLIGATIONS - TABULAR (Details) - USD ($) $ in Millions	May 25, 2019	Feb. 02, 2019
Debt
Total debt, excluding capital leases and financing obligations	$ 12,661	$ 14,351
Less current portion	(1,405)	(3,103)
Total long-term debt, excluding capital leases and financing obligations	11,256	11,248
Fair value of total debt	12,856	14,190
Senior Notes due through 2048
Debt
Total debt, excluding capital leases and financing obligations	$ 12,101	12,097
Senior Notes due through 2048 | Minimum
Debt
Interest rate (as a percent)	1.50%
Senior Notes due through 2048 | Maximum
Debt
Interest rate (as a percent)	8.00%
Mortgages due in varying amounts through 2027
Debt
Total debt, excluding capital leases and financing obligations	$ 14	14
Mortgages due in varying amounts through 2027 | Minimum
Debt
Interest rate (as a percent)	5.63%
Mortgages due in varying amounts through 2027 | Maximum
Debt
Interest rate (as a percent)	12.75%
Commercial paper borrowings
Debt
Total debt, excluding capital leases and financing obligations	$ 100	800
Commercial paper borrowings | Minimum
Debt
Interest rate (as a percent)	2.60%
Commercial paper borrowings | Maximum
Debt
Interest rate (as a percent)	2.63%
Term Loan due 2019
Debt
Total debt, excluding capital leases and financing obligations		$ 1,000
Interest rate (as a percent)		3.37%
Other
Debt
Total debt, excluding capital leases and financing obligations	$ 446	$ 440

BENEFIT PLANS - COMPONENTS OF N

BENEFIT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COSTS (Details) - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
Pension Benefits
Components of net periodic benefit cost:
Service cost	$ 11	$ 15
Interest cost	41	43
Expected return on plan assets	(56)	(54)
Amortization of:
Actuarial loss (gain)	16	25
Net periodic benefit cost	12	29
Other Benefits
Components of net periodic benefit cost:
Service cost	2	2
Interest cost	2	2
Amortization of:
Prior service cost	(3)	(3)
Actuarial loss (gain)	(3)	(3)
Net periodic benefit cost	$ (2)	$ (2)

BENEFIT PLANS - DEFINED CONTRIB

BENEFIT PLANS - DEFINED CONTRIBUTION PLAN INFORMATION (Details) - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
COMPANY-SPONSORED BENEFIT PLANS
Contribution to 401(k) retirement savings accounts	$ 88	$ 89

BENEFIT PLANS - MULTI EMPLOYER

BENEFIT PLANS - MULTI EMPLOYER PLAN (Details) - Multi-employer pension funds $ in Millions	4 Months Ended
	May 25, 2019USD ($)
Multiemployer Plans
Charge (before-tax) related to pension plan agreements	$ 59
Charge (after-tax) related to pension plan agreements	$ 44

EARNINGS PER COMMON SHARE (Deta

EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
EARNINGS PER COMMON SHARE
Net earnings numerator (basic)	$ 764	$ 2,005
Net earnings numerator (diluted)	$ 764	$ 2,005
Average number of common shares used in basic calculation	798	839
Net earnings attributable to The Kroger Co. per basic common share	$ 0.96	$ 2.39
Dilutive effect of stock options (in shares)	7	7
Average number of common shares used in diluted calculation	805	846
Net earnings attributable to The Kroger Co. per diluted common share	$ 0.95	$ 2.37
Undistributed and distributed earnings to participating securities	$ 8	$ 21
Shares excluded from the earnings per share calculation due to anti-dilutive effect on earnings per share	16	17

RECENTLY ADOPTED ACCOUNTING S_2

RECENTLY ADOPTED ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions	Feb. 03, 2019	May 25, 2019
Recently adopted accounting standards
Operating Lease, Right-of-Use Asset		$ 6,819
Operating Lease, Liability		7,102
Cumulative effect of accounting change		$ 146
ASU 2016-02
Recently adopted accounting standards
Lease - Practical Expedient - Package	true
ASU 2016-02 | Restatement Adjustment
Recently adopted accounting standards
Operating Lease, Right-of-Use Asset	$ 6,800
Operating Lease, Liability	7,000
ASU 2018-02 | Restatement Adjustment
Recently adopted accounting standards
Cumulative effect of accounting change	$ 146

LEASES AND LEASE-FINANCED TRA_3

LEASES AND LEASE-FINANCED TRANSACTIONS (Details)	4 Months Ended
	May 25, 2019
LEASES AND LEASE-FINANCED TRANSACTIONS
Option to renew - Operating	true
Option to renew - Finance	true
Minimum
LEASES AND LEASE-FINANCED TRANSACTIONS
Term - Operating	10 years
Term - Finance	10 years
Sublease term - Operating	1 year
Sublease term - Finance	1 year
Maximum
LEASES AND LEASE-FINANCED TRANSACTIONS
Term - Operating	20 years
Term - Finance	20 years
Sublease term - Operating	20 years
Sublease term - Finance	20 years

LEASES AND LEASE-FINANCED TRA_4

LEASES AND LEASE-FINANCED TRANSACTIONS - BALANCE SHEET CLASSIFICATION (Details) - USD ($) $ in Millions	May 25, 2019	Feb. 02, 2019
LEASES AND LEASE-FINANCED TRANSACTIONS
Operating	$ 6,819
Property, Plant and Equipment, Net.	21,661	$ 21,635
Total lease assets	7,460	721
Current - Operating	682
Current - Finance	48	54
Noncurrent - Operating	6,420
Noncurrent - Finance	760	824
Total lease liabilities	7,910	878
Finance lease assets
LEASES AND LEASE-FINANCED TRANSACTIONS
Property, Plant and Equipment, Net.	641	721
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 287	$ 345

LEASES AND LEASE-FINANCED TRA_5

LEASES AND LEASE-FINANCED TRANSACTIONS - LEASE COST (Details) $ in Millions	4 Months Ended
	May 25, 2019USD ($)
LEASES AND LEASE-FINANCED TRANSACTIONS
Net lease cost	$ 303
Rent Expense
LEASES AND LEASE-FINANCED TRANSACTIONS
Operating lease cost	311
Sublease Income	(37)
Depreciation and Amortization
LEASES AND LEASE-FINANCED TRANSACTIONS
Amortization of leased assets	15
Interest expense
LEASES AND LEASE-FINANCED TRANSACTIONS
Interest on lease liabilities	$ 14

LEASES AND LEASE-FINANCED TRA_6

LEASES AND LEASE-FINANCED TRANSACTIONS - MATURITIES (Details) - USD ($) $ in Millions	May 25, 2019	Feb. 02, 2019
Operating leases maturities:
Remainder of 2019	$ 700
2020	888
2021	824
2022	706
2023	635
Thereafter	6,645
Total lease payments	10,398
Less amount representing interest	3,296
Present value of lease liabilities	7,102
Finance leases maturities:
Remainder of 2019	63
2020	84
2021	84
2022	80
2023	79
Thereafter	787
Total lease payments	1,177
Less amount representing interest	369
Present value of lease liabilities	808
Maturities
Remainder of 2019	763
2020	972
2021	908
2022	786
2023	714
Thereafter	7,432
Total lease payments	11,575
Current - Operating	682
Current finance leases	$ 48	$ 54

LEASES AND LEASE-FINANCED TRA_7

LEASES AND LEASE-FINANCED TRANSACTIONS - SUB LEASES (Details) $ in Millions	May 25, 2019USD ($)
LEASES AND LEASE-FINANCED TRANSACTIONS
Future minimum rentals under non-cancellable subleases	$ 274

LEASES AND LEASE-FINANCED TRA_8

LEASES AND LEASE-FINANCED TRANSACTIONS - QUANTITATIVE INFORMATION (Details)	May 25, 2019
LEASES AND LEASE-FINANCED TRANSACTIONS
Operating leases -Weighted-average remaining lease term (years)	16 years 3 months 18 days
Finance leases - Weighted-average remaining lease term (years)	15 years
Operating leases - Weighted-average discount rate	4.40%
Finance leases - Weighted-average discount rate	4.40%

LEASES AND LEASE-FINANCED TRA_9

LEASES AND LEASE-FINANCED TRANSACTIONS - CASH FLOW INFORMATION (Details) $ in Millions	4 Months Ended
	May 25, 2019USD ($)property
LEASES AND LEASE-FINANCED TRANSACTIONS
Operating cash flows from operating leases	$ 239
Operating cash flows from finance leases	14
Financing cash flows from finance leases	9
Leased assets obtained in exchange for new operating lease liabilities	257
Leased assets obtained in exchange for new finance lease liabilities	33
Net gain recognized from sale and leaseback transactions	$ 51
Number of properties | property	8
Total proceeds	$ 102

LEASES AND LEASE-FINANCED TR_10

LEASES AND LEASE-FINANCED TRANSACTIONS (Details) $ in Millions	Feb. 02, 2019USD ($)
Capital Leases, Future minimum annual rentals and payments
Capital Leases, 2019	$ 103
Capital Leases, 2020	89
Capital Leases, 2021	86
Capital Leases, 2022	82
Capital Leases, 2023	81
Capital Leases, Thereafter	766
Minimum capital lease annual rentals and payments	1,207
Net minimum lease payments under capital leases	1,207
Less amount representing interest	372
Present value of net minimum lease payments under capital leases	835
Operating Leases, Future minimum annual rentals and payments
Operating Leases, 2019	948
Operating Leases, 2020	880
Operating Leases, 2021	773
Operating Leases, 2022	649
Operating Leases, 2023	556
Operating Leases, Thereafter	3,197
Minimum operating lease annual rentals and payments	7,003
Lease-Financed Transactions, Future minimum annual rentals and payments
Lease-Financed Transactions, 2019	5
Lease-Financed Transactions, 2020	6
Lease-Financed Transactions, 2021	5
Lease-Financed Transactions, 2022	5
Lease-Financed Transactions, 2023	5
Lease-Financed Transactions, Thereafter	17
Minimum lease-financed transactions annual rentals and payments	$ 43

ACCUMULATED OTHER COMPREHENSI_3

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - CHANGES IN AOCI BY COMPONENT (Details) - USD ($) $ in Millions		4 Months Ended
		May 25, 2019	May 26, 2018
Accumulated other comprehensive income (loss)
Balance at the beginning of the period		$ 7,886
Cumulative effect of accounting change	[1]	(146)
Amounts reclassified out of AOCI		8	$ 16
Total other comprehensive (loss) income		(146)	16
Balance at the end of the period		8,581
Accumulated Other Comprehensive Loss
Accumulated other comprehensive income (loss)
Balance at the beginning of the period		(346)	(471)
Cumulative effect of accounting change		(146)
OCI before reclassifications		(8)
Amounts reclassified out of AOCI		8	16
Total other comprehensive (loss) income		(146)	16
Balance at the end of the period		(492)	(455)
Cash Flow Hedging Activities
Accumulated other comprehensive income (loss)
Balance at the beginning of the period		6	24
Cumulative effect of accounting change		(5)
OCI before reclassifications		(8)	4
Amounts reclassified out of AOCI		1	1
Total other comprehensive (loss) income		(12)	5
Balance at the end of the period		(6)	29
OCI before reclassifications, tax		(9)	1
Amounts reclassified out of AOCI, tax		1	1
Available for sale Securities
Accumulated other comprehensive income (loss)
Balance at the beginning of the period			4
OCI before reclassifications			(4)
Total other comprehensive (loss) income			(4)
OCI before reclassifications, tax			(1)
Pension and Postretirement Defined Benefit Plans
Accumulated other comprehensive income (loss)
Balance at the beginning of the period		(352)	(499)
Cumulative effect of accounting change		(141)
Amounts reclassified out of AOCI		7	15
Total other comprehensive (loss) income		(134)	15
Balance at the end of the period		(486)	(484)
Amounts reclassified out of AOCI, tax		$ 3	$ 4
[1]	Amount is net of tax of $1 for the first quarters of 2019 and 2018. Related to the adoption of Accounting Standards Update (“ASU”) 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," (see Note 5 for additional details).

ACCUMULATED OTHER COMPREHENSI_4

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - ITEMS RECLASSIFIED OUT OF AOCI (Details) - USD ($) $ in Millions	4 Months Ended
	May 25, 2019	May 26, 2018
Reclassification out of AOCI and the related tax effects
Amortization of gains and losses on cash flow hedging activities	$ 197	$ 192
Tax expense	226	616
Net of tax	(772)	(2,026)
Total reclassifications, net of tax	8	16
Cash Flow Hedging Activities
Reclassification out of AOCI and the related tax effects
Tax expense	(1)	(1)
Total reclassifications, net of tax	1	1
Pension and Postretirement Defined Benefit Plans
Reclassification out of AOCI and the related tax effects
Amortization of amounts included in net periodic pension expense	10	19
Tax expense	(3)	(4)
Total reclassifications, net of tax	7	15
Reclassification out of AOCI | Cash Flow Hedging Activities
Reclassification out of AOCI and the related tax effects
Amortization of gains and losses on cash flow hedging activities	2	2
Tax expense	(1)	(1)
Net of tax	$ 1	$ 1

INCOME TAXES - EFFECTIVE INCOME

INCOME TAXES - EFFECTIVE INCOME TAX RATE (Details)	4 Months Ended
	May 25, 2019	May 26, 2018
INCOME TAXES
Effective income tax rate (as a percent)	22.80%	23.40%

HELD FOR SALE AND DISPOSAL OF_2

HELD FOR SALE AND DISPOSAL OF BUSINESS (Details) - USD ($) $ in Millions	Apr. 26, 2019	Mar. 13, 2019	May 25, 2019	May 26, 2018
HELD FOR SALE
Gain on sale of businesses			$ 176	$ 1,771
You Technology business unit | Disposal Group, Held-for-sale, Not Discontinued Operations
HELD FOR SALE
Consideration for sale		$ 565
Proceeds received upon closing		396
Preferred equity		64
Other cash consideration		$ 105
Other cash consideration receivable period		5 years
Gain on sale of businesses		$ 70
Gain on sale of business, net of tax		$ 52
Term to be recorded as sales		10 years
You Technology business unit | Disposal Group, Held-for-sale, Not Discontinued Operations | Other current liabilities and Other long-term liabilities
HELD FOR SALE
Fair value of long-term service agreement		$ 358
Turkey Hill Dairy Business | Disposal Group, Held-for-sale, Not Discontinued Operations
HELD FOR SALE
Proceeds received upon closing	$ 225
Gain on sale of businesses	106
Gain on sale of business, net of tax	$ 80