1
EXHIBIT 99.2
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
December 31, 1998 and 1997
Table of Contents
-----------------
Financial Statements: Pages
- --------------------- -----
Report of Independent Accountants 2
Statement of Net Assets Available for Plan Benefits 3
Statement of Changes in Net Assets Available for Plan Benefits 4
Notes to Financial Statements 5-8
Supplemental Schedules: Schedule
- ----------------------- --------
Item 27(a) - Schedule of Assets Held for Investment Purposes 1
Item 27(d) - Schedule of Reportable Transactions 2
All other schedules required by Form 5500 have been omitted as being not
applicable.
2
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Trust Committee
Dillon Companies, Inc.
Employees' Stock Ownership and Savings Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the financial position of
Dillon Companies, Inc. Employees' Stock Ownership and Savings Plan at December
31, 1998 and 1997. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
In our opinion, the accompanying supplemental schedules of assets held for
investment purposes and reportable transactions are fairly stated in all
material respects in relation to the basic financial statements, taken as a
whole. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. This information is presented for
purposes of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements.
(PricewaterhouseCoopers LLP)
Cincinnati, Ohio
April 9, 1999
3
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Statement of Net Assets
Available for Plan Benefits
As of December 31, 1998 and 1997
1998 1997
------------- ------------
Assets
- ------
Cash and cash equivalents $ 4,919,899 $ 7,486,499
Investment contracts with insurance companies 661,350 5,708,750
Investments in BASIC 28,853,965 28,232,408
Investments in PIMCO 22,279,441 20,116,767
Investments in State Street Fixed Fund 16,127,809 16,402,062
Investments in CDC Investment Management 5,264,821 4,884,465
Investments in Transamerica Life Insurance 8,103,865 -
The Kroger Co. common stock 654,913,963 412,737,653
Trust funds managed by:
Sanford C. Bernstein & Co. 27,196,483 24,031,425
Mellon Capital Stock Index Fund 37,551,936 28,342,734
----------- -----------
Total assets 805,873,532 547,942,763
----------- -----------
Liabilities
- -----------
Accounts payable 187,427 136,241
Dividends payable 16,763 16,763
----------- -----------
Total liabilities 204,190 153,004
----------- -----------
Net assets available for plan benefits $805,669,342 $547,789,759
=========== ===========
See accompanying notes to financial statements.
4
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Statement of Changes in Net Assets
Available for Plan Benefits
For the Years Ended December 31, 1998 and 1997
1998 1997
------------- ------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments:
The Kroger Co. common stock $260,908,978 $150,678,679
----------- -----------
Interest:
Short-term investments 186,902 113,490
Investment contracts with insurance companies, investments in BASIC,
investments in PIMCO, investments in State Street Fixed Fund,
investments in CDC Investment Management,
investments in Transamerica Life Insurance 5,627,138 5,828,533
----------- -----------
5,814,040 5,942,023
Net investment income of trust funds managed by:
Sanford C. Bernstein & Co. 3,309,564 4,224,362
Mellon Capital Stock Index Fund 8,085,828 6,961,650
----------- -----------
11,395,392 11,186,012
Contributions:
Employer 2,533,545 1,272,049
Employee 27,018,626 25,374,816
----------- -----------
29,552,171 26,646,865
Total additions 307,670,581 194,453,579
----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 49,711,845 29,209,099
Administrative expenses 79,153 82,167
----------- -----------
Total deductions 49,790,998 29,291,266
----------- -----------
Increase in net assets available for plan benefits 257,879,583 165,162,313
Net assets available at beginning of period 547,789,759 382,627,446
----------- -----------
Net assets available at end of period $805,669,342 $547,789,759
=========== ===========
See accompanying notes to financial statements.
5
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared on an accrual
basis and present the net assets available for plan benefits and
changes in those net assets based on fair value (quoted market prices
where available). Fixed investments are valued at contract value (cost
plus accrued interest). Purchases and sales of The Kroger Co. common
stock are recorded on a trade date basis. The Dillon Companies, Inc.
Employees' Stock Ownership and Savings Plan (the Plan) presents in the
statement of changes in net assets the net appreciation (depreciation)
in the fair value of its investments which consists of the realized
gains or losses and the unrealized appreciation (depreciation) on those
investments.
2) DESCRIPTION OF DILLON COMPANIES, INC. EMPLOYEES' STOCK OWNERSHIP AND
SAVINGS PLAN
Employees of Dillon Companies, Inc. (the Company) and its subsidiaries
with one year of service and who have attained age 21 are eligible to
become a participant on January 1 or July 1 following completion of
eligibility requirements.
The interest of all participants in the Plan is fully vested at all
times and is not subject to forfeiture or cancellation under any
circumstances. Plan assets are for participants only and may never
revert to the employer.
Plan income and expenses for each period are allocated to the
participants' accounts in the ratio that the balance in the account of
each participant bears to the balance of all the participants' accounts
immediately before the allocation. Employer contributions are allocated
based on participants' salaries as stated in the Plan.
All distributions to participants are in cash or in whole shares of The
Kroger Co. common stock (cash is paid for fractional shares).
Participants and beneficiaries individually exercise voting rights on
the shares of The Kroger Co. common stock allocated to their account.
Under the 401(k) salary reduction provision, Plan participants may make
an election to have the Company contribute to the Plan on their behalf
from two percent (2%) to twenty percent (20%) of the qualifying
compensation that would otherwise be payable to them for the Plan year.
A basic matching employer contribution is allocated to participants of
the Stock Fund equal to ten percent (10%) of salaries directed by
participants. A supplemental employer contribution is allocated in
proportion to all participants' salaries directed to all investments.
The supplemental contribution is based on the annual financial results
of The Kroger Co. and determined annually by the Board of Directors.
The Company currently has discontinued contributions to the ESOP
portion of the Plan and has no present intentions to resume such
contributions.
6
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
2) DESCRIPTION OF DILLON COMPANIES, INC. EMPLOYEES' STOCK OWNERSHIP AND
SAVINGS PLAN, CONTINUED
Participants of the 401(k) portion of the Plan and participants of the
ESOP portion of the Plan who are over age 55 are allowed monthly and
annual investment option selections, respectively, to direct all or a
portion of their contributions to the following funds:
Fixed
Index
Balanced
Kroger Stock
3) INVESTMENTS
The Dillon Companies, Inc. Employee Master Trust (the Trust) was formed
on July 1, 1987, as the funding medium for various employee benefit
plans administered by the Company. All assets of the Dillon Companies,
Inc. Profit Sharing and Savings Plan, Dillon Companies, Inc. Pension
Plan, and Dillon Companies, Inc. Employees' Stock Ownership and Savings
Plan are funded through the Dillon Companies, Inc. Employee Master
Trust. The allocation of assets between plans is based upon individual
plan assets adjusted monthly for contributions, benefit payments,
earnings and administrative expenses.
The Plan's investments are held by the Trust and are administered by
the Dillon Companies, Inc. Trust Committee. The Trust Committee selects
investment managers to manage certain assets of the Plan. The net
change in funds managed by investment managers includes revenue earned,
unrealized and realized gains and losses on investments, and fiduciary
expenses. The investments and changes therein of the trust funds
managed by investment managers have been reported to the Plan by the
trustees as having been determined through the use of fair value or
estimated fair values for all assets and liabilities of the trust
funds.
4) FIXED INVESTMENTS
The Plan had the following fixed investments in the fixed fund as of
December 31, 1998:
* Investment contracts with an insurance company with annual
crediting interest rates of 14.40% and maturities of six
months.
* Benefit Accessible Securities Investment Contracts (BASIC)
with annual crediting interest rates ranging from 6.00% to
8.50% and maturities from one to ten years.
* Investment in Pacific Investment Management Company (PIMCO)
with a variable crediting interest rate of 7.22%. The variable
crediting interest rate is adjusted quarterly.
* Investment in Diversified Financial Products Inc. (State
Street Fixed Fund) with a variable crediting interest rate of
6.72%. The variable crediting interest rate is adjusted
quarterly.
* CDC Investment Management with annual crediting interest
rates ranging from 6.20% to 6.45% and maturities from two to
three years.
* Investment in Transamerica Life Insurance and Annuity Company
(J.P. Morgan Investment Management Inc.) with a variable
crediting interest rate of 6.05%. The variable crediting
interest rate is adjusted quarterly.
7
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
4) FIXED INVESTMENTS, CONTINUED
The crediting interest rate for investment contracts with an insurance
company, BASIC, and CDC Investment Management is the contract rate. The
crediting interest rate for investments in PIMCO, State Street Fixed
Fund, and J.P. Morgan Investment Management Inc. is based upon a
predetermined formula which factors in duration, market value, and book
value of the portfolio. The minimum crediting interest rate for these
investments is zero percent.
All of the Plan's fixed investments are fully benefit-responsive. A
fully benefit-responsive investment provides a liquidity guarantee by a
financially responsible third party of principal and previously accrued
interest for liquidations, transfers, loans, or withdrawals initiated
by plan participants under the terms of the ongoing Plan. Certain
employer initiated events (i.e. lay-offs, mergers, bankruptcy, plan
termination) are not eligible for the liquidity guarantee.
The following information is presented in the aggregate for the fixed
investments:
1998 1997
------------- ---------
Fair Value $90,158,673 $85,047,367
Average Yield 7.19% 7.39%
The fair value of the fixed investments are calculated as the aggregate
present value of the underlying cash flows using interest rates quoted
for securities with similar duration and credit risk.
5) TAX STATUS
The Internal Revenue Service has issued a determination letter to the
Plan that the requirements for a qualified plan under Section 401(a) of
the Internal Revenue Code have been met and the Plan is exempt from
federal and state income taxes.
6) PRIORITIES UPON TERMINATION OF THE PLAN
It is the intent of the Company to continue the Plan indefinitely;
however, the Company reserves the right to terminate the Plan at any
time.
In the event of termination of the Plan, the Trustees shall continue to
administer the Plan in accordance with the provisions of the Plan until
all obligations have been discharged or satisfied.
7) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of net assets
available for plan benefits as of the date of the Plan's financial
statements and the reported changes in net assets available for plan
benefits during the reporting period. Actual results could differ from
those estimates.
8
DILLON COMPANIES, INC.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
8) SUMMARY OF CHANGES IN INVESTMENT OPTIONS
Kroger
Fixed Index Balanced Stock Total
----------- ---------- ---------- ----------- -----------
1998
- ----
ESOP
Beginning Balance 12-31-97 $ 2,661,683 $ 646,068 $ 968,956 $124,729,177 $ 129,005,884
Transfers 460,103 175,156 (78,550) (556,709) -
Withdrawals (329,183) (64,365) (176,862) (10,804,366) (11,374,776)
Earnings, net 177,697 173,724 118,368 77,762,648 78,232,437
----------- ---------- ---------- ----------- -----------
Ending Balance 12-31-98 $ 2,970,300 $ 930,583 $ 831,912 $191,130,750 195,863,545
=========== ========== ========== =========== -----------
401(k)
Beginning Balance 12-31-97 $ 79,366,092 $28,034,565 $23,374,742 $288,008,476 418,783,875
Transfers (557,208) 23,314 (661,359) 1,195,253 -
Withdrawals (7,563,752) (1,988,622) (1,774,637) (27,010,058) (38,337,069)
Contributions -- Employee 6,076,149 2,730,775 2,302,034 15,909,668 27,018,626
Contributions -- Employer - - - 2,533,545 2,533,545
Earnings, net 5,557,222 7,912,398 3,190,871 183,146,329 199,806,820
----------- ---------- ---------- ----------- -----------
Ending Balance 12-31-98 $ 82,878,503 $36,712,430 $26,431,651 $463,783,213 609,805,797
=========== ========== ========== =========== -----------
Total $805,669,342
===========
1997
ESOP
Beginning Balance 12-31-96 $ 3,079,114 $ 541,784 $ 786,405 $ 84,335,898 $ 88,743,201
Transfers (256,075) 2,556 91,145 162,374 -
Withdrawals (372,522) (67,438) (71,192) (7,006,691) (7,517,843)
Earnings, net 211,166 169,166 162,598 47,237,596 47,780,526
----------- ---------- ---------- ----------- -----------
Ending Balance 12-31-97 $ 2,661,683 $ 646,068 $ 968,956 $124,729,177 129,005,884
=========== ========== ========== =========== -----------
401(k)
Beginning Balance 12-31-96 $ 83,811,542 $21,254,733 $19,746,042 $169,071,928 293,884,245
Transfers (11,234,895) (1,011,418) (1,555,352) 13,801,665 -
Withdrawals (6,034,968) (1,478,313) (1,164,418) (13,013,557) (21,691,256)
Contributions -- Employee 7,181,850 2,473,674 2,283,984 13,435,308 25,374,816
Contributions -- Employer - - - 1,272,049 1,272,049
Earnings, net 5,642,563 6,795,889 4,064,486 103,441,083 119,944,021
----------- ---------- ---------- ----------- -----------
Ending Balance 12-31-97 $ 79,366,092 $28,034,565 $23,374,742 $288,008,476 418,783,875
=========== ========== ========== =========== -----------
Total $547,789,759
===========
9
DILLON COMPANIES, INC. Schedule 1
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN ----------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
--------- --------- ------------ ------------
Cash and Cash Equivalents:
- --------------------------
Short Term Investments with PIMCO $ 19,466,314 $ 19,450,012
=========== ===========
Allocation:
-----------
Profit Sharing $ 13,113,059 $ 13,102,078
Pension 350,666 350,372
ESOP 401(k) 6,002,589 5,997,562
----------- -----------
$ 19,466,314 $ 19,450,012
=========== ===========
10
DILLON COMPANIES, INC. Schedule 1, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN -----------------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
--------- ---------- ------------ ------------
Investment Contracts with Insurance Company:
- --------------------------------------------
Mutual Benefit Life of New Jersey 14.40% 1999 $ 1,500,000 $ 2,253,460
----------- -----------
Total Dillon Companies, Inc.
Employee Master Trust $ 1,500,000 $ 2,253,460
=========== ===========
Allocation:
-----------
Profit Sharing $ 972,240 $ 1,460,603
Pension 87,537 131,507
ESOP 401(k) 440,223 661,350
----------- -----------
$ 1,500,000 $ 2,253,460
=========== ===========
11
DILLON COMPANIES, INC. Schedule 1, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN -----------------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
-------- -------- ------------ ------------
Investments in BASIC:
- ---------------------
FNMA 90-128H 8.500% 2000 $ 69,669 $ 198,968
FNMA 92-16KD 7.000% 2005 4,759,312 4,901,266
FNMA 92-134H 7.500% 2005 6,838,022 7,117,878
FHLMC 1365PI 7.250% 2005 3,961,844 4,100,261
FNMA 92-182PH 7.000% 2005 2,881,109 3,054,136
FNMA 92-200H 7.000% 2006 2,946,875 3,087,067
FHLMC 1458J 7.000% 2005 4,856,601 5,059,241
FHLMC 1457PJ 7.000% 2006 4,922,875 5,093,469
FHLMC 1542H 6.500% 2003 6,032,812 6,139,119
FHLMC 1625H 6.000% 2008 9,695,312 9,855,544
FNMA 93-134G 6.500% 2006 7,415,000 7,689,667
FNMA 94-48E 6.000% 2007 6,002,062 6,291,641
FNMA 94-10PC 6.500% 2005 9,006,250 9,382,042
5 YR UST 7.750% 1999 4,005,212 4,157,252
10 YR UST 7.875% 2004 4,042,185 4,069,288
FNMA 93-107D 6.500% 2002 2,902,969 2,966,015
FNMA 93-118H 6.500% 2004 5,932,992 5,981,907
FNMA 93-209J 6.000% 2008 4,641,333 4,744,337
Pension - BASIC Valuation - 43,394
----------- -----------
Total Dillon Companies, Inc.
Employee Master Trust $ 90,912,434 $ 93,932,492
=========== ===========
Fair Value $101,541,988
Wrap Value (7,609,496)
-----------
$ 93,932,492
===========
Allocation:
-----------
Profit Sharing $ 61,704,118 $ 63,724,441
Pension 1,269,138 1,310,692
Pension - BASIC Valuation - 43,394
ESOP 401(k) 27,939,178 28,853,965
----------- -----------
$ 90,912,434 $ 93,932,492
=========== ===========
12
DILLON COMPANIES, INC. Schedule 1, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN -----------------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
-------- -------- ------------ ------------
Investments in PIMCO:
- ---------------------
Total Dillon Companies, Inc.
Employee Master Trust 7.220% Variable $ 51,750,000 $ 71,483,943
=========== ===========
Fair Value $ 75,238,374
Wrap Value (3,754,431)
-----------
$ 71,483,943
===========
Allocation:
-----------
Profit Sharing $ 35,621,048 $ 49,204,502
Pension - -
ESOP 401(k) 16,128,952 22,279,441
----------- -----------
$ 51,750,000 $ 71,483,943
=========== ===========
Investments in State Street Fixed Fund:
- ---------------------------------------
Total Dillon Companies, Inc.
Employee Master Trust 6.721% Variable $ 38,750,000 $ 51,746,333
=========== ===========
Fair Value $ 55,087,704
Wrap Value (3,341,371)
-----------
$ 51,746,333
===========
Allocation:
-----------
Profit Sharing $ 26,672,765 $ 35,618,524
Pension - -
ESOP 401(k) 12,077,235 16,127,809
----------- -----------
$ 38,750,000 $ 51,746,333
=========== ===========
Investments in CDC Investment Management:
- -----------------------------------------
Total Dillon Companies, Inc. 6.200%
Employee Master Trust to 6.450% Variable $ 15,000,025 $ 16,892,263
=========== ===========
Fair Value $ 17,068,071
Wrap Value (175,808)
-----------
$ 16,892,263
===========
Allocation:
-----------
Profit Sharing $ 10,324,959 $ 11,627,442
Pension - -
ESOP 401(k) 4,675,066 5,264,821
----------- -----------
$ 15,000,025 $ 16,892,263
=========== ===========
13
DILLON COMPANIES, INC. Schedule 1, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN-----------------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
--------- ---------- ------------ --------------
Investments in Transamerica Life Insurance:
- -------------------------------------------
Total Dillon Companies, Inc.
Employee Master Trust $ 25,000,000 $ 26,001,379
=========== =============
Fair Value $ 26,058,970
Wrap Value (57,591)
-------------
$ 26,001,379
=============
Allocation:
-----------
Profit Sharing $ 17,208,235 $ 17,897,514
Pension - -
ESOP 401(k) 7,791,765 8,103,865
----------- -------------
$ 25,000,000 $ 26,001,379
=========== =============
Investments in The Kroger Co. Common Stock:
- -------------------------------------------
Total Dillon Companies, Inc.
Employee Master Trust $166,415,369 $1,044,980,578
=========== =============
Allocation: Shares
----------- ----------
Profit Sharing 6,236,447 $ 78,298,302 $ 377,305,067
Pension 210,935 1,271,404 12,761,548
ESOP 401(k) 10,825,024 86,845,663 654,913,963
---------- ----------- -------------
17,272,406 $166,415,369 $1,044,980,578
========== =========== =============
14
DILLON COMPANIES, INC. Schedule 1, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN -----------------
Item 27(a) - Schedule of Assets Held for Investment Purposes
(Master Trust)
December 31, 1998
Annual
Interest Maturity Carrying
Rate Date Cost Value
-------- --------- ------------- ------------
Investments in Trust Funds Managed by:
- --------------------------------------
Sanford C. Bernstein & Co.:
---------------------------
Total Dillon Companies, Inc.
Employee Master Trust $ 66,285,819 $ 81,181,811
=========== ===========
Allocation:
-----------
Profit Sharing $ 44,079,599 $ 53,985,328
Pension - -
ESOP 401(k) 22,206,220 27,196,483
----------- -----------
$ 66,285,819 $ 81,181,811
=========== ===========
Mellon Capital Stock Index Fund:
--------------------------------
Total Dillon Companies, Inc.
Employee Master Trust $ 42,776,376 $ 93,998,483
=========== ===========
Allocation:
-----------
Profit Sharing $ 25,687,422 $ 56,446,547
Pension - -
ESOP 401(k) 17,088,954 37,551,936
----------- -----------
$ 42,776,376 $ 93,998,483
=========== ===========
Investments in Mellon Trust:
- ----------------------------
Total Dillon Companies, Inc.
Employee Master Trust $ 51,581,779 $ 87,024,468
=========== ===========
Allocation:
-----------
Profit Sharing $ - $ -
Pension 51,581,779 87,024,468
ESOP 401(k) - -
----------- -----------
$ 51,581,779 $ 87,024,468
=========== ===========
15
DILLON COMPANIES, INC. Schedule 2
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN ----------
Item 27(d) - Schedule of Reportable Transactions
(Master Trust)
Year Ended December 31, 1998
Current
Value on
Selling Cost of Date of Net Gain
Description of Transaction Price Price Asset Transactions or (Loss)
- -------------------------------------- ------------ ---------- ----------- ------------- ----------
PIMCO
time deposits $70,955,000 -- $70,955,000 $70,955,000 --
PIMCO
time deposits -- $76,000,000 76,000,000 76,000,000 --
John Hancock Mutual Life
investment contract -- 2,000,000 2,000,000 2,000,000 --
Hartford Life Insurance
investment contract -- 1,000,000 1,000,000 1,000,000 --
Metropolitan Life Insurance
investment contracts -- 803,852 803,852 803,852 --
Ohio National Life
investment contracts -- 5,000,000 5,000,000 5,000,000 --
Provident Mutual Life
investment contract -- 1,000,000 1,000,000 1,000,000 --
Travelers Insurance Company
investment contracts -- 2,000,000 2,000,000 2,000,000 --
FNMA 90-60G
investment contract -- 441,563 441,563 441,563 --
FNMA 89-50E
investment contract -- 56,801 56,801 56,801 --
FNMA 90-128H
investment contract -- 836,536 836,536 836,536 --
State Street Fixed Fund
trust investment -- 6,000,000 6,000,000 6,000,000 --
Transamerica Life Insurance
trust investment 25,000,000 -- 25,000,000 25,000,000 --
Merrill Lynch
The Kroger Co. common stock
155,847 shares 9,331,337 -- 9,331,337 9,331,337 --
Morgan Stanley
The Kroger Co. common stock
187,800 shares 8,982,379 -- 8,982,379 8,982,379 --
Morgan Stanley
The Kroger Co. common stock
511,300 shares -- 23,559,987 4,627,001 23,559,987 $18,932,986
Mellon Trust
The Kroger Co. common stock
99,611 shares -- 4,879,081 600,404 4,879,081 4,278,677
Sanford C. Bernstein & Co.
trust investment 1,300,000 -- 1,300,000 1,300,000 --
Sanford C. Bernstein & Co.
trust investment -- 7,800,000 7,800,000 7,800,000 --
Mellon Capital Index Fund
trust investment 2,400,000 -- 2,400,000 2,400,000 --
Mellon Capital Index Fund
trust investment -- 4,600,000 4,600,000 4,600,000 --
16
DILLON COMPANIES, INC. Schedule 2, cont.
EMPLOYEES' STOCK OWNERSHIP AND SAVINGS PLAN -----------------
Item 27(d) - Schedule of Reportable Transactions
(Master Trust)
Year Ended December 31, 1998
Current
Value on
Selling Cost of Date of Net Gain
Description of Transaction Price Price Asset Transactions or (Loss)
- ------------------------------ ----------- ----------- ----------- ------------ -----------
Mellon Trust
trust investment $ 4,879,081 -- $ 4,879,081 $ 4,879,081 --
Mellon Trust
trust investment -- $ 750,000 750,000 750,000 --