Kroger 2007 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2007 Kroger annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 55

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55

FREE CASH FLOW
Kroger’s long-term financial strategy is to manage free cash flow to
repurchase shares and pay dividends, while maintaining a leverage ratio
that supports our solid investment grade rating. Kroger believes
maintaining a solid investment grade rating provides the best cost of capital
and the flexibility to execute our Customer 1st strategy in a competitive and
consolidating industry.
From January 2000 through the end of fiscal 2007, Kroger reduced its net
total debt to EBITDA ratio from 2.8 to 2.0, a reduction of 0.8 times EBITDA.
During the same time frame, Kroger invested $5.0 billion to repurchase
237.3 million shares of stock at an average price of $21.22 per share. The
Company also paid $342 million in cash dividends to shareholders since it
initiated its dividend program in 2006.
Kroger’s share repurchase and dividend programs deliver substantial value
to shareholders. These programs reflect the Board of Directors’ confidence
in Kroger’s Customer 1st strategic plan.
SHARE REPURCHASE
Board Repurchase Authorizations
We maintain stock repurchase programs that comply with Securities
Exchange Act Rule 10b5-1 to allow for the orderly repurchase of our
common stock, from time to time, even though we may be aware of
material non-public information, as long as purchases are made in
accordance with the plan. We made open market purchases totaling
$1,151 million, $374 million, and $239 million under Board-authorized
repurchase programs during fiscal 2007, 2006, and 2005, respectively.
Stock Option Program
The Kroger Co. Page 50
In addition to the Board-authorized repurchase programs, in December
1999, Kroger initiated a program to repurchase common stock to reduce
dilution resulting from our employee stock option plans. This program is
solely funded by proceeds from stock option exercises, including the tax
benefit from these exercises. We repurchased approximately $270 million,
$259 million, and $13 million under the stock option program during 2007,
2006, and 2005, respectively.