Kroger 2010 Annual Report Download - page 105

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RE C E N T L Y AD O P T E D AC C O U N T I N G ST A N D A R D S
In January 2010, the FASB amended its standards related to fair value measurements and disclosures,
which were effective for interim and annual fiscal periods beginning after December 15, 2009, except
for disclosures about certain Level 3 activity that will become effective for interim and annual periods
beginning after December 15, 2010. The new standards require us to disclose transfers in and out of Level
1 and Level 2 fair value measurements and describe the reasons for the transfers as well as activity in
Level 3 fair value measurements. The new standards also require a more detailed level of disaggregation
of the assets and liabilities being measured as well as increased disclosures regarding inputs and valuation
techniques of the fair value measurements. We adopted the amended standards effective January 31, 2010,
except for disclosures about certain Level 3 activity, which will be effective starting January 30, 2011. See
Note 7 to the Consolidated Financial Statements for our fair value measurements and disclosures.
In June 2009, the FASB amended its existing standards related to the consolidation of VIEs, which
was effective for interim and annual fiscal periods beginning after November 15, 2009. The new standards
require an entity to analyze whether its variable interests give it a controlling financial interest of a VIE and
outlines what defines a primary beneficiary. The new standards amend GAAP by: (a) changing certain rules
for determining whether an entity is a VIE; (b) replacing the quantitative approach previously required
for determining the primary beneficiary with a more qualitative approach; and (c) requiring entities to
continuously analyze whether they are the primary beneficiary of a VIE, among other amendments. The
new standards also require enhanced disclosures regarding an entity’s involvement in a VIE. We adopted
the amended standards effective January 31, 2010. The adoption of these new standards did not have a
material effect on our Consolidated Financial Statements.
Effective February 1, 2009, we adopted the new standards that clarify that share-based payment
awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered
participating securities and included in the computation of EPS pursuant to the two-class method. See Note
9 to the Consolidated Financial Statements for further discussion of its adoption.
OU T L O O K
This discussion and analysis contains certain forward-looking statements about Kroger’s future
performance. These statements are based on management’s assumptions and beliefs in light of the
information currently available. Such statements relate to, among other things: projected changes
in net earnings attributable to The Kroger Co.; identical supermarket sales growth; expected product
cost; expected pension plan contributions; our ability to generate operating cash flow; projected capital
expenditures; square footage growth; opportunities to reduce costs; cash flow requirements; and our
operating plan for the future; and are indicated by words such as “comfortable,” “committed,” “will,”
“expect,” “goal,” “should,” “intend,” “target,” “believe,” “anticipate,” “plan,” and similar words or phrases.
These forward-looking statements are subject to uncertainties and other factors that could cause actual
results to differ materially.
Statements elsewhere in this report and below regarding our expectations, projections, beliefs,
intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. While we believe that the statements are accurate, uncertainties about the general
economy, our labor relations, our ability to execute our plans on a timely basis and other uncertainties
described below could cause actual results to differ materially.