Kroger 2010 Annual Report Download - page 5

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3
Consistent record of rewarding Shareholders.
In 2010, we achieved solid positive identical supermarket sales and market share growth, which
demonstrates that we can strengthen our business and reward shareholders by placing our customers’
needs first. Kroger’s return to our Shareholders has been strong. Our total payout to Shareholders during
the past five years (combining dividends and share repurchases) has averaged nearly 70 percent of net
income. In fiscal 2010, for example, Kroger repurchased $545 million of our Common Shares, on top
of share repurchases of $218 million in 2009 and $637 million in 2008. That’s more than $1.1 billion of
share repurchases during the last three years, and more than $6.4 billion since January 2000. And, on
March 3, 2011, Kroger announced that our Board of Directors had authorized an additional $1 billion share
repurchase program.
We also paid dividends of $250 million in fiscal 2010, increasing the dividends paid to Shareholders in
each of the years since we began paying a dividend in 2006. During the last five years, Kroger has paid more
than $1.0 billion in dividends to our Shareholders. We’ve been able to accomplish this while maintaining
our investment-grade credit rating and reducing long-term debt and annual interest expense.
Strong balance sheet with significant flexibility.
Kroger’s BBB investment-grade credit rating gives us significant financial flexibility. During 2010,
Kroger reduced net total debt by $243.5 million, to $7.3 billion. In addition, at the end of fiscal 2010, our net
total debt to EBITDA ratio, adjusted for the impairment charges in fiscal 2010 and 2009, was 1.89 compared
with 1.97 at the end of fiscal 2009.
Living our Mission and Values
Safety
Safety is one of our core values. As a result of our Associates’ engagement in our safety programs,
Kroger has reduced the accident rates in stores and plants by 74 percent during the past 15 years. We
continue to make steady progress toward our goal of zero accidents.
Partnering with our Customers and Associates to serve our communities.
We have the privilege of touching the lives of millions of Customers daily in our 2,458 supermarkets,
786 convenience stores and 361 jewelry stores. Kroger is proud to partner with our Associates and
Customers to help improve the communities in which we live and work. We are especially focused on
helping Feeding America and more than 80 community organizations that feed the hungry. During the past
five years, Kroger has donated the equivalent of 560 million meals to local food banks.
The winners of The Kroger Co. Community Service Award for 2010 are listed after this letter. Their
hard work and dedication are appreciated by us all, and we encourage all of our Associates to get involved
in the communities where we work and live.
Sustainability is a major focus.
Kroger continues to make important progress on our sustainability agenda. We encourage you to read
our latest sustainability report, which is available at www.thekrogerco.com.