Kroger 2011 Annual Report Download - page 107

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A-52
NO T E S T O CO N S O L I D A T E D FI N A N C I A L ST A T E M E N T S , CO N T I N U E D
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 adverse 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.
Assignments — The Company is contingently liable for leases that have been assigned to various third
parties in connection with facility closings and dispositions. The Company could be required to satisfy the
obligations under the leases if any of the assignees is unable to fulfill its lease obligations. Due to the wide
distribution of the Company’s assignments among third parties, and various other remedies available, the
Company believes the likelihood that it will be required to assume a material amount of these obligations
is remote.
1 2 . S T O C K
Preferred Shares
The Company has authorized five million shares of voting cumulative preferred shares; two million
were available for issuance at January 28, 2012. The shares have a par value of $100 per share and are issuable
in series.
Common Shares
The Company has authorized one billion common shares, $1 par value per share. On May 20, 1999, the
shareholders authorized an amendment to the Amended Articles of Incorporation to increase the number of
authorized common shares from one billion to two billion when the Board of Directors determines it to be in
the best interest of the Company.
Common Stock Repurchase Program
The Company maintains stock repurchase programs that comply with Securities Exchange Act Rule
10b5-1 to allow for the orderly repurchase of The Kroger Co. stock, from time to time. The Company made
open market purchases totaling $1,420, $505 and $156 under these repurchase programs in 2011, 2010 and
2009, respectively. In addition to these repurchase programs, in December 1999, the Company began a
program to repurchase common shares to reduce dilution resulting from its employee stock option plans.
This program is solely funded by proceeds from stock option exercises, and the related tax benefit. The
Company repurchased approximately $127, $40 and $62 under the stock option program during 2011, 2010
and 2009, respectively.
1 3 . C O M P A N Y -SP O N S O R E D BE N E F I T PL A N S
The Company administers non-contributory defined benefit retirement plans for substantially all non-
union employees and some union-represented employees as determined by the terms and conditions of
collective bargaining agreements. These include several qualified pension plans (the “Qualified Plans”) and
a non-qualified plan (the “Non-Qualified Plan”). The Non-Qualified Plan pays benefits to any employee that
earns in excess of the maximum allowed for the Qualified Plans by Section 415 of the Internal Revenue Code.
The Company only funds obligations under the Qualified Plans. Funding for the pension plans is based on a
review of the specific requirements and on evaluation of the assets and liabilities of each plan.