Kroger 2011 Annual Report Download - page 75

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A-20
•฀ Our฀Fixed฀Charge฀Coverage฀Ratio฀(the฀ratio฀of฀Consolidated฀EBITDA฀plus฀Consolidated฀Rental฀Expense฀to฀
Consolidated Cash Interest Expense plus Consolidated Rental Expense, as defined in the credit facility)
was 4.42 to 1 as of January 28, 2012. If this ratio fell below 1.70 to 1, we would be in default of our credit
facility and our ability to borrow under the facility would be impaired.
Consolidated EBITDA, as defined in our credit facility, includes an adjustment for unusual gains and
losses including our UFCW consolidated pension plan charge in 2011. Our credit agreement is more fully
described in Note 5 to the Consolidated Financial Statements. We were in compliance with our financial
covenants at year-end 2011.
The tables below illustrate our significant contractual obligations and other commercial commitments,
based on year of maturity or settlement, as of January 28, 2012 (in millions of dollars):
2012 2013 2014 2015 2016 Thereafter Total
Contractual Obligations (1) (2)
Long-term debt (3) . . . . . . . . . . . . . . . . . . . . . $ 1,275 $ 1,514 $ 374 $ 517 $ 463 $ 3,600 $ 7,743
Interest on long-term debt (4). . . . . . . . . . . . . 414 350 284 268 248 2,145 3,709
Capital lease obligations ................. 59 49 45 40 36 202 431
Operating lease obligations . . . . . . . . . . . . . . 725 683 630 563 497 2,197 5,295
Low-income housing obligations . . . . . . . . . . 6 4 1 — — — 11
Financed lease obligations . . . . . . . . . . . . . . . 13 13 13 13 13 133 198
Self-insurance liability (5) ................ 197 123 83 53 26 47 529
Construction commitments . . . . . . . . . . . . . . 225 — — — — — 225
UFCW consolidated pension plan
commitment ....................... — — — — 7 304 311
Purchase obligations .................... 645 94 24 19 12 14 808
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,559 $ 2,830 $ 1,454 $ 1,473 $ 1,302 $ 8,642 $19,260
Other Commercial Commitments
Standby letters of credit . . . . . . . . . . . . . . . . . $ 210 $ — $ — $ — $ — $ — $ 210
Surety bonds .......................... 298 — — — — — 298
Guarantees ........................... 6 — — — — — 6
Total ................................ $ 514 $ — $ — $ — $ — $ — $ 514
(1) The contractual obligations table excludes funding of pension and other postretirement benefit
obligations, which totaled approximately $75 million in 2011. This table also excludes contributions
under various multi-employer pension plans, which totaled $946 million in 2011, including our
$650 million contribution to the UFCW consolidated pension plan.
(2) The liability related to unrecognized tax benefits has been excluded from the contractual obligations
table because a reasonable estimate of the timing of future tax settlements cannot be determined.
(3) As of January 28, 2012, we had $370 million of borrowings of commercial paper and no borrowings
under our credit agreement and money market lines.
(4) Amounts include contractual interest payments using the interest rate as of January 28, 2012, and stated
fixed and swapped interest rates, if applicable, for all other debt instruments.
(5) The amounts included in the contractual obligations table for self-insurance liability have been stated on
a present value basis.
Our construction commitments include funds owed to third parties for projects currently under
construction. These amounts are reflected in other current liabilities in our Consolidated Balance Sheets.