Kroger 2012 Annual Report Download - page 80

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A-22
Consequently, the amendments change some fair value measurement principles and disclosure requirements.
The implementation of the amended accounting guidance did not have a material effect on our consolidated
financial position or results of operations.
RE C E N T L Y I S S U E D A C C O U N T I N G S T A N D A R D S
As discussed above under Recently Adopted Accounting Standards, in December 2011 the FASB deferred
certain provisions of its 2011 rule amendments dealing with reclassification adjustments. In February 2013, the
FASB amended its standards on comprehensive income by requiring disclosure in the footnotes of information
about amounts reclassified out of accumulated other comprehensive income by component. Specifically, the
amendment will require disclosure of the line items of net income in which the item was reclassified only if
it is reclassified to net income in its entirety in the same reporting period. It will also require cross reference
to other disclosures for amounts that are not reclassified in their entirety in the same reporting period. The
new disclosures will be required for us prospectively only for annual periods beginning February 3, 2013 and
interim periods within those annual periods.
LI Q U I D I T Y A N D C A P I T A L R E S O U R C E S
Cash Flow Information
Net cash provided by operating activities
We generated $2.8 billion of cash from operations in 2012, compared to $2.7 billion in 2011 and $3.4 billion
in 2010. The cash provided by operating activities came from net earnings including non-controlling interests
adjusted primarily for non-cash expenses of depreciation and amortization, the LIFO charge and changes
in working capital. The increase in net cash provided by operating activities in 2012, compared to 2011,
resulted primarily due to an increase in net earnings including non-controlling interests, offset by a decline
in long-term liabilities and changes in working capital. The decline in long-term liabilities in 2012 is due to
the investment returns of our Company-sponsored pension plans during the year and our funding of the
remaining UAAL commitment, partially offset by a lower discount rate on our Company-sponsored pension
plans. The decrease in net cash provided by operating activities in 2011, compared to 2010, was primarily due
to the decline in net earnings including non-controlling interests, due to the UFCW consolidated pension plan
charge, and changes in working capital, offset by an increase in long-term liabilities. The increase in long-term
liabilities in 2011 was due to establishing a liability for our remaining estimated commitment for the UAAL in
excess of the cash contribution and a lower discount rate on our Company-sponsored pension plans, offset by
the investment returns of our Company-sponsored pension plans during the year. Changes in working capital
also provided (used) cash from operating activities of ($332) million in 2012, compared to ($300) million
in 2011 and $698 million in 2010. The decrease in cash provided by changes in working capital for 2012,
compared to 2011, was primarily due to an increase in inventories and prepaid expenses, offset partially
by an increase in accrued expenses. Prepaid expenses increased in 2012, compared to 2011, due to Kroger
prefunding $250 million of employee benefits at the end of 2012. The decrease in cash provided by changes in
working capital for 2011, compared to 2010, was primarily due to an increase in inventories, offset partially by
increases in trade accounts payable and accrued expenses. These amounts are also net of cash contributions
to our Company-sponsored defined benefit pension plans totaling $71 million in 2012, $52 million in 2011
and $141 million in 2010.
The amount of cash paid for income taxes increased in 2012, compared to 2011, primarily due to an
increase in net earnings including non-controlling interests. The amount of cash paid for income taxes
decreased in 2011, compared to 2010, primarily due to a decrease in net earnings including non-controlling
interests and from the bonus depreciation deductions allowed by the 2010 Tax Relief Act for property placed
into service in 2011.