Kroger 2013 Annual Report Download - page 100

A-27
In addition to the available credit mentioned above, as of February 1, 2014, we had authorized for
issuance $2.5 billion of securities under a shelf registration statement filed with the SEC and effective on
December 13, 2013.
We also maintain surety bonds related primarily to our self-insured workers’ compensation claims. These
bonds are required by most states in which we are self-insured for workers’ compensation and are placed with
predominately third-party insurance providers to insure payment of our obligations in the event we are unable
to meet our claim payment obligations up to our self-insured retention levels. These bonds do not represent
liabilities of Kroger, as we already have reserves on our books for the claims costs. Market changes may make
the surety bonds more costly and, in some instances, availability of these bonds may become more limited,
which could affect our costs of, or access to, such bonds. Although we do not believe increased costs or
decreased availability would significantly affect our ability to access these surety bonds, if this does become
an issue, we would issue letters of credit, in states where allowed, against our credit facility to meet the state
bonding requirements. This could increase our cost and decrease the funds available under our credit facility.
We also are contingently liable for leases that have been assigned to various third parties in connection
with facility closings and dispositions. We could be required to satisfy obligations under the leases if any of
the assignees are unable to fulfill their lease obligations. Due to the wide distribution of our assignments
among third parties, and various other remedies available to us, we believe the likelihood that we will be
required to assume a material amount of these obligations is remote. We have agreed to indemnify certain
third-party logistics operators for certain expenses, including pension trust fund contribution obligations and
withdrawal liabilities.
In addition to the above, we enter into various indemnification agreements and take on indemnification
obligations in the ordinary course of business. Such arrangements include indemnities against third party
claims arising out of agreements to provide services to Kroger; indemnities related to the sale of our securities;
indemnities of directors, officers and employees in connection with the performance of their work; and
indemnities of individuals serving as fiduciaries on benefit plans. While Kroger’s aggregate indemnification
obligation could result in a material liability, we are not aware of any current matter that could result in a
material liability.
OU T L O O K
This discussion and analysis contains certain forward-looking statements about Kroger’s future
performance, including Harris Teeter. These statements are based on management’s assumptions and beliefs
in light of the information currently available. Such statements 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.
•฀ We฀expect฀net฀earnings฀per฀diluted฀share฀in฀the฀range฀of฀$3.14-$3.25฀for฀fiscal฀year฀2014.
•฀ In฀2014,฀we฀expect฀net฀earnings฀per฀diluted฀share฀growth฀of฀10฀–฀14%,฀which฀includes฀the฀expected฀
accretion to net earnings from the Harris Teeter merger. Thereafter, we would expect to return to our
8 – 11% long-term growth rate.
•฀ We฀expect฀identical฀supermarket฀sales฀growth,฀excluding฀fuel฀sales,฀of฀2.5%-3.5%฀in฀fiscal฀year฀2014.
•฀ We฀ expect฀ full-year฀ FIFO฀ non-fuel฀ operating฀ margin฀ for฀ 2014฀ to฀ expand฀ slightly฀ compared฀ to฀ 2013,฀
excluding the 2013 adjusted items.
•฀ For฀2014,฀we฀expect฀our฀annualized฀LIFO฀charge฀to฀be฀approximately฀$55฀million.