Kroger 2013 Annual Report Download - page 102

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A-29
extent to which the adjustments we are making to our strategy create value for our shareholders will
depend primarily on the reaction of our customers and our competitors to these adjustments, as well
as operating conditions, including inflation or deflation, increased competitive activity, and cautious
spending behavior of our customers. Our ability to achieve sales and earnings goals may also be affected
by our ability to manage the factors identified above.
•฀ During฀the฀first฀three฀quarters฀of฀our฀fiscal฀year,฀our฀LIFO฀charge฀and฀the฀recognition฀of฀LIFO฀expense฀
will be affected primarily by estimated year-end changes in product costs. Our LIFO charge for the fiscal
year will be affected primarily by changes in product costs at year-end.
•฀ If฀actual฀results฀differ฀significantly฀from฀anticipated฀future฀results฀for฀certain฀reporting฀units฀including฀
variable interest entities, an impairment loss for any excess of the carrying value of the reporting units’
goodwill over the implied fair value would have to be recognized.
•฀ Our฀effective฀tax฀rate฀may฀differ฀from฀the฀expected฀rate฀due฀to฀changes฀in฀laws,฀the฀status฀of฀pending฀
items with various taxing authorities, and the deductibility of certain expenses.
•฀ The฀ actual฀ amount฀ of฀ automatic฀ and฀ matching฀ cash฀ contributions฀ to฀ our฀ 401(k)฀ Retirement฀ Savings฀
Account Plan will depend on the number of participants, savings rate, compensation as defined by the
plan, and length of service of participants.
•฀ Changes฀in฀our฀product฀mix฀may฀negatively฀affect฀certain฀financial฀indicators.฀For฀example,฀we฀continue฀
to add supermarket fuel centers to our store base. Since gasoline generates low profit margins, we
expect to see our FIFO gross profit margins decline as gasoline sales increase.
We cannot fully foresee the effects of changes in economic conditions on Kroger’s business. We have
assumed economic and competitive situations will not change significantly in 2014.
Other factors and assumptions not identified above could also cause actual results to differ materially
from those set forth in the forward-looking information. Accordingly, actual events and results may vary
significantly from those included in, contemplated or implied by forward-looking statements made by us
or our representatives. We undertake no obligation to update the forward-looking information contained in
this filing.