Kroger 2015 Annual Report Download - page 136

A-62
Litigation – Various claims and lawsuits arising in the normal course of business, including suits
charging violations of certain antitrust, wage and hour, or civil rights laws, as well as product liability
cases, are pending against the Company. Some of these suits purport or have been determined to be
class actions and/or seek substantial damages. Any damages that may be awarded in antitrust cases
will be automatically trebled. Although it is not possible at this time to evaluate 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 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
when an adverse outcome is probable. Nonetheless, assessing and predicting the outcomes of these
matters involves 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.
14. STOCK
Preferred Shares
The Company has authorized five million shares of voting cumulative preferred shares; two million
shares were available for issuance at January 30, 2016. The shares have a par value of $100 per share
and are issuable in series.
Common Shares
The Company has authorized two billion common shares, $1 par value per share.
On June 25, 2015, the Company’s Board of Directors approved a two-for-one stock split of The
Kroger Co.’s common shares in the form of a 100% stock dividend, which was effective July 13, 2015.
All share and per share amounts in the Company’s Consolidated Financial Statements and related notes
have been retroactively adjusted to reflect the stock split for all periods presented.
Common Stock Repurchase Program
The Company maintains stock repurchase programs that comply with Rule 10b5-1 of the Securities
Exchange Act of 1934 to allow for the orderly repurchase of The Kroger Co. common shares, from
time to time. The Company made open market purchases totaling $500, $1,129 and $338 under these
repurchase programs in 2015, 2014 and 2013, 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 $203, $154 and
$271 under the stock option program during 2015, 2014 and 2013, respectively.