Kroger 2014 Annual Report Download - page 92

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A-27
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฀ $3.80-$3.90฀ for฀ fiscal฀ year฀ 2015,฀ which฀ is฀
consistent with our long-term net earnings per diluted share growth rate of 8 – 11%, growing off of 2014
adjusted net earnings of $3.52 per diluted share.
•฀ We฀expect฀identical฀supermarket฀sales฀growth,฀excluding฀fuel฀sales,฀of฀3.0%-4.0%฀in฀fiscal฀year฀2015.
•฀ We฀ expect฀ full-year฀ FIFO฀ non-fuel฀ operating฀ margin฀ for฀ 2015฀ to฀ expand฀ slightly฀ compared฀ to฀ 2014,฀
excluding the 2014 Adjusted Items.
•฀ For฀2015,฀we฀expect฀our฀annualized฀LIFO฀charge฀to฀be฀approximately฀$75฀million.
•฀ For฀2015,฀we฀expect฀interest฀expense฀to฀be฀approximately฀$480฀million.
•฀ We฀plan฀to฀use฀cash฀flow฀primarily฀to฀maintain฀our฀current฀investment฀grade฀debt฀rating,฀fund฀capital฀
investments, fund our cash dividend and repurchase shares of common stock.
•฀ We฀expect฀to฀obtain฀sales฀growth฀from฀new฀square฀footage,฀as฀well฀as฀from฀increased฀productivity฀from฀
existing locations.
•฀ We฀expect฀capital฀investments,฀excluding฀mergers,฀acquisitions฀and฀purchases฀of฀leased฀facilities,฀to฀be฀
$3.0 - $3.3 billion. We expect total food store square footage for 2015 to grow approximately 2.0% - 2.5%
before mergers, acquisitions and operational closings.
•฀ For฀2015,฀we฀expect฀our฀effective฀tax฀rate฀to฀be฀approximately฀35.0%,฀excluding฀the฀resolution฀of฀certain฀
tax items and potential changes to tax legislation.
•฀ We฀do฀not฀anticipate฀goodwill฀impairments฀in฀2015.
•฀ For฀ 2015,฀ we฀ expect฀ to฀ contribute฀ approximately฀ $250฀ million฀ to฀ multi-employer฀ pension฀ funds.฀ We฀
continue to evaluate and address our potential exposure to under-funded multi-employer pension plans.
Although these liabilities are not a direct obligation or liability of Kroger, any new agreements that would
commit us to fund certain multi-employer plans will be expensed when our commitment is probable and
an estimate can be made.
•฀ In฀2015,฀we฀will฀negotiate฀agreements฀with฀the฀UFCW฀for฀store฀associates฀in฀Columbus,฀Denver,฀Las฀Vegas,฀
Louisville, Memphis and Portland, and agreements with the Teamsters covering several distribution
and manufacturing facilities. Negotiations this year will be challenging as we must have competitive
cost structures in each market while meeting our associates’ needs for solid wages and good quality,
affordable health care and retirement benefits.
Various uncertainties and other factors could cause actual results to differ materially from those contained
in the forward-looking statements. These include:
•฀ The฀extent฀to฀which฀our฀sources฀of฀liquidity฀are฀sufficient฀to฀meet฀our฀requirements฀may฀be฀affected฀by฀
the state of the financial markets and the effect that such condition has on our ability to issue commercial
paper at acceptable rates. Our ability to borrow under our committed lines of credit, including our
bank credit facilities, could be impaired if one or more of our lenders under those lines is unwilling or
unable to honor its contractual obligation to lend to us, or in the event that natural disasters or weather
conditions interfere with the ability of our lenders to lend to us. Our ability to refinance maturing debt
may be affected by the state of the financial markets.
•฀ Our฀ability฀to฀use฀cash฀flow฀to฀continue฀to฀maintain฀our฀investment฀grade฀debt฀rating฀and฀repurchase฀
shares, fund dividends and increase capital investments, could be affected by unanticipated increases
in net total debt, our inability to generate cash flow at the levels anticipated, and our failure to generate
expected earnings.