Kroger Reports Record Third Quarter Earnings Per Share

            Kroger Reports Record Third Quarter Earnings Per Share

ID Sales Up 3.2% Without Fuel

Company Raises Fiscal 2012 Adjusted EPS Guidance to $2.44 to $2.46

PR Newswire

CINCINNATI, Nov. 29, 2012

CINCINNATI, Nov. 29, 2012 /PRNewswire/ --The Kroger Co. (NYSE: KR) today
reported net earnings of $0.60 per diluted share for the third quarter, which
ended November 3, 2012. This includes a $0.14 per diluted share benefit from a
settlement with Visa and MasterCard and from a reduction in the company's
obligation to fund the UFCW consolidated pension fund created in January.

Excluding the benefit of these two items, Kroger's adjusted earnings per
diluted share was a record $0.46 for the quarter. The company believes the
adjusted earnings figure presents a more accurate year-over-year comparison of
its financial results because the two items were not the result of our normal
operations.

Identical supermarket sales growth, without fuel, was 3.2% in the third
quarter. Other highlights of the quarter include:

  oAchieved 36^th consecutive quarter of positive identical supermarket sales
  oIncreased adjusted FIFO operating profit $29 million for the third
    quarter, including fuel, compared to last year and GAAP FIFO operating
    profit increased $144 million
  oImproved tonnage – highest increase in unit movement since the second
    quarter of 2010
  oRaised adjusted earnings per diluted share guidance for the fiscal year

"Kroger achieved our growth objectives for the quarter, including positive
identical supermarket sales, operating profit growth and outstanding tonnage
growth," said David B. Dillon, Kroger's chairman and chief executive officer.
"This quarter illustrates that the strength of our core business positions
Kroger to accelerate our earnings per share growth."

Total sales, including fuel, increased 5.9% to $21.8 billion in the third
quarter compared with $20.6 billion for the same period last year. Total
sales, excluding fuel, increased 3.7% in the third quarter over the same
period last year.

Net earnings for the third quarter totaled $316.5 million, or $0.60 per
diluted share. Excluding the $0.14 per share benefit of the two items
described above, Kroger's adjusted net earnings for the third quarter totaled
$242.4 million, or $0.46 per diluted share. The lower LIFO charge described
below benefited this year's third quarter by $0.02 per diluted share. Net
earnings in the same period last year were $195.9 million, or $0.33 per
diluted share.

Details of Third Quarter 2012 Results

FIFO gross margin was 20.35% of sales for the third quarter of fiscal 2012.
Excluding retail fuel operations, FIFO gross margin decreased 25 basis points
from the same period last year.

The company recorded a $15.5 million LIFO charge during the quarter compared
to a $61.6 million LIFO charge in the same quarter last year. Excluding retail
fuel sales, the LIFO charge decreased 28 basis points as a percentage of
sales. Kroger reduced its LIFO charge estimate to $125 million for the year
from its previous estimate of $150 million, due to lower than anticipated
inflation expectations for the year.

Operating, general and administrative costs plus rent and depreciation,
excluding retail fuel operations and the two adjustment items, declined 21
basis points as a percent of sales compared to the prior year.

Total third quarter FIFO operating profit, excluding the two adjustment items,
increased approximately $29 million over the prior year. Excluding fuel and
the two adjustment items, on a rolling four quarters basis, the company's FIFO
operating margin was 7 basis points lower compared to last year. Kroger
expects to have a slightly higher FIFO operating margin rate, excluding fuel,
for the full 2012 fiscal year, in line with our commitment to grow the rate
slightly over time on a rolling four quarters basis.

Financial Strategy

Kroger's strong financial position has allowed the company to return more than
$1.7 billion to shareholders through share buybacks and dividends over the
last four quarters. During the third quarter, Kroger repurchased 14.5 million
common shares for a total investment of $333 million.

Capital expenditures, excluding acquisitions and purchases of leased
facilities, totaled $473.5 million for the third quarter, compared to $497.0
million for the same period last year.

Kroger recently began reporting return on invested capital, or ROIC, results
on a quarterly basis. ROIC in the third quarter was 13.3%, compared to 13.5%
during the same period last year.

Net total debt was $8.7 billion, an increase of $1.0 billion from a year ago.
On a rolling four quarters basis, Kroger's net total debt to adjusted EBITDA
ratio was 2.08 compared to 1.89 during the same period last year.

Fiscal 2012 Guidance

Kroger raised its diluted earnings per share guidance, excluding the two
adjustment items, to $2.44 to $2.46 for the full year, up from the previous
guidance range of $2.35 to $2.42. In the fourth quarter, the company expects
identical supermarket sales growth between 3.0% and 3.5%, excluding fuel.

"Kroger's proven Customer 1st Strategy continues to increase customer loyalty,
identical supermarket sales and market share. With that foundation firmly in
place, we are focused on deploying capital to further accelerate growth and
improve ROIC," Mr. Dillon said. "We are committed to delivering shareholder
value through stronger earnings per share growth, higher dividends and stock
buybacks."

Kroger, one of the world's largest retailers, employs more than 339,000
associates who serve customers in 2,422 supermarkets and multi-department
stores in 31 states under two dozen local banner names including Kroger, City
Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC,
Ralphs and Smith's. The company also operates 790 convenience stores, 344 fine
jewelry stores, 1,141 supermarket fuel centers and 37 food processing plants
in the U.S. Recognized by Forbes as the most generous company in America,
Kroger supports hunger relief, breast cancer awareness, the military and their
families, and more than 30,000 schools and grassroots organizations. Kroger
contributes food and funds equal to 160 million meals a year through more than
80 Feeding America food bank partners. A leader in supplier diversity, Kroger
is a proud member of the Billion Dollar Roundtable and the U.S. Hispanic
Chamber's Million Dollar Club.

--------------------------------------------------------------------------------

Note: Fuel sales have historically had a low FIFO gross margin rate and OG&A
rate as compared to corresponding rates on non-fuel sales. As a result Kroger
discusses the changes in these rates excluding the effect of retail fuel
operations.

This press release contains certain forward-looking statements about the
future performance of the company. These statements are based on management's
assumptions and beliefs in light of the information currently available to it.
These statements are indicated by words such as "expects" and "guidance."
Aggressive competition, economic conditions, interest rates, goodwill
impairment, the success of programs designed to increase our identical
supermarket sales without fuel and increase customer loyalty, the impact of
fuel costs on consumer spending, and labor disputes, particularly as the
company seeks to manage increases in health care and pension costs, could
materially affect our expected identical supermarket sales growth, earnings
per share, and our ability to continue to create value for shareholders.
Earnings per share also will be affected by the number of shares outstanding
and volatility in the company's fuel margins. Earnings and sales also may be
affected by adverse weather conditions or natural disasters, particularly to
the extent that these disrupt our operations or those of our suppliers; create
shortages in the availability or increases in the cost of products that we
sell in our stores or materials and ingredients we use in our manufacturing
facilities; or raise the cost of supplying energy to our various operations,
including the cost of transportation. Our results also will be affected by
rising commodity costs, the inconsistency of the economic recovery, consumer
confidence, changes in government-funded benefit programs, and changes in
inflation or deflation in product and operating costs, and our ability to
implement cost controls. Our FIFO operating margin, excluding fuel, will be
affected by changes in product costs during the year, if our estimates of
product cost changes or the timing of those changes prove incorrect, and if
competitive or other factors cause our margins on product sold to fail to meet
our objectives. These forward-looking statements are subject to uncertainties
and other factors that could cause actual results to differ materially. We
assume no obligation to update the information contained herein. Please refer
to Kroger's reports and filings with the Securities and Exchange Commission
for a further discussion of these risks and uncertainties.

Note: Kroger's quarterly conference call with investors will be broadcast live
online at 10 a.m. (ET) on November 29, 2012 at ir.kroger.com. An on-demand
replay of the webcast will be available from approximately 1 p.m. (ET)
Thursday, November 29 through Thursday, December 13, 2012.

View 3^rd Quarter 2012 Reports:

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF CASH FLOWS

SUPPLEMENTAL SALES INFORMATION

RECONCILIATION OF TOTAL DEBT TO NET TOTAL DEBT AND
NET EARNINGS ATTRIBUTABLE TO THE KROGER CO. TO EBITDA

NET EARNINGS PER DILUTED SHARE EXCLUDING THE UFCW CONSOLIDATED PENSION PLAN
LIABILITY AND CREDIT CARD SETTLEMENT ADJUSTMENTS

RETURN ON INVESTED CAPITAL



Table 1.
THE KROGER CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)
                         THIRD QUARTER                           YEAR-TO-DATE
                         2012                2011                2012                2011
SALES                    $          100.00%  $          100.00%  $          100.00%  $          100.00%
                         21,807.0           20,594.3           72,598.2           68,968.6
     MERCHANDISE COSTS,
     INCLUDING
     ADVERTISING,
        WAREHOUSING AND
        TRANSPORTATION
        (a),
        AND LIFO CHARGE  17,383.6   79.72    16,358.9   79.43    57,757.3   79.56    54,538.7   79.08
        (b)
     OPERATING, GENERAL
     AND ADMINISTRATIVE  3,306.1    15.16    3,317.4    16.11    11,160.6   15.37    11,005.8   15.96
     (a)
     RENT                140.6      0.64     140.8      0.68     471.2      0.65     475.0      0.69
     DEPRECIATION AND    381.9      1.75     372.8      1.81     1,265.4    1.74     1,245.5    1.81
     AMORTIZATION
        OPERATING        594.8      2.73     404.4      1.96     1,943.7    2.68     1,703.6    2.47
        PROFIT
     INTEREST EXPENSE    103.0      0.47     99.1       0.48     349.8      0.48     334.4      0.48
        NET EARNINGS
        BEFORE INCOME    491.8      2.26     305.3      1.48     1,593.9    2.20     1,369.2    1.99
        TAX EXPENSE
     INCOME TAX EXPENSE 174.7      0.80     107.9      0.52     555.0      0.76     467.7      0.68
        NET EARNINGS
        INCLUDING        317.1      1.45     197.4      0.96     1,038.9    1.43     901.5      1.31
        NONCONTROLLING
        INTERESTS
        NET EARNINGS
        (LOSS)
        ATTRIBUTABLE TO
          NONCONTROLLING 0.6        -        1.5        0.01     4.0        0.01     (7.5)      (0.01)
          INTERESTS
        NET EARNINGS     $                $                $                  $   
        ATTRIBUTABLE TO  316.5     1.45%    195.9      0.95%    1,034.9   1.43%    909.0      1.32%
        THE KROGER CO.
        NET EARNINGS
        ATTRIBUTABLE TO
        THE KROGER CO.
          PER BASIC      $               $               $               $    
          COMMON SHARE   0.61               0.33               1.90                1.51
        AVERAGE NUMBER
        OF COMMON SHARES
        USED IN
          BASIC          518.2               582.7               539.2               597.0
          CALCULATION
        NET EARNINGS
        ATTRIBUTABLE TO
        THE KROGER CO.
          PER DILUTED    $               $               $               $    
          COMMON SHARE   0.60               0.33               1.89                1.50
        AVERAGE NUMBER
        OF COMMON SHARES
        USED IN
          DILUTED        521.5               585.9               542.5               600.7
          CALCULATION
Note: Certain prior-year amounts have been reclassified to conform to current-year presentation.
Certain per share amounts and percentages may not sum due to rounding.
Note: The Company defines FIFO gross margin, as described in the earnings release, as sales minus
merchandise costs, including advertising, warehousing and transportation, but excluding the
Last-In First-Out (LIFO) charge. This measure is included to reflect trends in current cost of
product.
(a)  Merchandise costs and operating, general and administrative expenses exclude depreciation and
     amortization expense and rent expense which are included in separate expense lines.
(b)  LIFO charges of $15.5 and $61.6 were recorded in the third quarters of 2012 and 2011,
     respectively. For the year to date period, LIFO charges of $96.2 and $142.3 were recorded
    for2012 and 2011,
     respectively.



Table 2.
THE KROGER CO.
CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
                                       November 3,         November 5,
                                       2012                2011
ASSETS
Current Assets
  Cash                                 $      269.1  $      207.6
  Temporary cash investments           165.9               8.2
  Deposits in-transit                  920.0               879.4
  Receivables                          1,039.1             876.7
  Inventories                          5,550.0             5,507.3
  Prepaid and other current assets     333.1               344.1
        Total current assets           8,277.2             7,823.3
Property, plant and equipment, net     14,690.1            14,450.5
Goodwill                               1,163.6             1,137.9
Other assets                           527.5               548.6
        Total Assets                   $    24,658.4    $    23,960.3
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
  Current portion of long-term debt
  including obligations
        under capital leases and       $     2,079.3   $     1,261.7
        financing obligations
  Trade accounts payable               4,824.8             4,654.3
  Accrued salaries and wages           905.6               956.4
  Deferred income taxes                189.8               214.7
  Other current liabilities            2,547.9             2,401.5
        Total current liabilities      10,547.4            9,488.6
Long-term debt including obligations
under capital leases
and financing obligations
  Face-value of long-term debt
  including obligations under
        capital leases and financing   6,772.9             6,396.2
        obligations
  Adjustment to reflect fair-value     7.4                 31.9
  interest rate hedges
  Long-term debt including obligations
  under capital leases
        and financing obligations      6,780.3             6,428.1
Deferred income taxes                  770.9               1,065.6
Pension and postretirement benefit     1,380.2             930.2
obligations
Other long-term liabilities            1,416.9             1,148.8
        Total Liabilities              20,895.7            19,061.3
Shareowners' equity                    3,762.7             4,899.0
        Total Liabilities and          $    24,658.4    $    23,960.3
        Shareowners' Equity
Total common shares outstanding at end 513.8               571.6
of period
Total diluted shares year-to-date      542.5               600.7



Table 3.
THE KROGER CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
                                                    YEAR-TO-DATE
                                                    2012         2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net earnings including noncontrolling interests    $        $     
                                                    1,038.9      901.5
 Adjustment to reconcile net earnings including
 noncontrolling
     interests to net cash provided by operating
     activities:
         Depreciation and amortization              1,265.4      1,245.5
         LIFO charge                                96.2         142.3
         Stock-based employee compensation          61.1         62.4
         Expense for Company-sponsored pension      68.1         54.0
         plans
         Asset impairment charges                   9.7          29.5
         Deferred income taxes                      130.4        313.5
         Other                                      23.1         24.5
         Changes in operating assets and
         liabilities, net
            of effects from acquisitions of
            businesses:
               Deposits in-transit                  (133.7)      (213.3)
               Receivables                          (131.4)      20.8
               Inventories                          (531.1)      (680.9)
               Prepaid expenses                     (31.5)       (22.4)
               Trade accounts payable               379.9        452.3
               Accrued expenses                     62.5         240.3
               Income taxes receivable and payable  115.1        (110.9)
               Contribution to Company-sponsored    (37.0)       (51.7)
               pension plan
               Other                                (117.3)      3.1
 Net cash provided by operating activities          2,268.4      2,410.5
CASH FLOWS FROM INVESTING ACTIVITIES:
 Payments for capital expenditures                  (1,470.5)    (1,405.1)
 Payments for acquisitions                          (12.3)       (51.0)
 Proceeds from sale of assets                       23.4         42.6
 Other                                              (28.0)       (5.6)
 Net cash used by investing activities              (1,487.4)    (1,419.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from lease-financing transactions         3.7          1.7
 Proceeds from issuance of long-term debt           849.5        2.7
 Payments on long-term debt                         (921.0)      (541.9)
 Net borrowings on commercial paper/ credit        743.7        330.0
 facility
 Dividends paid                                     (188.8)      (191.4)
 Excess tax benefits on stock-based awards          4.8          6.1
 Proceeds from issuance of capital stock            71.5         92.7
 Treasury stock purchases                           (1,203.6)    (1,274.1)
 Increase (decrease) in book overdrafts             115.0        (25.1)
 Other                                              (8.3)        (0.9)
 Net cash used by financing activities              (533.5)      (1,600.2)
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
 CASH INVESTMENTS                                   247.5        (608.8)
CASH AND TEMPORARY CASH INVESTMENTS:
 BEGINNING OF YEAR                                  187.5        824.6
 END OF QUARTER                                     $       $     
                                                    435.0       215.8
Reconciliation of capital expenditures:
 Payments for capital expenditures                  $         $   
                                                    (1,470.5)   (1,405.1)
 Changes in construction-in-progress payables       (11.2)       (123.7)
     Total capital expenditures                     $         $   
                                                    (1,481.7)   (1,528.8)
Disclosure of cash flow information:
     Cash paid during the year for interest         $       $     
                                                    320.2       338.8
     Cash paid during the year for income taxes     $       $     
                                                    333.9       295.4





Table 4. Supplemental Sales Information
(in millions, except percentages)
(unaudited)
     Items identified below should not be considered as alternatives to sales
     or any other GAAP measure of performance. Identical supermarket sales is
     an industry-specific measure and it is important to review it in
     conjunction with Kroger's financial results reported in accordance with
     GAAP. Other companies in our industry may calculate identical sales
     differently than Kroger does, limiting the comparability of the measure.
                    IDENTICAL SUPERMARKET SALES (a)
                         THIRD QUARTER                    YEAR-TO-DATE
                         2012              2011           2012       2011
     INCLUDING FUEL      $               $            $        $  
     CENTERS             19,456.9         18,497.4      65,000.5  62,002.2
     EXCLUDING FUEL      $               $            $        $  
     CENTERS             16,056.8         15,555.3      53,978.3  52,039.3
     INCLUDING FUEL      5.2%              9.4%           4.8%       9.9%
     CENTERS
     EXCLUDING FUEL      3.2%              5.0%           3.7%       4.9%
     CENTERS
(a) Kroger defines a supermarket as identical when it has been open without
    expansion or relocation for five full quarters.



Table 5. Reconciliation of Total Debt to Net Total Debt and
Net Earnings Attributable to The Kroger Co. to EBITDA
(in millions, except for ratio)
(unaudited)
The items identified below should not be considered an alternative to any GAAP
measure of performance or access to liquidity. The items below are a primary
component of determining compliance with the financial covenants under the
Company's credit facility and management believes that they are an important
measure of access to liquidity. The items below should be reviewed in
conjunction with Kroger's financial results reported in accordance with GAAP.
The following table provides a reconciliation of total debt to net total debt
and compares the balance in the third quarter of 2012 to the balance in the
third quarter of 2011.
                           November 3,           November 5,
                           2012                  2011             Change
Current portion of
long-term debt
including obligations
 under capital leases
and financing              $   2,079.3         $   1,261.7    $  817.6
obligations
Face-value of long-term
debt including
obligations under          6,772.9               6,396.2          376.7
 capital leases and
financing obligations
Adjustment to reflect
fair-value interest        7.4                   31.9             (24.5)
rate hedges
 Total debt            $   8,859.6         $   7,689.8    $ 1,169.8
Less: Temporary cash       165.9                 8.2              157.7
investments
 Net total debt        $   8,693.7         $   7,681.6    $ 1,012.1
The following table provides a reconciliation from net earnings attributable
to The Kroger Co. to EBITDA, as defined in the Company's credit agreement
("EBITDA"), on a rolling four quarters basis.
                           Rolling Four Quarters Ended
                           November 3,           November 5,
                           2012                  2011
Net earnings
attributable to The        $    728.0        $   1,187.8
Kroger Co.
LIFO                       169.6                 161.1
Goodwill impairment        -                     18.6
charge
Depreciation and           1,657.7               1,632.3
amortization
Interest expense           450.3                 444.6
Income tax expense         334.7                 632.8
UFCW pension plan          952.6                 -
consolidation charge
UFCW consolidated
pension plan liability
and credit card            (114.9)               -
 settlement
adjustments
Other                      (4.7)                 (3.8)
EBITDA                     $   4,173.3         $   4,073.4
Net total debt to          2.08                  1.89
adjusted EBITDA ratio



Table 6. Net Earnings Per Diluted Share Excluding the UFCW Consolidated
Pension Plan Liability
and Credit Card Settlement Adjustments
(in millions, except per share amounts)
(unaudited)
Items identified in this table should not be considered alternatives to net
earnings attributable to The Kroger Co. or any other GAAP measure of
performance. These items should not be reviewed in isolation or considered
substitutes of the Company's financial results as reported in accordance with
GAAP. Due to the nature of these items, as further described below, it is
important to identify these items and to review them in conjunction with the
Company's financial results reported in accordance with GAAP.
The following table summarizes items that affected the Company's financial
results during the periods presented. These items include a reduction to the
Company's UFCW consolidated pension plan liability and the receipt of a credit
card litigation settlement payment.
                                                    THIRD         YEAR-TO-DATE
                                                    QUARTER
                                                    2012          2012
      NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.   $   316.5   $  1,034.9
      AFTER-TAX UFCW CONSOLIDATED PENSION PLAN
      LIABILITY AND
           CREDIT CARD SETTLEMENT ADJUSTMENTS (a)   (74.1)        (74.1)
      NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.
           EXCLUDING THE UFCW CONSOLIDATED PENSION
           PLAN LIABILITY AND
           CREDIT CARD SETTLEMENT ADJUSTMENTS       $   242.4   $   960.8
      NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.
           PER DILUTED COMMON SHARE                 $    0.60  $    1.89
      NET EARNINGS PER DILUTED COMMON SHARE EFFECT
           DUE TO THE UFCW CONSOLIDATED PENSION
           PLAN LIABILITY
           AND CREDIT CARD SETTLEMENT ADJUSTMENTS   (0.14)        (0.13)
      NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.
      PER
           DILUTED COMMON SHARE EXCLUDING THE
           UFCW CONSOLIDATED PENSION PLAN LIABILITY
           AND CREDIT CARD SETTLEMENT ADJUSTMENTS   $   0.46   $    1.76
      AVERAGE NUMBER OF COMMON SHARES USED IN
           DILUTED CALCULATION                      521.5         542.5
      For the third quarter and the year-to-date period of 2012, the pre-tax
(a)   UFCW consolidated pension plan liability and credit card settlement
      adjustments were $114.9.

Table 7. Return on Invested Capital
(in millions, except percentages)
(unaudited)
Return on invested capital should not be considered an alternative to any
GAAP measure of performance. Return on invested capital is an important
measure used by management to evaluate our investment returns on capital and
our effectiveness of deploying our assets. Return on invested capital should
not be reviewed in isolation or considered as a substitute for our financial
results as reported in accordance with GAAP. Other companies may calculate
return on invested capital differently than Kroger, limiting the
comparability of the measure.
The following table provides a reconciliation of return on invested capital
for the rolling four quarters ended November 3, 2012 and November 5, 2011.
                                          Rolling Four Quarters Ended
                                          November 3,        November 5,
                                          2012               2011
     Return on Invested Capital
     Numerator (a)
                Operating profit          $   1,518.5      $   2,262.6
                LIFO charge               169.6              161.1
                Depreciation and          1,657.7            1,632.2
                amortization
                Rent                      615.3              616.9
                Goodwill impairment       -                  18.6
                charge
                UFCW pension plan         952.6              -
                consolidation charge
                UFCW consolidated pension
                plan liability and credit
                card                      (114.9)            -
                  settlement
                adjustments
                Adjusted operating income $   4,798.8      $   4,691.4
     Denominator (b)
                Average total assets     $  24,309.3       $  23,857.6
                Average taxes receivable  (26.5)             (31.9)
                (c)
                Average LIFO reserve (d)  1,054.5            889.2
                Average accumulated
                depreciation and          13,851.9           12,857.6
                amortization
                Average trade accounts    (4,739.5)          (4,416.4)
                payable
                Average accrued salaries  (931.0)            (896.5)
                and wages
                Average other current     (2,436.1)          (2,364.4)
                liabilities (e)
                Rent * 8                  4,922.4            4,935.2
                Average invested capital  $  36,005.0       $  34,830.4
     Return on Invested Capital           13.3%              13.5%
a)   Represents results for the rolling four quarters ended for the periods
     noted.
b)   Represents the average of amounts at beginning and end of four quarter
     period presented.
c)   Taxes receivable is recorded in the Consolidated Balance Sheet in
     receivables.
d)   LIFO reserve is recorded in the Consolidated Balance Sheet in
     inventories.
e)   The calculation of average other current liabilities excludes accrued
     income taxes.



SOURCE The Kroger Co.

Website: http://www.kroger.com
Contact: Media: Keith Dailey, +1-513-762-1304; Investors: Cindy Holmes,
+1-513-762-4969