EX-99.1 2 l87270aex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENTS OF EARNINGS-AS RESTATED WITHOUT ONE-TIME ITEMS (in millions, except per share amounts) (unaudited)
First Quarter Ended ----------------------- May 20, May 22, 2000 1999 ------- ------- Sales ........................................................................ $14,329 $13,493 Merchandise costs, including advertising, warehousing, and transportation..... 10,485 9,951 Operating, general and administrative ........................................ 2,676 2,468 Rent ......................................................................... 208 199 Depreciation and amortization ................................................ 307 281 ------- ------- Operating profit ........................................................ 653 594 Interest expense ............................................................. 206 199 ------- ------- Earnings before income tax expense ...................................... 447 395 Income tax expense ........................................................... 177 160 ------- ------- Net earnings ............................................................ $ 270 $ 235 ======= ======= Basic earnings per common share: Net earnings ....................................................... $ 0.33 $ 0.28 ------- ------- Average number of common shares used in basic calculation .................... 831 827 Diluted earnings per common share: Net earnings ....................................................... $ 0.32 $ 0.27 ------- ------- Average number of common shares used in diluted calculation .................. 850 863 OTHER INCOME STATEMENT INFORMATION One-time items excluded from merchandise costs ............................... $ 15 $ 6 One-time items excluded from operating, general and administrative costs ..... $ 66 $ -- LIFO charge .................................................................. $ 12 $ 12 Gross profit rate excluding LIFO charge ...................................... 26.91% 26.34% Operating, general and administrative costs as a % to sales .................. 18.68% 18.29%
2 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENT OF EARNINGS-AS RESTATED WITH ONE-TIME ITEMS (in millions, except per share amounts) (unaudited)
First Quarter Ended ------------------------ May 20, May 22, 2000 1999 -------- ------- Sales ............................................................... $14,329 $13,493 ------- ------- Merchandise costs, including advertising, warehousing, and transportation .................................................... 10,500 9,957 Operating, general and administrative ............................... 2,742 2,468 Rent ................................................................ 208 199 Depreciation and amortization ....................................... 307 281 Asset impairment charges ............................................ 191 -- Merger related costs ................................................ 9 35 ------- ------- Operating profit .................................................. 372 553 Interest expense .................................................... 206 199 ------- ------- Earnings before income tax expense ................................ 166 354 Income tax expense .................................................. 67 143 ------- ------- Net Earnings ...................................................... $ 99 $ 211 ------- ------- Earnings per basic common share: Net earnings ................................................... $ 0.12 $ 0.26 ------- ------- Average number of common shares used in basic calculation ........... 831 827 Earnings per diluted common share: Net earnings ................................................... $ 0.12 $ 0.25 ------- ------- Average number of common shares used in diluted calculation ......... 850 863 OTHER INCOME STATEMENT INFORMATION Gross profit rate excluding LIFO charge ................................... 26.81% 26.29% Operating, general and administrative costs as a % to sales ............... 19.14% 18.29%
3 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED BALANCE SHEET-AS RESTATED (in millions, except per share amounts) (unaudited)
May 20, January 29, 2000 2000 -------- ----------- ASSETS Current assets Cash ........................................................ $ 163 $ 281 Receivables ................................................. 622 636 Inventories ................................................. 3,903 3,938 Prepaid and other current assets ............................ 435 690 ------- ------- Total current assets .................................... 5,123 5,545 Property, plant and equipment, net ............................. 8,351 8,266 Goodwill, net .................................................. 3,682 3,718 Other assets ................................................... 430 403 ------- ------- Total Assets ............................................ $17,586 $17,932 ======= ======= LIABILITIES Current liabilities Current portion of long-term debt ........................... $ 536 $ 536 Accounts payable ............................................ 2,994 2,773 Salaries and wages .......................................... 657 695 Other current liabilities ................................... 1,577 1,660 ------- ------- Total current liabilities ............................... 5,764 5,664 Long-term debt ................................................. 7,619 8,045 Other long-term liabilities .................................... 1,607 1,542 ------- ------- Total Liabilities ....................................... 14,990 15,251 ------- ------- Commitments and contingent liabilities ......................... -- -- SHAREOWNERS' EQUITY Preferred stock, $100 par, 5 shares authorized and unissued ................................................ -- -- Common stock, $1 par, 1,000 shares authorized: 888 shares issued in 2000 and 885 shares issued in 1999 ....................... 888 885 Additional paid-in capital ..................................... 2,044 2,023 Retained earnings .............................................. 330 230 Common stock in treasury, at cost, 61 shares in 2000 and 50 shares in 1999 ........................................... (666) (457) ------- ------- Total Shareowners' Equity ............................... 2,596 2,681 ------- ------- Total Liabilities and Shareowners' Equity ............... $17,586 $17,932 ======= =======
4 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENTS OF EARNINGS-AS RESTATED WITHOUT ONE-TIME ITEMS (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Second Quarter Ended Two Quarters Ended ----------------------- ----------------------- August 12, August 14, August 12, August 14, 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Sales .......................................................................... $11,017 $10,289 $25,346 $23,782 Merchandise costs, including advertising, warehousing, and transportation ...... 8,047 7,576 18,532 17,527 Operating, general and administrative .......................................... 2,062 1,888 4,738 4,356 Rent ........................................................................... 148 137 356 336 Depreciation and amortization .................................................. 234 216 541 497 ------- ------- ------- ------- Operating profit .......................................................... 526 472 1,179 1,066 Interest expense ............................................................... 155 143 361 342 ------- ------- ------- ------- Earnings before income tax expense and extraordinary loss ................. 371 329 818 724 Income tax expense ............................................................. 145 131 322 291 ------- ------- ------- ------- Earnings before extraordinary loss ........................................ 226 198 496 433 Extraordinary loss, net of income tax benefit .................................. (2) (10) (2) (10) ------- ------- ------- ------- Net earnings .............................................................. $ 224 $ 188 $ 494 $ 423 ======= ======= ======= ======= Basic earnings per common share: Earnings before extraordinary loss ........................................ $ 0.27 $ 0.24 $ 0.60 $ 0.52 Extraordinary loss ........................................................ -- (0.01) -- (0.01) ------- ------- ------- ------- Net earnings .......................................................... $ 0.27 $ 0.23 $ 0.60 $ 0.51 ======= ======= ======= ======= Average number of common shares used in basic calculation ...................... 824 829 828 828 Diluted earnings per common share: Earnings before extraordinary loss ........................................ $ 0.27 $ 0.23 $ 0.58 $ 0.50 Extraordinary loss ........................................................ -- (0.01) -- (0.01) ------- ------- ------- ------- Net earnings .......................................................... $ 0.27 $ 0.22 $ 0.58 $ 0.49 ======= ======= ======= ======= Average number of common shares used in diluted calculation .................... 847 860 849 861 OTHER INCOME STATEMENT INFORMATION One-time items excluded from merchandise costs ................................. $ 4 $ 12 $ 19 $ 18 One-time items excluded from operating, general and administrative costs........ $ 4 $ 17 $ 70 $ 17 LIFO charge .................................................................... $ 4 $ -- $ 16 $ 12 Gross profit rate excluding LIFO charge ........................................ 26.99% 26.37% 26.94% 26.35% Operating, general and administrative costs as a % to sales .................... 18.72% 18.34% 18.70% 18.31%
5 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENT OF EARNINGS-AS RESTATED WITH ONE-TIME ITEMS (in millions, except per share amounts) (unaudited)
Second Quarter Ended Two Quarters Ended ------------------------- -------------------------- August 12, August 14, August 12, August 14, 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Sales ..................................................... $11,017 $10,289 $25,346 $23,782 ------- ------- ------- ------- Merchandise costs, including advertising, warehousing, and transportation ...................................... 8,051 7,588 18,551 17,545 Operating, general and administrative ..................... 2,066 1,905 4,808 4,373 Rent ...................................................... 148 137 356 336 Depreciation and amortization ............................. 234 216 541 497 Asset impairment charges .................................. -- -- 191 -- Merger related costs ...................................... 2 200 11 235 ------- ------- ------- ------- Operating profit ........................................ 516 243 888 796 Interest expense .......................................... 155 143 361 342 ------- ------- ------- ------- Earnings before income tax expense and extraordinary loss 361 100 527 454 Income tax expense ........................................ 151 47 218 190 ------- ------- ------- ------- Earnings before extraordinary loss ...................... $ 210 $ 53 $ 309 $ 264 Extraordinary loss, net of income tax benefit ............. (2) (10) (2) (10) ------- ------- ------- ------- Net earnings ............................................ $ 208 $ 43 $ 307 $ 254 ======= ======= ======= ======= Earnings per basic common share: Earnings before extraordinary loss ...................... $ 0.25 $ 0.06 $ 0.37 $ 0.32 Extraordinary loss ...................................... -- (0.01) -- (0.01) ------- ------- ------- ------- Net earnings ......................................... $ 0.25 $ 0.05 $ 0.37 $ 0.31 ======= ======= ======= ======= Average number of common shares used in basic calculation.. 824 829 828 828 Earnings per diluted common share: Earnings before extraordinary loss ...................... $ 0.25 $ 0.06 $ 0.36 $ 0.31 Extraordinary loss ...................................... -- (0.01) -- (0.01) ------- ------- ------- ------- Net earnings ......................................... $ 0.25 $ 0.05 $ 0.36 $ 0.30 ======= ======= ======= ======= Average number of common shares used in diluted calculation 847 860 849 861 OTHER INCOME STATEMENT INFORMATION Gross profit rate excluding LIFO charge ................... 26.96% 26.25% 26.87% 26.27% Operating, general and administrative costs as a % to sales ......................................... 18.75% 18.51% 18.97% 18.39%
6 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED BALANCE SHEET-AS RESTATED (in millions, except per share amounts) (unaudited)
August 12, January 29, 2000 2000 ---------- ----------- ASSETS Current assets Cash.................................................................. $ 155 $ 281 Receivables........................................................... 583 636 Inventories........................................................... 3,795 3,938 Prepaid and other current assets...................................... 261 690 ------- ------- Total current assets.............................................. 4,794 5,545 Property, plant and equipment, net....................................... 8,525 8,266 Goodwill, net............................................................ 3,683 3,718 Other assets............................................................. 312 403 ------- ------- Total assets...................................................... $17,314 $17,932 ======= ======= LIABILITIES Current liabilities Current portion of long-term debt..................................... $ 586 $ 536 Accounts payable...................................................... 2,908 2,773 Accrued salaries and wages............................................ 638 695 Other current liabilities............................................. 1,675 1,660 ------- ------- Total current liabilities......................................... 5,807 5,664 Long-term debt........................................................... 7,222 8,045 Other long-term liabilities.............................................. 1,564 1,542 ------- ------- Total liabilities................................................. 14,593 15,251 ------- ------- Commitments and contingent liabilities -- -- SHAREOWNERS' EQUITY Preferred stock, $100 par, 5 shares authorized and unissued.......................................................... -- -- Common stock, $1 par, 1,000 shares authorized: 888 shares issued in 2000 and 885 shares issued in 1999................................. 888 885 Additional paid-in capital............................................... 2,063 2,023 Retained earnings........................................................ 538 230 Common stock in treasury, at cost, 66 shares in 2000 and 50 shares in 1999..................................................... (768) (457) ------- ------- Total shareowners' equity......................................... 2,721 2,681 ------- ------- Total liabilities and shareowners' equity......................... $17,314 $17,932 ======= =======
7 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENTS OF EARNINGS-AS RESTATED WITHOUT ONE-TIME ITEMS (in millions, except per share amounts) (unaudited)
Third Quarter Ended Three Quarters Ended ------------------------- ------------------------- November 4, November 6, November 4, November 6, 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Sales ........................................................................ $10,962 $10,329 $36,308 $34,111 Merchandise costs, including advertising, warehousing, and transportation..... 8,039 7,585 26,571 25,112 Operating, general and administrative ........................................ 2,013 1,902 6,751 6,258 Rent ......................................................................... 147 153 503 489 Depreciation and amortization ................................................ 234 217 775 714 ------- ------- ------- ------- Operating profit ........................................................ 529 472 1,708 1,538 Interest expense ............................................................. 146 143 508 485 ------- ------- ------- ------- Earnings before income tax expense and extraordinary loss ............... 383 329 1,200 1,053 Income tax expense ........................................................... 150 129 472 420 ------- ------- ------- ------- Earnings before extraordinary loss ...................................... 233 200 728 633 Extraordinary loss, net of income tax benefit ................................ (2) -- (3) (10) ------- ------- ------- ------- Net earnings ............................................................ $ 231 $ 200 $ 725 $ 623 ======= ======= ======= ======= Basic earnings per common share: Earnings before extraordinary loss ...................................... $ 0.28 $ 0.24 $ 0.88 $ 0.76 Extraordinary loss ...................................................... -- -- -- (0.01) ------- ------- ------- ------- Net earnings ........................................................ $ 0.28 $ 0.24 $ 0.88 $ 0.75 ======= ======= ======= ======= Average number of common shares used in basic calculation .................... 821 832 825 829 Diluted earnings per common share: Earnings before extraordinary loss ...................................... $ 0.28 $ 0.23 $ 0.86 $ 0.74 Extraordinary loss ...................................................... -- -- -- (0.01) ------- ------- ------- ------- Net earnings ........................................................ $ 0.28 $ 0.23 $ 0.86 $ 0.73 ======= ======= ======= ======= Average number of common shares used in diluted calculation .................. 845 857 848 860 OTHER INCOME STATEMENT INFORMATION One-time items excluded from merchandise costs ............................... $ 8 $ 18 $ 27 $ 36 One-time items excluded from operating, general and administrative costs ..... $ 24 $ 6 $ 94 $ 23 LIFO (credit)/charge ......................................................... $ (6) $ (6) $ 10 $ 6 Gross profit rate excluding LIFO (credit)/charge ............................. 26.61% 26.51% 26.84% 26.40% Operating, general and administrative costs as a % to sales .................. 18.36% 18.42% 18.60% 18.34%
8 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED STATEMENT OF EARNINGS-AS RESTATED WITH ONE-TIME ITEMS (in millions, except per share amounts) (unaudited)
Third Quarter Ended Three Quarters Ended ------------------------ -------------------------- November 4, November 6, November 4, November 6, 2000 1999 2000 1999 ----------- ---------- ----------- ----------- Sales......................................................................... $10,962 $10,329 $36,308 $34,111 ------- ------- ------- ------- Merchandise costs, including advertising, warehousing, and transportation..... 8,047 7,603 26,598 25,148 Operating, general and administrative......................................... 2,037 1,908 6,846 6,281 Rent.......................................................................... 147 153 503 489 Depreciation and amortization................................................. 234 217 775 714 Asset impairment charges...................................................... -- -- 191 -- Merger related costs.......................................................... 2 69 13 304 ------- ------- ------- ------- Operating profit............................................................ 495 379 1,382 1,175 Interest expense.............................................................. 146 143 508 485 ------- ------- ------- ------- Earnings before income tax expense and extraordinary loss................... 348 236 874 690 Income tax expense............................................................ 146 109 364 299 ------- ------- ------- ------- Earnings before extraordinary loss.......................................... $ 203 $ 127 $ 510 $ 391 Extraordinary loss, net of income tax benefit................................. (2) -- (3) (10) ------- ------- ------- ------- Net earnings ............................................................... $ 201 $ 127 $ 507 $ 381 ======= ======= ======= ======= Earnings per basic common share: Earnings before extraordinary loss.......................................... $ 0.25 $ 0.15 $ 0.62 $ 0.47 Extraordinary loss.......................................................... -- -- (0.01) ------- ------- ------- ------- Net earnings ............................................................ $ 0.25 $ 0.15 $ 0.62 $ 0.46 ======= ======= ======= ======= Average number of common shares used in basic calculation..................... 821 832 825 829 Earnings per diluted common share: Earnings before extraordinary loss.......................................... $ 0.24 $ 0.15 $ 0.60 $ 0.45 Extraordinary loss ......................................................... -- -- -- (0.01) ------- ------- ------- ------- Net earnings............................................................. $ 0.24 $ 0.15 $ 0.60 $ 0.44 ======= ======= ======= ======= Average number of common shares used in diluted calculation................... 845 857 848 860 OTHER INCOME STATEMENT INFORMATION Gross profit rate excluding LIFO (credit)/charge ............................. $ 26.54% $ 26.33% $ 26.77% $ 26.29% Operating, general and administrative costs as a % to sales .................. 18.59% 18.47% 18.85% 18.41%
9 THE KROGER CO. AND SUBSIDIARIES PRELIMINARY CONSOLIDATED BALANCE SHEET-AS RESTATED (in millions, except per share amounts) (unaudited)
November 4, January 29, 2000 2000 ----------- ----------- ASSETS Current assets Cash ............................................................. $ 131 $ 281 Receivables ...................................................... 629 636 Inventories ...................................................... 4,412 3,938 Prepaid and other current assets ................................. 197 690 ------- ------- Total current assets ......................................... 5,369 5,545 Property, plant and equipment, net .................................. 8,689 8,266 Goodwill, net ....................................................... 3,664 3,718 Other assets ........................................................ 344 403 ------- ------- Total assets ................................................. $18,066 $17,932 ======= ======= LIABILITIES Current liabilities Current portion of long-term debt ................................ $ 309 $ 536 Accounts payable ................................................. 3,272 2,773 Accrued salaries and wages ....................................... 651 695 Other current liabilities ........................................ 1,731 1,660 ------- ------- Total current liabilities .................................... 5,963 5,664 Long-term debt ...................................................... 7,746 8,045 Other long-term liabilities ......................................... 1,528 1,542 ------- ------- Total liabilities ............................................ 15,237 15,251 ------- ------- Commitments and contingent liabilities .............................. -- -- SHAREOWNERS' EQUITY Preferred stock, $100 par, 5 million shares authorized and unissued ..................................................... -- -- Common stock, $1 par, 1 billion shares authorized: 889 million shares issued in 2000 and 885 million shares issued in 1999 ............. 889 885 Additional paid-in capital .......................................... 2,073 2,023 Retained earnings ................................................... 738 230 Common stock in treasury, at cost, 71 million shares in 2000 and 50 million shares in 1999 ........................................ (871) (457) ------- ------- Total shareowners' equity .................................... 2,829 2,681 ------- ------- Total liabilities and shareowners' equity .................... $18,066 $17,932 ======= =======