---
ticker: KR
company: KR
filing_type: 10-K
year_current: 2024
year_prior: 2023
risks_added: 8
risks_removed: 6
risks_modified: 35
risks_unchanged: 30
source: SEC EDGAR
url: https://riskdiff.com/kr/2024-vs-2023/
markdown_url: https://riskdiff.com/kr/2024-vs-2023/index.md
generated: 2026-06-01
---

# KR: 10-K Risk Factor Changes 2024 vs 2023

> Source: U.S. Securities and Exchange Commission (EDGAR)  
> Generated: 2026-06-01  
> All data extracted directly from official filings. No hallucinated content.

## Summary

| Status | Count |
|--------|-------|
| New risks added | 8 |
| Risks removed | 6 |
| Risks modified | 35 |
| Unchanged | 30 |

---

## New in Current Filing: COMPETITIVE ENVIRONMENT

​ The operating environment for the food retailing industry continues to be characterized by the proliferation of local, regional, and national retailers, including both retail and digital formats, and intense and ever-increasing competition ranging from online retailers, mass merchant, club stores, regional chains, deep discounters, and dollar stores, as well as ethnic, specialty and natural food stores. With the proliferation of grocery delivery - both by retailers and third-party delivery service providers - customers have an even wider range of retailers from which to choose. Customers continue to expect a great shopping experience both in-store and online. The industry continues to be shaped by e-commerce, cooking at home and prepared foods to go and other customer needs and preferences. Customers want to be able to shop on their own terms with zero compromise whether at brick and mortar stores or online, pick-up or delivery, depending on their particular trip needs and other factors. If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these ever-changing preferences, our sales and profitability could be adversely affected. If we fail to meet the evolving needs of our customers, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. ​ We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these strategies is designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams. Growth in loyal households, customer traffic and digitally engaged customers allow us to grow profits and power the flywheel in our model. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability. ​ In addition, evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​ In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations or through customer fulfillment centers powered by Ocado. 13 13 13 ​PRODUCT SAFETY​Customers count on Kroger to provide them with safe food and drugs and other merchandise. Concerns regarding the safety of the products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply even if the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. We could be adversely affected by personal injury or product liability claims, product recalls, or other health and safety issues, which occur from time to time. If we sell products that cause illness or injury to customers, resulting from product contamination or spoilage, the presence of certain substances, or damage caused in handling, storage or transportation, we could be exposed to claims or litigation. Any issue regarding the safety of items, whether Our Brands items manufactured by us or for us or CPG products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.​EMPLOYEE MATTERS​Nearly two-thirds of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 350 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows.​We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage or ordinances related to pay or working conditions enacted by local governments, could have an effect on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws.​Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. We may not be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.​DATA AND TECHNOLOGY​Our business is increasingly dependent on information technology systems that are complex and vital to continuing operations, resulting in an expansion of our technological presence and corresponding risk exposure. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates. ​Through our sales and marketing activities, we collect and store some personal information that our customers provide to us. We also gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information with vendors that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy.​14 ​ ​ PRODUCT SAFETY​Customers count on Kroger to provide them with safe food and drugs and other merchandise. Concerns regarding the safety of the products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply even if the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. We could be adversely affected by personal injury or product liability claims, product recalls, or other health and safety issues, which occur from time to time. If we sell products that cause illness or injury to customers, resulting from product contamination or spoilage, the presence of certain substances, or damage caused in handling, storage or transportation, we could be exposed to claims or litigation. Any issue regarding the safety of items, whether Our Brands items manufactured by us or for us or CPG products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.​EMPLOYEE MATTERS​Nearly two-thirds of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 350 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows.​We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage or ordinances related to pay or working conditions enacted by local governments, could have an effect on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws.​Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. We may not be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.​DATA AND TECHNOLOGY​Our business is increasingly dependent on information technology systems that are complex and vital to continuing operations, resulting in an expansion of our technological presence and corresponding risk exposure. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates. ​Through our sales and marketing activities, we collect and store some personal information that our customers provide to us. We also gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information with vendors that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy.​

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## New in Current Filing: WEATHER, NATURAL DISASTERS AND OTHER EVENTS

​ A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows. ​

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## New in Current Filing: UNRESOLVED STAFF COMMENTS.

​ None. ​ ​ ​ 19 19 19 ​ITEM 1C.CYBERSECURITY.​RISK MANAGEMENT AND STRATEGY​Securing Kroger's business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management program ("CRM"), the Kroger Third-Party Cybersecurity Risk Management program ("TPCRM"), and the Kroger Cyber Incident Response Plan ("IR Plan"). Our approach is guided by the principles of the CRM, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer ("CISO") and Chief Information Officer ("CIO"). Kroger's cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership. ​Kroger Cyber Risk Management Program ​The CRM was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology ("NIST"), Risk Management Framework ("RMF"), Cybersecurity Framework ("CSF") and the International Organization for Standardization 27001 ("ISO 27001"). The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger's CRM, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below.​In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM's foundational processes, metrics, monitoring, and reporting with common frameworks such as NIST and RMF.​Third-Party Cyber Risk Management ​Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger's cybersecurity posture, sourcing, and contracting processes. Kroger's Information Security Operations Center ("iSOC") responds to known third-party incidents on a continuous basis. The iSOC is a part of the Corporate Information Security ("CIS") department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the iSOC and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan.​Kroger Cyber Incident Response Plan​The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger iSOC, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident's scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the iSOC, CISO, legal counsel, and corporate affairs stakeholders.​20 ​ ​ ITEM 1C.CYBERSECURITY.​RISK MANAGEMENT AND STRATEGY​Securing Kroger's business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management program ("CRM"), the Kroger Third-Party Cybersecurity Risk Management program ("TPCRM"), and the Kroger Cyber Incident Response Plan ("IR Plan"). Our approach is guided by the principles of the CRM, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer ("CISO") and Chief Information Officer ("CIO"). Kroger's cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership. ​Kroger Cyber Risk Management Program ​The CRM was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology ("NIST"), Risk Management Framework ("RMF"), Cybersecurity Framework ("CSF") and the International Organization for Standardization 27001 ("ISO 27001"). The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger's CRM, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below.​In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM's foundational processes, metrics, monitoring, and reporting with common frameworks such as NIST and RMF.​Third-Party Cyber Risk Management ​Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger's cybersecurity posture, sourcing, and contracting processes. Kroger's Information Security Operations Center ("iSOC") responds to known third-party incidents on a continuous basis. The iSOC is a part of the Corporate Information Security ("CIS") department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the iSOC and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan.​Kroger Cyber Incident Response Plan​The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger iSOC, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident's scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the iSOC, CISO, legal counsel, and corporate affairs stakeholders.​ ITEM 1C.

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## New in Current Filing: RISK MANAGEMENT AND STRATEGY

​ Securing Kroger's business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management program ("CRM"), the Kroger Third-Party Cybersecurity Risk Management program ("TPCRM"), and the Kroger Cyber Incident Response Plan ("IR Plan"). Our approach is guided by the principles of the CRM, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer ("CISO") and Chief Information Officer ("CIO"). Kroger's cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership. ​ Kroger Cyber Risk Management Program ​ The CRM was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology ("NIST"), Risk Management Framework ("RMF"), Cybersecurity Framework ("CSF") and the International Organization for Standardization 27001 ("ISO 27001"). The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger's CRM, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below. ​ In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM's foundational processes, metrics, monitoring, and reporting with common frameworks such as NIST and RMF. ​ Third-Party Cyber Risk Management ​ Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger's cybersecurity posture, sourcing, and contracting processes. Kroger's Information Security Operations Center ("iSOC") responds to known third-party incidents on a continuous basis. The iSOC is a part of the Corporate Information Security ("CIS") department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the iSOC and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan. ​ Kroger Cyber Incident Response Plan ​ The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger iSOC, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident's scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the iSOC, CISO, legal counsel, and corporate affairs stakeholders. ​ 20 20 20 ​In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks.​We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see "Item 1A. Risk Factors" for more information on our cybersecurity-related risks.​GOVERNANCE​Protection of our customers' data is a fundamental priority for our Board and management team. Our risk management team is integrated into our CIS function and is led by our CIO and CISO. The risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations.​Kroger's CIO reports to the CEO and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy. Kroger's CIO & Chief Digital Officer, has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry. Kroger's interim CISO brings nearly 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management.​The Audit Committee of Kroger's Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger's CIO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CIO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. In overseeing cybersecurity risks, the Audit Committee focuses on aggregated, thematic issues with a risk-based approach. Oversight of cybersecurity risk incorporates strategy metrics, third-party assessments, and internal audit and controls. An independent third party also regularly reports to the Audit Committee and the full Board on cybersecurity, and outside counsel advises the Board on best practices for cybersecurity oversight by the Board, and the evolution of that oversight over time. Management also reports on strategic key risk indicators, ongoing initiatives, and significant incidents and their effect.​ITEM 2.PROPERTIES.​As of February 3, 2024, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at February 3, 2024, was $56.7 billion while the accumulated depreciation was $31.5 billion.​21 ​ ​ In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks.​We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see "Item 1A. Risk Factors" for more information on our cybersecurity-related risks.​GOVERNANCE​Protection of our customers' data is a fundamental priority for our Board and management team. Our risk management team is integrated into our CIS function and is led by our CIO and CISO. The risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations.​Kroger's CIO reports to the CEO and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy. Kroger's CIO & Chief Digital Officer, has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry. Kroger's interim CISO brings nearly 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management.​The Audit Committee of Kroger's Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger's CIO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CIO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. In overseeing cybersecurity risks, the Audit Committee focuses on aggregated, thematic issues with a risk-based approach. Oversight of cybersecurity risk incorporates strategy metrics, third-party assessments, and internal audit and controls. An independent third party also regularly reports to the Audit Committee and the full Board on cybersecurity, and outside counsel advises the Board on best practices for cybersecurity oversight by the Board, and the evolution of that oversight over time. Management also reports on strategic key risk indicators, ongoing initiatives, and significant incidents and their effect.​ITEM 2.PROPERTIES.​As of February 3, 2024, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at February 3, 2024, was $56.7 billion while the accumulated depreciation was $31.5 billion.​ In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks. ​ We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see "Item 1A. Risk Factors" for more information on our cybersecurity-related risks. ​ GOVERNANCE ​ Protection of our customers' data is a fundamental priority for our Board and management team. Our risk management team is integrated into our CIS function and is led by our CIO and CISO. The risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations. ​ Kroger's CIO reports to the CEO and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy. Kroger's CIO & Chief Digital Officer, has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry. Kroger's interim CISO brings nearly 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management. ​ The Audit Committee of Kroger's Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger's CIO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CIO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. In overseeing cybersecurity risks, the Audit Committee focuses on aggregated, thematic issues with a risk-based approach. Oversight of cybersecurity risk incorporates strategy metrics, third-party assessments, and internal audit and controls. An independent third party also regularly reports to the Audit Committee and the full Board on cybersecurity, and outside counsel advises the Board on best practices for cybersecurity oversight by the Board, and the evolution of that oversight over time. Management also reports on strategic key risk indicators, ongoing initiatives, and significant incidents and their effect. ​ ITEM 2.

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## New in Current Filing: 2023 EXECUTIVE SUMMARY

​ We achieved strong results in 2023, in line with our long-term growth model and built on three consecutive years of growth, despite navigating a challenging operating environment. By maintaining our long-term commitment to lower prices, through personalized promotions and rewards, we are increasing customer visits and growing loyal households through the strength of our retail business, continuing our evolution into a more diverse business, and our value creation model is providing us multiple ways to drive sustainable future growth. ​ Our results provided another proof point of the strength and resilience of our value creation model, which supported another year of strong free cash flow and adjusted net earnings per diluted share growth, excluding the 53rd week in fiscal year 2023 (the "Extra Week"). This was the result of continued momentum across several margin expansion initiatives, strong Our Brands performance, strong growth in alternative profit businesses, our ability to effectively manage product cost through strong sourcing practices, lower supply chain costs and a lower year-over-year LIFO charge. During the year, we continued to invest in wages and the associate experience as a way to support the delivery of a full, fresh and friendly customer experience. In 2023, we increased associate wages resulting in an average hourly rate of nearly $19, and a rate of nearly $25 with comprehensive benefits factored in, which is a 33% increase in rate in the last five years. ​ The following table provides highlights of our financial performance: ​

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## New in Current Filing: Net Earnings per Diluted Share excluding the Adjusted Items

($ in millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 Net earnings attributable to The Kroger Co. ​ $ 2,164 ​ $ 2,244 ​ $ 1,655 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Income) expense adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities(1)(2) ​  -  ​ 19 ​ 344 ​ Adjustment for company-sponsored pension plan settlement charges(1)(3) ​ ​  -  ​ ​  -  ​ ​ 68 ​ Adjustment for (gain) loss on investments(1)(4) ​ ​ (116) ​ ​ 561 ​ ​ 628 ​ Adjustment for Home Chef contingent consideration(1)(5) ​ ​  -  ​ ​ 15 ​ ​ 50 ​ Adjustment for transformation costs(1)(6) ​ ​  -  ​ ​  -  ​ ​ 104 ​ Adjustment for merger related costs(1)(7) ​ ​ 268 ​ ​ 34 ​ ​  -  ​ Adjustment for opioid settlement charges(1)(8) ​ ​ 1,163 ​ ​ 67 ​ ​  -  ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9) ​ ​  -  ​ ​ 164 ​ ​  -  ​ Adjustment for income tax audit examinations(1) ​ ​  -  ​ ​  -  ​ ​ (47) ​ Total Adjusted Items ​ ​ 1,315 ​ ​ 860 ​ ​ 1,147 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. excluding the Adjusted Items ​ $ 3,479 ​ $ 3,104 ​ $ 2,802 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Extra Week adjustment(1)(10) ​ ​ (144) ​ ​  -  ​ ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. excluding the Adjusted Items and the Extra Week adjustment ​ $ 3,335 ​ $ 3,104 ​ $ 2,802 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 2.96 ​ $ 3.06 ​ $ 2.17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Income) expense adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities(11) ​  -  ​ 0.03 ​ 0.45 ​ Adjustment for company-sponsored pension plan settlement charges(11) ​ ​  -  ​ ​  -  ​ ​ 0.09 ​ Adjustment for (gain) loss on investments(11) ​ ​ (0.17) ​ ​ 0.76 ​ ​ 0.83 ​ Adjustment for Home Chef contingent consideration(11) ​ ​  -  ​ ​ 0.02 ​ ​ 0.07 ​ Adjustment for transformation costs(11) ​ ​  -  ​ ​  -  ​ ​ 0.14 ​ Adjustment for merger related costs(11) ​ ​ 0.37 ​ ​ 0.05 ​ ​  -  ​ Adjustment for opioid settlement charges(11) ​ ​ 1.60 ​ ​ 0.09 ​ ​  -  ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(11) ​ ​  -  ​ ​ 0.22 ​ ​  -  ​ Adjustment for income tax audit examinations(11) ​ ​  -  ​ ​  -  ​ ​ (0.07) ​ Total Adjusted Items ​ ​ 1.80 ​ ​ 1.17 ​ ​ 1.51 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items ​ $ 4.76 ​ $ 4.23 ​ $ 3.68 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Extra Week adjustment(11) ​ ​ (0.20) ​ ​  -  ​ ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items and the Extra Week adjustment ​ $ 4.56 ​ $ 4.23 ​ $ 3.68 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average numbers of common shares used in diluted calculation ​ 725 ​ 727 ​ 754 ​ ​ 31 31 31 ​Net Earnings per Diluted Share excluding the Adjusted Items (continued)($ in millions, except per share amounts)​(1)The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates.(2)The pre-tax adjustment for pension plan withdrawal liabilities was $25 in 2022 and $449 in 2021.(3)The pre-tax adjustment for company-sponsored pension plan settlement charges was $87.(4)The pre-tax adjustment for (gain) loss on investments was $(151) in 2023, $728 in 2022 and $821 in 2021.(5)The pre-tax adjustment for Home Chef contingent consideration was $20 in 2022 and $66 in 2021.(6)The pre-tax adjustment for transformation costs was $136. Transformation costs primarily include costs related to store and business closure costs and third-party professional consulting fees associated with business transformation and cost saving initiatives.(7)The pre-tax adjustment for merger related costs was $316 in 2023 and $44 in 2022. Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(8)The pre-tax adjustment for opioid settlement charges was $1,475 in 2023 and $85 in 2022.(9)The pre-tax and after-tax adjustments for goodwill and fixed asset impairment charges related to Vitacost.com was $164.(10)The pre-tax Extra Week adjustment was $(179). (11)The amount presented represents the net earnings per diluted common share effect of each adjustment.​Key Performance Indicators​We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies.​32 ​ ​ Net Earnings per Diluted Share excluding the Adjusted Items (continued)($ in millions, except per share amounts)​(1)The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates.(2)The pre-tax adjustment for pension plan withdrawal liabilities was $25 in 2022 and $449 in 2021.(3)The pre-tax adjustment for company-sponsored pension plan settlement charges was $87.(4)The pre-tax adjustment for (gain) loss on investments was $(151) in 2023, $728 in 2022 and $821 in 2021.(5)The pre-tax adjustment for Home Chef contingent consideration was $20 in 2022 and $66 in 2021.(6)The pre-tax adjustment for transformation costs was $136. Transformation costs primarily include costs related to store and business closure costs and third-party professional consulting fees associated with business transformation and cost saving initiatives.(7)The pre-tax adjustment for merger related costs was $316 in 2023 and $44 in 2022. Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(8)The pre-tax adjustment for opioid settlement charges was $1,475 in 2023 and $85 in 2022.(9)The pre-tax and after-tax adjustments for goodwill and fixed asset impairment charges related to Vitacost.com was $164.(10)The pre-tax Extra Week adjustment was $(179). (11)The amount presented represents the net earnings per diluted common share effect of each adjustment.​Key Performance Indicators​We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies.​

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## New in Current Filing: (in millions)

First period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 5, 2023 to December 2, 2023 7,093 ​ $ 44.09 6,900 ​ $ 1,000 ​ Second period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 3, 2023 to December 30, 2023 82,059 ​ $ 44.75 64,200 ​ $ 1,000 ​ Third period - five weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 to February 3, 2024 96,000 ​ $ 46.07 96,000 ​ $ 1,000 ​ Total 185,152 ​ $ 45.41 167,100 ​ $ 1,000 ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 24 24 24 ​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​25 ​ ​ ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

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## New in Current Filing: PROPERTY, PLANT AND EQUIPMENT, NET

​ Property, plant and equipment, net consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Land ​ $ 3,512 ​ $ 3,442 ​ Buildings and land improvements ​ 15,137 ​ 14,539 ​ Equipment ​ 19,375 ​ 17,328 ​ Leasehold improvements ​ 12,394 ​ 11,435 ​ Construction-in-progress ​ 3,574 ​ 4,044 ​ Leased property under finance leases ​ 2,701 ​ 2,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property, plant and equipment ​ 56,693 ​ 53,368 ​ Accumulated depreciation and amortization ​ (31,463) ​ (28,642) ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ $ 25,230 ​ $ 24,726 ​ ​ Accumulated depreciation and amortization for leased property under finance leases was $730 at February 3, 2024 and $562 at January 28, 2023. 68 68 68

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## No Match in Current: INTEGRATION OF NEW BUSINESS AND STRATEGIC ALLIANCES

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

​ In addition to the above, we enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies, procurement savings, innovation and sharing of best practices, that may allow for future growth. Achieving the anticipated or desired benefits may be subject to a number of significant challenges and uncertainties, including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and effective manner, the coordination of geographically separate organizations, the possibility of imprecise assumptions underlying expectations regarding potential synergies, capital requirements, and the integration process, unforeseen expenses and delays, and competitive factors in the marketplace. We could also encounter unforeseen transaction and integration-related costs or other circumstances such as unforeseen liabilities or other issues. Many of these potential circumstances are outside of our control and any of them could result in increased costs, decreased revenue, decreased synergies and the diversion of management time and attention. If we are unable to achieve our objectives within the anticipated time frame, or at all, the expected benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on our business, financial condition, results of operations or cash flows. ​

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## No Match in Current: LEGAL AND GOVERNMENT REGULATION

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

​ We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for the Company, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows. ​ In addition, increasing governmental and societal attention to environmental, social, and governance (ESG) matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect the Company's reputation. ​ Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows. ​

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## No Match in Current: 2022 EXECUTIVE SUMMARY

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

​ We achieved exceptional results in 2022 as we executed on our Leading with Fresh and Accelerating with Digital strategy, building on record years in 2020 and 2021. These results were driven by positive identical sales without fuel of 5.6%, disciplined margin management and strong fuel profitability. Our proven go-to-market strategy enables us to successfully navigate many operating environments, which has allowed us to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets. ​ Our value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted Our Brands products and our fuel rewards program, is resonating with shoppers and driving total household growth and enhanced customer loyalty. During the year, we continued to invest in wages and the associate experience and in creating zero hunger, zero waste communities, as we believe these components of our strategy are critical to achieving long term sustainable growth. In 2022, our average hourly rates increased by more than 6% and we have now invested an incremental $1.9 billion in associate wages since 2018. Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included. ​ In 2023, we expect to build on this momentum and deliver revenue and adjusted net earnings per diluted share growth on top of the record results achieved over the past three years. We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience. Building on our significant investments over the past four years, we will also continue to increase associate wages. We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses. Looking forward, we believe we are well positioned to successfully operate in an evolving economic environment and continue to deliver attractive and sustainable total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons. ​ The following table provides highlights of our financial performance: ​

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## No Match in Current: (in millions)

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

First four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 6, 2022 to December 3, 2022 26,566 ​ $ 47.90 26,566 ​ $ 1,000 ​ Second four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 4, 2022 to December 31, 2022 87,928 ​ $ 45.83 66,804 ​ $ 1,000 ​ Third four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2023 to January 28, 2023 83,500 ​ $ 45.15 83,500 ​ $ 1,000 ​ Total 197,994 ​ $ 45.82 176,870 ​ $ 1,000 ​ ​ ​ ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 22 22 22 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​23 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

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## No Match in Current: PROPERTY, PLANT AND EQUIPMENT, NET

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

​ Property, plant and equipment, net consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Land ​ $ 3,442 ​ $ 3,395 ​ Buildings and land improvements ​ 14,539 ​ 13,996 ​ Equipment ​ 17,328 ​ 15,951 ​ Leasehold improvements ​ 11,435 ​ 10,775 ​ Construction-in-progress ​ 4,044 ​ 3,831 ​ Leased property under finance leases ​ 2,580 ​ 1,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property, plant and equipment ​ 53,368 ​ 49,887 ​ Accumulated depreciation and amortization ​ (28,642) ​ (26,098) ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ $ 24,726 ​ $ 23,789 ​ ​ Accumulated depreciation and amortization for leased property under finance leases was $562 at January 28, 2023 and $414 at January 29, 2022. 65 65 65 ​Approximately $124 and $136, net book value, of property, plant and equipment collateralized certain mortgages at January 28, 2023 and January 29, 2022, respectively.​Capitalized implementation costs associated with cloud computing arrangements of $193, net of accumulated amortization of $36, and $151, net of accumulated amortization of $15, are included in "Other assets" in the Company's Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022, respectively. The corresponding cash flows related to these arrangements are included in "Net cash provided by operating activities" in the Company's Consolidated Statements of Cash Flows.​4.TAXES BASED ON INCOME​The provision for taxes based on income consists of:​​​​​​​​​​​​​ 2022 2021 2020 Federal​​​​​​​​​​Current​$ 401​$ 349​$ 577​Deferred​ 162​ (46)​ 75​​​​​​​​​​​​Subtotal federal ​ 563​ 303​ 652​​​​​​​​​​​​State and local​​​​​​​​​​Current​ 91​ 67​ 133​Deferred​ (1)​ 15​ (3)​​​​​​​​​​​​Subtotal state and local​ 90​ 82​ 130​​​​​​​​​​​​Total​$ 653​$ 385​$ 782​​A reconciliation of the statutory federal rate and the effective rate follows:​​​​​​​​​​ 2022 2021 2020 Statutory rate 21.0% 21.0% 21.0% State income taxes, net of federal tax benefit 2.5​ 3.2​ 3.0​Credits (0.8)​ (1.3)​ (0.7)​Resolution of tax audit examinations (0.2)​ (3.1)​  - ​Excess tax benefits from share-based payments​ (1.9)​ (1.3)​ (0.8)​Impairment of goodwill related to Vitacost.com​ 1.2​  - ​  - ​Non-deductible executive compensation​ 0.5​ 0.6​ 0.3​Other changes, net 0.2​ (0.3)​ 0.4​​​​​​​​​​ 22.5% 18.8% 23.2%​The Company's effective income tax rates were 22.5% in 2022, 18.8% in 2021, and 23.2% in 2020. ​The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits.​The 2021 tax rate differed from the federal statutory rate primarily due to a discrete benefit of $47 which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.​The 2020 tax rate differed from the federal statutory rate primarily due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions.​66 ​ ​ Approximately $124 and $136, net book value, of property, plant and equipment collateralized certain mortgages at January 28, 2023 and January 29, 2022, respectively.​Capitalized implementation costs associated with cloud computing arrangements of $193, net of accumulated amortization of $36, and $151, net of accumulated amortization of $15, are included in "Other assets" in the Company's Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022, respectively. The corresponding cash flows related to these arrangements are included in "Net cash provided by operating activities" in the Company's Consolidated Statements of Cash Flows.​4.TAXES BASED ON INCOME​The provision for taxes based on income consists of:​​​​​​​​​​​​​ 2022 2021 2020 Federal​​​​​​​​​​Current​$ 401​$ 349​$ 577​Deferred​ 162​ (46)​ 75​​​​​​​​​​​​Subtotal federal ​ 563​ 303​ 652​​​​​​​​​​​​State and local​​​​​​​​​​Current​ 91​ 67​ 133​Deferred​ (1)​ 15​ (3)​​​​​​​​​​​​Subtotal state and local​ 90​ 82​ 130​​​​​​​​​​​​Total​$ 653​$ 385​$ 782​​A reconciliation of the statutory federal rate and the effective rate follows:​​​​​​​​​​ 2022 2021 2020 Statutory rate 21.0% 21.0% 21.0% State income taxes, net of federal tax benefit 2.5​ 3.2​ 3.0​Credits (0.8)​ (1.3)​ (0.7)​Resolution of tax audit examinations (0.2)​ (3.1)​  - ​Excess tax benefits from share-based payments​ (1.9)​ (1.3)​ (0.8)​Impairment of goodwill related to Vitacost.com​ 1.2​  - ​  - ​Non-deductible executive compensation​ 0.5​ 0.6​ 0.3​Other changes, net 0.2​ (0.3)​ 0.4​​​​​​​​​​ 22.5% 18.8% 23.2%​The Company's effective income tax rates were 22.5% in 2022, 18.8% in 2021, and 23.2% in 2020. ​The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits.​The 2021 tax rate differed from the federal statutory rate primarily due to a discrete benefit of $47 which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.​The 2020 tax rate differed from the federal statutory rate primarily due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions.​ Approximately $124 and $136, net book value, of property, plant and equipment collateralized certain mortgages at January 28, 2023 and January 29, 2022, respectively. ​ Capitalized implementation costs associated with cloud computing arrangements of $193, net of accumulated amortization of $36, and $151, net of accumulated amortization of $15, are included in "Other assets" in the Company's Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022, respectively. The corresponding cash flows related to these arrangements are included in "Net cash provided by operating activities" in the Company's Consolidated Statements of Cash Flows. ​ 4.

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## No Match in Current: TAXES BASED ON INCOME

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

​ The provision for taxes based on income consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Federal ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ $ 401 ​ $ 349 ​ $ 577 ​ Deferred ​ 162 ​ (46) ​ 75 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subtotal federal ​ 563 ​ 303 ​ 652 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State and local ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ 91 ​ 67 ​ 133 ​ Deferred ​ (1) ​ 15 ​ (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subtotal state and local ​ 90 ​ 82 ​ 130 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 653 ​ $ 385 ​ $ 782 ​ ​ A reconciliation of the statutory federal rate and the effective rate follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.5 ​ 3.2 ​ 3.0 ​ Credits (0.8) ​ (1.3) ​ (0.7) ​ Resolution of tax audit examinations (0.2) ​ (3.1) ​  -  ​ Excess tax benefits from share-based payments ​ (1.9) ​ (1.3) ​ (0.8) ​ Impairment of goodwill related to Vitacost.com ​ 1.2 ​  -  ​  -  ​ Non-deductible executive compensation ​ 0.5 ​ 0.6 ​ 0.3 ​ Other changes, net 0.2 ​ (0.3) ​ 0.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22.5 % 18.8 % 23.2 % ​ The Company's effective income tax rates were 22.5% in 2022, 18.8% in 2021, and 23.2% in 2020. ​ The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits. ​ The 2021 tax rate differed from the federal statutory rate primarily due to a discrete benefit of $47 which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes. ​ The 2020 tax rate differed from the federal statutory rate primarily due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions. ​ 66 66 66

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## Modified: USE OF NON-GAAP FINANCIAL MEASURES

**Key changes:**

- Reworded sentence: "​ The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles ("GAAP")."
- Reworded sentence: "FIFO gross margin is an important measure used by management, and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy."
- Reworded sentence: "FIFO operating profit is an important measure used by management, and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model."
- Reworded sentence: "Net earnings for 2023 include $179 million, $144 million net of tax, due to the Extra Week."
- Reworded sentence: "per diluted common share excluding the 2023, 2022 and 2021 Adjusted Items:​Net Earnings per Diluted Share excluding the Adjusted Items($ in millions, except per share amounts)​​​​​​​​​​​​​ 2023 2022 2021 Net earnings attributable to The Kroger Co.​$ 2,164​$ 2,244​$ 1,655​​​​​​​​​​​​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(1)(2)​  - ​ 19​ 344​Adjustment for company-sponsored pension plan settlement charges(1)(3)​​  - ​​  - ​​ 68​Adjustment for (gain) loss on investments(1)(4)​​ (116)​​ 561​​ 628​Adjustment for Home Chef contingent consideration(1)(5)​​  - ​​ 15​​ 50​Adjustment for transformation costs(1)(6)​​  - ​​  - ​​ 104​Adjustment for merger related costs(1)(7)​​ 268​​ 34​​  - ​Adjustment for opioid settlement charges(1)(8)​​ 1,163​​ 67​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9)​​  - ​​ 164​​  - ​Adjustment for income tax audit examinations(1)​​  - ​​  - ​​ (47)​Total Adjusted Items​​ 1,315​​ 860​​ 1,147​​​​​​​​​​​​Net earnings attributable to The Kroger Co."

**Prior (2023):**

The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles ("GAAP"). We provide non-GAAP measures, including First-In, First-Out ("FIFO") gross margin, FIFO operating profit, adjusted FIFO operating profit, adjusted net earnings and adjusted net earnings per diluted share because management believes these metrics are useful to investors and analysts. These non- GAAP financial measures should not be considered as an alternative to gross margin, operating profit, net earnings and net earnings per diluted share or any other GAAP measure of performance. These measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ​ We calculate FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing, and transportation expenses, but excluding the Last-In, First-Out ("LIFO") charge. Merchandise costs exclude depreciation and rent expenses. FIFO gross margin is an important measure used by management and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy. ​ We calculate FIFO operating profit as operating profit excluding the LIFO charge. FIFO operating profit is an important measure used by management and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model. ​ 27 27 27 The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:"​●Charges to operating, general and administrative expenses ("OG&A") of $25 million, $19 million net of tax, for obligations related to withdrawal liabilities for certain multi-employer pension funds, $20 million, $15 million net of tax, for the revaluation of Home Chef contingent consideration, $44 million, $34 million net of tax, for merger related costs, $85 million, $67 million net of tax, for legal settlement costs and $164 million for goodwill and fixed asset impairment charges related to Vitacost.com (the "2022 OG&A Adjusted Items").​●Losses in other income (expense) of $728 million, $561 million net of tax, for the unrealized loss on investments (the "2022 Other Income (Expense) Adjusted Items").​Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:"​●Charges to OG&A of $449 million, $344 million net of tax, for obligations related to withdrawal liabilities for a certain multi-employer pension fund, $66 million, $50 million net of tax, for the revaluation of Home Chef contingent consideration and $136 million, $104 million net of tax, for transformation costs (the "2021 OG&A Adjusted Items").​●Losses in other income (expense) of $87 million, $68 million net of tax, related to company-sponsored pension plan settlements and $821 million, $628 million net of tax, for the unrealized loss on investments (the "2021 Other Income (Expense) Adjusted Items").​●A reduction to income tax expense of $47 million primarily due to the completion of income tax audit examinations covering multiple years.​Net earnings for 2020 include the following, which we define as the "2020 Adjusted Items:"​●Charges to OG&A of $989 million, $754 million net of tax, for commitments to certain multi-employer pension funds, $189 million, $141 million net of tax, for the revaluation of Home Chef contingent consideration and $111 million, $81 million net of tax, for transformation costs (the "2020 OG&A Adjusted Items").​●Gains in other income (expense) of $1.1 billion, $821 million net of tax, for the unrealized gain on investments (the "2020 Other Income (Expense) Adjusted Item").​The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2022, 2021 and 2020 Adjusted Items:​28 The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:"​●Charges to operating, general and administrative expenses ("OG&A") of $25 million, $19 million net of tax, for obligations related to withdrawal liabilities for certain multi-employer pension funds, $20 million, $15 million net of tax, for the revaluation of Home Chef contingent consideration, $44 million, $34 million net of tax, for merger related costs, $85 million, $67 million net of tax, for legal settlement costs and $164 million for goodwill and fixed asset impairment charges related to Vitacost.com (the "2022 OG&A Adjusted Items").​●Losses in other income (expense) of $728 million, $561 million net of tax, for the unrealized loss on investments (the "2022 Other Income (Expense) Adjusted Items").​Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:"​●Charges to OG&A of $449 million, $344 million net of tax, for obligations related to withdrawal liabilities for a certain multi-employer pension fund, $66 million, $50 million net of tax, for the revaluation of Home Chef contingent consideration and $136 million, $104 million net of tax, for transformation costs (the "2021 OG&A Adjusted Items").​●Losses in other income (expense) of $87 million, $68 million net of tax, related to company-sponsored pension plan settlements and $821 million, $628 million net of tax, for the unrealized loss on investments (the "2021 Other Income (Expense) Adjusted Items").​●A reduction to income tax expense of $47 million primarily due to the completion of income tax audit examinations covering multiple years.​Net earnings for 2020 include the following, which we define as the "2020 Adjusted Items:"​●Charges to OG&A of $989 million, $754 million net of tax, for commitments to certain multi-employer pension funds, $189 million, $141 million net of tax, for the revaluation of Home Chef contingent consideration and $111 million, $81 million net of tax, for transformation costs (the "2020 OG&A Adjusted Items").​●Gains in other income (expense) of $1.1 billion, $821 million net of tax, for the unrealized gain on investments (the "2020 Other Income (Expense) Adjusted Item").​The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2022, 2021 and 2020 Adjusted Items:​ The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:" ​ ​ ​ Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:" ​ ​ ​ ​ Net earnings for 2020 include the following, which we define as the "2020 Adjusted Items:" ​ ​ ​ The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2022, 2021 and 2020 Adjusted Items: ​ 28 28 28 Net Earnings per Diluted Share excluding the Adjusted Items($ in millions, except per share amounts)​​​​​​​​​​​​​ 2022 2021 2020 Net earnings attributable to The Kroger Co.​$ 2,244​$ 1,655​$ 2,585​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(1)(2)​ 19​ 344​ 754​Adjustment for company-sponsored pension plan settlement charges(1)(3)​​  - ​​ 68​​  - ​Adjustment for loss (gain) on investments(1)(4)​​ 561​​ 628​​ (821)​Adjustment for Home Chef contingent consideration(1)(5)​​ 15​​ 50​​ 141​Adjustment for transformation costs(1)(6)​​  - ​​ 104​​ 81​Adjustment for merger related costs(1)(7)​​ 34​​  - ​​  - ​Adjustment for legal settlement costs(1)(8)​​ 67​​  - ​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9)​​ 164​​  - ​​  - ​Adjustment for income tax audit examinations(1)​​  - ​​ (47)​​  - ​Total Adjusted Items​​ 860​​ 1,147​​ 155​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items​$ 3,104​$ 2,802​$ 2,740​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​$ 3.06​$ 2.17​$ 3.27​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(10)​ 0.03​ 0.45​ 0.95​Adjustment for company-sponsored pension plan settlement charges(10)​​  - ​​ 0.09​​  - ​Adjustment for loss (gain) on investments(10)​​ 0.76​​ 0.83​​ (1.05)​Adjustment for Home Chef contingent consideration(10)​​ 0.02​​ 0.07​​ 0.18​Adjustment for transformation costs(10)​​  - ​​ 0.14​​ 0.12​Adjustment for merger related costs(10)​​ 0.05​​  - ​​  - ​Adjustment for legal settlement costs(10)​​ 0.09​​  - ​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(10)​​ 0.22​​  - ​​  - ​Adjustment for income tax audit examinations(10)​​  - ​​ (0.07)​​  - ​Total Adjusted Items​​ 1.17​​ 1.51​​ 0.20​​​ ​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items​$ 4.23​$ 3.68​$ 3.47​​​​​​​​​​​​Average numbers of common shares used in diluted calculation​ 727​ 754​ 781​(1)The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates. (2)The pre-tax adjustment for pension plan withdrawal liabilities was $25 in 2022, $449 in 2021 and $989 in 2020. (3)The pre-tax adjustment for company-sponsored pension plan settlement charges was $87.(4)The pre-tax adjustment for loss (gain) on investments was $728 in 2022, $821 in 2021 and ($1,105) in 2020.(5)The pre-tax adjustment for Home Chef contingent consideration was $20 in 2022, $66 in 2021 and $189 in 2020.(6)The pre-tax adjustment for transformation costs was $136 in 2021 and $111 in 2020. Transformation costs primarily include costs related to store and business closure costs and third party professional consulting fees associated with business transformation and cost saving initiatives.(7)The pre-tax adjustment for merger related costs was $44. Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(8)The pre-tax adjustment for legal settlement costs was $85.(9)The pre-tax and after-tax adjustments for goodwill and fixed asset impairment charges related to Vitacost.com was $164.(10)The amount presented represents the net earnings per diluted common share effect of each adjustment.​29 Net Earnings per Diluted Share excluding the Adjusted Items($ in millions, except per share amounts)​​​​​​​​​​​​​ 2022 2021 2020 Net earnings attributable to The Kroger Co.​$ 2,244​$ 1,655​$ 2,585​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(1)(2)​ 19​ 344​ 754​Adjustment for company-sponsored pension plan settlement charges(1)(3)​​  - ​​ 68​​  - ​Adjustment for loss (gain) on investments(1)(4)​​ 561​​ 628​​ (821)​Adjustment for Home Chef contingent consideration(1)(5)​​ 15​​ 50​​ 141​Adjustment for transformation costs(1)(6)​​  - ​​ 104​​ 81​Adjustment for merger related costs(1)(7)​​ 34​​  - ​​  - ​Adjustment for legal settlement costs(1)(8)​​ 67​​  - ​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9)​​ 164​​  - ​​  - ​Adjustment for income tax audit examinations(1)​​  - ​​ (47)​​  - ​Total Adjusted Items​​ 860​​ 1,147​​ 155​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items​$ 3,104​$ 2,802​$ 2,740​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​$ 3.06​$ 2.17​$ 3.27​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(10)​ 0.03​ 0.45​ 0.95​Adjustment for company-sponsored pension plan settlement charges(10)​​  - ​​ 0.09​​  - ​Adjustment for loss (gain) on investments(10)​​ 0.76​​ 0.83​​ (1.05)​Adjustment for Home Chef contingent consideration(10)​​ 0.02​​ 0.07​​ 0.18​Adjustment for transformation costs(10)​​  - ​​ 0.14​​ 0.12​Adjustment for merger related costs(10)​​ 0.05​​  - ​​  - ​Adjustment for legal settlement costs(10)​​ 0.09​​  - ​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(10)​​ 0.22​​  - ​​  - ​Adjustment for income tax audit examinations(10)​​  - ​​ (0.07)​​  - ​Total Adjusted Items​​ 1.17​​ 1.51​​ 0.20​​​ ​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items​$ 4.23​$ 3.68​$ 3.47​​​​​​​​​​​​Average numbers of common shares used in diluted calculation​ 727​ 754​ 781​(1)The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates. (2)The pre-tax adjustment for pension plan withdrawal liabilities was $25 in 2022, $449 in 2021 and $989 in 2020. (3)The pre-tax adjustment for company-sponsored pension plan settlement charges was $87.(4)The pre-tax adjustment for loss (gain) on investments was $728 in 2022, $821 in 2021 and ($1,105) in 2020.(5)The pre-tax adjustment for Home Chef contingent consideration was $20 in 2022, $66 in 2021 and $189 in 2020.(6)The pre-tax adjustment for transformation costs was $136 in 2021 and $111 in 2020. Transformation costs primarily include costs related to store and business closure costs and third party professional consulting fees associated with business transformation and cost saving initiatives.(7)The pre-tax adjustment for merger related costs was $44. Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(8)The pre-tax adjustment for legal settlement costs was $85.(9)The pre-tax and after-tax adjustments for goodwill and fixed asset impairment charges related to Vitacost.com was $164.(10)The amount presented represents the net earnings per diluted common share effect of each adjustment.​

**Current (2024):**

​ The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles ("GAAP"). We provide non-GAAP measures, including First-In, First-Out ("FIFO") gross margin, FIFO operating profit, adjusted FIFO operating profit, adjusted net earnings and adjusted net earnings per diluted share because management believes these metrics are useful to investors and analysts. These non- GAAP financial measures should not be considered as an alternative to gross margin, operating profit, net earnings and net earnings per diluted share or any other GAAP measure of performance. These measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ​ We calculate FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing, and transportation expenses, but excluding the Last-In, First-Out ("LIFO") charge. Merchandise costs exclude depreciation and rent expenses. FIFO gross margin is an important measure used by management, and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy. ​ We calculate FIFO operating profit as operating profit excluding the LIFO charge. FIFO operating profit is an important measure used by management, and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model. ​ 29 29 29 ​The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2023 include $179 million, $144 million net of tax, due to the Extra Week. In addition, net earnings for 2023 include the following, which we define as the "2023 Adjusted Items:" ​●Charges to operating, general and administrative expenses ("OG&A") of $316 million, $268 million net of tax, for merger related costs and $1.5 billion, $1.2 billion net of tax, for opioid settlement charges (the "2023 OG&A Adjusted Items").​●A gain in other income (expense) of $151 million, $116 million net of tax, for the unrealized gain on investments (the "2023 Other Income (Expense) Adjusted Items").​Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:"​●Charges to operating, general and administrative expenses ("OG&A") of $25 million, $19 million net of tax, for obligations related to withdrawal liabilities for certain multi-employer pension funds, $20 million, $15 million net of tax, for the revaluation of Home Chef contingent consideration, $44 million, $34 million net of tax, for merger related costs, $85 million, $67 million net of tax, for opioid settlement charges and $164 million for goodwill and fixed asset impairment charges related to Vitacost.com (the "2022 OG&A Adjusted Items").​●Losses in other income (expense) of $728 million, $561 million net of tax, for the unrealized loss on investments (the "2022 Other Income (Expense) Adjusted Items").​Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:"​●Charges to OG&A of $449 million, $344 million net of tax, for obligations related to withdrawal liabilities for a certain multi-employer pension fund, $66 million, $50 million net of tax, for the revaluation of Home Chef contingent consideration and $136 million, $104 million net of tax, for transformation costs (the "2021 OG&A Adjusted Items").​●Losses in other income (expense) of $87 million, $68 million net of tax, related to company-sponsored pension plan settlements and $821 million, $628 million net of tax, for the unrealized loss on investments (the "2021 Other Income (Expense) Adjusted Items").​●A reduction to income tax expense of $47 million primarily due to the completion of income tax audit examinations covering multiple years.​30 ​ ​ The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2023 include $179 million, $144 million net of tax, due to the Extra Week. In addition, net earnings for 2023 include the following, which we define as the "2023 Adjusted Items:" ​●Charges to operating, general and administrative expenses ("OG&A") of $316 million, $268 million net of tax, for merger related costs and $1.5 billion, $1.2 billion net of tax, for opioid settlement charges (the "2023 OG&A Adjusted Items").​●A gain in other income (expense) of $151 million, $116 million net of tax, for the unrealized gain on investments (the "2023 Other Income (Expense) Adjusted Items").​Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:"​●Charges to operating, general and administrative expenses ("OG&A") of $25 million, $19 million net of tax, for obligations related to withdrawal liabilities for certain multi-employer pension funds, $20 million, $15 million net of tax, for the revaluation of Home Chef contingent consideration, $44 million, $34 million net of tax, for merger related costs, $85 million, $67 million net of tax, for opioid settlement charges and $164 million for goodwill and fixed asset impairment charges related to Vitacost.com (the "2022 OG&A Adjusted Items").​●Losses in other income (expense) of $728 million, $561 million net of tax, for the unrealized loss on investments (the "2022 Other Income (Expense) Adjusted Items").​Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:"​●Charges to OG&A of $449 million, $344 million net of tax, for obligations related to withdrawal liabilities for a certain multi-employer pension fund, $66 million, $50 million net of tax, for the revaluation of Home Chef contingent consideration and $136 million, $104 million net of tax, for transformation costs (the "2021 OG&A Adjusted Items").​●Losses in other income (expense) of $87 million, $68 million net of tax, related to company-sponsored pension plan settlements and $821 million, $628 million net of tax, for the unrealized loss on investments (the "2021 Other Income (Expense) Adjusted Items").​●A reduction to income tax expense of $47 million primarily due to the completion of income tax audit examinations covering multiple years.​ The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2023 include $179 million, $144 million net of tax, due to the Extra Week. In addition, net earnings for 2023 include the following, which we define as the "2023 Adjusted Items:" ​ ​ ​ Net earnings for 2022 include the following, which we define as the "2022 Adjusted Items:" ​ ​ ​ Net earnings for 2021 include the following, which we define as the "2021 Adjusted Items:" ​ ​ ​ ​ 30 30 30 ​The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2023, 2022 and 2021 Adjusted Items:​Net Earnings per Diluted Share excluding the Adjusted Items($ in millions, except per share amounts)​​​​​​​​​​​​​ 2023 2022 2021 Net earnings attributable to The Kroger Co.​$ 2,164​$ 2,244​$ 1,655​​​​​​​​​​​​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(1)(2)​  - ​ 19​ 344​Adjustment for company-sponsored pension plan settlement charges(1)(3)​​  - ​​  - ​​ 68​Adjustment for (gain) loss on investments(1)(4)​​ (116)​​ 561​​ 628​Adjustment for Home Chef contingent consideration(1)(5)​​  - ​​ 15​​ 50​Adjustment for transformation costs(1)(6)​​  - ​​  - ​​ 104​Adjustment for merger related costs(1)(7)​​ 268​​ 34​​  - ​Adjustment for opioid settlement charges(1)(8)​​ 1,163​​ 67​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9)​​  - ​​ 164​​  - ​Adjustment for income tax audit examinations(1)​​  - ​​  - ​​ (47)​Total Adjusted Items​​ 1,315​​ 860​​ 1,147​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items​$ 3,479​$ 3,104​$ 2,802​​​​​​​​​​​​Extra Week adjustment(1)(10)​​ (144)​​  - ​​  - ​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items and the Extra Week adjustment​$ 3,335​$ 3,104​$ 2,802​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​$ 2.96​$ 3.06​$ 2.17​​​​​​​​​​​​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(11)​  - ​ 0.03​ 0.45​Adjustment for company-sponsored pension plan settlement charges(11)​​  - ​​  - ​​ 0.09​Adjustment for (gain) loss on investments(11)​​ (0.17)​​ 0.76​​ 0.83​Adjustment for Home Chef contingent consideration(11)​​  - ​​ 0.02​​ 0.07​Adjustment for transformation costs(11)​​  - ​​  - ​​ 0.14​Adjustment for merger related costs(11)​​ 0.37​​ 0.05​​  - ​Adjustment for opioid settlement charges(11)​​ 1.60​​ 0.09​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(11)​​  - ​​ 0.22​​  - ​Adjustment for income tax audit examinations(11)​​  - ​​  - ​​ (0.07)​Total Adjusted Items​​ 1.80​​ 1.17​​ 1.51​​​ ​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items​$ 4.76​$ 4.23​$ 3.68​​​​​​​​​​​​Extra Week adjustment(11)​​ (0.20)​​  - ​​  - ​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items and the Extra Week adjustment​$ 4.56​$ 4.23​$ 3.68​​​​​​​​​​​​Average numbers of common shares used in diluted calculation​ 725​ 727​ 754​​31 ​ ​ The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2023, 2022 and 2021 Adjusted Items:​Net Earnings per Diluted Share excluding the Adjusted Items($ in millions, except per share amounts)​​​​​​​​​​​​​ 2023 2022 2021 Net earnings attributable to The Kroger Co.​$ 2,164​$ 2,244​$ 1,655​​​​​​​​​​​​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(1)(2)​  - ​ 19​ 344​Adjustment for company-sponsored pension plan settlement charges(1)(3)​​  - ​​  - ​​ 68​Adjustment for (gain) loss on investments(1)(4)​​ (116)​​ 561​​ 628​Adjustment for Home Chef contingent consideration(1)(5)​​  - ​​ 15​​ 50​Adjustment for transformation costs(1)(6)​​  - ​​  - ​​ 104​Adjustment for merger related costs(1)(7)​​ 268​​ 34​​  - ​Adjustment for opioid settlement charges(1)(8)​​ 1,163​​ 67​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9)​​  - ​​ 164​​  - ​Adjustment for income tax audit examinations(1)​​  - ​​  - ​​ (47)​Total Adjusted Items​​ 1,315​​ 860​​ 1,147​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items​$ 3,479​$ 3,104​$ 2,802​​​​​​​​​​​​Extra Week adjustment(1)(10)​​ (144)​​  - ​​  - ​​​​​​​​​​​​Net earnings attributable to The Kroger Co. excluding the Adjusted Items and the Extra Week adjustment​$ 3,335​$ 3,104​$ 2,802​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​$ 2.96​$ 3.06​$ 2.17​​​​​​​​​​​​(Income) expense adjustments​​​​​​​​​​Adjustment for pension plan withdrawal liabilities(11)​  - ​ 0.03​ 0.45​Adjustment for company-sponsored pension plan settlement charges(11)​​  - ​​  - ​​ 0.09​Adjustment for (gain) loss on investments(11)​​ (0.17)​​ 0.76​​ 0.83​Adjustment for Home Chef contingent consideration(11)​​  - ​​ 0.02​​ 0.07​Adjustment for transformation costs(11)​​  - ​​  - ​​ 0.14​Adjustment for merger related costs(11)​​ 0.37​​ 0.05​​  - ​Adjustment for opioid settlement charges(11)​​ 1.60​​ 0.09​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(11)​​  - ​​ 0.22​​  - ​Adjustment for income tax audit examinations(11)​​  - ​​  - ​​ (0.07)​Total Adjusted Items​​ 1.80​​ 1.17​​ 1.51​​​ ​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items​$ 4.76​$ 4.23​$ 3.68​​​​​​​​​​​​Extra Week adjustment(11)​​ (0.20)​​  - ​​  - ​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items and the Extra Week adjustment​$ 4.56​$ 4.23​$ 3.68​​​​​​​​​​​​Average numbers of common shares used in diluted calculation​ 725​ 727​ 754​​ The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2023, 2022 and 2021 Adjusted Items: ​

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## Modified: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

**Key changes:**

- Reworded sentence: "​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021"

**Prior (2023):**

​ Years Ended January 28, 2023, January 29, 2022 and January 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 2020

**Current (2024):**

​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021

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## Modified: Expected Year of Maturity

**Key changes:**

- Reworded sentence: "​ 2024 2025 2026 2027 2028 Thereafter Total Fair Value ​ ​"

**Prior (2023):**

​ 2023 2024 2025 2026 2027 Thereafter Total Fair Value ​ ​

**Current (2024):**

​ 2024 2025 2026 2027 2028 Thereafter Total Fair Value ​ ​

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## Modified: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

**Key changes:**

- Reworded sentence: "MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021."

**Prior (2023):**

​ The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results. ​

**Current (2024):**

​ The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021. ​

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## Modified: Total Sales

**Key changes:**

- Reworded sentence: "($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ Percentage ​ Percentage ​ ​ ​ ​ 2023 ​ Adjusted(1) ​ Change(2) ​ 2022 ​ Change(3) ​ 2021 ​ Total sales to retail customers without fuel(4) ​ $ 132,284 ​ $ 129,868 ​ 0.9 % $ 128,664 ​ 5.2 % $ 122,293 ​ Supermarket fuel sales ​ ​ 16,621 ​ ​ 16,340 ​ (12.3) % 18,632 ​ 26.9 % 14,678 ​ Other sales(5) ​ 1,134 ​ 1,120 ​ 16.4 % 962 ​ 4.9 % 917 ​ Total sales ​ $ 150,039 ​ $ 147,328 ​ (0.6) % $ 148,258 ​ 7.5 % $ 137,888 ​ ​ Total 2023 adjusted sales represent total sales for 2023 excluding the Extra Week."
- Reworded sentence: "​ 33 33 33 ​We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions."
- Reworded sentence: "We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2023 and 2022.​Identical Sales($ in millions)​​​​​​​​​​ 2023 2022(1) Excluding fuel​$ 131,748​$ 130,562​Excluding fuel​ 0.9% 5.6%(1)Identical sales, excluding fuel, for 2022 were adjusted to a comparable 53 week basis by including week 1 of fiscal 2023 in our 2022 identical sales, excluding fuel, base."
- Reworded sentence: "Excluding the effect of fuel and the Extra Week, our FIFO gross margin rate increased 18 basis points in 2023, compared to 2022."
- Reworded sentence: "We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2023 and 2022.​Identical Sales($ in millions)​​​​​​​​​​ 2023 2022(1) Excluding fuel​$ 131,748​$ 130,562​Excluding fuel​ 0.9% 5.6%(1)Identical sales, excluding fuel, for 2022 were adjusted to a comparable 53 week basis by including week 1 of fiscal 2023 in our 2022 identical sales, excluding fuel, base."

**Prior (2023):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ Percentage ​ ​ ​ ​ 2022 ​ Change(1) ​ 2021 ​ Change(2) ​ 2020 ​ Total sales to retail customers without fuel(3) ​ $ 128,664 ​ 5.2 % $ 122,293 ​ 0.1 % $ 122,134 ​ Supermarket fuel sales ​ ​ 18,632 ​ 26.9 % 14,678 ​ 54.7 % 9,486 ​ Other sales(4) ​ 962 ​ 4.9 % 917 ​ 4.4 % 878 ​ Total sales ​ $ 148,258 ​ 7.5 % $ 137,888 ​ 4.1 % $ 132,498 ​ ​ Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel. ​ 30 30 30 Total sales increased in 2021, compared to 2020, by 4.1%. The increase was primarily due to an increase in supermarket fuel sales. Total sales, excluding fuel, increased 0.2% in 2021, compared to 2020, which was primarily due to our identical sales increase, excluding fuel, of 0.2%. Identical sales, excluding fuel, increased in 2021 on top of record sales results in 2020, which was primarily caused by unprecedented demand due to the COVID-19 pandemic during 2020. Total supermarket fuel sales increased 54.7% in 2021, compared to 2020, primarily due to an increase in fuel gallons sold of 7.9% and an increase in the average retail fuel price of 43.6%. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​ We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2022 and 2021.​Identical Sales($ in millions)​​​​​​​​​​ 2022 2021 Excluding fuel​$ 127,635​$ 120,846​Excluding fuel​ 5.6% 0.2%​Gross Margin, LIFO and FIFO Gross Margin​We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin.​Our gross margin rates, as a percentage of sales, were 21.43% in 2022 and 22.01% in 2021. The decrease in rate in 2022, compared to 2021, resulted primarily from increased fuel sales, which have a lower gross margin rate, a decrease in our fuel gross margin, increased shrink, as a percentage of sales, and a higher LIFO charge, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year.​Our LIFO charge was $626 million in 2022 and $197 million in 2021. The increase in our LIFO charge was attributable to higher product cost inflation primarily in grocery. ​Our FIFO gross margin rate, which excludes the LIFO charge, was 21.86% in 2022, compared to 22.15% in 2021. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, our FIFO gross margin rate decreased 9 basis points in 2022, compared to 2021. This decrease resulted primarily from increased shrink, as a percentage of sales, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year.​31 Total sales increased in 2021, compared to 2020, by 4.1%. The increase was primarily due to an increase in supermarket fuel sales. Total sales, excluding fuel, increased 0.2% in 2021, compared to 2020, which was primarily due to our identical sales increase, excluding fuel, of 0.2%. Identical sales, excluding fuel, increased in 2021 on top of record sales results in 2020, which was primarily caused by unprecedented demand due to the COVID-19 pandemic during 2020. Total supermarket fuel sales increased 54.7% in 2021, compared to 2020, primarily due to an increase in fuel gallons sold of 7.9% and an increase in the average retail fuel price of 43.6%. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​ We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2022 and 2021.​Identical Sales($ in millions)​​​​​​​​​​ 2022 2021 Excluding fuel​$ 127,635​$ 120,846​Excluding fuel​ 5.6% 0.2%​Gross Margin, LIFO and FIFO Gross Margin​We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin.​Our gross margin rates, as a percentage of sales, were 21.43% in 2022 and 22.01% in 2021. The decrease in rate in 2022, compared to 2021, resulted primarily from increased fuel sales, which have a lower gross margin rate, a decrease in our fuel gross margin, increased shrink, as a percentage of sales, and a higher LIFO charge, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year.​Our LIFO charge was $626 million in 2022 and $197 million in 2021. The increase in our LIFO charge was attributable to higher product cost inflation primarily in grocery. ​Our FIFO gross margin rate, which excludes the LIFO charge, was 21.86% in 2022, compared to 22.15% in 2021. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, our FIFO gross margin rate decreased 9 basis points in 2022, compared to 2021. This decrease resulted primarily from increased shrink, as a percentage of sales, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year.​ Total sales increased in 2021, compared to 2020, by 4.1%. The increase was primarily due to an increase in supermarket fuel sales. Total sales, excluding fuel, increased 0.2% in 2021, compared to 2020, which was primarily due to our identical sales increase, excluding fuel, of 0.2%. Identical sales, excluding fuel, increased in 2021 on top of record sales results in 2020, which was primarily caused by unprecedented demand due to the COVID-19 pandemic during 2020. Total supermarket fuel sales increased 54.7% in 2021, compared to 2020, primarily due to an increase in fuel gallons sold of 7.9% and an increase in the average retail fuel price of 43.6%. The increase in the average retail fuel price was caused by an increase in the product cost of fuel. ​ We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2022 and 2021. ​

**Current (2024):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ Percentage ​ Percentage ​ ​ ​ ​ 2023 ​ Adjusted(1) ​ Change(2) ​ 2022 ​ Change(3) ​ 2021 ​ Total sales to retail customers without fuel(4) ​ $ 132,284 ​ $ 129,868 ​ 0.9 % $ 128,664 ​ 5.2 % $ 122,293 ​ Supermarket fuel sales ​ ​ 16,621 ​ ​ 16,340 ​ (12.3) % 18,632 ​ 26.9 % 14,678 ​ Other sales(5) ​ 1,134 ​ 1,120 ​ 16.4 % 962 ​ 4.9 % 917 ​ Total sales ​ $ 150,039 ​ $ 147,328 ​ (0.6) % $ 148,258 ​ 7.5 % $ 137,888 ​ ​ Total 2023 adjusted sales represent total sales for 2023 excluding the Extra Week. Total 2023 adjusted sales decreased in 2023, compared to 2022, by 0.6%. The decrease was primarily due to the decrease in supermarket fuel sales, partially offset by the increase in total sales to retail customers without fuel. Total sales, excluding fuel, adjusted for the Extra Week, increased 1.1% in 2023, compared to 2022, which was primarily due to our identical sales increase, excluding fuel, of 0.9%. Identical sales, excluding fuel, in 2023, compared to 2022, increased primarily due to an increase in the number of loyal households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts effective December 31, 2022. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the approximately $1.8 billion reduction in pharmacy sales from the termination of our agreement with Express Scripts effective December 31, 2022. Total adjusted fuel sales decreased 12.3% in 2023, compared to 2022, primarily due to a decrease in the average retail fuel price of 11.1% and a decrease in fuel gallons sold of 1.5%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. ​ Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel. ​ 33 33 33 ​We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2023 and 2022.​Identical Sales($ in millions)​​​​​​​​​​ 2023 2022(1) Excluding fuel​$ 131,748​$ 130,562​Excluding fuel​ 0.9% 5.6%(1)Identical sales, excluding fuel, for 2022 were adjusted to a comparable 53 week basis by including week 1 of fiscal 2023 in our 2022 identical sales, excluding fuel, base. However, for the purpose of determining the percentage change in identical sales, excluding fuel, from 2021 to 2022, 2022 identical sales, excluding fuel, were not adjusted to include the sales from week 1 of 2023. ​Gross Margin, LIFO and FIFO Gross Margin​We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin.​Our gross margin rates, as a percentage of sales, were 22.24% in 2023 and 21.43% in 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. The increase in rate in 2023, compared to 2022, resulted primarily from a decreased LIFO charge, an increase in our fuel gross margin, strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by higher shrink, as a percentage of sales, and increased promotional price investment.​Our LIFO charge was $113 million in 2023 and $626 million in 2022. The decrease in our LIFO charge was attributable to lower product cost inflation for 2023 compared to 2022. ​Our FIFO gross margin rate, which excludes the LIFO charge, was 22.31% in 2023, compared to 21.86% in 2022. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel and the Extra Week, our FIFO gross margin rate increased 18 basis points in 2023, compared to 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. This increase resulted primarily from strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by increased promotional price investment and higher shrink, as a percentage of sales.​34 ​ ​ We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2023 and 2022.​Identical Sales($ in millions)​​​​​​​​​​ 2023 2022(1) Excluding fuel​$ 131,748​$ 130,562​Excluding fuel​ 0.9% 5.6%(1)Identical sales, excluding fuel, for 2022 were adjusted to a comparable 53 week basis by including week 1 of fiscal 2023 in our 2022 identical sales, excluding fuel, base. However, for the purpose of determining the percentage change in identical sales, excluding fuel, from 2021 to 2022, 2022 identical sales, excluding fuel, were not adjusted to include the sales from week 1 of 2023. ​Gross Margin, LIFO and FIFO Gross Margin​We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin.​Our gross margin rates, as a percentage of sales, were 22.24% in 2023 and 21.43% in 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. The increase in rate in 2023, compared to 2022, resulted primarily from a decreased LIFO charge, an increase in our fuel gross margin, strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by higher shrink, as a percentage of sales, and increased promotional price investment.​Our LIFO charge was $113 million in 2023 and $626 million in 2022. The decrease in our LIFO charge was attributable to lower product cost inflation for 2023 compared to 2022. ​Our FIFO gross margin rate, which excludes the LIFO charge, was 22.31% in 2023, compared to 21.86% in 2022. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel and the Extra Week, our FIFO gross margin rate increased 18 basis points in 2023, compared to 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. This increase resulted primarily from strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by increased promotional price investment and higher shrink, as a percentage of sales.​ We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy businesses and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy businesses as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. We define Kroger Delivery identical sales powered by Ocado based on geography. We include Kroger Delivery sales powered by Ocado as identical if the delivery occurs in an existing Kroger supermarket geography. If the Kroger Delivery sales powered by Ocado occur in a new geography, these sales are included as identical when deliveries have occurred to the new geography for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales, excluding fuel, results are summarized in the following table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2023 and 2022. ​

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## Modified: (In millions)

**Key changes:**

- Reworded sentence: "(53 weeks) ​ (52 weeks) ​ (52 weeks) Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings including noncontrolling interests ​ $ 2,169 ​ $ 2,249 ​ $ 1,666 ​ Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 3,125 ​ 2,965 ​ 2,824 ​ Asset impairment charges ​ ​ 69 ​ ​ 68 ​ ​ 64 ​ Goodwill and fixed asset impairment charges related to Vitacost.com ​ ​  -  ​ ​ 164 ​ ​  -  ​ Operating lease asset amortization ​ ​ 625 ​ ​ 614 ​ ​ 605 ​ LIFO charge ​ 113 ​ 626 ​ 197 ​ Share-based employee compensation ​ 172 ​ 190 ​ 203 ​ Company-sponsored pension plans (benefit) expense ​ (9) ​ (26) ​ 50 ​ Deferred income taxes ​ (155) ​ 161 ​ (31) ​ Gain on the sale of assets ​ ​ (56) ​ ​ (40) ​ ​ (44) ​ (Gain) loss on investments ​ ​ (151) ​ ​ 728 ​ ​ 821 ​ Other ​ 78 ​ (8) ​ 64 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Store deposits in-transit ​ (88) ​ (45) ​ 13 ​ Receivables ​ 14 ​ (222) ​ (61) ​ Inventories ​ 342 ​ (1,370) ​ 80 ​ Prepaid and other current assets ​ 72 ​ (36) ​ 232 ​ Accounts payable ​ 545 ​ 44 ​ 903 ​ Accrued expenses ​ (222) ​ (167) ​ (134) ​ Income taxes receivable and payable ​ 68 ​ ​ (190) ​ ​ 16 ​ Operating lease liabilities ​ ​ (695) ​ ​ (622) ​ ​ (618) ​ Other ​ 772 ​ (585) ​ (660) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 6,788 ​ 4,498 ​ 6,190 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments for property and equipment, including payments for lease buyouts ​ (3,904) ​ (3,078) ​ (2,614) ​ Proceeds from sale of assets ​ 101 ​ ​ 78 ​ ​ 153 ​ Other ​ 53 ​ (15) ​ (150) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities ​ (3,750) ​ (3,015) ​ (2,611) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from issuance of long-term debt ​ 15 ​  -  ​ 56 ​ Payments on long-term debt including obligations under finance leases ​ (1,301) ​ ​ (552) ​ ​ (1,442) ​ Dividends paid ​ ​ (796) ​ ​ (682) ​ ​ (589) ​ Financing fees paid ​ ​  -  ​ ​ (84) ​ ​ (5) ​ Proceeds from issuance of capital stock ​ ​ 50 ​ 134 ​ 172 ​ Treasury stock purchases ​ (62) ​ (993) ​ (1,647) ​ Proceeds from financing arrangement ​ ​  -  ​ ​  -  ​ ​ 166 ​ Other ​ ​ (76) ​ (112) ​ (156) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by financing activities ​ (2,170) ​ (2,289) ​ (3,445) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and temporary cash investments ​ 868 ​ (806) ​ 134 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and temporary cash investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning of year ​ 1,015 ​ 1,821 ​ 1,687 ​ End of year ​ $ 1,883 ​ $ 1,015 ​ $ 1,821 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of capital investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments for property and equipment, including payments for lease buyouts ​ $ (3,904) ​ $ (3,078) ​ $ (2,614) ​ Payments for lease buyouts ​ ​  -  ​ 21 ​  -  ​ Changes in construction-in-progress payables ​ 344 ​ (281) ​ (542) ​ Total capital investments, excluding lease buyouts ​ $ (3,560) ​ $ (3,338) ​ $ (3,156) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid during the year for interest ​ $ 488 ​ $ 545 ​ $ 607 ​ Cash paid during the year for income taxes ​ $ 751 ​ $ 698 ​ $ 513 ​ ​ ​ The accompanying notes are an integral part of the consolidated financial statements."

**Prior (2023):**

(52 weeks) ​ (52 weeks) ​ (52 weeks) Net earnings including noncontrolling interests ​ $ 2,249 ​ $ 1,666 ​ $ 2,588 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in pension and other postretirement defined benefit plans, net of income tax(1) ​ ​ (83) ​ ​ 156 ​ ​ 22 Unrealized gains and losses on cash flow hedging activities, net of income tax(2) ​ (89) ​  -  ​ (14) Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3) ​ ​ 7 ​ ​ 7 ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive (loss) income ​ (165) ​ 163 ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 2,084 ​ 1,829 ​ 2,598 Comprehensive income attributable to noncontrolling interests ​ 5 ​ 11 ​ 3 Comprehensive income attributable to The Kroger Co. ​ $ 2,079 ​ $ 1,818 ​ $ 2,595 ​ Amount is net of tax (benefit) expense of ($26) in 2022, $48 in 2021 and $7 in 2020. Amount is net of tax benefit of ($27) in 2022 and ($8) in 2020. Amount is net of tax expense of $2 in 2022, $3 in 2021 and $2 in 2020. ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 54 54 54 THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​ ​​2022 2021 2020​(In millions) (52 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,249​$ 1,666​$ 2,588​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 2,965​ 2,824​ 2,747​Asset impairment charges​​ 68​​ 64​​ 70​Goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​​  - ​Operating lease asset amortization​​ 614​​ 605​​ 626​LIFO charge (credit)​ 626​ 197​ (7)​Share-based employee compensation​ 190​ 203​ 185​Company-sponsored pension plans (benefit) expense​ (26)​ 50​ (9)​Deferred income taxes​ 161​ (31)​ 73​Gain on the sale of assets​​ (40)​​ (44)​​ (59)​Loss (gain) on investments​​ 728​​ 821​​ (1,105)​Other​ (8)​ 64​ 165​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (45)​ 13​ 83​Receivables​ (222)​ (61)​ (90)​Inventories​ (1,370)​ 80​ 7​Prepaid and other current assets​ (36)​ 232​ (342)​Trade accounts payable​ 3​ 438​ 330​Accrued expenses​ (126)​ 331​ 1,382​Income taxes receivable and payable​ (190)​​ 16​​ 24​Operating lease liabilities​​ (622)​​ (618)​​ (552)​Other​ (585)​ (660)​ 699​​​​​​​​​​​​Net cash provided by operating activities​ 4,498​ 6,190​ 6,815​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,078)​ (2,614)​ (2,865)​Proceeds from sale of assets​ 78​​ 153​​ 165​Other​ (15)​ (150)​ (114)​​​​​​​​​​​​Net cash used by investing activities​ (3,015)​ (2,611)​ (2,814)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​  - ​ 56​ 1,049​Payments on long-term debt including obligations under finance leases​ (552)​​ (1,442)​​ (747)​Net payments on commercial paper​  - ​​  - ​​ (1,150)​Dividends paid​​ (682)​​ (589)​​ (534)​Financing fees paid​​ (84)​​ (5)​​ (9)​Proceeds from issuance of capital stock​​ 134​ 172​ 127​Treasury stock purchases​ (993)​ (1,647)​ (1,324)​Proceeds from financing arrangement​​  - ​​ 166​​  - ​Other​​ (112)​ (156)​ (125)​​​​​​​​​​​​Net cash used by financing activities​ (2,289)​ (3,445)​ (2,713)​​​​​​​​​​​​Net (decrease) increase in cash and temporary cash investments​ (806)​ 134​ 1,288​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,821​ 1,687​ 399​End of year​$ 1,015​$ 1,821​$ 1,687​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,078)​$ (2,614)​$ (2,865)​Payments for lease buyouts​​ 21​  - ​ 58​Changes in construction-in-progress payables​ (281)​ (542)​ (359)​Total capital investments, excluding lease buyouts​$ (3,338)​$ (3,156)​$ (3,166)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 545​$ 607​$ 564​Cash paid during the year for income taxes​$ 698​$ 513​$ 659​​​The accompanying notes are an integral part of the consolidated financial statements​​55 THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​ ​​2022 2021 2020​(In millions) (52 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,249​$ 1,666​$ 2,588​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 2,965​ 2,824​ 2,747​Asset impairment charges​​ 68​​ 64​​ 70​Goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​​  - ​Operating lease asset amortization​​ 614​​ 605​​ 626​LIFO charge (credit)​ 626​ 197​ (7)​Share-based employee compensation​ 190​ 203​ 185​Company-sponsored pension plans (benefit) expense​ (26)​ 50​ (9)​Deferred income taxes​ 161​ (31)​ 73​Gain on the sale of assets​​ (40)​​ (44)​​ (59)​Loss (gain) on investments​​ 728​​ 821​​ (1,105)​Other​ (8)​ 64​ 165​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (45)​ 13​ 83​Receivables​ (222)​ (61)​ (90)​Inventories​ (1,370)​ 80​ 7​Prepaid and other current assets​ (36)​ 232​ (342)​Trade accounts payable​ 3​ 438​ 330​Accrued expenses​ (126)​ 331​ 1,382​Income taxes receivable and payable​ (190)​​ 16​​ 24​Operating lease liabilities​​ (622)​​ (618)​​ (552)​Other​ (585)​ (660)​ 699​​​​​​​​​​​​Net cash provided by operating activities​ 4,498​ 6,190​ 6,815​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,078)​ (2,614)​ (2,865)​Proceeds from sale of assets​ 78​​ 153​​ 165​Other​ (15)​ (150)​ (114)​​​​​​​​​​​​Net cash used by investing activities​ (3,015)​ (2,611)​ (2,814)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​  - ​ 56​ 1,049​Payments on long-term debt including obligations under finance leases​ (552)​​ (1,442)​​ (747)​Net payments on commercial paper​  - ​​  - ​​ (1,150)​Dividends paid​​ (682)​​ (589)​​ (534)​Financing fees paid​​ (84)​​ (5)​​ (9)​Proceeds from issuance of capital stock​​ 134​ 172​ 127​Treasury stock purchases​ (993)​ (1,647)​ (1,324)​Proceeds from financing arrangement​​  - ​​ 166​​  - ​Other​​ (112)​ (156)​ (125)​​​​​​​​​​​​Net cash used by financing activities​ (2,289)​ (3,445)​ (2,713)​​​​​​​​​​​​Net (decrease) increase in cash and temporary cash investments​ (806)​ 134​ 1,288​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,821​ 1,687​ 399​End of year​$ 1,015​$ 1,821​$ 1,687​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,078)​$ (2,614)​$ (2,865)​Payments for lease buyouts​​ 21​  - ​ 58​Changes in construction-in-progress payables​ (281)​ (542)​ (359)​Total capital investments, excluding lease buyouts​$ (3,338)​$ (3,156)​$ (3,166)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 545​$ 607​$ 564​Cash paid during the year for income taxes​$ 698​$ 513​$ 659​​​The accompanying notes are an integral part of the consolidated financial statements​​

**Current (2024):**

(53 weeks) ​ (52 weeks) ​ (52 weeks) Net earnings including noncontrolling interests ​ $ 2,169 ​ $ 2,249 ​ $ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in pension and other postretirement defined benefit plans, net of income tax(1) ​ ​ (46) ​ ​ (83) ​ ​ 156 Unrealized gains and losses on cash flow hedging activities, net of income tax(2) ​ 183 ​ (89) ​  -  Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3) ​ ​ 6 ​ ​ 7 ​ ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ​ 143 ​ (165) ​ 163 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 2,312 ​ 2,084 ​ 1,829 Comprehensive income attributable to noncontrolling interests ​ 5 ​ 5 ​ 11 Comprehensive income attributable to The Kroger Co. ​ $ 2,307 ​ $ 2,079 ​ $ 1,818 ​ Amount is net of tax (benefit) expense of $(14) in 2023, $(26) in 2022 and $48 in 2021. Amount is net of tax expense (benefit) of $56 in 2023 and $(27) in 2022. Amount is net of tax expense of $2 in 2023, $2 in 2022 and $3 in 2021. ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 57 57 57 ​THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​58 ​ ​ THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​

---

## Modified: GOODWILL AND INTANGIBLE ASSETS

**Key changes:**

- Reworded sentence: "​ The following table summarizes the changes in the Company's net goodwill balance through February 3, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Balance beginning of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ $ 5,737 ​ $ 5,737 ​ Accumulated impairment losses ​ (2,821) ​ (2,661) ​ Subtotal ​ 2,916 ​ 3,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ Activity during the year ​ ​ ​ ​ ​ ​ ​ Impairment charge related to Vitacost.com ​ ​  -  ​ ​ (160) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance end of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ 5,737 ​ 5,737 ​ Accumulated impairment losses ​ (2,821) ​ (2,821) ​ Total Goodwill ​ $ 2,916 ​ $ 2,916 ​ ​ Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount."
- Reworded sentence: "​The following table summarizes the Company's intangible assets balance through February 3, 2024:​​​​​​​​​​​​​​​​​2023​2022 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 360​$ (259)​$ 325​$ (230)​Definite-lived customer relationships​​ 186​​ (179)​​ 186​​ (173)​Definite-lived other​ 118​ (103)​ 112​ (96)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 91​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,440​$ (541)​$ 1,398​$ (499)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense."
- Reworded sentence: "​The following table summarizes the Company's intangible assets balance through February 3, 2024:​​​​​​​​​​​​​​​​​2023​2022 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 360​$ (259)​$ 325​$ (230)​Definite-lived customer relationships​​ 186​​ (179)​​ 186​​ (173)​Definite-lived other​ 118​ (103)​ 112​ (96)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 91​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,440​$ (541)​$ 1,398​$ (499)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense."
- Reworded sentence: "In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus was to effectively utilize its Pickup and Delivery capabilities."
- Reworded sentence: "​ The following table summarizes the Company's intangible assets balance through February 3, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​"

**Prior (2023):**

​ The following table summarizes the changes in the Company's net goodwill balance through January 28, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Balance beginning of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ $ 5,737 ​ $ 5,737 ​ Accumulated impairment losses ​ (2,661) ​ (2,661) ​ Subtotal ​ 3,076 ​ 3,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ Activity during the year ​ ​ ​ ​ ​ ​ ​ Impairment charge related to Vitacost.com ​ ​ (160) ​ ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance end of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ 5,737 ​ 5,737 ​ Accumulated impairment losses ​ (2,821) ​ (2,661) ​ Total Goodwill ​ $ 2,916 ​ $ 3,076 ​ ​ Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2021 and 2020 and did not result in impairment. ​ 64 64 64 ​Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus will be to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​The following table summarizes the Company's intangible assets balance through January 28, 2023:​​​​​​​​​​​​​​​​​2022​2021 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 325​$ (230)​$ 317​$ (199)​Definite-lived customer relationships​​ 186​​ (173)​​ 186​​ (160)​Definite-lived other​ 112​ (96)​ 111​ (88)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 90​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,398​$ (499)​$ 1,389​$ (447)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense. ​Amortization expense associated with intangible assets totaled approximately $52, $59 and $67, during fiscal years 2022, 2021 and 2020, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2022 is estimated to be approximately:​​​​​2023 $ 412024​ 362025​ 322026​ 112027​ 2Thereafter​ 2​​​​Total future estimated amortization associated with definite-lived intangible assets​$ 124​​3.PROPERTY, PLANT AND EQUIPMENT, NET​Property, plant and equipment, net consists of:​​​​​​​​​​ 2022 2021 Land​$ 3,442​$ 3,395​Buildings and land improvements​ 14,539​ 13,996​Equipment​ 17,328​ 15,951​Leasehold improvements​ 11,435​ 10,775​Construction-in-progress​ 4,044​ 3,831​Leased property under finance leases​ 2,580​ 1,939​​​​​​​​​Total property, plant and equipment​ 53,368​ 49,887​Accumulated depreciation and amortization​ (28,642)​ (26,098)​​​​​​​​​Property, plant and equipment, net​$ 24,726​$ 23,789​​Accumulated depreciation and amortization for leased property under finance leases was $562 at January 28, 2023 and $414 at January 29, 2022.65 ​ ​ Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus will be to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​The following table summarizes the Company's intangible assets balance through January 28, 2023:​​​​​​​​​​​​​​​​​2022​2021 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 325​$ (230)​$ 317​$ (199)​Definite-lived customer relationships​​ 186​​ (173)​​ 186​​ (160)​Definite-lived other​ 112​ (96)​ 111​ (88)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 90​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,398​$ (499)​$ 1,389​$ (447)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense. ​Amortization expense associated with intangible assets totaled approximately $52, $59 and $67, during fiscal years 2022, 2021 and 2020, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2022 is estimated to be approximately:​​​​​2023 $ 412024​ 362025​ 322026​ 112027​ 2Thereafter​ 2​​​​Total future estimated amortization associated with definite-lived intangible assets​$ 124​​3.PROPERTY, PLANT AND EQUIPMENT, NET​Property, plant and equipment, net consists of:​​​​​​​​​​ 2022 2021 Land​$ 3,442​$ 3,395​Buildings and land improvements​ 14,539​ 13,996​Equipment​ 17,328​ 15,951​Leasehold improvements​ 11,435​ 10,775​Construction-in-progress​ 4,044​ 3,831​Leased property under finance leases​ 2,580​ 1,939​​​​​​​​​Total property, plant and equipment​ 53,368​ 49,887​Accumulated depreciation and amortization​ (28,642)​ (26,098)​​​​​​​​​Property, plant and equipment, net​$ 24,726​$ 23,789​​Accumulated depreciation and amortization for leased property under finance leases was $562 at January 28, 2023 and $414 at January 29, 2022. Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus will be to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​ The following table summarizes the Company's intangible assets balance through January 28, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​

**Current (2024):**

​ The following table summarizes the changes in the Company's net goodwill balance through February 3, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Balance beginning of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ $ 5,737 ​ $ 5,737 ​ Accumulated impairment losses ​ (2,821) ​ (2,661) ​ Subtotal ​ 2,916 ​ 3,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ Activity during the year ​ ​ ​ ​ ​ ​ ​ Impairment charge related to Vitacost.com ​ ​  -  ​ ​ (160) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance end of year ​ ​ ​ ​ ​ ​ ​ Goodwill ​ 5,737 ​ 5,737 ​ Accumulated impairment losses ​ (2,821) ​ (2,821) ​ Total Goodwill ​ $ 2,916 ​ $ 2,916 ​ ​ Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2023, 2022 and 2021. The evaluation did not result in impairment in 2023 or 2021. The evaluation resulted in an impairment in 2022. ​ 67 67 67 ​Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus was to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​The following table summarizes the Company's intangible assets balance through February 3, 2024:​​​​​​​​​​​​​​​​​2023​2022 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 360​$ (259)​$ 325​$ (230)​Definite-lived customer relationships​​ 186​​ (179)​​ 186​​ (173)​Definite-lived other​ 118​ (103)​ 112​ (96)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 91​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,440​$ (541)​$ 1,398​$ (499)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense. ​Amortization expense associated with intangible assets totaled approximately $42, $52 and $59, during fiscal years 2023, 2022 and 2021, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2023 is estimated to be approximately:​​​​​2024 $ 422025​ 382026​ 172027​ 82028​ 8Thereafter​ 10​​​​Total future estimated amortization associated with definite-lived intangible assets​$ 123​​3.PROPERTY, PLANT AND EQUIPMENT, NET​Property, plant and equipment, net consists of:​​​​​​​​​​ 2023 2022 Land​$ 3,512​$ 3,442​Buildings and land improvements​ 15,137​ 14,539​Equipment​ 19,375​ 17,328​Leasehold improvements​ 12,394​ 11,435​Construction-in-progress​ 3,574​ 4,044​Leased property under finance leases​ 2,701​ 2,580​​​​​​​​​Total property, plant and equipment​ 56,693​ 53,368​Accumulated depreciation and amortization​ (31,463)​ (28,642)​​​​​​​​​Property, plant and equipment, net​$ 25,230​$ 24,726​​Accumulated depreciation and amortization for leased property under finance leases was $730 at February 3, 2024 and $562 at January 28, 2023.68 ​ ​ Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus was to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​The following table summarizes the Company's intangible assets balance through February 3, 2024:​​​​​​​​​​​​​​​​​2023​2022 ​ Gross carrying Accumulated Gross carrying Accumulated ​​amount​amortization(1)​amount​amortization(1) Definite-lived pharmacy prescription files​$ 360​$ (259)​$ 325​$ (230)​Definite-lived customer relationships​​ 186​​ (179)​​ 186​​ (173)​Definite-lived other​ 118​ (103)​ 112​ (96)​Indefinite-lived trade name​ 685​  - ​ 685​  - ​Indefinite-lived liquor licenses​ 91​  - ​ 90​  - ​​​​​​​​​​​​​​​Total​$ 1,440​$ (541)​$ 1,398​$ (499)​(1)Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense. ​Amortization expense associated with intangible assets totaled approximately $42, $52 and $59, during fiscal years 2023, 2022 and 2021, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2023 is estimated to be approximately:​​​​​2024 $ 422025​ 382026​ 172027​ 82028​ 8Thereafter​ 10​​​​Total future estimated amortization associated with definite-lived intangible assets​$ 123​​3.PROPERTY, PLANT AND EQUIPMENT, NET​Property, plant and equipment, net consists of:​​​​​​​​​​ 2023 2022 Land​$ 3,512​$ 3,442​Buildings and land improvements​ 15,137​ 14,539​Equipment​ 19,375​ 17,328​Leasehold improvements​ 12,394​ 11,435​Construction-in-progress​ 3,574​ 4,044​Leased property under finance leases​ 2,701​ 2,580​​​​​​​​​Total property, plant and equipment​ 56,693​ 53,368​Accumulated depreciation and amortization​ (31,463)​ (28,642)​​​​​​​​​Property, plant and equipment, net​$ 25,230​$ 24,726​​Accumulated depreciation and amortization for leased property under finance leases was $730 at February 3, 2024 and $562 at January 28, 2023. Based on the results of the Company's impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company's digital strategy evolved, the Company's primary focus was to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. ​ The following table summarizes the Company's intangible assets balance through February 3, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​

---

## Modified: CONSOLIDATED STATEMENTS OF CASH FLOWS

**Key changes:**

- Reworded sentence: "​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​"

**Prior (2023):**

​ Years Ended January 28, 2023, January 29, 2022 and January 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​

**Current (2024):**

​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​

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## Modified: Company Name/Index

**Key changes:**

- Reworded sentence: "2018 2019 2020 2021 2022 2023 The Kroger Co."
- Reworded sentence: "* Total assumes $100 invested on February 2, 2019, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends."
- Reworded sentence: "(included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corp., Walgreens Boots Alliance Inc."
- Reworded sentence: "​​24 ​ ​ The following table presents information on our purchases of our common shares during the fourth quarter of 2023:​ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​​​​​​​​Approximate Dollar ​​​​​​​​​Value of Shares ​​​​​​​Total Number of​that May Yet Be ​​​​​​​Shares Purchased​Purchased Under ​​Total Number​Average​as Part of Publicly​the Plans or ​​of Shares​Price Paid Per​Announced Plans​Programs(4) Period(1) Purchased(2) Share(2) or Programs(3) (in millions) First period - four weeks​​​​​​​​​​​November 5, 2023 to December 2, 2023 7,093​$ 44.09 6,900​$ 1,000​Second period - four weeks​​​​​​​​​​​December 3, 2023 to December 30, 2023 82,059​$ 44.75 64,200​$ 1,000​Third period - five weeks​​​​​​​​​​​December 31, 2023 to February 3, 2024 96,000​$ 46.07 96,000​$ 1,000​Total 185,152​$ 45.41 167,100​$ 1,000​(1)The fourth quarter of 2023 contained two 28-day periods and one 35-day period.(2)Includes (i) shares repurchased under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program") and (ii) 18,052 shares that were surrendered to Kroger by participants under our long-term incentive plans to pay for taxes on restricted stock awards.(3)Represents shares repurchased under the 1999 Repurchase Program.(4)On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "September 2022 Repurchase Program")."
- Reworded sentence: "​​ The following table presents information on our purchases of our common shares during the fourth quarter of 2023: ​"

**Prior (2023):**

2017 2018 2019 2020 2021 2022 The Kroger Co. 100 97.48 95.47 125.25 161.03 170.17 ​ S&P 500 Index 100 99.94 121.49 142.45 172.36 160.94 ​ Peer Group 100 97.12 117.20 144.16 170.23 164.97 ​ ​ Kroger's fiscal year ends on the Saturday closest to January 31. ​ Data supplied by Standard & Poor's. ​ The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto. * Total assumes $100 invested on February 3, 2018, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends. ​ ** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Supervalu Inc. (included through October 19, 2018 when it was acquired by United Natural Foods), Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc. ​ 21 21 21 The following table presents information on our purchases of our common shares during the fourth quarter of 2022:​ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​​​​​​​​Approximate Dollar ​​​​​​​​​Value of Shares ​​​​​​​Total Number of​that May Yet Be ​​​​​​​Shares Purchased​Purchased Under ​​Total Number​Average​as Part of Publicly​the Plans or ​​of Shares​Price Paid Per​Announced Plans​Programs(4) Period(1) Purchased(2) Share(2) or Programs(3) (in millions) First four weeks​​​​​​​​​​​November 6, 2022 to December 3, 2022 26,566​$ 47.90 26,566​$ 1,000​Second four weeks​​​​​​​​​​​December 4, 2022 to December 31, 2022 87,928​$ 45.83 66,804​$ 1,000​Third four weeks​​​​​​​​​​​January 1, 2023 to January 28, 2023 83,500​$ 45.15 83,500​$ 1,000​Total 197,994​$ 45.82 176,870​$ 1,000​(1)The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The fourth quarter of 2022 contained three 28-day periods.​(2)Includes (i) shares repurchased under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program") and (ii) 21,124 shares that were surrendered to the Company by participants under our long-term incentive plans to pay for taxes on restricted stock awards.​(3)Represents shares repurchased under the 1999 Repurchase Program.​(4)On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "September 2022 Repurchase Program"). The amounts shown in this column reflect the amount remaining under the September 2022 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The September 2022 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ITEM 6.RESERVED.​Not applicable. ​​22 The following table presents information on our purchases of our common shares during the fourth quarter of 2022:​ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​​​​​​​​Approximate Dollar ​​​​​​​​​Value of Shares ​​​​​​​Total Number of​that May Yet Be ​​​​​​​Shares Purchased​Purchased Under ​​Total Number​Average​as Part of Publicly​the Plans or ​​of Shares​Price Paid Per​Announced Plans​Programs(4) Period(1) Purchased(2) Share(2) or Programs(3) (in millions) First four weeks​​​​​​​​​​​November 6, 2022 to December 3, 2022 26,566​$ 47.90 26,566​$ 1,000​Second four weeks​​​​​​​​​​​December 4, 2022 to December 31, 2022 87,928​$ 45.83 66,804​$ 1,000​Third four weeks​​​​​​​​​​​January 1, 2023 to January 28, 2023 83,500​$ 45.15 83,500​$ 1,000​Total 197,994​$ 45.82 176,870​$ 1,000​(1)The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The fourth quarter of 2022 contained three 28-day periods.​(2)Includes (i) shares repurchased under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program") and (ii) 21,124 shares that were surrendered to the Company by participants under our long-term incentive plans to pay for taxes on restricted stock awards.​(3)Represents shares repurchased under the 1999 Repurchase Program.​(4)On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "September 2022 Repurchase Program"). The amounts shown in this column reflect the amount remaining under the September 2022 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The September 2022 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ITEM 6.RESERVED.​Not applicable. ​​ The following table presents information on our purchases of our common shares during the fourth quarter of 2022: ​

**Current (2024):**

2018 2019 2020 2021 2022 2023 The Kroger Co. 100 97.94 128.49 165.19 174.57 183.07 ​ S&P 500 Index 100 121.56 142.53 172.46 161.03 199.42 ​ Peer Group 100 120.67 148.43 175.27 169.86 197.90 ​ ​ Kroger's fiscal year ends on the Saturday closest to January 31. ​ Data supplied by Standard & Poor's. ​ The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto. * Total assumes $100 invested on February 2, 2019, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends. ​ ** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc. ​ 23 23 23 ​The following table presents information on our purchases of our common shares during the fourth quarter of 2023:​ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​​​​​​​​Approximate Dollar ​​​​​​​​​Value of Shares ​​​​​​​Total Number of​that May Yet Be ​​​​​​​Shares Purchased​Purchased Under ​​Total Number​Average​as Part of Publicly​the Plans or ​​of Shares​Price Paid Per​Announced Plans​Programs(4) Period(1) Purchased(2) Share(2) or Programs(3) (in millions) First period - four weeks​​​​​​​​​​​November 5, 2023 to December 2, 2023 7,093​$ 44.09 6,900​$ 1,000​Second period - four weeks​​​​​​​​​​​December 3, 2023 to December 30, 2023 82,059​$ 44.75 64,200​$ 1,000​Third period - five weeks​​​​​​​​​​​December 31, 2023 to February 3, 2024 96,000​$ 46.07 96,000​$ 1,000​Total 185,152​$ 45.41 167,100​$ 1,000​(1)The fourth quarter of 2023 contained two 28-day periods and one 35-day period.(2)Includes (i) shares repurchased under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program") and (ii) 18,052 shares that were surrendered to Kroger by participants under our long-term incentive plans to pay for taxes on restricted stock awards.(3)Represents shares repurchased under the 1999 Repurchase Program.(4)On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "September 2022 Repurchase Program"). The amounts shown in this column reflect the amount remaining under the September 2022 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The September 2022 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ITEM 6.RESERVED.​Not applicable. ​​24 ​ ​ The following table presents information on our purchases of our common shares during the fourth quarter of 2023:​ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​​​​​​​​Approximate Dollar ​​​​​​​​​Value of Shares ​​​​​​​Total Number of​that May Yet Be ​​​​​​​Shares Purchased​Purchased Under ​​Total Number​Average​as Part of Publicly​the Plans or ​​of Shares​Price Paid Per​Announced Plans​Programs(4) Period(1) Purchased(2) Share(2) or Programs(3) (in millions) First period - four weeks​​​​​​​​​​​November 5, 2023 to December 2, 2023 7,093​$ 44.09 6,900​$ 1,000​Second period - four weeks​​​​​​​​​​​December 3, 2023 to December 30, 2023 82,059​$ 44.75 64,200​$ 1,000​Third period - five weeks​​​​​​​​​​​December 31, 2023 to February 3, 2024 96,000​$ 46.07 96,000​$ 1,000​Total 185,152​$ 45.41 167,100​$ 1,000​(1)The fourth quarter of 2023 contained two 28-day periods and one 35-day period.(2)Includes (i) shares repurchased under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program") and (ii) 18,052 shares that were surrendered to Kroger by participants under our long-term incentive plans to pay for taxes on restricted stock awards.(3)Represents shares repurchased under the 1999 Repurchase Program.(4)On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "September 2022 Repurchase Program"). The amounts shown in this column reflect the amount remaining under the September 2022 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The September 2022 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ITEM 6.RESERVED.​Not applicable. ​​ The following table presents information on our purchases of our common shares during the fourth quarter of 2023: ​

---

## Modified: Supermarket Storing Activity

**Key changes:**

- Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 Beginning of year 2,719 2,726 2,742 ​ Opened 5 3 4 ​ Opened (relocation) 2 1 4 ​ Closed (operational) (1) (10) (20) ​ Closed (relocation) (3) (1) (4) ​ End of year 2,722 2,719 2,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total supermarket square footage (in millions) 180 179 179 ​ ​ Debt Management ​ Total debt, including both the current and long-term portions of obligations under finance leases, decreased $1.2 billion to $12.2 billion as of year-end 2023 compared to 2022."
- Reworded sentence: "We made open market purchases of our common shares totaling $821 million in 2022."
- Reworded sentence: "We repurchased approximately $62 million in 2023 and $172 million in 2022 of our common shares under the 1999 Repurchase Program.​On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "September 2022 Repurchase Program")."
- Reworded sentence: "As of February 3, 2024, there was $1.0 billion remaining under the September 2022 Repurchase Program.​Dividends​The following table provides dividend information for 2023 and 2022 ($ in millions, except per share amounts):​​​​​​​​2023​2022Cash dividends paid$ 796​$ 682Cash dividends paid per common share$ 1.10​$ 0.94​Liquidity Needs​We held cash and temporary cash investments of $1.9 billion, as of the end of 2023, which reflects our elevated operating performance over the last few years and paused share repurchase program."
- Reworded sentence: "​ 44 44 44 ​The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of February 3, 2024 (in millions of dollars):​​​​​​​​​​​​​​​​​​​​​​​​​ 2024 2025 2026 2027 2028 Thereafter Total Contractual Obligations(1)(2)​​​​​​​​​​​​​​​​​​​​​​Long-term debt(3)​$ 25​$ 92​$ 1,305​$ 611​$ 642​$ 7,512​$ 10,187​Interest on long-term debt(4)​​ 450​​ 446​​ 418​​ 387​​ 375​​ 4,163​​ 6,239​Finance lease obligations​​ 243​​ 240​​ 240​​ 242​​ 238​​ 1,359​​ 2,562​Operating lease obligations​​ 961​​ 898​​ 838​​ 784​​ 722​​ 5,738​​ 9,941​Self-insurance liability(5)​​ 281​​ 159​​ 108​​ 68​​ 40​​ 105​​ 761​Construction commitments(6)​​ 1,374​​  - ​​  - ​​  - ​​  - ​​  - ​​ 1,374​Opioid settlement commitments(7)​​ 296​​ 154​​ 143​​ 143​​ 143​​ 568​​ 1,447​Purchase obligations(8)​​ 827​​ 391​​ 360​​ 307​​ 267​​ 1,752​​ 3,904​Total​$ 4,457​$ 2,380​$ 3,412​$ 2,542​$ 2,427​$ 21,197​$ 36,415​(1)The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $65 million in 2023."

**Prior (2023):**

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Beginning of year 2,726 2,742 2,757 ​ Opened 3 4 5 ​ Opened (relocation) 1 4 6 ​ Closed (operational) (10) (20) (20) ​ Closed (relocation) (1) (4) (6) ​ End of year 2,719 2,726 2,742 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total supermarket square footage (in millions) 179 179 179 ​ ​ Debt Management ​ Total debt, including both the current and long-term portions of obligations under finance leases, increased $14 million to $13.4 billion as of year-end 2022 compared to 2021. This increase resulted primarily from a net increase in obligations under finance leases of $466 million primarily related to our four additional Kroger Delivery customer fulfillment center openings during 2022, partially offset by the payment of $400 million of senior notes bearing an interest rate of 2.80%. ​ Common Share Repurchase Programs ​ We maintain share repurchase programs that comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and allow for the orderly repurchase of our common shares, from time to time. The share repurchase programs do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. We made open market purchases of our common shares totaling $821 million in 2022 and $1.4 billion in 2021. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ In addition to these repurchase programs, we also repurchase common shares to reduce dilution resulting from our employee stock option plans. This program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises. We repurchased approximately $172 million in 2022 and $225 million in 2021 of our common shares under the stock option program. ​ On December 30, 2021, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "December 2021 Repurchase Program"). The December 2021 Repurchase Program was exhausted during the third quarter of 2022. On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "September 2022 Repurchase Program"). No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ The shares we repurchased in 2022 were reacquired under the following share repurchase programs: ​ ​ ​ As of January 28, 2023, there was $1.0 billion remaining under the September 2022 Repurchase Program. ​ 40 40 40 Dividends​The following table provides dividend information for 2022 and 2021 ($ in millions, except per share amounts):​​​​​​​​2022​2021Cash dividends paid$ 682​$ 589Cash dividends paid per common share$ 0.94​$ 0.78​Liquidity Needs​We held cash and temporary cash investments of $1.0 billion, as of the end of 2022, which reflects our elevated operating performance over the last few years. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​41 Dividends​The following table provides dividend information for 2022 and 2021 ($ in millions, except per share amounts):​​​​​​​​2022​2021Cash dividends paid$ 682​$ 589Cash dividends paid per common share$ 0.94​$ 0.78​Liquidity Needs​We held cash and temporary cash investments of $1.0 billion, as of the end of 2022, which reflects our elevated operating performance over the last few years. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ Dividends ​ The following table provides dividend information for 2022 and 2021 ($ in millions, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 Cash dividends paid $ 682 ​ $ 589 Cash dividends paid per common share $ 0.94 ​ $ 0.78 ​ Liquidity Needs ​ We held cash and temporary cash investments of $1.0 billion, as of the end of 2022, which reflects our elevated operating performance over the last few years. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ 41 41 41 The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of January 28, 2023 (in millions of dollars):​​​​​​​​​​​​​​​​​​​​​​​​​ 2023 2024 2025 2026 2027 Thereafter Total Contractual Obligations(1)(2)​​​​​​​​​​​​​​​​​​​​​​Long-term debt(3)​$ 1,153​$ 25​$ 84​$ 1,386​$ 607​$ 8,037​$ 11,292​Interest on long-term debt(4)​​ 480​​ 439​​ 422​​ 400​​ 376​​ 4,548​​ 6,665​Finance lease obligations​​ 228​​ 226​​ 222​​ 221​​ 223​​ 1,492​​ 2,612​Operating lease obligations​​ 930​​ 864​​ 791​​ 740​​ 683​​ 5,688​​ 9,696​Self-insurance liability(5)​​ 236​​ 162​​ 106​​ 65​​ 38​​ 105​​ 712​Construction commitments(6)​​ 1,718​​  - ​​  - ​​  - ​​  - ​​  - ​​ 1,718​Purchase obligations(7)​​ 725​​ 330​​ 274​​ 303​​ 283​​ 1,937​​ 3,852​Total​$ 5,470​$ 2,046​$ 1,899​$ 3,115​$ 2,210​$ 21,807​$ 36,547​(1)The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $38 million in 2022. For additional information about these obligations, see Note 14 to the Consolidated Financial Statements. This table also excludes contributions under various multi-employer pension plans, which totaled $620 million in 2022. For additional information about these multi-employer pension plans, see Note 15 to the Consolidated Financial Statements. (2)The liability related to unrecognized tax benefits has been excluded from the contractual obligations table because a reasonable estimate of the timing of future tax settlements cannot be determined.(3)As of January 28, 2023, we had no outstanding commercial paper and no borrowings under our credit facility.(4)Amounts include contractual interest payments using the interest rate as of January 28, 2023 and stated fixed and swapped interest rates, if applicable, for all other debt instruments.(5)The amounts included for self-insurance liability related to workers' compensation claims have been stated on a present value basis.(6)Amounts include funds owed to third parties for projects currently under construction. These amounts are reflected in "Other current liabilities" in our Consolidated Balance Sheets.(7)Amounts include commitments, many of which are short-term in nature, to be utilized in the normal course of business, such as several contracts to purchase raw materials utilized in our food production plants and several contracts to purchase energy to be used in our stores and food production plants. Our obligations also include management fees for facilities operated by third parties and outside service contracts. Any upfront vendor allowances or incentives associated with outstanding purchase commitments are recorded as either current or long-term liabilities in our Consolidated Balance Sheets. We included our future commitments for customer fulfillment centers for which we have placed an order as of January 28, 2023. We did not include our commitments associated with additional customer fulfillment centers that have not yet been ordered. We expect our future commitments for customer fulfillment centers will continue to grow as we place orders for additional customer fulfillment centers.​We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of January 28, 2023, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and bank credit facility. Our short-term and long-term liquidity needs include anticipated requirements for working capital to maintain our operations, pension plan commitments, interest payments and scheduled principal payments of debt and commercial paper, settlement of interest rate swap liabilities, servicing our lease obligations, self-insurance liabilities, capital investments and other purchase obligations. We may also require additional capital in the future to fund organic growth opportunities, additional customer fulfillment centers, joint ventures or other business partnerships, property development, acquisitions, dividends and share repurchases. In addition, we generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to the capital markets. We believe we have adequate coverage of our debt covenants to continue to maintain our current investment grade debt ratings and to respond effectively to competitive conditions.​42 The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of January 28, 2023 (in millions of dollars):​​​​​​​​​​​​​​​​​​​​​​​​​ 2023 2024 2025 2026 2027 Thereafter Total Contractual Obligations(1)(2)​​​​​​​​​​​​​​​​​​​​​​Long-term debt(3)​$ 1,153​$ 25​$ 84​$ 1,386​$ 607​$ 8,037​$ 11,292​Interest on long-term debt(4)​​ 480​​ 439​​ 422​​ 400​​ 376​​ 4,548​​ 6,665​Finance lease obligations​​ 228​​ 226​​ 222​​ 221​​ 223​​ 1,492​​ 2,612​Operating lease obligations​​ 930​​ 864​​ 791​​ 740​​ 683​​ 5,688​​ 9,696​Self-insurance liability(5)​​ 236​​ 162​​ 106​​ 65​​ 38​​ 105​​ 712​Construction commitments(6)​​ 1,718​​  - ​​  - ​​  - ​​  - ​​  - ​​ 1,718​Purchase obligations(7)​​ 725​​ 330​​ 274​​ 303​​ 283​​ 1,937​​ 3,852​Total​$ 5,470​$ 2,046​$ 1,899​$ 3,115​$ 2,210​$ 21,807​$ 36,547​(1)The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $38 million in 2022. For additional information about these obligations, see Note 14 to the Consolidated Financial Statements. This table also excludes contributions under various multi-employer pension plans, which totaled $620 million in 2022. For additional information about these multi-employer pension plans, see Note 15 to the Consolidated Financial Statements. (2)The liability related to unrecognized tax benefits has been excluded from the contractual obligations table because a reasonable estimate of the timing of future tax settlements cannot be determined.(3)As of January 28, 2023, we had no outstanding commercial paper and no borrowings under our credit facility.(4)Amounts include contractual interest payments using the interest rate as of January 28, 2023 and stated fixed and swapped interest rates, if applicable, for all other debt instruments.(5)The amounts included for self-insurance liability related to workers' compensation claims have been stated on a present value basis.(6)Amounts include funds owed to third parties for projects currently under construction. These amounts are reflected in "Other current liabilities" in our Consolidated Balance Sheets.(7)Amounts include commitments, many of which are short-term in nature, to be utilized in the normal course of business, such as several contracts to purchase raw materials utilized in our food production plants and several contracts to purchase energy to be used in our stores and food production plants. Our obligations also include management fees for facilities operated by third parties and outside service contracts. Any upfront vendor allowances or incentives associated with outstanding purchase commitments are recorded as either current or long-term liabilities in our Consolidated Balance Sheets. We included our future commitments for customer fulfillment centers for which we have placed an order as of January 28, 2023. We did not include our commitments associated with additional customer fulfillment centers that have not yet been ordered. We expect our future commitments for customer fulfillment centers will continue to grow as we place orders for additional customer fulfillment centers.​We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of January 28, 2023, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and bank credit facility. Our short-term and long-term liquidity needs include anticipated requirements for working capital to maintain our operations, pension plan commitments, interest payments and scheduled principal payments of debt and commercial paper, settlement of interest rate swap liabilities, servicing our lease obligations, self-insurance liabilities, capital investments and other purchase obligations. We may also require additional capital in the future to fund organic growth opportunities, additional customer fulfillment centers, joint ventures or other business partnerships, property development, acquisitions, dividends and share repurchases. In addition, we generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to the capital markets. We believe we have adequate coverage of our debt covenants to continue to maintain our current investment grade debt ratings and to respond effectively to competitive conditions.​ The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of January 28, 2023 (in millions of dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 Thereafter Total

**Current (2024):**

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 Beginning of year 2,719 2,726 2,742 ​ Opened 5 3 4 ​ Opened (relocation) 2 1 4 ​ Closed (operational) (1) (10) (20) ​ Closed (relocation) (3) (1) (4) ​ End of year 2,722 2,719 2,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total supermarket square footage (in millions) 180 179 179 ​ ​ Debt Management ​ Total debt, including both the current and long-term portions of obligations under finance leases, decreased $1.2 billion to $12.2 billion as of year-end 2023 compared to 2022. This decrease resulted primarily from the payment of $600 million of senior notes bearing an interest rate of 3.85% and the payment of $500 million of senior notes bearing an interest rate of 4.00%. ​ 43 43 43 ​Common Share Repurchase Programs​We maintain share repurchase programs that comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and allow for the orderly repurchase of our common shares, from time to time. The share repurchase programs do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. We made open market purchases of our common shares totaling $821 million in 2022. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​In addition, we also repurchase common shares under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program"). This program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises. We repurchased approximately $62 million in 2023 and $172 million in 2022 of our common shares under the 1999 Repurchase Program.​On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "September 2022 Repurchase Program"). No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. As of February 3, 2024, there was $1.0 billion remaining under the September 2022 Repurchase Program.​Dividends​The following table provides dividend information for 2023 and 2022 ($ in millions, except per share amounts):​​​​​​​​2023​2022Cash dividends paid$ 796​$ 682Cash dividends paid per common share$ 1.10​$ 0.94​Liquidity Needs​We held cash and temporary cash investments of $1.9 billion, as of the end of 2023, which reflects our elevated operating performance over the last few years and paused share repurchase program. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy.​44 ​ ​ Common Share Repurchase Programs​We maintain share repurchase programs that comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and allow for the orderly repurchase of our common shares, from time to time. The share repurchase programs do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. We made open market purchases of our common shares totaling $821 million in 2022. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​In addition, we also repurchase common shares under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program"). This program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises. We repurchased approximately $62 million in 2023 and $172 million in 2022 of our common shares under the 1999 Repurchase Program.​On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "September 2022 Repurchase Program"). No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. As of February 3, 2024, there was $1.0 billion remaining under the September 2022 Repurchase Program.​Dividends​The following table provides dividend information for 2023 and 2022 ($ in millions, except per share amounts):​​​​​​​​2023​2022Cash dividends paid$ 796​$ 682Cash dividends paid per common share$ 1.10​$ 0.94​Liquidity Needs​We held cash and temporary cash investments of $1.9 billion, as of the end of 2023, which reflects our elevated operating performance over the last few years and paused share repurchase program. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy.​ Common Share Repurchase Programs ​ We maintain share repurchase programs that comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and allow for the orderly repurchase of our common shares, from time to time. The share repurchase programs do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. We made open market purchases of our common shares totaling $821 million in 2022. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ In addition, we also repurchase common shares under a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith ("1999 Repurchase Program"). This program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises. We repurchased approximately $62 million in 2023 and $172 million in 2022 of our common shares under the 1999 Repurchase Program. ​ On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the "September 2022 Repurchase Program"). No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. As of February 3, 2024, there was $1.0 billion remaining under the September 2022 Repurchase Program. ​ Dividends ​ The following table provides dividend information for 2023 and 2022 ($ in millions, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 Cash dividends paid $ 796 ​ $ 682 Cash dividends paid per common share $ 1.10 ​ $ 0.94 ​ Liquidity Needs ​ We held cash and temporary cash investments of $1.9 billion, as of the end of 2023, which reflects our elevated operating performance over the last few years and paused share repurchase program. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy. ​ 44 44 44 ​The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of February 3, 2024 (in millions of dollars):​​​​​​​​​​​​​​​​​​​​​​​​​ 2024 2025 2026 2027 2028 Thereafter Total Contractual Obligations(1)(2)​​​​​​​​​​​​​​​​​​​​​​Long-term debt(3)​$ 25​$ 92​$ 1,305​$ 611​$ 642​$ 7,512​$ 10,187​Interest on long-term debt(4)​​ 450​​ 446​​ 418​​ 387​​ 375​​ 4,163​​ 6,239​Finance lease obligations​​ 243​​ 240​​ 240​​ 242​​ 238​​ 1,359​​ 2,562​Operating lease obligations​​ 961​​ 898​​ 838​​ 784​​ 722​​ 5,738​​ 9,941​Self-insurance liability(5)​​ 281​​ 159​​ 108​​ 68​​ 40​​ 105​​ 761​Construction commitments(6)​​ 1,374​​  - ​​  - ​​  - ​​  - ​​  - ​​ 1,374​Opioid settlement commitments(7)​​ 296​​ 154​​ 143​​ 143​​ 143​​ 568​​ 1,447​Purchase obligations(8)​​ 827​​ 391​​ 360​​ 307​​ 267​​ 1,752​​ 3,904​Total​$ 4,457​$ 2,380​$ 3,412​$ 2,542​$ 2,427​$ 21,197​$ 36,415​(1)The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $65 million in 2023. For additional information about these obligations, see Note 14 to the Consolidated Financial Statements. This table also excludes contributions under various multi-employer pension plans, which totaled $635 million in 2023. For additional information about these multi-employer pension plans, see Note 15 to the Consolidated Financial Statements.(2)The liability related to unrecognized tax benefits has been excluded from the contractual obligations table because a reasonable estimate of the timing of future tax settlements cannot be determined.(3)As of February 3, 2024, we had no outstanding commercial paper and no borrowings under our credit facility.(4)Amounts include contractual interest payments using the interest rate as of February 3, 2024 and stated fixed and swapped interest rates, if applicable, for all other debt instruments.(5)The amounts included for self-insurance liability related to workers' compensation claims have been stated on a present value basis.(6)Amounts include funds owed to third parties for projects currently under construction. These amounts are reflected in "Accounts payable" in our Consolidated Balance Sheets.(7)Amounts include scheduled opioid settlement commitments related to the nationwide opioid settlement framework and the State of West Virginia. For additional information about our opioid settlement charges, see Note 12 to the Consolidated Financial Statements.(8)Amounts include commitments, many of which are short-term in nature, to be utilized in the normal course of business, such as several contracts to purchase raw materials utilized in our food production plants and several contracts to purchase energy to be used in our stores and food production plants. Our obligations also include management fees for facilities operated by third parties and outside service contracts. Any upfront vendor allowances or incentives associated with outstanding purchase commitments are recorded as either current or long-term liabilities in our Consolidated Balance Sheets. We included our future commitments for customer fulfillment centers for which we have placed an order as of February 3, 2024. We did not include our commitments associated with additional customer fulfillment centers that have not yet been ordered. We expect our future commitments for customer fulfillment centers will continue to grow as we place orders for additional customer fulfillment centers.​We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of February 3, 2024, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and bank credit facility. Our short-term and long-term liquidity needs include anticipated requirements for working capital to maintain our operations, pension plan commitments, interest payments and scheduled principal payments of debt and commercial paper, servicing our lease obligations, self-insurance liabilities, capital investments, scheduled opioid settlement payments and other purchase obligations. We may also require additional capital in the future to fund organic growth opportunities, additional customer fulfillment centers, joint ventures or other business partnerships, property development, acquisitions, dividends and share repurchases. In addition, we generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to the capital markets. We believe we have adequate coverage of our debt covenants to continue to maintain our current investment grade debt ratings and to respond effectively to competitive conditions.​45 ​ ​ The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of February 3, 2024 (in millions of dollars):​​​​​​​​​​​​​​​​​​​​​​​​​ 2024 2025 2026 2027 2028 Thereafter Total Contractual Obligations(1)(2)​​​​​​​​​​​​​​​​​​​​​​Long-term debt(3)​$ 25​$ 92​$ 1,305​$ 611​$ 642​$ 7,512​$ 10,187​Interest on long-term debt(4)​​ 450​​ 446​​ 418​​ 387​​ 375​​ 4,163​​ 6,239​Finance lease obligations​​ 243​​ 240​​ 240​​ 242​​ 238​​ 1,359​​ 2,562​Operating lease obligations​​ 961​​ 898​​ 838​​ 784​​ 722​​ 5,738​​ 9,941​Self-insurance liability(5)​​ 281​​ 159​​ 108​​ 68​​ 40​​ 105​​ 761​Construction commitments(6)​​ 1,374​​  - ​​  - ​​  - ​​  - ​​  - ​​ 1,374​Opioid settlement commitments(7)​​ 296​​ 154​​ 143​​ 143​​ 143​​ 568​​ 1,447​Purchase obligations(8)​​ 827​​ 391​​ 360​​ 307​​ 267​​ 1,752​​ 3,904​Total​$ 4,457​$ 2,380​$ 3,412​$ 2,542​$ 2,427​$ 21,197​$ 36,415​(1)The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $65 million in 2023. For additional information about these obligations, see Note 14 to the Consolidated Financial Statements. This table also excludes contributions under various multi-employer pension plans, which totaled $635 million in 2023. For additional information about these multi-employer pension plans, see Note 15 to the Consolidated Financial Statements.(2)The liability related to unrecognized tax benefits has been excluded from the contractual obligations table because a reasonable estimate of the timing of future tax settlements cannot be determined.(3)As of February 3, 2024, we had no outstanding commercial paper and no borrowings under our credit facility.(4)Amounts include contractual interest payments using the interest rate as of February 3, 2024 and stated fixed and swapped interest rates, if applicable, for all other debt instruments.(5)The amounts included for self-insurance liability related to workers' compensation claims have been stated on a present value basis.(6)Amounts include funds owed to third parties for projects currently under construction. These amounts are reflected in "Accounts payable" in our Consolidated Balance Sheets.(7)Amounts include scheduled opioid settlement commitments related to the nationwide opioid settlement framework and the State of West Virginia. For additional information about our opioid settlement charges, see Note 12 to the Consolidated Financial Statements.(8)Amounts include commitments, many of which are short-term in nature, to be utilized in the normal course of business, such as several contracts to purchase raw materials utilized in our food production plants and several contracts to purchase energy to be used in our stores and food production plants. Our obligations also include management fees for facilities operated by third parties and outside service contracts. Any upfront vendor allowances or incentives associated with outstanding purchase commitments are recorded as either current or long-term liabilities in our Consolidated Balance Sheets. We included our future commitments for customer fulfillment centers for which we have placed an order as of February 3, 2024. We did not include our commitments associated with additional customer fulfillment centers that have not yet been ordered. We expect our future commitments for customer fulfillment centers will continue to grow as we place orders for additional customer fulfillment centers.​We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of February 3, 2024, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and bank credit facility. Our short-term and long-term liquidity needs include anticipated requirements for working capital to maintain our operations, pension plan commitments, interest payments and scheduled principal payments of debt and commercial paper, servicing our lease obligations, self-insurance liabilities, capital investments, scheduled opioid settlement payments and other purchase obligations. We may also require additional capital in the future to fund organic growth opportunities, additional customer fulfillment centers, joint ventures or other business partnerships, property development, acquisitions, dividends and share repurchases. In addition, we generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to the capital markets. We believe we have adequate coverage of our debt covenants to continue to maintain our current investment grade debt ratings and to respond effectively to competitive conditions.​ The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of February 3, 2024 (in millions of dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 Thereafter Total

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## Modified: PROPERTIES.

**Key changes:**

- Reworded sentence: "​ As of February 3, 2024, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates."
- Reworded sentence: "The total cost of our owned assets and finance leases at February 3, 2024, was $56.7 billion while the accumulated depreciation was $31.5 billion."
- Removed sentence: "​ 19 19 19 ITEM 3.LEGAL PROCEEDINGS.​Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under "Litigation" contained in Note 12 - "Commitments and Contingencies" in the notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report.​ITEM 4.MINE SAFETY DISCLOSURES.​Not applicable.​PART II​ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.​Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 22, 2023, there were 25,062 shareholders of record.​During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share."
- Removed sentence: "During 2021, we paid two quarterly cash dividends of $0.18 per share and two quarterly cash dividends of $0.21 per share."
- Removed sentence: "On March 1, 2023, we paid a quarterly cash dividend of $0.26 per share."

**Prior (2023):**

​ As of January 28, 2023, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at January 28, 2023, was $53.4 billion while the accumulated depreciation was $28.6 billion. ​ We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements. ​ 19 19 19 ITEM 3.LEGAL PROCEEDINGS.​Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under "Litigation" contained in Note 12 - "Commitments and Contingencies" in the notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report.​ITEM 4.MINE SAFETY DISCLOSURES.​Not applicable.​PART II​ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.​Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 22, 2023, there were 25,062 shareholders of record.​During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. During 2021, we paid two quarterly cash dividends of $0.18 per share and two quarterly cash dividends of $0.21 per share. On March 1, 2023, we paid a quarterly cash dividend of $0.26 per share. On March 9, 2023, we announced that our Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on June 1, 2023, to shareholders of record at the close of business on May 15, 2023. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board.​For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."​20 ITEM 3.LEGAL PROCEEDINGS.​Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under "Litigation" contained in Note 12 - "Commitments and Contingencies" in the notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report.​ITEM 4.MINE SAFETY DISCLOSURES.​Not applicable.​PART II​ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.​Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 22, 2023, there were 25,062 shareholders of record.​During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. During 2021, we paid two quarterly cash dividends of $0.18 per share and two quarterly cash dividends of $0.21 per share. On March 1, 2023, we paid a quarterly cash dividend of $0.26 per share. On March 9, 2023, we announced that our Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on June 1, 2023, to shareholders of record at the close of business on May 15, 2023. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board.​For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."​ ITEM 3.

**Current (2024):**

​ As of February 3, 2024, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at February 3, 2024, was $56.7 billion while the accumulated depreciation was $31.5 billion. ​ 21 21 21 ​We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements.​ITEM 3.LEGAL PROCEEDINGS.​Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under "Litigation" contained in Note 12 - "Commitments and Contingencies" in the notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report.​ITEM 4.MINE SAFETY DISCLOSURES.​Not applicable.​PART II​ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.​Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 27, 2024, there were 24,275 shareholders of record.​During 2023, we paid two quarterly cash dividends of $0.26 per share and two quarterly cash dividends of $0.29 per share. During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. On March 1, 2024, we paid a quarterly cash dividend of $0.29 per share. On March 14, 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.29 per share, payable on June 1, 2024, to shareholders of record at the close of business on May 15, 2024. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board.​For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."​22 ​ ​ We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements.​ITEM 3.LEGAL PROCEEDINGS.​Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under "Litigation" contained in Note 12 - "Commitments and Contingencies" in the notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report.​ITEM 4.MINE SAFETY DISCLOSURES.​Not applicable.​PART II​ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.​Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 27, 2024, there were 24,275 shareholders of record.​During 2023, we paid two quarterly cash dividends of $0.26 per share and two quarterly cash dividends of $0.29 per share. During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. On March 1, 2024, we paid a quarterly cash dividend of $0.29 per share. On March 14, 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.29 per share, payable on June 1, 2024, to shareholders of record at the close of business on May 15, 2024. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board.​For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."​ We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements. ​ ITEM 3.

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## Modified: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

**Key changes:**

- Reworded sentence: "​ Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 27, 2024, there were 24,275 shareholders of record."
- Reworded sentence: "​ For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." ​ 22 22 22 ​PERFORMANCE GRAPH​Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor's 500 Stock Index and a peer group composed of food and drug companies.​​​​​​​​​​​​​​​​​​​Base​INDEXED RETURNS ​​Period​Years Ending Company Name/Index 2018 2019 2020 2021 2022 2023 The Kroger Co."

**Prior (2023):**

​ Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 22, 2023, there were 25,062 shareholders of record. ​ During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. During 2021, we paid two quarterly cash dividends of $0.18 per share and two quarterly cash dividends of $0.21 per share. On March 1, 2023, we paid a quarterly cash dividend of $0.26 per share. On March 9, 2023, we announced that our Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on June 1, 2023, to shareholders of record at the close of business on May 15, 2023. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board. ​ For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." ​ 20 20 20 PERFORMANCE GRAPH​Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor's 500 Stock Index and a peer group composed of food and drug companies.​​​​​​​​​​​​​​​​​​​Base​INDEXED RETURNS ​​Period​Years Ending Company Name/Index 2017 2018 2019 2020 2021 2022 The Kroger Co. 100 97.48 95.47 125.25 161.03 170.17​S&P 500 Index 100 99.94 121.49 142.45 172.36 160.94​Peer Group 100 97.12 117.20 144.16 170.23 164.97​​Kroger's fiscal year ends on the Saturday closest to January 31.​Data supplied by Standard & Poor's.​The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto.* Total assumes $100 invested on February 3, 2018, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.​** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Supervalu Inc. (included through October 19, 2018 when it was acquired by United Natural Foods), Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc.​21 PERFORMANCE GRAPH​Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor's 500 Stock Index and a peer group composed of food and drug companies.​​​​​​​​​​​​​​​​​​​Base​INDEXED RETURNS ​​Period​Years Ending Company Name/Index 2017 2018 2019 2020 2021 2022 The Kroger Co. 100 97.48 95.47 125.25 161.03 170.17​S&P 500 Index 100 99.94 121.49 142.45 172.36 160.94​Peer Group 100 97.12 117.20 144.16 170.23 164.97​​Kroger's fiscal year ends on the Saturday closest to January 31.​Data supplied by Standard & Poor's.​The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto.* Total assumes $100 invested on February 3, 2018, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.​** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Supervalu Inc. (included through October 19, 2018 when it was acquired by United Natural Foods), Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc.​

**Current (2024):**

​ Our common stock is listed on the New York Stock Exchange under the symbol "KR." As of March 27, 2024, there were 24,275 shareholders of record. ​ During 2023, we paid two quarterly cash dividends of $0.26 per share and two quarterly cash dividends of $0.29 per share. During 2022, we paid two quarterly cash dividends of $0.21 per share and two quarterly cash dividends of $0.26 per share. On March 1, 2024, we paid a quarterly cash dividend of $0.29 per share. On March 14, 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.29 per share, payable on June 1, 2024, to shareholders of record at the close of business on May 15, 2024. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board. ​ For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." ​ 22 22 22 ​PERFORMANCE GRAPH​Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor's 500 Stock Index and a peer group composed of food and drug companies.​​​​​​​​​​​​​​​​​​​Base​INDEXED RETURNS ​​Period​Years Ending Company Name/Index 2018 2019 2020 2021 2022 2023 The Kroger Co. 100 97.94 128.49 165.19 174.57 183.07​S&P 500 Index 100 121.56 142.53 172.46 161.03 199.42​Peer Group 100 120.67 148.43 175.27 169.86 197.90​​Kroger's fiscal year ends on the Saturday closest to January 31.​Data supplied by Standard & Poor's.​The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto.* Total assumes $100 invested on February 2, 2019, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.​** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc.​23 ​ ​ PERFORMANCE GRAPH​Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor's 500 Stock Index and a peer group composed of food and drug companies.​​​​​​​​​​​​​​​​​​​Base​INDEXED RETURNS ​​Period​Years Ending Company Name/Index 2018 2019 2020 2021 2022 2023 The Kroger Co. 100 97.94 128.49 165.19 174.57 183.07​S&P 500 Index 100 121.56 142.53 172.46 161.03 199.42​Peer Group 100 120.67 148.43 175.27 169.86 197.90​​Kroger's fiscal year ends on the Saturday closest to January 31.​Data supplied by Standard & Poor's.​The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto.* Total assumes $100 invested on February 2, 2019, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.​** The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc.​

---

## Modified: ECONOMIC CONDITIONS

**Key changes:**

- Reworded sentence: "​ Our operating results could be materially affected by changes in overall economic conditions and other economic factors that affect consumer confidence and spending, including discretionary spending."
- Added sentence: "Geopolitical and catastrophic events, such as wars and conflicts, civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or the loss of merchandise as a result of shrink or industry-wide theft and organized retail crime, or pandemics or other health crises, and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows."
- Reworded sentence: "​ 17 17 17 ​Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns."
- Reworded sentence: "Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.​In addition, increasing governmental and societal attention to environmental, social, and governance ("ESG") matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect our reputation."
- Reworded sentence: "Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.​18 ​ ​ Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns."

**Prior (2023):**

​ Our operating results could be materially affected by changes in overall economic conditions and other economic factors that impact consumer confidence and spending, including discretionary spending. Future economic conditions affecting disposable consumer income such as employment levels, business conditions, overall economic slowdown or recession, changes in housing market conditions, changes in government benefits such as SNAP/EBT or child care credits, the availability of credit, interest rates, inflation or deflation, tax rates and other matters could reduce consumer spending. Inflation could materially affect our operating results through increases to our cost of goods, supply chain costs and labor costs. In addition, the economic factors listed above, or any other economic factors or circumstances resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, and other economic factors can increase our merchandise costs and operating, general and administrative expenses and otherwise adversely affect our financial condition, results of operations or cash flows. Increased fuel prices also have an effect on consumer spending and on our costs of producing and procuring products that we sell. A deterioration in overall economic conditions, including the uncertainty caused by inflation rate volatility, could adversely affect our business in many ways, including slowing sales growth, reducing overall sales and reducing gross margins. We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limit and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets. If banks or financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened. We are unable to predict how the global economy and financial markets will perform. If the global economy and financial markets do not perform as we expect, it could adversely affect our business, financial condition, results of operations or cash flows. ​ 17 17 17 COVID-19​COVID-19 has impacted and may continue to impact our business, including our supply chain, store operations and merchandising functions, as well as our associates. While our operations have generally stabilized since the peak of the pandemic, we cannot predict with certainty the extent that our operations may continue to be impacted by any continuing effects of COVID-19 on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely impact us. To the extent that COVID-19 continues to affect the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements. ​LEGAL AND GOVERNMENT REGULATION​We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for the Company, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.​In addition, increasing governmental and societal attention to environmental, social, and governance (ESG) matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect the Company's reputation.​Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.​WEATHER, NATURAL DISASTERS AND OTHER EVENTS​A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather, natural disasters, geopolitical and catastrophic events, such as war, civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or pandemics, such as the spread of COVID-19, or other future pandemics and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.18 COVID-19​COVID-19 has impacted and may continue to impact our business, including our supply chain, store operations and merchandising functions, as well as our associates. While our operations have generally stabilized since the peak of the pandemic, we cannot predict with certainty the extent that our operations may continue to be impacted by any continuing effects of COVID-19 on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely impact us. To the extent that COVID-19 continues to affect the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements. ​LEGAL AND GOVERNMENT REGULATION​We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for the Company, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.​In addition, increasing governmental and societal attention to environmental, social, and governance (ESG) matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect the Company's reputation.​Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.​WEATHER, NATURAL DISASTERS AND OTHER EVENTS​A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather, natural disasters, geopolitical and catastrophic events, such as war, civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or pandemics, such as the spread of COVID-19, or other future pandemics and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows. COVID-19 ​ COVID-19 has impacted and may continue to impact our business, including our supply chain, store operations and merchandising functions, as well as our associates. While our operations have generally stabilized since the peak of the pandemic, we cannot predict with certainty the extent that our operations may continue to be impacted by any continuing effects of COVID-19 on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely impact us. To the extent that COVID-19 continues to affect the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements. ​

**Current (2024):**

​ Our operating results could be materially affected by changes in overall economic conditions and other economic factors that affect consumer confidence and spending, including discretionary spending. Future economic conditions affecting disposable consumer income such as employment levels, business conditions, overall economic slowdown or recession, changes in housing market conditions, changes in government benefits such as SNAP/EBT, student loan relief, or child care credits, the availability of credit, interest rates, inflation, disinflation or deflation, tax rates and other matters could reduce consumer spending. Inflation could materially affect our operating results through increases to our cost of goods, supply chain costs and labor costs. In addition, the economic factors listed above, or any other economic factors or circumstances resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, and other economic factors can increase our merchandise costs and operating, general and administrative expenses and otherwise adversely affect our financial condition, results of operations or cash flows. Increased fuel prices also have an effect on consumer spending and on our costs of producing and procuring products that we sell. A deterioration in overall economic conditions, including the uncertainty caused by inflation rate volatility, could adversely affect our business in many ways, including slowing sales growth, reducing overall sales and reducing gross margins. Geopolitical and catastrophic events, such as wars and conflicts, civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or the loss of merchandise as a result of shrink or industry-wide theft and organized retail crime, or pandemics or other health crises, and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows. We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limit and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets. If banks or financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened. We are unable to predict how the global economy and financial markets will perform. If the global economy and financial markets do not perform as we expect, it could adversely affect our business, financial condition, results of operations or cash flows. ​ 17 17 17 ​Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns. We cannot predict with certainty the extent that our operations may be affected by any effects of the foregoing on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely affect us. To the extent that any health crisis affects the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.​LEGAL AND GOVERNMENT REGULATION​We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for us, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.​In addition, increasing governmental and societal attention to environmental, social, and governance ("ESG") matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect our reputation. Given our commitment to our ESG strategy, we have established and publicly announced certain goals which we may refine or even expand further in the future. The execution of this strategy to achieve these goals is subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipate. These risks and uncertainties include, but are not limited to, our ability to achieve our goals within the currently projected costs and the expected timeframes; unforeseen operational and technological difficulties; the outcome of research efforts and future technology developments; and the success of our collaborations with and reliance on third parties. Any failure, or perceived failure, to achieve these goals or the setting or publication of certain targets could damage our reputation and customer, investor and other stakeholder relationships, and may even result in regulatory enforcement action. Such conditions could have an adverse effect on our business, financial condition, results of operations or cash flows.​Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.​18 ​ ​ Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns. We cannot predict with certainty the extent that our operations may be affected by any effects of the foregoing on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely affect us. To the extent that any health crisis affects the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.​LEGAL AND GOVERNMENT REGULATION​We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for us, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.​In addition, increasing governmental and societal attention to environmental, social, and governance ("ESG") matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect our reputation. Given our commitment to our ESG strategy, we have established and publicly announced certain goals which we may refine or even expand further in the future. The execution of this strategy to achieve these goals is subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipate. These risks and uncertainties include, but are not limited to, our ability to achieve our goals within the currently projected costs and the expected timeframes; unforeseen operational and technological difficulties; the outcome of research efforts and future technology developments; and the success of our collaborations with and reliance on third parties. Any failure, or perceived failure, to achieve these goals or the setting or publication of certain targets could damage our reputation and customer, investor and other stakeholder relationships, and may even result in regulatory enforcement action. Such conditions could have an adverse effect on our business, financial condition, results of operations or cash flows.​Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.​ Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns. We cannot predict with certainty the extent that our operations may be affected by any effects of the foregoing on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely affect us. To the extent that any health crisis affects the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements. ​

---

## Modified: CONSOLIDATED STATEMENTS OF OPERATIONS

**Key changes:**

- Reworded sentence: "​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​"

**Prior (2023):**

​ Years Ended January 28, 2023, January 29, 2022 and January 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​

**Current (2024):**

​ Years Ended February 3, 2024, January 28, 2023 and January 29, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​

---

## Modified: FINANCIAL RISK MANAGEMENT

**Key changes:**

- Reworded sentence: "​ As of February 3, 2024 and January 28, 2023, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion."
- Reworded sentence: "The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate ("SOFR")."
- Added sentence: "As of February 3, 2024, the fair value of the interest rate swaps designated as cash flow hedges was recorded in "Other assets" for $125 million and accumulated other comprehensive income for $95 million, net of tax."
- Reworded sentence: "​ The remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps was not designated as a cash-flow hedge."
- Added sentence: "As of February 3, 2024, the fair value of these swaps was recorded in "Other Assets" for $35 million and "Other long-term liabilities" for $3 million."

**Prior (2023):**

​ In addition to the risks inherent in our operations, we are exposed to market risk from a variety of sources, including changes in interest rates, commodity prices, the fair value of certain equity investments and defined benefit pension and other post-retirement benefit plans. Our market risk exposures are discussed below. ​ Interest Rate Risk ​ We manage our exposure to interest rates and changes in the fair value of our debt instruments primarily through the strategic use of our commercial paper program, variable and fixed rate debt, and interest rate swaps. Our current program relative to interest rate protection contemplates hedging the exposure to changes in the fair value of fixed-rate debt attributable to changes in interest rates. To do this, we use the following guidelines: (i) use average daily outstanding borrowings to determine annual debt amounts subject to interest rate exposure, (ii) limit the average annual amount subject to interest rate reset and the amount of floating rate debt to a combined total amount that represents 25% of the carrying value of our debt portfolio or less, (iii) include no leveraged products, and (iv) hedge without regard to profit motive or sensitivity to current mark-to-market status. ​ When we use derivative financial instruments, it is primarily to manage our exposure to fluctuations in interest rates. We do not enter into derivative financial instruments for trading purposes. As a matter of policy, all of our derivative positions are intended to reduce risk by hedging an underlying economic exposure. Because of the high correlation between the hedging instrument and the underlying exposure, fluctuations in the value of the instruments generally are offset by reciprocal changes in the value of the underlying exposure. The interest rate derivatives we use are straightforward instruments with liquid markets. ​ As of January 28, 2023, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. We entered into these forward-starting interest rate swaps in order to lock in fixed interest rates on our forecasted issuances of debt. The fixed interest rates for these forward-starting interest rate swaps range from 3.00% to 3.78%. The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate (SOFR). A notional amount of $2.4 billion of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. As of January 28, 2023, the fair value of the interest rate swaps designated as cash flow hedges was recorded in "Other long-term liabilities" for $116 million and accumulated other comprehensive loss for $89 million, net of tax. The remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings. As of January 28, 2023, the fair value of these swaps was recorded in "Other long-term liabilities" for $142 million. During 2022, we recognized an unrealized loss of $142 million that is included in "(Loss) gain on investments" in our Consolidated Statements of Operations. We had no forward-starting interest rate swap agreements outstanding as of January 29, 2022. ​ Annually, we review with the Finance Committee of our Board of Directors compliance with the guidelines described above. The guidelines may change as our business needs dictate. ​ 45 45 45 The tables below provide information about our underlying debt portfolio as of January 28, 2023 and January 29, 2022. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of January 28, 2023 and January 29, 2022. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of January 28, 2023 and January 29, 2022. The Fair Value column includes the fair value of our debt instruments as of January 28, 2023 and January 29, 2022. We had no outstanding interest rate derivatives classified as fair value hedges as of January 28, 2023 or January 29, 2022. See Notes 5, 6 and 7 to the Consolidated Financial Statements.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 28, 2023 ​​Expected Year of Maturity ​ 2023 2024 2025 2026 2027 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate​$ (1,118)​$ (3)​$ (3)​$ (1,386)​$ (607)​$ (8,037)​$ (11,154)​$ (10,455)​Average interest rate​ 4.52% 1.53% 3.64% 4.26% 4.68% 4.54% ​​​​​​Variable rate​$ (35)​$ (22)​$ (81)​$  - ​$  - ​$  - ​$ (138)​$ (138)​Average interest rate​ 6.32% 7.07% 1.70%  - ​  - ​  - ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 29, 2022 ​​Expected Year of Maturity ​ 2022 2023 2024 2025 2026 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate​$ (416)​$ (1,107)​$ (5)​$ (3)​$ (1,387)​$ (8,688)​$ (11,606)​$ (13,050)​Average interest rate​ 4.38% 4.50% 1.51% 3.53% 4.27% 4.46% ​​​​​​Variable rate​$ (35)​$ (23)​$  - ​$ (81)​$  - ​$  - ​$ (139)​$ (139)​Average interest rate​ 1.86% 2.61%  - ​ 0.12%  - ​  - ​​​​​​​​Based on our year-end 2022 variable rate debt levels, a 10 percent change in interest rates would be immaterial. See Note 6 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies.​Commodity Price Risk​We are subject to commodity price risk generated by our purchases of meat, seafood and dairy products, among other food items. We purchase, manufacture and sell various commodity related food products and risk arises from the price volatility of these commodities. The price and availability of these commodities directly impacts our results of operations. To help manage or minimize the effect of commodity price risk exposure on our operations, we use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts, and have the ability to increase or decrease retail prices to our customers as commodity prices change. ​We are exposed to changes in the prices of diesel and unleaded fuel. The majority of our fuel contracts utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. While many of the indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for fuel. Because of this, our operating results may be affected should the market price of fuel suddenly change by a significant amount, which can affect our operating results either positively or negatively in the short-term. ​We have entered into fixed price contracts to purchase electricity and natural gas for a portion of our energy needs. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. ​As of January 28, 2023 and January 29, 2022, we had no commodity derivative contracts outstanding.​46 The tables below provide information about our underlying debt portfolio as of January 28, 2023 and January 29, 2022. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of January 28, 2023 and January 29, 2022. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of January 28, 2023 and January 29, 2022. The Fair Value column includes the fair value of our debt instruments as of January 28, 2023 and January 29, 2022. We had no outstanding interest rate derivatives classified as fair value hedges as of January 28, 2023 or January 29, 2022. See Notes 5, 6 and 7 to the Consolidated Financial Statements.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 28, 2023 ​​Expected Year of Maturity ​ 2023 2024 2025 2026 2027 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate​$ (1,118)​$ (3)​$ (3)​$ (1,386)​$ (607)​$ (8,037)​$ (11,154)​$ (10,455)​Average interest rate​ 4.52% 1.53% 3.64% 4.26% 4.68% 4.54% ​​​​​​Variable rate​$ (35)​$ (22)​$ (81)​$  - ​$  - ​$  - ​$ (138)​$ (138)​Average interest rate​ 6.32% 7.07% 1.70%  - ​  - ​  - ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 29, 2022 ​​Expected Year of Maturity ​ 2022 2023 2024 2025 2026 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate​$ (416)​$ (1,107)​$ (5)​$ (3)​$ (1,387)​$ (8,688)​$ (11,606)​$ (13,050)​Average interest rate​ 4.38% 4.50% 1.51% 3.53% 4.27% 4.46% ​​​​​​Variable rate​$ (35)​$ (23)​$  - ​$ (81)​$  - ​$  - ​$ (139)​$ (139)​Average interest rate​ 1.86% 2.61%  - ​ 0.12%  - ​  - ​​​​​​​​Based on our year-end 2022 variable rate debt levels, a 10 percent change in interest rates would be immaterial. See Note 6 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies.​Commodity Price Risk​We are subject to commodity price risk generated by our purchases of meat, seafood and dairy products, among other food items. We purchase, manufacture and sell various commodity related food products and risk arises from the price volatility of these commodities. The price and availability of these commodities directly impacts our results of operations. To help manage or minimize the effect of commodity price risk exposure on our operations, we use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts, and have the ability to increase or decrease retail prices to our customers as commodity prices change. ​We are exposed to changes in the prices of diesel and unleaded fuel. The majority of our fuel contracts utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. While many of the indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for fuel. Because of this, our operating results may be affected should the market price of fuel suddenly change by a significant amount, which can affect our operating results either positively or negatively in the short-term. ​We have entered into fixed price contracts to purchase electricity and natural gas for a portion of our energy needs. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. ​As of January 28, 2023 and January 29, 2022, we had no commodity derivative contracts outstanding.​ The tables below provide information about our underlying debt portfolio as of January 28, 2023 and January 29, 2022. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of January 28, 2023 and January 29, 2022. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of January 28, 2023 and January 29, 2022. The Fair Value column includes the fair value of our debt instruments as of January 28, 2023 and January 29, 2022. We had no outstanding interest rate derivatives classified as fair value hedges as of January 28, 2023 or January 29, 2022. See Notes 5, 6 and 7 to the Consolidated Financial Statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

**Current (2024):**

​ In addition to the risks inherent in our operations, we are exposed to market risk from a variety of sources, including changes in interest rates, commodity prices, the fair value of certain equity investments and defined benefit pension and other post-retirement benefit plans. Our market risk exposures are discussed below. ​ Interest Rate Risk ​ We manage our exposure to interest rates and changes in the fair value of our debt instruments primarily through the strategic use of our commercial paper program, variable and fixed rate debt, and interest rate swaps. Our current program relative to interest rate protection contemplates hedging the exposure to changes in the fair value of fixed-rate debt attributable to changes in interest rates. To do this, we use the following guidelines: (i) use average daily outstanding borrowings to determine annual debt amounts subject to interest rate exposure, (ii) limit the average annual amount subject to interest rate reset and the amount of floating rate debt to a combined total amount that represents 25% of the carrying value of our debt portfolio or less, (iii) include no leveraged products, and (iv) hedge without regard to profit motive or sensitivity to current mark-to-market status. ​ When we use derivative financial instruments, it is primarily to manage our exposure to fluctuations in interest rates. We do not enter into derivative financial instruments for trading purposes. As a matter of policy, all of our derivative positions are intended to reduce risk by hedging an underlying economic exposure. Because of the high correlation between the hedging instrument and the underlying exposure, fluctuations in the value of the instruments generally are offset by reciprocal changes in the value of the underlying exposure. The interest rate derivatives we use are straightforward instruments with liquid markets. ​ As of February 3, 2024 and January 28, 2023, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. We entered into these forward-starting interest rate swaps in order to lock in fixed interest rates on our forecasted issuances of debt. The fixed interest rates for these forward-starting interest rate swaps range from 3.00% to 3.78%. The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate ("SOFR"). ​ A notional amount of $2.4 billion of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. As of February 3, 2024, the fair value of the interest rate swaps designated as cash flow hedges was recorded in "Other assets" for $125 million and accumulated other comprehensive income for $95 million, net of tax. As of January 28, 2023, the fair value of the interest rate swaps designated as cash flow hedges was recorded in "Other long-term liabilities" for $116 million and accumulated other comprehensive loss for $89 million, net of tax. ​ The remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings. As of February 3, 2024, the fair value of these swaps was recorded in "Other Assets" for $35 million and "Other long-term liabilities" for $3 million. In 2023, we recognized an unrealized gain of $174 million that is included in "Gain (loss) on investments" in our Consolidated Statements of Operations. As of January 28, 2023, the fair value of these swaps was recorded in "Other long-term liabilities" for $142 million. In 2022, we recognized an unrealized loss of $142 million related to these swaps that is included in "Gain (loss) on investments" in our Consolidated Statements of Operations. ​ Annually, we review with the Finance Committee of our Board of Directors compliance with the guidelines described above. The guidelines may change as our business needs dictate. 48 48 48 ​The tables below provide information about our underlying debt portfolio as of February 3, 2024 and January 28, 2023. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of February 3, 2024 and January 28, 2023. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of February 3, 2024 and January 28, 2023. The Fair Value column includes the fair value of our debt instruments as of February 3, 2024 and January 28, 2023. We had no outstanding interest rate derivatives classified as fair value hedges as of February 3, 2024 or January 28, 2023. See Notes 5, 6 and 7 to the Consolidated Financial Statements.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​February 3, 2024 ​​Expected Year of Maturity ​ 2024 2025 2026 2027 2028 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate principal payments(1)​$ (23)​$ (19)​$ (1,311)​$ (616)​$ (625)​$ (7,521)​$ (10,115)​$ (9,256)​Average interest rate(1)​ 2.41% 3.03% 3.00% 3.68% 4.50% 4.56% ​​​​​​Variable rate principal payments​$ (9)​$ (81)​$  - ​$  - ​$ (22)​$ (33)​$ (145)​$ (145)​Average interest rate​ 7.19% 3.07%  - ​  - ​ 7.94% 7.19%​​​​​​(1)The fixed rate principal payments exclude debt discounts and deferred financing costs of $73 million, of which $7 million is current and $66 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 28, 2023 ​​Expected Year of Maturity ​ 2023 2024 2025 2026 2027 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate principal payments(1)​$ (1,127)​$ (10)​$ (10)​$ (1,392)​$ (612)​$ (8,085)​$ (11,236)​$ (10,455)​Average interest rate(1)​ 3.89% 2.67% 2.68% 3.04% 3.68% 4.56% ​​​​​​Variable rate principal payments​$ (35)​$ (22)​$ (81)​$  - ​$  - ​$  - ​$ (138)​$ (138)​Average interest rate​ 6.32% 7.07% 1.70%  - ​  - ​  - ​​​​​​​(1)The fixed rate principal payments exclude debt discounts and deferred financing costs of $82 million, of which $9 million is current and $73 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.​Based on our year-end 2023 variable rate debt levels, a 10 percent change in interest rates would be immaterial. See Note 6 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies.​Commodity Price Risk​We are subject to commodity price risk generated by our purchases of meat, seafood and dairy products, among other food items. We purchase, manufacture and sell various commodity related food products and risk arises from the price volatility of these commodities. The price and availability of these commodities directly affects our results of operations. To help manage or minimize the effect of commodity price risk exposure on our operations, we use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts, and have the ability to increase or decrease retail prices to our customers as commodity prices change.​We are exposed to changes in the prices of diesel and unleaded fuel. The majority of our fuel contracts utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. While many of the indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for fuel. Because of this, our operating results may be affected should the market price of fuel suddenly change by a significant amount, which can affect our operating results either positively or negatively in the short-term. ​49 ​ ​ The tables below provide information about our underlying debt portfolio as of February 3, 2024 and January 28, 2023. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of February 3, 2024 and January 28, 2023. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of February 3, 2024 and January 28, 2023. The Fair Value column includes the fair value of our debt instruments as of February 3, 2024 and January 28, 2023. We had no outstanding interest rate derivatives classified as fair value hedges as of February 3, 2024 or January 28, 2023. See Notes 5, 6 and 7 to the Consolidated Financial Statements.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​February 3, 2024 ​​Expected Year of Maturity ​ 2024 2025 2026 2027 2028 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate principal payments(1)​$ (23)​$ (19)​$ (1,311)​$ (616)​$ (625)​$ (7,521)​$ (10,115)​$ (9,256)​Average interest rate(1)​ 2.41% 3.03% 3.00% 3.68% 4.50% 4.56% ​​​​​​Variable rate principal payments​$ (9)​$ (81)​$  - ​$  - ​$ (22)​$ (33)​$ (145)​$ (145)​Average interest rate​ 7.19% 3.07%  - ​  - ​ 7.94% 7.19%​​​​​​(1)The fixed rate principal payments exclude debt discounts and deferred financing costs of $73 million, of which $7 million is current and $66 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​January 28, 2023 ​​Expected Year of Maturity ​ 2023 2024 2025 2026 2027 Thereafter Total Fair Value ​​(in millions) Debt​​​​​​​​​​​​​​​​​​​​​​​​​Fixed rate principal payments(1)​$ (1,127)​$ (10)​$ (10)​$ (1,392)​$ (612)​$ (8,085)​$ (11,236)​$ (10,455)​Average interest rate(1)​ 3.89% 2.67% 2.68% 3.04% 3.68% 4.56% ​​​​​​Variable rate principal payments​$ (35)​$ (22)​$ (81)​$  - ​$  - ​$  - ​$ (138)​$ (138)​Average interest rate​ 6.32% 7.07% 1.70%  - ​  - ​  - ​​​​​​​(1)The fixed rate principal payments exclude debt discounts and deferred financing costs of $82 million, of which $9 million is current and $73 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.​Based on our year-end 2023 variable rate debt levels, a 10 percent change in interest rates would be immaterial. See Note 6 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies.​Commodity Price Risk​We are subject to commodity price risk generated by our purchases of meat, seafood and dairy products, among other food items. We purchase, manufacture and sell various commodity related food products and risk arises from the price volatility of these commodities. The price and availability of these commodities directly affects our results of operations. To help manage or minimize the effect of commodity price risk exposure on our operations, we use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts, and have the ability to increase or decrease retail prices to our customers as commodity prices change.​We are exposed to changes in the prices of diesel and unleaded fuel. The majority of our fuel contracts utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. While many of the indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for fuel. Because of this, our operating results may be affected should the market price of fuel suddenly change by a significant amount, which can affect our operating results either positively or negatively in the short-term. ​ The tables below provide information about our underlying debt portfolio as of February 3, 2024 and January 28, 2023. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of February 3, 2024 and January 28, 2023. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of February 3, 2024 and January 28, 2023. The Fair Value column includes the fair value of our debt instruments as of February 3, 2024 and January 28, 2023. We had no outstanding interest rate derivatives classified as fair value hedges as of February 3, 2024 or January 28, 2023. See Notes 5, 6 and 7 to the Consolidated Financial Statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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## Modified: INTEGRATION OF NEW BUSINESS AND STRATEGIC ALLIANCES

**Key changes:**

- Reworded sentence: "​ In addition to the above, we enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies, procurement savings, innovation and sharing of best practices, that may allow for future growth."
- Reworded sentence: "Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams."
- Reworded sentence: "The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability.​In addition, evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels in our industry increase the competitive environment."
- Reworded sentence: "If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected."
- Reworded sentence: "We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use."

**Prior (2023):**

​ The operating environment for the food retailing industry continues to be characterized by the fragmentation of local, regional, and national retailers, including both retail and digital formats, intense competition and entry of non-traditional competitors. Customer behavior shifted quickly and considerably during the pandemic, including a shift from food away from home to food at home. We see three major trends shaping the industry: e-commerce, cooking at home and prepared foods to go. If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these changing preferences, or if trends shift more quickly to food away from home, our sales and profitability could be adversely affected. If we fail to meet the evolving needs of our customers, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. ​ 12 12 12 We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these are strategies designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail supermarket business to create fast-growing, asset-light and margin rich revenue streams. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability.​In addition, evolving customer preferences and the advancement of online, delivery, ship to home, and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our traditional in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. Our digital business accelerated significantly during the COVID-19 pandemic. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in, providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations, or through customer fulfillment centers powered by Ocado.​PRODUCT SAFETY​Customers count on Kroger to provide them with safe food and drugs and other merchandise. Concerns regarding the safety of the products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply even if the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. We could be adversely affected by personal injury or product liability claims, product recalls, or other health and safety issues, which occur from time to time. If we sell products that cause illness or injury to customers, resulting from product contamination or spoilage, the presence of certain substances, or damage caused in handling, storage or transportation, we could be exposed to claims or litigation. Any issue regarding the safety of items, whether Our Brands items manufactured by the Company or for the Company or CPG products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.​EMPLOYEE MATTERS​A majority of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 310 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows.​13 We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these are strategies designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail supermarket business to create fast-growing, asset-light and margin rich revenue streams. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability.​In addition, evolving customer preferences and the advancement of online, delivery, ship to home, and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our traditional in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. Our digital business accelerated significantly during the COVID-19 pandemic. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in, providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations, or through customer fulfillment centers powered by Ocado.​PRODUCT SAFETY​Customers count on Kroger to provide them with safe food and drugs and other merchandise. Concerns regarding the safety of the products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply even if the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. We could be adversely affected by personal injury or product liability claims, product recalls, or other health and safety issues, which occur from time to time. If we sell products that cause illness or injury to customers, resulting from product contamination or spoilage, the presence of certain substances, or damage caused in handling, storage or transportation, we could be exposed to claims or litigation. Any issue regarding the safety of items, whether Our Brands items manufactured by the Company or for the Company or CPG products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.​EMPLOYEE MATTERS​A majority of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 310 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows.​ We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these are strategies designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail supermarket business to create fast-growing, asset-light and margin rich revenue streams. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability. ​ In addition, evolving customer preferences and the advancement of online, delivery, ship to home, and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our traditional in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​ In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. Our digital business accelerated significantly during the COVID-19 pandemic. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in, providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations, or through customer fulfillment centers powered by Ocado. ​

**Current (2024):**

​ In addition to the above, we enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies, procurement savings, innovation and sharing of best practices, that may allow for future growth. Achieving the anticipated or desired benefits may be subject to a number of significant challenges and uncertainties, including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and effective manner, the coordination of geographically separate organizations, the possibility of imprecise assumptions underlying expectations regarding potential synergies, capital requirements, and the integration process (including the integration of internal controls into our business operations), unforeseen expenses and delays and competitive factors in the marketplace. We could also encounter unforeseen transaction and integration-related costs or other circumstances such as unforeseen liabilities or other issues. Many of these potential circumstances are outside of our control and any of them could result in increased costs, decreased revenue, decreased synergies and the diversion of management time and attention. If we are unable to achieve our objectives within the anticipated time frame, or at all, the expected benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on our business, financial condition, results of operations or cash flows. ​ 12 12 12 ​COMPETITIVE ENVIRONMENT​The operating environment for the food retailing industry continues to be characterized by the proliferation of local, regional, and national retailers, including both retail and digital formats, and intense and ever-increasing competition ranging from online retailers, mass merchant, club stores, regional chains, deep discounters, and dollar stores, as well as ethnic, specialty and natural food stores. With the proliferation of grocery delivery - both by retailers and third-party delivery service providers - customers have an even wider range of retailers from which to choose. Customers continue to expect a great shopping experience both in-store and online. The industry continues to be shaped by e-commerce, cooking at home and prepared foods to go and other customer needs and preferences. Customers want to be able to shop on their own terms with zero compromise whether at brick and mortar stores or online, pick-up or delivery, depending on their particular trip needs and other factors. If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these ever-changing preferences, our sales and profitability could be adversely affected. If we fail to meet the evolving needs of our customers, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected.​We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these strategies is designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams. Growth in loyal households, customer traffic and digitally engaged customers allow us to grow profits and power the flywheel in our model. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability.​In addition, evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations or through customer fulfillment centers powered by Ocado.13 ​ ​ COMPETITIVE ENVIRONMENT​The operating environment for the food retailing industry continues to be characterized by the proliferation of local, regional, and national retailers, including both retail and digital formats, and intense and ever-increasing competition ranging from online retailers, mass merchant, club stores, regional chains, deep discounters, and dollar stores, as well as ethnic, specialty and natural food stores. With the proliferation of grocery delivery - both by retailers and third-party delivery service providers - customers have an even wider range of retailers from which to choose. Customers continue to expect a great shopping experience both in-store and online. The industry continues to be shaped by e-commerce, cooking at home and prepared foods to go and other customer needs and preferences. Customers want to be able to shop on their own terms with zero compromise whether at brick and mortar stores or online, pick-up or delivery, depending on their particular trip needs and other factors. If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these ever-changing preferences, our sales and profitability could be adversely affected. If we fail to meet the evolving needs of our customers, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected.​We are continuing to enhance the customer connection with investments in our four strategic pillars - Seamless, Personalization, Fresh, and Our Brands. Each of these strategies is designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe our plans to continue to improve these four strategic pillars will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the foregoing key elements of our connection with customers, or they fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams. Growth in loyal households, customer traffic and digitally engaged customers allow us to grow profits and power the flywheel in our model. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could adversely affect our profitability.​In addition, evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels in our industry increase the competitive environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected. ​In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors as well as the evolving needs and preferences of our customers. We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing in providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations or through customer fulfillment centers powered by Ocado.

---

## Modified: (In millions, except per share amounts)

**Key changes:**

- Reworded sentence: "(53 weeks) ​ (52 weeks) ​ (52 weeks) Sales ​ ​ $ 150,039 ​ $ 148,258 ​ $ 137,888 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below ​ ​ 116,675 ​ 116,480 ​ 107,539 ​ Operating, general and administrative ​ ​ 26,252 ​ 23,848 ​ 23,203 ​ Rent ​ ​ 891 ​ 839 ​ 845 ​ Depreciation and amortization ​ ​ 3,125 ​ 2,965 ​ 2,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 3,096 ​ 4,126 ​ 3,477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ (441) ​ (535) ​ (571) ​ Non-service component of company-sponsored pension plan benefits (costs) ​ ​ ​ 30 ​ ​ 39 ​ ​ (34) ​ Gain (loss) on investments ​ ​ ​ 151 ​ ​ (728) ​ ​ (821) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings before income tax expense ​ ​ 2,836 ​ 2,902 ​ 2,051 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 667 ​ 653 ​ 385 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings including noncontrolling interests ​ ​ 2,169 ​ 2,249 ​ 1,666 ​ Net income attributable to noncontrolling interests ​ ​ 5 ​ 5 ​ 11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co."

**Prior (2023):**

(52 weeks) ​ (52 weeks) ​ (52 weeks) Sales ​ ​ $ 148,258 ​ $ 137,888 ​ $ 132,498 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below ​ ​ 116,480 ​ 107,539 ​ 101,597 ​ Operating, general and administrative ​ ​ 23,848 ​ 23,203 ​ 24,500 ​ Rent ​ ​ 839 ​ 845 ​ 874 ​ Depreciation and amortization ​ ​ 2,965 ​ 2,824 ​ 2,747 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 4,126 ​ 3,477 ​ 2,780 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ (535) ​ (571) ​ (544) ​ Non-service component of company-sponsored pension plan benefits (costs) ​ ​ ​ 39 ​ ​ (34) ​ ​ 29 ​ (Loss) gain on investments ​ ​ ​ (728) ​ ​ (821) ​ ​ 1,105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings before income tax expense ​ ​ 2,902 ​ 2,051 ​ 3,370 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 653 ​ 385 ​ 782 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings including noncontrolling interests ​ ​ 2,249 ​ 1,666 ​ 2,588 ​ Net income attributable to noncontrolling interests ​ ​ 5 ​ 11 ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. ​ ​ $ 2,244 ​ $ 1,655 ​ $ 2,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per basic common share ​ ​ $ 3.10 ​ $ 2.20 ​ $ 3.31 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average number of common shares used in basic calculation ​ ​ 718 ​ 744 ​ 773 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share ​ ​ $ 3.06 ​ $ 2.17 ​ $ 3.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average number of common shares used in diluted calculation ​ ​ 727 ​ 754 ​ 781 ​ ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 53 53 53 THE KROGER CO.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​​​2022​2021 2020(In millions) (52 weeks)​(52 weeks)​(52 weeks)Net earnings including noncontrolling interests​$ 2,249​$ 1,666​$ 2,588​​​​​​​​​​Other comprehensive (loss) income​​​​​​​​​Change in pension and other postretirement defined benefit plans, net of income tax(1)​​ (83)​​ 156​​ 22Unrealized gains and losses on cash flow hedging activities, net of income tax(2)​ (89)​  - ​ (14)Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)​​ 7​​ 7​​ 2​​​​​​​​​​Total other comprehensive (loss) income​ (165)​ 163​ 10​​​​​​​​​​Comprehensive income​ 2,084​ 1,829​ 2,598Comprehensive income attributable to noncontrolling interests​ 5​ 11​ 3Comprehensive income attributable to The Kroger Co. ​$ 2,079​$ 1,818​$ 2,595​(1)Amount is net of tax (benefit) expense of ($26) in 2022, $48 in 2021 and $7 in 2020.(2)Amount is net of tax benefit of ($27) in 2022 and ($8) in 2020.(3)Amount is net of tax expense of $2 in 2022, $3 in 2021 and $2 in 2020.​The accompanying notes are an integral part of the consolidated financial statements.​54 THE KROGER CO.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​​​2022​2021 2020(In millions) (52 weeks)​(52 weeks)​(52 weeks)Net earnings including noncontrolling interests​$ 2,249​$ 1,666​$ 2,588​​​​​​​​​​Other comprehensive (loss) income​​​​​​​​​Change in pension and other postretirement defined benefit plans, net of income tax(1)​​ (83)​​ 156​​ 22Unrealized gains and losses on cash flow hedging activities, net of income tax(2)​ (89)​  - ​ (14)Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)​​ 7​​ 7​​ 2​​​​​​​​​​Total other comprehensive (loss) income​ (165)​ 163​ 10​​​​​​​​​​Comprehensive income​ 2,084​ 1,829​ 2,598Comprehensive income attributable to noncontrolling interests​ 5​ 11​ 3Comprehensive income attributable to The Kroger Co. ​$ 2,079​$ 1,818​$ 2,595​(1)Amount is net of tax (benefit) expense of ($26) in 2022, $48 in 2021 and $7 in 2020.(2)Amount is net of tax benefit of ($27) in 2022 and ($8) in 2020.(3)Amount is net of tax expense of $2 in 2022, $3 in 2021 and $2 in 2020.​The accompanying notes are an integral part of the consolidated financial statements.​

**Current (2024):**

(53 weeks) ​ (52 weeks) ​ (52 weeks) Sales ​ ​ $ 150,039 ​ $ 148,258 ​ $ 137,888 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below ​ ​ 116,675 ​ 116,480 ​ 107,539 ​ Operating, general and administrative ​ ​ 26,252 ​ 23,848 ​ 23,203 ​ Rent ​ ​ 891 ​ 839 ​ 845 ​ Depreciation and amortization ​ ​ 3,125 ​ 2,965 ​ 2,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 3,096 ​ 4,126 ​ 3,477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ (441) ​ (535) ​ (571) ​ Non-service component of company-sponsored pension plan benefits (costs) ​ ​ ​ 30 ​ ​ 39 ​ ​ (34) ​ Gain (loss) on investments ​ ​ ​ 151 ​ ​ (728) ​ ​ (821) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings before income tax expense ​ ​ 2,836 ​ 2,902 ​ 2,051 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 667 ​ 653 ​ 385 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings including noncontrolling interests ​ ​ 2,169 ​ 2,249 ​ 1,666 ​ Net income attributable to noncontrolling interests ​ ​ 5 ​ 5 ​ 11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. ​ ​ $ 2,164 ​ $ 2,244 ​ $ 1,655 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per basic common share ​ ​ $ 2.99 ​ $ 3.10 ​ $ 2.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average number of common shares used in basic calculation ​ ​ 718 ​ 718 ​ 744 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share ​ ​ $ 2.96 ​ $ 3.06 ​ $ 2.17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average number of common shares used in diluted calculation ​ ​ 725 ​ 727 ​ 754 ​ ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 56 56 56 ​THE KROGER CO.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​​​2023​2022 2021(In millions) (53 weeks)​(52 weeks)​(52 weeks)Net earnings including noncontrolling interests​$ 2,169​$ 2,249​$ 1,666​​​​​​​​​​Other comprehensive (loss) income​​​​​​​​​Change in pension and other postretirement defined benefit plans, net of income tax(1)​​ (46)​​ (83)​​ 156Unrealized gains and losses on cash flow hedging activities, net of income tax(2)​ 183​ (89)​  - Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)​​ 6​​ 7​​ 7​​​​​​​​​​Total other comprehensive income (loss)​ 143​ (165)​ 163​​​​​​​​​​Comprehensive income​ 2,312​ 2,084​ 1,829Comprehensive income attributable to noncontrolling interests​ 5​ 5​ 11Comprehensive income attributable to The Kroger Co. ​$ 2,307​$ 2,079​$ 1,818​(1)Amount is net of tax (benefit) expense of $(14) in 2023, $(26) in 2022 and $48 in 2021.(2)Amount is net of tax expense (benefit) of $56 in 2023 and $(27) in 2022.(3)Amount is net of tax expense of $2 in 2023, $2 in 2022 and $3 in 2021.​The accompanying notes are an integral part of the consolidated financial statements.​57 ​ ​ THE KROGER CO.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​​​2023​2022 2021(In millions) (53 weeks)​(52 weeks)​(52 weeks)Net earnings including noncontrolling interests​$ 2,169​$ 2,249​$ 1,666​​​​​​​​​​Other comprehensive (loss) income​​​​​​​​​Change in pension and other postretirement defined benefit plans, net of income tax(1)​​ (46)​​ (83)​​ 156Unrealized gains and losses on cash flow hedging activities, net of income tax(2)​ 183​ (89)​  - Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)​​ 6​​ 7​​ 7​​​​​​​​​​Total other comprehensive income (loss)​ 143​ (165)​ 163​​​​​​​​​​Comprehensive income​ 2,312​ 2,084​ 1,829Comprehensive income attributable to noncontrolling interests​ 5​ 5​ 11Comprehensive income attributable to The Kroger Co. ​$ 2,307​$ 2,079​$ 1,818​(1)Amount is net of tax (benefit) expense of $(14) in 2023, $(26) in 2022 and $48 in 2021.(2)Amount is net of tax expense (benefit) of $56 in 2023 and $(27) in 2022.(3)Amount is net of tax expense of $2 in 2023, $2 in 2022 and $3 in 2021.​The accompanying notes are an integral part of the consolidated financial statements.​

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## Modified: OUR PROPOSED TRANSACTION WITH ALBERTSONS CREATES INCREMENTAL BUSINESS, REGULATORY AND REPUTATIONAL RISKS

**Key changes:**

- Reworded sentence: "In connection with the proposed transaction, Kroger and Albertsons entered into a comprehensive divestiture plan with C&S Wholesale Grocers, LLC for the combined sale of certain stores, distribution centers, offices and private label brands."

**Prior (2023):**

​ On October 13, 2022, we entered into a merger agreement with Albertsons Companies Inc. ("Albertsons"), which sets forth the terms of our proposed transaction. The proposed transaction with Albertsons entails important risks, including, among others: the expected timing and likelihood of completion of the proposed transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed transaction; the effect and terms and conditions of any potential divestitures, including those that may be imposed by regulators as a condition to the approval of the proposed transaction, and/or the separation of SpinCo (as described in the merger agreement); the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that have been instituted and may in the future be instituted against the parties and others following announcement of the merger agreement and proposed transaction; the inability to consummate the proposed transaction due to the failure to satisfy other conditions to complete the proposed transaction; risks that the proposed transaction disrupts our current plans and operations; the ability to identify and recognize, including on the expected timeline, the anticipated total shareholder return ("TSR"), revenue and EBITDA expectations; the amount of the costs, fees, expenses and charges related to the proposed transaction; the risk that transaction and/or integration costs are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential effect of the announcement and/or consummation of the proposed transaction on relationships, including with associates, suppliers and competitors; our ability to maintain an investment grade credit rating; the risk that management's attention is diverted from other matters; risks related to the potential effect of general economic, political and market factors, including changes in the financial markets as a result of inflation or measures implemented to address inflation, and any epidemic, pandemic or disease outbreaks, on Kroger, Albertsons or the proposed transaction; the risk of adverse effects on the market price of our or Albertsons's securities or on Albertsons's or the Company's operating results for any reason; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; and other risks described in our filings with the SEC. ​

**Current (2024):**

​ On October 13, 2022, we entered into a merger agreement with Albertsons Companies Inc. ("Albertsons"), which sets forth the terms of our proposed transaction. In connection with the proposed transaction, Kroger and Albertsons entered into a comprehensive divestiture plan with C&S Wholesale Grocers, LLC for the combined sale of certain stores, distribution centers, offices and private label brands. The proposed transaction with Albertsons and the divestiture plan entails important risks, including, among others: the expected timing and likelihood of completion of the proposed transaction and divestiture plan, including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed transaction and divestiture plan, and/or resolution of pending litigation challenging the merger; the effect of the proposed divestiture plan; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or divestiture agreement; the outcome of any legal proceedings that have been instituted and may in the future be instituted against the parties and others following announcement of the merger agreement and proposed transaction or divestiture plan; the inability to consummate the proposed transaction or divestiture plan due to the failure to satisfy other conditions to complete the proposed transaction or divestiture plan; risks that the proposed transaction or divestiture plan disrupts our current plans and operations; the ability to identify and recognize, including on the expected timeline, the anticipated total shareholder return ("TSR"), revenue and EBITDA expectations; the amount of the costs, fees, expenses and charges related to the proposed transaction or divestiture plan; the risk that transaction and/or integration costs are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential effect of the announcement and/or consummation of the proposed transaction or divestiture plan on relationships, including with associates, suppliers and competitors; our ability to maintain an investment grade credit rating; the risk that management's attention is diverted from other matters; risks related to the potential effect of general economic, political and market factors, including changes in the financial markets as a result of inflation or measures implemented to address inflation, and any epidemic, pandemic or disease outbreaks, on Kroger, Albertsons or the proposed transaction or divestiture plan; the risk of adverse effects on the market price of our or Albertsons's securities or on Albertsons's or our operating results for any reason; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or divestiture agreement; and other risks described in our filings with the SEC. ​

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## Modified: (in millions)

**Key changes:**

- Reworded sentence: "First period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 5, 2023 to December 2, 2023 7,093 ​ $ 44.09 6,900 ​ $ 1,000 ​ Second period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 3, 2023 to December 30, 2023 82,059 ​ $ 44.75 64,200 ​ $ 1,000 ​ Third period - five weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 to February 3, 2024 96,000 ​ $ 46.07 96,000 ​ $ 1,000 ​ Total 185,152 ​ $ 45.41 167,100 ​ $ 1,000 ​ ​ ITEM 6."
- Reworded sentence: "MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future."
- Reworded sentence: "During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​25 ​ ​ ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co."
- Reworded sentence: "MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future."

**Prior (2023):**

First four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 6, 2022 to December 3, 2022 26,566 ​ $ 47.90 26,566 ​ $ 1,000 ​ Second four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 4, 2022 to December 31, 2022 87,928 ​ $ 45.83 66,804 ​ $ 1,000 ​ Third four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2023 to January 28, 2023 83,500 ​ $ 45.15 83,500 ​ $ 1,000 ​ Total 197,994 ​ $ 45.82 176,870 ​ $ 1,000 ​ ​ ​ ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 22 22 22 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​23 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

**Current (2024):**

First period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 5, 2023 to December 2, 2023 7,093 ​ $ 44.09 6,900 ​ $ 1,000 ​ Second period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 3, 2023 to December 30, 2023 82,059 ​ $ 44.75 64,200 ​ $ 1,000 ​ Third period - five weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 to February 3, 2024 96,000 ​ $ 46.07 96,000 ​ $ 1,000 ​ Total 185,152 ​ $ 45.41 167,100 ​ $ 1,000 ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 24 24 24 ​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​25 ​ ​ ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

---

## Modified: Net Earnings per Diluted Share excluding the Adjusted Items (continued)

**Key changes:**

- Reworded sentence: "($ in millions, except per share amounts) ​ ​ Key Performance Indicators ​ We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital."
- Reworded sentence: "These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies."
- Reworded sentence: "Digital sales increased approximately 12% in 2023 excluding the Extra Week, increased approximately 4% in 2022 and decreased approximately 3% in 2021."
- Reworded sentence: "The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​33 ​ ​ RESULTS OF OPERATIONS​Sales​Total Sales($ in millions)​​​​​​​​​​​​​​​​​​​​​​​ ​ 2023​Percentage ​ Percentage ​​ ​​2023​Adjusted(1)​Change(2)​2022​Change(3)​2021​Total sales to retail customers without fuel(4)​$ 132,284​$ 129,868​ 0.9% $ 128,664​ 5.2% $ 122,293​Supermarket fuel sales​​ 16,621​​ 16,340​ (12.3)% 18,632​ 26.9% 14,678​Other sales(5)​ 1,134​ 1,120​ 16.4% 962​ 4.9% 917​Total sales​$ 150,039​$ 147,328​ (0.6)% $ 148,258​ 7.5% $ 137,888​(1)The 2023 adjusted column represents the items presented in the 2023 column adjusted to remove the Extra Week.(2)This column represents the percentage change in 2023 adjusted sales compared to 2022.(3)This column represents the percentage change in 2022 compared to 2021.(4)Digital sales are included in the "Total sales to retail customers without fuel" line above."
- Reworded sentence: "Digital sales increased approximately 12% in 2023 excluding the Extra Week, increased approximately 4% in 2022 and decreased approximately 3% in 2021."

**Prior (2023):**

($ in millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Net earnings attributable to The Kroger Co. ​ $ 2,244 ​ $ 1,655 ​ $ 2,585 ​ (Income) expense adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities(1)(2) ​ 19 ​ 344 ​ 754 ​ Adjustment for company-sponsored pension plan settlement charges(1)(3) ​ ​  -  ​ ​ 68 ​ ​  -  ​ Adjustment for loss (gain) on investments(1)(4) ​ ​ 561 ​ ​ 628 ​ ​ (821) ​ Adjustment for Home Chef contingent consideration(1)(5) ​ ​ 15 ​ ​ 50 ​ ​ 141 ​ Adjustment for transformation costs(1)(6) ​ ​  -  ​ ​ 104 ​ ​ 81 ​ Adjustment for merger related costs(1)(7) ​ ​ 34 ​ ​  -  ​ ​  -  ​ Adjustment for legal settlement costs(1)(8) ​ ​ 67 ​ ​  -  ​ ​  -  ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9) ​ ​ 164 ​ ​  -  ​ ​  -  ​ Adjustment for income tax audit examinations(1) ​ ​  -  ​ ​ (47) ​ ​  -  ​ Total Adjusted Items ​ ​ 860 ​ ​ 1,147 ​ ​ 155 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. excluding the Adjusted Items ​ $ 3,104 ​ $ 2,802 ​ $ 2,740 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 3.06 ​ $ 2.17 ​ $ 3.27 ​ (Income) expense adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities(10) ​ 0.03 ​ 0.45 ​ 0.95 ​ Adjustment for company-sponsored pension plan settlement charges(10) ​ ​  -  ​ ​ 0.09 ​ ​  -  ​ Adjustment for loss (gain) on investments(10) ​ ​ 0.76 ​ ​ 0.83 ​ ​ (1.05) ​ Adjustment for Home Chef contingent consideration(10) ​ ​ 0.02 ​ ​ 0.07 ​ ​ 0.18 ​ Adjustment for transformation costs(10) ​ ​  -  ​ ​ 0.14 ​ ​ 0.12 ​ Adjustment for merger related costs(10) ​ ​ 0.05 ​ ​  -  ​ ​  -  ​ Adjustment for legal settlement costs(10) ​ ​ 0.09 ​ ​  -  ​ ​  -  ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(10) ​ ​ 0.22 ​ ​  -  ​ ​  -  ​ Adjustment for income tax audit examinations(10) ​ ​  -  ​ ​ (0.07) ​ ​  -  ​ Total Adjusted Items ​ ​ 1.17 ​ ​ 1.51 ​ ​ 0.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items ​ $ 4.23 ​ $ 3.68 ​ $ 3.47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average numbers of common shares used in diluted calculation ​ 727 ​ 754 ​ 781 ​ ​ 29 29 29 Key Performance Indicators​We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies.​RESULTS OF OPERATIONS​Sales​Total Sales($ in millions)​​​​​​​​​​​​​​​​​​​​ ​ Percentage ​ Percentage ​​ ​​2022​Change(1)​2021​Change(2)​2020​Total sales to retail customers without fuel(3)​$ 128,664​ 5.2% $ 122,293​ 0.1% $ 122,134​Supermarket fuel sales​​ 18,632​ 26.9% 14,678​ 54.7% 9,486​Other sales(4)​ 962​ 4.9% 917​ 4.4% 878​Total sales​$ 148,258​ 7.5% $ 137,888​ 4.1% $ 132,498​(1)This column represents the percentage change in 2022 compared to 2021.(2)This column represents the percentage change in 2021 compared to 2020.(3)Digital sales are included in the "total sales to retail customers without fuel" line above. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. Digital sales increased approximately 4% in 2022, decreased approximately 3% in 2021 and grew approximately 116% in 2020. Digital sales growth for 2022 was led by strength in our Delivery solutions, which grew by 25% in 2022. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. The change in results for 2021 compared to 2020 is primarily due to cycling COVID-19 trends. While digital sales decreased 3% during 2021, almost all customers who reduced their online spend during the year continued to shop with us in store, highlighting the power of our seamless ecosystem and our ability to create a meaningful customer experience across channels.(4)Other sales primarily relate to external sales at food production plants, data analytic services and third-party media revenue. The increase in 2022, compared to 2021, and the increase in 2021, compared to 2020, is primarily due to an increase in data analytic services and third-party media revenue, partially offset by decreased external sales at food production plants due to the closing of a plant during 2021.​Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​30 Key Performance Indicators​We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies.​RESULTS OF OPERATIONS​Sales​Total Sales($ in millions)​​​​​​​​​​​​​​​​​​​​ ​ Percentage ​ Percentage ​​ ​​2022​Change(1)​2021​Change(2)​2020​Total sales to retail customers without fuel(3)​$ 128,664​ 5.2% $ 122,293​ 0.1% $ 122,134​Supermarket fuel sales​​ 18,632​ 26.9% 14,678​ 54.7% 9,486​Other sales(4)​ 962​ 4.9% 917​ 4.4% 878​Total sales​$ 148,258​ 7.5% $ 137,888​ 4.1% $ 132,498​(1)This column represents the percentage change in 2022 compared to 2021.(2)This column represents the percentage change in 2021 compared to 2020.(3)Digital sales are included in the "total sales to retail customers without fuel" line above. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. Digital sales increased approximately 4% in 2022, decreased approximately 3% in 2021 and grew approximately 116% in 2020. Digital sales growth for 2022 was led by strength in our Delivery solutions, which grew by 25% in 2022. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. The change in results for 2021 compared to 2020 is primarily due to cycling COVID-19 trends. While digital sales decreased 3% during 2021, almost all customers who reduced their online spend during the year continued to shop with us in store, highlighting the power of our seamless ecosystem and our ability to create a meaningful customer experience across channels.(4)Other sales primarily relate to external sales at food production plants, data analytic services and third-party media revenue. The increase in 2022, compared to 2021, and the increase in 2021, compared to 2020, is primarily due to an increase in data analytic services and third-party media revenue, partially offset by decreased external sales at food production plants due to the closing of a plant during 2021.​Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​ Key Performance Indicators ​ We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies. ​

**Current (2024):**

($ in millions, except per share amounts) ​ ​ Key Performance Indicators ​ We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies. ​ 32 32 32 ​RESULTS OF OPERATIONS​Sales​Total Sales($ in millions)​​​​​​​​​​​​​​​​​​​​​​​ ​ 2023​Percentage ​ Percentage ​​ ​​2023​Adjusted(1)​Change(2)​2022​Change(3)​2021​Total sales to retail customers without fuel(4)​$ 132,284​$ 129,868​ 0.9% $ 128,664​ 5.2% $ 122,293​Supermarket fuel sales​​ 16,621​​ 16,340​ (12.3)% 18,632​ 26.9% 14,678​Other sales(5)​ 1,134​ 1,120​ 16.4% 962​ 4.9% 917​Total sales​$ 150,039​$ 147,328​ (0.6)% $ 148,258​ 7.5% $ 137,888​(1)The 2023 adjusted column represents the items presented in the 2023 column adjusted to remove the Extra Week.(2)This column represents the percentage change in 2023 adjusted sales compared to 2022.(3)This column represents the percentage change in 2022 compared to 2021.(4)Digital sales are included in the "Total sales to retail customers without fuel" line above. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. Digital sales increased approximately 12% in 2023 excluding the Extra Week, increased approximately 4% in 2022 and decreased approximately 3% in 2021. Digital sales growth for 2023 and 2022 was led by strength in our Delivery solutions, which grew by 25% in 2023 excluding the Extra Week and 25% in 2022. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network.(5)Other sales primarily relate to external sales at food production plants, data analytic services and third-party media revenue. The increase in 2023, compared to 2022, and the increase in 2022, compared to 2021, is primarily due to an increase in data analytic services and third-party media revenue.​Total 2023 adjusted sales represent total sales for 2023 excluding the Extra Week. Total 2023 adjusted sales decreased in 2023, compared to 2022, by 0.6%. The decrease was primarily due to the decrease in supermarket fuel sales, partially offset by the increase in total sales to retail customers without fuel. Total sales, excluding fuel, adjusted for the Extra Week, increased 1.1% in 2023, compared to 2022, which was primarily due to our identical sales increase, excluding fuel, of 0.9%. Identical sales, excluding fuel, in 2023, compared to 2022, increased primarily due to an increase in the number of loyal households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts effective December 31, 2022. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the approximately $1.8 billion reduction in pharmacy sales from the termination of our agreement with Express Scripts effective December 31, 2022. Total adjusted fuel sales decreased 12.3% in 2023, compared to 2022, primarily due to a decrease in the average retail fuel price of 11.1% and a decrease in fuel gallons sold of 1.5%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. ​Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​33 ​ ​ RESULTS OF OPERATIONS​Sales​Total Sales($ in millions)​​​​​​​​​​​​​​​​​​​​​​​ ​ 2023​Percentage ​ Percentage ​​ ​​2023​Adjusted(1)​Change(2)​2022​Change(3)​2021​Total sales to retail customers without fuel(4)​$ 132,284​$ 129,868​ 0.9% $ 128,664​ 5.2% $ 122,293​Supermarket fuel sales​​ 16,621​​ 16,340​ (12.3)% 18,632​ 26.9% 14,678​Other sales(5)​ 1,134​ 1,120​ 16.4% 962​ 4.9% 917​Total sales​$ 150,039​$ 147,328​ (0.6)% $ 148,258​ 7.5% $ 137,888​(1)The 2023 adjusted column represents the items presented in the 2023 column adjusted to remove the Extra Week.(2)This column represents the percentage change in 2023 adjusted sales compared to 2022.(3)This column represents the percentage change in 2022 compared to 2021.(4)Digital sales are included in the "Total sales to retail customers without fuel" line above. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. Digital sales increased approximately 12% in 2023 excluding the Extra Week, increased approximately 4% in 2022 and decreased approximately 3% in 2021. Digital sales growth for 2023 and 2022 was led by strength in our Delivery solutions, which grew by 25% in 2023 excluding the Extra Week and 25% in 2022. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network.(5)Other sales primarily relate to external sales at food production plants, data analytic services and third-party media revenue. The increase in 2023, compared to 2022, and the increase in 2022, compared to 2021, is primarily due to an increase in data analytic services and third-party media revenue.​Total 2023 adjusted sales represent total sales for 2023 excluding the Extra Week. Total 2023 adjusted sales decreased in 2023, compared to 2022, by 0.6%. The decrease was primarily due to the decrease in supermarket fuel sales, partially offset by the increase in total sales to retail customers without fuel. Total sales, excluding fuel, adjusted for the Extra Week, increased 1.1% in 2023, compared to 2022, which was primarily due to our identical sales increase, excluding fuel, of 0.9%. Identical sales, excluding fuel, in 2023, compared to 2022, increased primarily due to an increase in the number of loyal households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts effective December 31, 2022. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the approximately $1.8 billion reduction in pharmacy sales from the termination of our agreement with Express Scripts effective December 31, 2022. Total adjusted fuel sales decreased 12.3% in 2023, compared to 2022, primarily due to a decrease in the average retail fuel price of 11.1% and a decrease in fuel gallons sold of 1.5%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. ​Total sales increased in 2022, compared to 2021, by 7.5%. The increase was primarily due to increases in supermarket fuel sales and total sales to retail customers without fuel. Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy. Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts. Identical sales without fuel would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. Total supermarket fuel sales increased 26.9% in 2022, compared to 2021, primarily due to an increase in the average retail fuel price of 28.5%, partially offset by a decrease in fuel gallons sold of 1.2%, which was less than the national average decline. The increase in the average retail fuel price was caused by an increase in the product cost of fuel.​

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## Modified: LEGAL AND GOVERNMENT REGULATION

**Key changes:**

- Reworded sentence: "​ We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters."
- Reworded sentence: "Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.​CLIMATE IMPACT​The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable."
- Reworded sentence: "These events and their effects could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business."
- Reworded sentence: "The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, quality control issues, a supplier's financial distress, natural disasters or health crises, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.​ITEM 1B.UNRESOLVED STAFF COMMENTS.​None.​​​19 ​ ​ WEATHER, NATURAL DISASTERS AND OTHER EVENTS​A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes."
- Reworded sentence: "These events and their effects could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business."

**Prior (2023):**

​ A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather, natural disasters, geopolitical and catastrophic events, such as war, civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or pandemics, such as the spread of COVID-19, or other future pandemics and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows. 18 18 18 CLIMATE IMPACT​The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, many of our operations and facilities are in locations that may be affected by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. We also use natural gas, diesel fuel, gasoline and electricity in our operations, all of which could face increased regulation and cost increases as a result of climate change or other environmental concerns. Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, and investments in new technologies, could incur higher costs. Regulations limiting greenhouse gas emissions and energy inputs will also increase in coming years, which may increase our costs associated with compliance, tracking, reporting, and sourcing. These events and their impacts could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business. The products we sell are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, such as the ongoing war between Russia and Ukraine, quality control issues, a supplier's financial distress, natural disasters or health crises, including the COVID-19 pandemic, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.​ITEM 1B.UNRESOLVED STAFF COMMENTS.​None.​ITEM 2.PROPERTIES.​As of January 28, 2023, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at January 28, 2023, was $53.4 billion while the accumulated depreciation was $28.6 billion.​We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements.​19 CLIMATE IMPACT​The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, many of our operations and facilities are in locations that may be affected by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. We also use natural gas, diesel fuel, gasoline and electricity in our operations, all of which could face increased regulation and cost increases as a result of climate change or other environmental concerns. Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, and investments in new technologies, could incur higher costs. Regulations limiting greenhouse gas emissions and energy inputs will also increase in coming years, which may increase our costs associated with compliance, tracking, reporting, and sourcing. These events and their impacts could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business. The products we sell are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, such as the ongoing war between Russia and Ukraine, quality control issues, a supplier's financial distress, natural disasters or health crises, including the COVID-19 pandemic, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.​ITEM 1B.UNRESOLVED STAFF COMMENTS.​None.​ITEM 2.PROPERTIES.​As of January 28, 2023, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at January 28, 2023, was $53.4 billion while the accumulated depreciation was $28.6 billion.​We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements.​

**Current (2024):**

​ We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, and financial reporting or other matters. These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for us, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceeding, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows. ​ In addition, increasing governmental and societal attention to environmental, social, and governance ("ESG") matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect our reputation. Given our commitment to our ESG strategy, we have established and publicly announced certain goals which we may refine or even expand further in the future. The execution of this strategy to achieve these goals is subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipate. These risks and uncertainties include, but are not limited to, our ability to achieve our goals within the currently projected costs and the expected timeframes; unforeseen operational and technological difficulties; the outcome of research efforts and future technology developments; and the success of our collaborations with and reliance on third parties. Any failure, or perceived failure, to achieve these goals or the setting or publication of certain targets could damage our reputation and customer, investor and other stakeholder relationships, and may even result in regulatory enforcement action. Such conditions could have an adverse effect on our business, financial condition, results of operations or cash flows. ​ Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows. ​ 18 18 18 ​WEATHER, NATURAL DISASTERS AND OTHER EVENTS​A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.​CLIMATE IMPACT​The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may affect our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, many of our operations and facilities are in locations that may be affected by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. We also use natural gas, diesel fuel, gasoline and electricity in our operations, all of which could face increased regulation and cost increases as a result of climate change or other environmental concerns. Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, and investments in new technologies, could incur higher costs. Regulations limiting greenhouse gas emissions and energy inputs will also increase in coming years, which may increase our costs associated with compliance, tracking, reporting, and sourcing. These events and their effects could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business. The products we sell are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, quality control issues, a supplier's financial distress, natural disasters or health crises, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.​ITEM 1B.UNRESOLVED STAFF COMMENTS.​None.​​​19 ​ ​ WEATHER, NATURAL DISASTERS AND OTHER EVENTS​A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, ice and snow storms and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.​CLIMATE IMPACT​The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may affect our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, many of our operations and facilities are in locations that may be affected by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. We also use natural gas, diesel fuel, gasoline and electricity in our operations, all of which could face increased regulation and cost increases as a result of climate change or other environmental concerns. Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, and investments in new technologies, could incur higher costs. Regulations limiting greenhouse gas emissions and energy inputs will also increase in coming years, which may increase our costs associated with compliance, tracking, reporting, and sourcing. These events and their effects could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.​SUPPLY CHAIN​Disruption in our global supply chain could negatively affect our business. The products we sell are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, quality control issues, a supplier's financial distress, natural disasters or health crises, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.​ITEM 1B.UNRESOLVED STAFF COMMENTS.​None.​​​

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## Modified: (In millions)

**Key changes:**

- Reworded sentence: "(53 weeks) ​ (52 weeks) ​ (52 weeks) Net earnings including noncontrolling interests ​ $ 2,169 ​ $ 2,249 ​ $ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in pension and other postretirement defined benefit plans, net of income tax(1) ​ ​ (46) ​ ​ (83) ​ ​ 156 Unrealized gains and losses on cash flow hedging activities, net of income tax(2) ​ 183 ​ (89) ​  -  Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3) ​ ​ 6 ​ ​ 7 ​ ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ​ 143 ​ (165) ​ 163 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 2,312 ​ 2,084 ​ 1,829 Comprehensive income attributable to noncontrolling interests ​ 5 ​ 5 ​ 11 Comprehensive income attributable to The Kroger Co."
- Reworded sentence: "​ 57 57 57 ​THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​58 ​ ​ THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​"

**Prior (2023):**

(52 weeks) ​ (52 weeks) ​ (52 weeks) Net earnings including noncontrolling interests ​ $ 2,249 ​ $ 1,666 ​ $ 2,588 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in pension and other postretirement defined benefit plans, net of income tax(1) ​ ​ (83) ​ ​ 156 ​ ​ 22 Unrealized gains and losses on cash flow hedging activities, net of income tax(2) ​ (89) ​  -  ​ (14) Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3) ​ ​ 7 ​ ​ 7 ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive (loss) income ​ (165) ​ 163 ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 2,084 ​ 1,829 ​ 2,598 Comprehensive income attributable to noncontrolling interests ​ 5 ​ 11 ​ 3 Comprehensive income attributable to The Kroger Co. ​ $ 2,079 ​ $ 1,818 ​ $ 2,595 ​ Amount is net of tax (benefit) expense of ($26) in 2022, $48 in 2021 and $7 in 2020. Amount is net of tax benefit of ($27) in 2022 and ($8) in 2020. Amount is net of tax expense of $2 in 2022, $3 in 2021 and $2 in 2020. ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 54 54 54 THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​ ​​2022 2021 2020​(In millions) (52 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,249​$ 1,666​$ 2,588​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 2,965​ 2,824​ 2,747​Asset impairment charges​​ 68​​ 64​​ 70​Goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​​  - ​Operating lease asset amortization​​ 614​​ 605​​ 626​LIFO charge (credit)​ 626​ 197​ (7)​Share-based employee compensation​ 190​ 203​ 185​Company-sponsored pension plans (benefit) expense​ (26)​ 50​ (9)​Deferred income taxes​ 161​ (31)​ 73​Gain on the sale of assets​​ (40)​​ (44)​​ (59)​Loss (gain) on investments​​ 728​​ 821​​ (1,105)​Other​ (8)​ 64​ 165​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (45)​ 13​ 83​Receivables​ (222)​ (61)​ (90)​Inventories​ (1,370)​ 80​ 7​Prepaid and other current assets​ (36)​ 232​ (342)​Trade accounts payable​ 3​ 438​ 330​Accrued expenses​ (126)​ 331​ 1,382​Income taxes receivable and payable​ (190)​​ 16​​ 24​Operating lease liabilities​​ (622)​​ (618)​​ (552)​Other​ (585)​ (660)​ 699​​​​​​​​​​​​Net cash provided by operating activities​ 4,498​ 6,190​ 6,815​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,078)​ (2,614)​ (2,865)​Proceeds from sale of assets​ 78​​ 153​​ 165​Other​ (15)​ (150)​ (114)​​​​​​​​​​​​Net cash used by investing activities​ (3,015)​ (2,611)​ (2,814)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​  - ​ 56​ 1,049​Payments on long-term debt including obligations under finance leases​ (552)​​ (1,442)​​ (747)​Net payments on commercial paper​  - ​​  - ​​ (1,150)​Dividends paid​​ (682)​​ (589)​​ (534)​Financing fees paid​​ (84)​​ (5)​​ (9)​Proceeds from issuance of capital stock​​ 134​ 172​ 127​Treasury stock purchases​ (993)​ (1,647)​ (1,324)​Proceeds from financing arrangement​​  - ​​ 166​​  - ​Other​​ (112)​ (156)​ (125)​​​​​​​​​​​​Net cash used by financing activities​ (2,289)​ (3,445)​ (2,713)​​​​​​​​​​​​Net (decrease) increase in cash and temporary cash investments​ (806)​ 134​ 1,288​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,821​ 1,687​ 399​End of year​$ 1,015​$ 1,821​$ 1,687​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,078)​$ (2,614)​$ (2,865)​Payments for lease buyouts​​ 21​  - ​ 58​Changes in construction-in-progress payables​ (281)​ (542)​ (359)​Total capital investments, excluding lease buyouts​$ (3,338)​$ (3,156)​$ (3,166)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 545​$ 607​$ 564​Cash paid during the year for income taxes​$ 698​$ 513​$ 659​​​The accompanying notes are an integral part of the consolidated financial statements​​55 THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​ ​​2022 2021 2020​(In millions) (52 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,249​$ 1,666​$ 2,588​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 2,965​ 2,824​ 2,747​Asset impairment charges​​ 68​​ 64​​ 70​Goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​​  - ​Operating lease asset amortization​​ 614​​ 605​​ 626​LIFO charge (credit)​ 626​ 197​ (7)​Share-based employee compensation​ 190​ 203​ 185​Company-sponsored pension plans (benefit) expense​ (26)​ 50​ (9)​Deferred income taxes​ 161​ (31)​ 73​Gain on the sale of assets​​ (40)​​ (44)​​ (59)​Loss (gain) on investments​​ 728​​ 821​​ (1,105)​Other​ (8)​ 64​ 165​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (45)​ 13​ 83​Receivables​ (222)​ (61)​ (90)​Inventories​ (1,370)​ 80​ 7​Prepaid and other current assets​ (36)​ 232​ (342)​Trade accounts payable​ 3​ 438​ 330​Accrued expenses​ (126)​ 331​ 1,382​Income taxes receivable and payable​ (190)​​ 16​​ 24​Operating lease liabilities​​ (622)​​ (618)​​ (552)​Other​ (585)​ (660)​ 699​​​​​​​​​​​​Net cash provided by operating activities​ 4,498​ 6,190​ 6,815​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,078)​ (2,614)​ (2,865)​Proceeds from sale of assets​ 78​​ 153​​ 165​Other​ (15)​ (150)​ (114)​​​​​​​​​​​​Net cash used by investing activities​ (3,015)​ (2,611)​ (2,814)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​  - ​ 56​ 1,049​Payments on long-term debt including obligations under finance leases​ (552)​​ (1,442)​​ (747)​Net payments on commercial paper​  - ​​  - ​​ (1,150)​Dividends paid​​ (682)​​ (589)​​ (534)​Financing fees paid​​ (84)​​ (5)​​ (9)​Proceeds from issuance of capital stock​​ 134​ 172​ 127​Treasury stock purchases​ (993)​ (1,647)​ (1,324)​Proceeds from financing arrangement​​  - ​​ 166​​  - ​Other​​ (112)​ (156)​ (125)​​​​​​​​​​​​Net cash used by financing activities​ (2,289)​ (3,445)​ (2,713)​​​​​​​​​​​​Net (decrease) increase in cash and temporary cash investments​ (806)​ 134​ 1,288​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,821​ 1,687​ 399​End of year​$ 1,015​$ 1,821​$ 1,687​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,078)​$ (2,614)​$ (2,865)​Payments for lease buyouts​​ 21​  - ​ 58​Changes in construction-in-progress payables​ (281)​ (542)​ (359)​Total capital investments, excluding lease buyouts​$ (3,338)​$ (3,156)​$ (3,166)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 545​$ 607​$ 564​Cash paid during the year for income taxes​$ 698​$ 513​$ 659​​​The accompanying notes are an integral part of the consolidated financial statements​​

**Current (2024):**

(53 weeks) ​ (52 weeks) ​ (52 weeks) Net earnings including noncontrolling interests ​ $ 2,169 ​ $ 2,249 ​ $ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in pension and other postretirement defined benefit plans, net of income tax(1) ​ ​ (46) ​ ​ (83) ​ ​ 156 Unrealized gains and losses on cash flow hedging activities, net of income tax(2) ​ 183 ​ (89) ​  -  Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3) ​ ​ 6 ​ ​ 7 ​ ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ​ 143 ​ (165) ​ 163 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 2,312 ​ 2,084 ​ 1,829 Comprehensive income attributable to noncontrolling interests ​ 5 ​ 5 ​ 11 Comprehensive income attributable to The Kroger Co. ​ $ 2,307 ​ $ 2,079 ​ $ 1,818 ​ Amount is net of tax (benefit) expense of $(14) in 2023, $(26) in 2022 and $48 in 2021. Amount is net of tax expense (benefit) of $56 in 2023 and $(27) in 2022. Amount is net of tax expense of $2 in 2023, $2 in 2022 and $3 in 2021. ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 57 57 57 ​THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​58 ​ ​ THE KROGER CO.CONSOLIDATED STATEMENTS OF CASH FLOWS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​ ​​2023 2022 2021​(In millions) (53 weeks)​(52 weeks)​(52 weeks) Cash Flows from Operating Activities:​​​​​​​​​​Net earnings including noncontrolling interests ​$ 2,169​$ 2,249​$ 1,666​Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:​​​​​​​​​​Depreciation and amortization​ 3,125​ 2,965​ 2,824​Asset impairment charges​​ 69​​ 68​​ 64​Goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​​  - ​Operating lease asset amortization​​ 625​​ 614​​ 605​LIFO charge​ 113​ 626​ 197​Share-based employee compensation​ 172​ 190​ 203​Company-sponsored pension plans (benefit) expense​ (9)​ (26)​ 50​Deferred income taxes​ (155)​ 161​ (31)​Gain on the sale of assets​​ (56)​​ (40)​​ (44)​(Gain) loss on investments​​ (151)​​ 728​​ 821​Other​ 78​ (8)​ 64​Changes in operating assets and liabilities:​​​​​​​​​​Store deposits in-transit​ (88)​ (45)​ 13​Receivables​ 14​ (222)​ (61)​Inventories​ 342​ (1,370)​ 80​Prepaid and other current assets​ 72​ (36)​ 232​Accounts payable​ 545​ 44​ 903​Accrued expenses​ (222)​ (167)​ (134)​Income taxes receivable and payable​ 68​​ (190)​​ 16​Operating lease liabilities​​ (695)​​ (622)​​ (618)​Other​ 772​ (585)​ (660)​​​​​​​​​​​​Net cash provided by operating activities​ 6,788​ 4,498​ 6,190​​​​​​​​​​​​Cash Flows from Investing Activities:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​ (3,904)​ (3,078)​ (2,614)​Proceeds from sale of assets​ 101​​ 78​​ 153​Other​ 53​ (15)​ (150)​​​​​​​​​​​​Net cash used by investing activities​ (3,750)​ (3,015)​ (2,611)​​​​​​​​​​​​Cash Flows from Financing Activities:​​​​​​​​​​Proceeds from issuance of long-term debt​ 15​  - ​ 56​Payments on long-term debt including obligations under finance leases​ (1,301)​​ (552)​​ (1,442)​Dividends paid​​ (796)​​ (682)​​ (589)​Financing fees paid​​  - ​​ (84)​​ (5)​Proceeds from issuance of capital stock​​ 50​ 134​ 172​Treasury stock purchases​ (62)​ (993)​ (1,647)​Proceeds from financing arrangement​​  - ​​  - ​​ 166​Other​​ (76)​ (112)​ (156)​​​​​​​​​​​​Net cash used by financing activities​ (2,170)​ (2,289)​ (3,445)​​​​​​​​​​​​Net increase (decrease) in cash and temporary cash investments​ 868​ (806)​ 134​​​​​​​​​​​​Cash and temporary cash investments:​​​​​​​​​​Beginning of year​ 1,015​ 1,821​ 1,687​End of year​$ 1,883​$ 1,015​$ 1,821​​​​​​​​​​​​Reconciliation of capital investments:​​​​​​​​​​Payments for property and equipment, including payments for lease buyouts​$ (3,904)​$ (3,078)​$ (2,614)​Payments for lease buyouts​​  - ​ 21​  - ​Changes in construction-in-progress payables​ 344​ (281)​ (542)​Total capital investments, excluding lease buyouts​$ (3,560)​$ (3,338)​$ (3,156)​​​​​​​​​​​​Disclosure of cash flow information:​​​​​​​​​​Cash paid during the year for interest​$ 488​$ 545​$ 607​Cash paid during the year for income taxes​$ 751​$ 698​$ 513​​​The accompanying notes are an integral part of the consolidated financial statements.​​

---

## Modified: EMPLOYEE MATTERS

**Key changes:**

- Reworded sentence: "​ Nearly two-thirds of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows."
- Reworded sentence: "​ We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates."
- Reworded sentence: "Changes to wage regulations, including further increases in the minimum wage or ordinances related to pay or working conditions enacted by local governments, could have an effect on our future financial condition, results of operations or cash flows."
- Reworded sentence: "We may not be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows."

**Prior (2023):**

​ A majority of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 310 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows. ​ 13 13 13 We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage and extra pay ordinances enacted by local governments, could have an impact on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws.​Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. There is no assurance that we will be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.​DATA AND TECHNOLOGY​Our business is increasingly dependent on information technology systems that are complex and vital to continuing operations, resulting in an expansion of our technological presence and corresponding risk exposure. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates. ​Through our sales and marketing activities, we collect and store some personal information that our customers provide to us. We also gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information with vendors that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy.​Our technology systems have been, and may be in the future, disrupted from circumstances beyond our control, as we regularly defend against and respond to data security incidents. Cyber-attackers have targeted and accessed, and may in the future again target and, if successful, access, information stored in our or our vendors' systems in order to misappropriate confidential customer or business information. Due to the ongoing war between Russia and Ukraine, there is an increased possibility of cyberattacks that could either directly or indirectly affect our operations. Although we have implemented procedures to protect our information, and require our vendors to do the same, we cannot be certain that our security systems will successfully defend against, or be able to effectively respond to, rapidly evolving, increasingly sophisticated cyber-attacks as they become more difficult to detect and defend against. Further, a Kroger associate, a contractor or other third party with whom we do business may in the future circumvent our security measures in order to obtain information or may inadvertently cause a breach involving information. In addition, hardware, software or applications we may use may have inherent defects, vulnerabilities, or could be inadvertently or intentionally applied or used in a way that could compromise our information security.​14 We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage and extra pay ordinances enacted by local governments, could have an impact on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws.​Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. There is no assurance that we will be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.​DATA AND TECHNOLOGY​Our business is increasingly dependent on information technology systems that are complex and vital to continuing operations, resulting in an expansion of our technological presence and corresponding risk exposure. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates. ​Through our sales and marketing activities, we collect and store some personal information that our customers provide to us. We also gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information with vendors that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy.​Our technology systems have been, and may be in the future, disrupted from circumstances beyond our control, as we regularly defend against and respond to data security incidents. Cyber-attackers have targeted and accessed, and may in the future again target and, if successful, access, information stored in our or our vendors' systems in order to misappropriate confidential customer or business information. Due to the ongoing war between Russia and Ukraine, there is an increased possibility of cyberattacks that could either directly or indirectly affect our operations. Although we have implemented procedures to protect our information, and require our vendors to do the same, we cannot be certain that our security systems will successfully defend against, or be able to effectively respond to, rapidly evolving, increasingly sophisticated cyber-attacks as they become more difficult to detect and defend against. Further, a Kroger associate, a contractor or other third party with whom we do business may in the future circumvent our security measures in order to obtain information or may inadvertently cause a breach involving information. In addition, hardware, software or applications we may use may have inherent defects, vulnerabilities, or could be inadvertently or intentionally applied or used in a way that could compromise our information security.​ We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage and extra pay ordinances enacted by local governments, could have an impact on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws. ​ Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. There is no assurance that we will be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows. ​

**Current (2024):**

​ Nearly two-thirds of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 350 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with labor unions. In addition, changes to national labor policy could affect labor relations with our associates and relationships with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows. ​ We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers ("UFCW") and other labor unions representing associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage or ordinances related to pay or working conditions enacted by local governments, could have an effect on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws. ​ Our continued success depends on the ongoing contributions of our associates, including members of our senior management and other key personnel. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. We may not be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows. ​

---

## Modified: Income (Loss)

**Key changes:**

- Reworded sentence: "​ Earnings ​ Interest ​ Total Balances at January 30, 2021 1,918 ​ $ 1,918 ​ $ 3,461 1,160 ​ $ (18,191) ​ $ (630) ​ $ 23,018 ​ $ (26) ​ $ 9,550 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (7) ​ 172 ​  -  ​  -  ​  -  ​ 172 Restricted stock issued  -  ​  -  ​ (137) (3) ​ 73 ​  -  ​  -  ​  -  ​ (64) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  35 ​ (1,422) ​  -  ​  -  ​  -  ​ (1,422) Stock options exchanged  -  ​  -  ​  -  6 ​ (225) ​  -  ​  -  ​  -  ​ (225) Share-based employee compensation  -  ​  -  ​ 203  -  ​  -  ​  -  ​  -  ​  -  ​ 203 Other comprehensive income net of tax of $51  -  ​  -  ​  -   -  ​  -  ​ 163 ​  -  ​  -  ​ 163 Other  -  ​  -  ​ 130  -  ​ (129) ​  -  ​  -  ​ (8) ​ (7) Cash dividends declared ($0.81 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (607) ​  -  ​ ​ (607) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 1,655 ​ 11 ​ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 29, 2022 1,918 ​ $ 1,918 ​ $ 3,657 1,191 ​ $ (19,722) ​ $ (467) ​ $ 24,066 ​ $ (23) ​ $ 9,429 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (4) ​ 134 ​  -  ​  -  ​  -  ​ 134 Restricted stock issued  -  ​  -  ​ (173) (4) ​ 62 ​  -  ​  -  ​  -  ​ (111) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  16 ​ (821) ​  -  ​  -  ​  -  ​ (821) Stock options exchanged  -  ​  -  ​  -  3 ​ (172) ​  -  ​  -  ​  -  ​ (172) Share-based employee compensation  -  ​  -  ​ 190  -  ​  -  ​  -  ​  -  ​  -  ​ 190 Other comprehensive loss net of tax of $(51)  -  ​  -  ​  -   -  ​  -  ​ (165) ​  -  ​  -  ​ (165) Other  -  ​  -  ​ 131  -  ​ (131) ​  -  ​  -  ​ (10) ​ (10) Cash dividends declared ($0.99 per common share) ​  -  ​  -  ​  -   -  ​  -  ​  -  ​ (709) ​  -  ​ (709) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,244 ​ 5 ​ 2,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 28, 2023 1,918 ​ $ 1,918 ​ $ 3,805 1,202 ​ $ (20,650) ​ $ (632) ​ $ 25,601 ​ $ (28) ​ $ 10,014 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (2) ​ 50 ​  -  ​  -  ​  -  ​ 50 Restricted stock issued  -  ​  -  ​ (163) (3) ​ 88 ​  -  ​  -  ​  -  ​ (75) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exchanged  -  ​  -  ​  -  1 ​ (62) ​  -  ​  -  ​  -  ​ (62) Share-based employee compensation  -  ​  -  ​ 172  -  ​  -  ​  -  ​  -  ​  -  ​ 172 Other comprehensive income net of tax of $44  -  ​  -  ​  -   -  ​  -  ​ 143 ​  -  ​  -  ​ 143 Other  -  ​  -  ​ 108  -  ​ (108) ​  -  ​  -  ​ 9 ​ 9 Cash dividends declared ($1.13 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (819) ​  -  ​ (819) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,164 ​ 5 ​ 2,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at February 3, 2024 1,918 ​ $ 1,918 ​ $ 3,922 1,198 ​ $ (20,682) ​ $ (489) ​ $ 26,946 ​ $ (14) ​ $ 11,601 ​ ​ The accompanying notes are an integral part of the consolidated financial statements."
- Reworded sentence: "The Company is a food and drug retailer that operates 2,722 supermarkets, 2,257 pharmacies and 1,665 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience."
- Reworded sentence: "Intercompany transactions and balances have been eliminated.​Reclassifications​The Company reclassified $3.1 billion of liabilities from other current liabilities to accounts payable on the Consolidated Balance Sheet for the year ended January 28, 2023 to conform to the current year presentation."
- Reworded sentence: "Book overdrafts are included in "Accounts payable" and "Accrued salaries and wages" in the Consolidated Balance Sheets.​Deposits In-Transit​Deposits in-transit generally represent funds deposited to the Company's bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.​60 ​ ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS​All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.​1.ACCOUNTING POLICIES​The following is a summary of the significant accounting policies followed in preparing these financial statements.​Description of Business, Basis of Presentation and Principles of Consolidation​The Kroger Co."
- Reworded sentence: "The Company is a food and drug retailer that operates 2,722 supermarkets, 2,257 pharmacies and 1,665 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience."

**Prior (2023):**

​ Earnings ​ Interest ​ Total Balances at February 1, 2020 1,918 ​ $ 1,918 ​ $ 3,337 1,130 ​ $ (16,991) ​ $ (640) ​ $ 20,978 ​ $ (29) ​ $ 8,573 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (7) ​ 127 ​  -  ​  -  ​  -  ​ 127 Restricted stock issued  -  ​  -  ​ (134) (3) ​ 71 ​  -  ​  -  ​  -  ​ (63) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  36 ​ (1,196) ​  -  ​  -  ​  -  ​ (1,196) Stock options exchanged  -  ​  -  ​  -  4 ​ (128) ​  -  ​  -  ​  -  ​ (128) Share-based employee compensation  -  ​  -  ​ 185  -  ​  -  ​  -  ​  -  ​  -  ​ 185 Other comprehensive income net of tax of $1  -  ​  -  ​  -   -  ​  -  ​ 10 ​  -  ​  -  ​ 10 Other  -  ​  -  ​ 73  -  ​ (74) ​  -  ​  -  ​  -  ​ (1) Cash dividends declared ($0.70 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (545) ​  -  ​ ​ (545) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,585 ​ 3 ​ 2,588 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 30, 2021 1,918 ​ $ 1,918 ​ $ 3,461 1,160 ​ $ (18,191) ​ $ (630) ​ $ 23,018 ​ $ (26) ​ $ 9,550 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (7) ​ 172 ​  -  ​  -  ​  -  ​ 172 Restricted stock issued  -  ​  -  ​ (137) (3) ​ 73 ​  -  ​  -  ​  -  ​ (64) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  35 ​ (1,422) ​  -  ​  -  ​  -  ​ (1,422) Stock options exchanged  -  ​  -  ​  -  6 ​ (225) ​  -  ​  -  ​  -  ​ (225) Share-based employee compensation  -  ​  -  ​ 203  -  ​  -  ​  -  ​  -  ​  -  ​ 203 Other comprehensive income net of tax of $51  -  ​  -  ​  -   -  ​  -  ​ 163 ​  -  ​  -  ​ 163 Other  -  ​  -  ​ 130  -  ​ (129) ​  -  ​  -  ​ (8) ​ (7) Cash dividends declared ($0.81 per common share) ​  -  ​  -  ​  -   -  ​  -  ​  -  ​ (607) ​  -  ​ (607) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 1,655 ​ 11 ​ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 29, 2022 1,918 ​ $ 1,918 ​ $ 3,657 1,191 ​ $ (19,722) ​ $ (467) ​ $ 24,066 ​ $ (23) ​ $ 9,429 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (4) ​ 134 ​  -  ​  -  ​  -  ​ 134 Restricted stock issued  -  ​  -  ​ (173) (4) ​ 62 ​  -  ​  -  ​  -  ​ (111) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  16 ​ (821) ​  -  ​  -  ​  -  ​ (821) Stock options exchanged  -  ​  -  ​  -  3 ​ (172) ​  -  ​  -  ​  -  ​ (172) Share-based employee compensation  -  ​  -  ​ 190  -  ​  -  ​  -  ​  -  ​  -  ​ 190 Other comprehensive loss net of tax of ($51)  -  ​  -  ​  -   -  ​  -  ​ (165) ​  -  ​  -  ​ (165) Other  -  ​  -  ​ 131  -  ​ (131) ​  -  ​  -  ​ (10) ​ (10) Cash dividends declared ($0.99 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (709) ​  -  ​ (709) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,244 ​ 5 ​ 2,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 28, 2023 1,918 ​ $ 1,918 ​ $ 3,805 1,202 ​ $ (20,650) ​ $ (632) ​ $ 25,601 ​ $ (28) ​ $ 10,014 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 56 56 56 ​NOTES TO CONSOLIDATED FINANCIAL STATEMENTS​All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.​1.ACCOUNTING POLICIES​The following is a summary of the significant accounting policies followed in preparing these financial statements.​Description of Business, Basis of Presentation and Principles of Consolidation​The Kroger Co. (the "Company") was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,719 supermarkets, 2,252 pharmacies and 1,637 fuel centers across 35 states while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated.​Fiscal Year​The Company's fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the 52-week periods ended January 28, 2023, January 29, 2022 and January 30, 2021.​Pervasiveness of Estimates​The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates.​Cash, Temporary Cash Investments and Book Overdrafts​Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in "Trade accounts payable" and "Accrued salaries and wages" in the Consolidated Balance Sheets.​Deposits In-Transit​Deposits in-transit generally represent funds deposited to the Company's bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.​Inventories​Inventories are stated at the lower of cost (principally on a last-in, first-out "LIFO" basis) or market. In total, approximately 89% of inventories in 2022 and 91% of inventories in 2021 were valued using the LIFO method. The remaining inventories, including substantially all fuel inventories, are stated at the lower of cost (on a FIFO basis) or net realizable value. Replacement cost was higher than the carrying amount by $2,196 at January 28, 2023 and $1,570 at January 29, 2022. The Company follows the Link-Chain, Dollar-Value LIFO method for purposes of calculating its LIFO charge or credit. During 2020, the Company had a LIFO liquidation primarily related to pharmacy inventory. The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs. The effect of this reduction in inventory decreased "Merchandise costs" by approximately $76, $58 net of tax. ​57 ​ ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS​All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.​1.ACCOUNTING POLICIES​The following is a summary of the significant accounting policies followed in preparing these financial statements.​Description of Business, Basis of Presentation and Principles of Consolidation​The Kroger Co. (the "Company") was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,719 supermarkets, 2,252 pharmacies and 1,637 fuel centers across 35 states while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated.​Fiscal Year​The Company's fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the 52-week periods ended January 28, 2023, January 29, 2022 and January 30, 2021.​Pervasiveness of Estimates​The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates.​Cash, Temporary Cash Investments and Book Overdrafts​Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in "Trade accounts payable" and "Accrued salaries and wages" in the Consolidated Balance Sheets.​Deposits In-Transit​Deposits in-transit generally represent funds deposited to the Company's bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.​Inventories​Inventories are stated at the lower of cost (principally on a last-in, first-out "LIFO" basis) or market. In total, approximately 89% of inventories in 2022 and 91% of inventories in 2021 were valued using the LIFO method. The remaining inventories, including substantially all fuel inventories, are stated at the lower of cost (on a FIFO basis) or net realizable value. Replacement cost was higher than the carrying amount by $2,196 at January 28, 2023 and $1,570 at January 29, 2022. The Company follows the Link-Chain, Dollar-Value LIFO method for purposes of calculating its LIFO charge or credit. During 2020, the Company had a LIFO liquidation primarily related to pharmacy inventory. The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs. The effect of this reduction in inventory decreased "Merchandise costs" by approximately $76, $58 net of tax. ​

**Current (2024):**

​ Earnings ​ Interest ​ Total Balances at January 30, 2021 1,918 ​ $ 1,918 ​ $ 3,461 1,160 ​ $ (18,191) ​ $ (630) ​ $ 23,018 ​ $ (26) ​ $ 9,550 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (7) ​ 172 ​  -  ​  -  ​  -  ​ 172 Restricted stock issued  -  ​  -  ​ (137) (3) ​ 73 ​  -  ​  -  ​  -  ​ (64) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  35 ​ (1,422) ​  -  ​  -  ​  -  ​ (1,422) Stock options exchanged  -  ​  -  ​  -  6 ​ (225) ​  -  ​  -  ​  -  ​ (225) Share-based employee compensation  -  ​  -  ​ 203  -  ​  -  ​  -  ​  -  ​  -  ​ 203 Other comprehensive income net of tax of $51  -  ​  -  ​  -   -  ​  -  ​ 163 ​  -  ​  -  ​ 163 Other  -  ​  -  ​ 130  -  ​ (129) ​  -  ​  -  ​ (8) ​ (7) Cash dividends declared ($0.81 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (607) ​  -  ​ ​ (607) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 1,655 ​ 11 ​ 1,666 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 29, 2022 1,918 ​ $ 1,918 ​ $ 3,657 1,191 ​ $ (19,722) ​ $ (467) ​ $ 24,066 ​ $ (23) ​ $ 9,429 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (4) ​ 134 ​  -  ​  -  ​  -  ​ 134 Restricted stock issued  -  ​  -  ​ (173) (4) ​ 62 ​  -  ​  -  ​  -  ​ (111) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchases, at cost  -  ​  -  ​  -  16 ​ (821) ​  -  ​  -  ​  -  ​ (821) Stock options exchanged  -  ​  -  ​  -  3 ​ (172) ​  -  ​  -  ​  -  ​ (172) Share-based employee compensation  -  ​  -  ​ 190  -  ​  -  ​  -  ​  -  ​  -  ​ 190 Other comprehensive loss net of tax of $(51)  -  ​  -  ​  -   -  ​  -  ​ (165) ​  -  ​  -  ​ (165) Other  -  ​  -  ​ 131  -  ​ (131) ​  -  ​  -  ​ (10) ​ (10) Cash dividends declared ($0.99 per common share) ​  -  ​  -  ​  -   -  ​  -  ​  -  ​ (709) ​  -  ​ (709) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,244 ​ 5 ​ 2,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at January 28, 2023 1,918 ​ $ 1,918 ​ $ 3,805 1,202 ​ $ (20,650) ​ $ (632) ​ $ 25,601 ​ $ (28) ​ $ 10,014 Issuance of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised  -  ​  -  ​  -  (2) ​ 50 ​  -  ​  -  ​  -  ​ 50 Restricted stock issued  -  ​  -  ​ (163) (3) ​ 88 ​  -  ​  -  ​  -  ​ (75) Treasury stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exchanged  -  ​  -  ​  -  1 ​ (62) ​  -  ​  -  ​  -  ​ (62) Share-based employee compensation  -  ​  -  ​ 172  -  ​  -  ​  -  ​  -  ​  -  ​ 172 Other comprehensive income net of tax of $44  -  ​  -  ​  -   -  ​  -  ​ 143 ​  -  ​  -  ​ 143 Other  -  ​  -  ​ 108  -  ​ (108) ​  -  ​  -  ​ 9 ​ 9 Cash dividends declared ($1.13 per common share)  -  ​  -  ​  -   -  ​  -  ​  -  ​ (819) ​  -  ​ (819) Net earnings including non-controlling interests  -  ​  -  ​  -   -  ​  -  ​  -  ​ 2,164 ​ 5 ​ 2,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at February 3, 2024 1,918 ​ $ 1,918 ​ $ 3,922 1,198 ​ $ (20,682) ​ $ (489) ​ $ 26,946 ​ $ (14) ​ $ 11,601 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 59 59 59 ​NOTES TO CONSOLIDATED FINANCIAL STATEMENTS​All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.​1.ACCOUNTING POLICIES​The following is a summary of the significant accounting policies followed in preparing these financial statements.​Description of Business, Basis of Presentation and Principles of Consolidation​The Kroger Co. (the "Company") was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,722 supermarkets, 2,257 pharmacies and 1,665 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated.​Reclassifications​The Company reclassified $3.1 billion of liabilities from other current liabilities to accounts payable on the Consolidated Balance Sheet for the year ended January 28, 2023 to conform to the current year presentation. This reclassification was made to better align the presentation of liabilities associated with our third-party financing arrangements and other current liabilities on the Consolidated Balance Sheet with management's internal reporting. A similar reclassification was made to the Consolidated Statement of Cash Flows resulting in a change to accounts payable and accrued expenses within net cash provided by operating activities for the years ended February 3, 2024, January 28, 2023, and January 29, 2022. The reclassification did not affect total current liabilities on the Company's Consolidated Balance Sheet or total operating cash flows on the Consolidated Statement of Cash Flows.​Fiscal Year​The Company's fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the 53-week period ended February 3, 2024 and the 52-week periods ended January 28, 2023 and January 29, 2022.​Pervasiveness of Estimates​The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates.​Cash, Temporary Cash Investments and Book Overdrafts​Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in "Accounts payable" and "Accrued salaries and wages" in the Consolidated Balance Sheets.​Deposits In-Transit​Deposits in-transit generally represent funds deposited to the Company's bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.​60 ​ ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS​All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.​1.ACCOUNTING POLICIES​The following is a summary of the significant accounting policies followed in preparing these financial statements.​Description of Business, Basis of Presentation and Principles of Consolidation​The Kroger Co. (the "Company") was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,722 supermarkets, 2,257 pharmacies and 1,665 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated.​Reclassifications​The Company reclassified $3.1 billion of liabilities from other current liabilities to accounts payable on the Consolidated Balance Sheet for the year ended January 28, 2023 to conform to the current year presentation. This reclassification was made to better align the presentation of liabilities associated with our third-party financing arrangements and other current liabilities on the Consolidated Balance Sheet with management's internal reporting. A similar reclassification was made to the Consolidated Statement of Cash Flows resulting in a change to accounts payable and accrued expenses within net cash provided by operating activities for the years ended February 3, 2024, January 28, 2023, and January 29, 2022. The reclassification did not affect total current liabilities on the Company's Consolidated Balance Sheet or total operating cash flows on the Consolidated Statement of Cash Flows.​Fiscal Year​The Company's fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the 53-week period ended February 3, 2024 and the 52-week periods ended January 28, 2023 and January 29, 2022.​Pervasiveness of Estimates​The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates.​Cash, Temporary Cash Investments and Book Overdrafts​Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in "Accounts payable" and "Accrued salaries and wages" in the Consolidated Balance Sheets.​Deposits In-Transit​Deposits in-transit generally represent funds deposited to the Company's bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.​

---

## Modified: Identical Sales

**Key changes:**

- Reworded sentence: "($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022(1) Excluding fuel ​ $ 131,748 ​ $ 130,562 ​ Excluding fuel ​ 0.9 % 5.6 % ​ Gross Margin, LIFO and FIFO Gross Margin ​ We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation."
- Reworded sentence: "​ Our gross margin rates, as a percentage of sales, were 22.24% in 2023 and 21.43% in 2022."
- Reworded sentence: "Excluding the effect of fuel and the Extra Week, our FIFO gross margin rate increased 18 basis points in 2023, compared to 2022."
- Reworded sentence: "​ OG&A expenses, as a percentage of sales, were 17.50% in 2023 and 16.09% in 2022."
- Reworded sentence: "Excluding the effect of fuel, the Extra Week, the 2023 OG&A Adjusted Items, the 2022 OG&A Adjusted Items, our OG&A rate increased 21 basis points in 2023, compared to 2022."

**Prior (2023):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Excluding fuel ​ $ 127,635 ​ $ 120,846 ​ Excluding fuel ​ 5.6 % 0.2 % ​ Gross Margin, LIFO and FIFO Gross Margin ​ We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin. ​ Our gross margin rates, as a percentage of sales, were 21.43% in 2022 and 22.01% in 2021. The decrease in rate in 2022, compared to 2021, resulted primarily from increased fuel sales, which have a lower gross margin rate, a decrease in our fuel gross margin, increased shrink, as a percentage of sales, and a higher LIFO charge, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year. ​ Our LIFO charge was $626 million in 2022 and $197 million in 2021. The increase in our LIFO charge was attributable to higher product cost inflation primarily in grocery. ​ Our FIFO gross margin rate, which excludes the LIFO charge, was 21.86% in 2022, compared to 22.15% in 2021. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, our FIFO gross margin rate decreased 9 basis points in 2022, compared to 2021. This decrease resulted primarily from increased shrink, as a percentage of sales, partially offset by our ability to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets and the cycling of a write down related to a donation of personal protective equipment inventory from the prior year. ​ 31 31 31 Operating, General and Administrative Expenses​OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A.​OG&A expenses, as a percentage of sales, were 16.09% in 2022 and 16.83% in 2021. The decrease in 2022, compared to 2021, resulted primarily from the effect of sales leverage across fuel and supermarkets, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs, the 2021 OG&A Adjusted Items and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates, costs related to strategic investments in various margin expansion initiatives that will drive future growth and the 2022 OG&A Adjusted Items.​Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2022 OG&A Adjusted Items and the 2021 OG&A Adjusted Items, our OG&A rate decreased 19 basis points in 2022, compared to 2021. This decrease resulted primarily from the effect of supermarket sales leverage, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates and costs related to strategic investments in various margin expansion initiatives that will drive future growth.​Rent Expense​Rent expense was $839 million, or 0.57% of sales, for 2022, compared to $845 million, or 0.61% of sales, for 2021. Rent expense, as a percentage of sales, decreased 4 basis points in 2022, compared to 2021, primarily due to sales leverage and the completion of a property transaction during the first quarter of 2021 related to 28 previously leased properties that we are now accounting for as owned locations and therefore recognizing depreciation and amortization expense over their useful life. For additional information about this transaction, see Note 5 to the Consolidated Financial Statements.​Depreciation and Amortization Expense​Depreciation and amortization expense was $3.0 billion, or 2.00% of sales, for 2022, compared to $2.8 billion, or 2.05% of sales, for 2021. Depreciation and amortization expense, as a percentage of sales, decreased 5 basis points in 2022, compared to 2021, primarily due to sales leverage.​Operating Profit and FIFO Operating Profit​Operating profit was $4.1 billion, or 2.78% of sales, for 2022, compared to $3.5 billion, or 2.52% of sales, for 2021. Operating profit, as a percentage of sales, increased 26 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by an increased LIFO charge and a lower FIFO gross margin rate. Fuel earnings also contributed to our operating profit growth for 2022, compared to 2021.​FIFO operating profit was $4.8 billion, or 3.21% of sales, for 2022, compared to $3.7 billion, or 2.66% of sales, for 2021. FIFO operating profit, as a percentage of sales, excluding the 2022 and 2021 Adjusted Items, increased 30 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by a lower FIFO gross margin rate. Fuel earnings also contributed to our FIFO operating profit growth for 2022, compared to 2021.​Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.​32 Operating, General and Administrative Expenses​OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A.​OG&A expenses, as a percentage of sales, were 16.09% in 2022 and 16.83% in 2021. The decrease in 2022, compared to 2021, resulted primarily from the effect of sales leverage across fuel and supermarkets, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs, the 2021 OG&A Adjusted Items and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates, costs related to strategic investments in various margin expansion initiatives that will drive future growth and the 2022 OG&A Adjusted Items.​Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2022 OG&A Adjusted Items and the 2021 OG&A Adjusted Items, our OG&A rate decreased 19 basis points in 2022, compared to 2021. This decrease resulted primarily from the effect of supermarket sales leverage, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates and costs related to strategic investments in various margin expansion initiatives that will drive future growth.​Rent Expense​Rent expense was $839 million, or 0.57% of sales, for 2022, compared to $845 million, or 0.61% of sales, for 2021. Rent expense, as a percentage of sales, decreased 4 basis points in 2022, compared to 2021, primarily due to sales leverage and the completion of a property transaction during the first quarter of 2021 related to 28 previously leased properties that we are now accounting for as owned locations and therefore recognizing depreciation and amortization expense over their useful life. For additional information about this transaction, see Note 5 to the Consolidated Financial Statements.​Depreciation and Amortization Expense​Depreciation and amortization expense was $3.0 billion, or 2.00% of sales, for 2022, compared to $2.8 billion, or 2.05% of sales, for 2021. Depreciation and amortization expense, as a percentage of sales, decreased 5 basis points in 2022, compared to 2021, primarily due to sales leverage.​Operating Profit and FIFO Operating Profit​Operating profit was $4.1 billion, or 2.78% of sales, for 2022, compared to $3.5 billion, or 2.52% of sales, for 2021. Operating profit, as a percentage of sales, increased 26 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by an increased LIFO charge and a lower FIFO gross margin rate. Fuel earnings also contributed to our operating profit growth for 2022, compared to 2021.​FIFO operating profit was $4.8 billion, or 3.21% of sales, for 2022, compared to $3.7 billion, or 2.66% of sales, for 2021. FIFO operating profit, as a percentage of sales, excluding the 2022 and 2021 Adjusted Items, increased 30 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by a lower FIFO gross margin rate. Fuel earnings also contributed to our FIFO operating profit growth for 2022, compared to 2021.​Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.​ Operating, General and Administrative Expenses ​ OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A. ​ OG&A expenses, as a percentage of sales, were 16.09% in 2022 and 16.83% in 2021. The decrease in 2022, compared to 2021, resulted primarily from the effect of sales leverage across fuel and supermarkets, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs, the 2021 OG&A Adjusted Items and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates, costs related to strategic investments in various margin expansion initiatives that will drive future growth and the 2022 OG&A Adjusted Items. ​ Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2022 OG&A Adjusted Items and the 2021 OG&A Adjusted Items, our OG&A rate decreased 19 basis points in 2022, compared to 2021. This decrease resulted primarily from the effect of supermarket sales leverage, which decreases our OG&A rate, as a percentage of sales, lower contributions to multi-employer pension plans, decreased healthcare costs and broad-based improvement from cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions, partially offset by investments in our associates and costs related to strategic investments in various margin expansion initiatives that will drive future growth. ​ Rent Expense ​ Rent expense was $839 million, or 0.57% of sales, for 2022, compared to $845 million, or 0.61% of sales, for 2021. Rent expense, as a percentage of sales, decreased 4 basis points in 2022, compared to 2021, primarily due to sales leverage and the completion of a property transaction during the first quarter of 2021 related to 28 previously leased properties that we are now accounting for as owned locations and therefore recognizing depreciation and amortization expense over their useful life. For additional information about this transaction, see Note 5 to the Consolidated Financial Statements. ​ Depreciation and Amortization Expense ​ Depreciation and amortization expense was $3.0 billion, or 2.00% of sales, for 2022, compared to $2.8 billion, or 2.05% of sales, for 2021. Depreciation and amortization expense, as a percentage of sales, decreased 5 basis points in 2022, compared to 2021, primarily due to sales leverage. ​ Operating Profit and FIFO Operating Profit ​ Operating profit was $4.1 billion, or 2.78% of sales, for 2022, compared to $3.5 billion, or 2.52% of sales, for 2021. Operating profit, as a percentage of sales, increased 26 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by an increased LIFO charge and a lower FIFO gross margin rate. Fuel earnings also contributed to our operating profit growth for 2022, compared to 2021. ​ FIFO operating profit was $4.8 billion, or 3.21% of sales, for 2022, compared to $3.7 billion, or 2.66% of sales, for 2021. FIFO operating profit, as a percentage of sales, excluding the 2022 and 2021 Adjusted Items, increased 30 basis points in 2022, compared to 2021, due to decreased OG&A expense, as a percentage of sales, partially offset by a lower FIFO gross margin rate. Fuel earnings also contributed to our FIFO operating profit growth for 2022, compared to 2021. ​ Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section. ​ 32 32 32 The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2022 and 2021 Adjusted Items:​Operating Profit excluding the Adjusted Items($ in millions)​​​​​​​​​​ 2022 2021​Operating profit​$ 4,126​$ 3,477​LIFO charge​​ 626​​ 197​​​ ​​​​​FIFO Operating profit​ 4,752​ 3,674​​​​​​​​​Adjustment for pension plan withdrawal liabilities​​ 25​​ 449​Adjustment for Home Chef contingent consideration​​ 20​​ 66​Adjustment for transformation costs(1)​​  - ​​ 136​Adjustment for merger related costs(2)​​ 44​​  - ​Adjustment for legal settlement costs​​ 85​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​Other​​ (11)​​ (15)​​​​​​​​​2022 and 2021 Adjusted items​​ 327​​ 636​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above​$ 5,079​$ 4,310​(1)Transformation costs primarily include costs related to third-party professional consulting fees associated with business transformation and cost saving initiatives.(2)Merger related costs primarily include third party professional fees and credit facility fees associated with the proposed merger with Albertsons.​Interest Expense​Interest expense totaled $535 million in 2022 and $571 million in 2021. The decrease in interest expense in 2022, compared to 2021, was primarily due to decreased average total outstanding debt throughout 2022, compared to 2021, including both the current and long-term portions of obligations under finance leases, and increased interest income earned on our cash and temporary cash investments due to rising interest rates throughout 2022, compared to 2021.​Income Taxes​Our effective income tax rate was 22.5% in 2022 and 18.8% in 2021. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2021 tax rate differed from the federal statutory rate due to a discrete benefit of $47 million which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.​Net Earnings and Net Earnings Per Diluted Share​Our net earnings are based on the factors discussed in the Results of Operations section.​Net earnings of $3.06 per diluted share for 2022 represented an increase of 41.0% compared to net earnings of $2.17 per diluted share for 2021. Adjusted net earnings of $4.23 per diluted share for 2022 represented an increase of 14.9% compared to adjusted net earnings of $3.68 per diluted share for 2021. The increase in adjusted net earnings per diluted share resulted primarily from increased FIFO operating profit, excluding fuel, increased fuel earnings and lower weighted average common shares outstanding due to common share repurchases, partially offset by a higher LIFO charge and higher income tax expense.​33 The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2022 and 2021 Adjusted Items:​Operating Profit excluding the Adjusted Items($ in millions)​​​​​​​​​​ 2022 2021​Operating profit​$ 4,126​$ 3,477​LIFO charge​​ 626​​ 197​​​ ​​​​​FIFO Operating profit​ 4,752​ 3,674​​​​​​​​​Adjustment for pension plan withdrawal liabilities​​ 25​​ 449​Adjustment for Home Chef contingent consideration​​ 20​​ 66​Adjustment for transformation costs(1)​​  - ​​ 136​Adjustment for merger related costs(2)​​ 44​​  - ​Adjustment for legal settlement costs​​ 85​​  - ​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​Other​​ (11)​​ (15)​​​​​​​​​2022 and 2021 Adjusted items​​ 327​​ 636​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above​$ 5,079​$ 4,310​(1)Transformation costs primarily include costs related to third-party professional consulting fees associated with business transformation and cost saving initiatives.(2)Merger related costs primarily include third party professional fees and credit facility fees associated with the proposed merger with Albertsons.​Interest Expense​Interest expense totaled $535 million in 2022 and $571 million in 2021. The decrease in interest expense in 2022, compared to 2021, was primarily due to decreased average total outstanding debt throughout 2022, compared to 2021, including both the current and long-term portions of obligations under finance leases, and increased interest income earned on our cash and temporary cash investments due to rising interest rates throughout 2022, compared to 2021.​Income Taxes​Our effective income tax rate was 22.5% in 2022 and 18.8% in 2021. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2021 tax rate differed from the federal statutory rate due to a discrete benefit of $47 million which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.​Net Earnings and Net Earnings Per Diluted Share​Our net earnings are based on the factors discussed in the Results of Operations section.​Net earnings of $3.06 per diluted share for 2022 represented an increase of 41.0% compared to net earnings of $2.17 per diluted share for 2021. Adjusted net earnings of $4.23 per diluted share for 2022 represented an increase of 14.9% compared to adjusted net earnings of $3.68 per diluted share for 2021. The increase in adjusted net earnings per diluted share resulted primarily from increased FIFO operating profit, excluding fuel, increased fuel earnings and lower weighted average common shares outstanding due to common share repurchases, partially offset by a higher LIFO charge and higher income tax expense.​ The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2022 and 2021 Adjusted Items: ​

**Current (2024):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022(1) Excluding fuel ​ $ 131,748 ​ $ 130,562 ​ Excluding fuel ​ 0.9 % 5.6 % ​ Gross Margin, LIFO and FIFO Gross Margin ​ We define gross margin as sales minus merchandise costs, including advertising, warehousing, and transportation. Rent expense, depreciation and amortization expense, and interest expense are not included in gross margin. ​ Our gross margin rates, as a percentage of sales, were 22.24% in 2023 and 21.43% in 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. The increase in rate in 2023, compared to 2022, resulted primarily from a decreased LIFO charge, an increase in our fuel gross margin, strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by higher shrink, as a percentage of sales, and increased promotional price investment. ​ Our LIFO charge was $113 million in 2023 and $626 million in 2022. The decrease in our LIFO charge was attributable to lower product cost inflation for 2023 compared to 2022. ​ Our FIFO gross margin rate, which excludes the LIFO charge, was 22.31% in 2023, compared to 21.86% in 2022. Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel and the Extra Week, our FIFO gross margin rate increased 18 basis points in 2023, compared to 2022. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for our customers. This increase resulted primarily from strong Our Brands performance, our ability to effectively manage product cost through strong sourcing practices, lower transportation costs, as a percentage of sales, and the effect of our terminated agreement with Express Scripts, partially offset by increased promotional price investment and higher shrink, as a percentage of sales. ​ 34 34 34 ​Operating, General and Administrative Expenses​OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A.​OG&A expenses, as a percentage of sales, were 17.50% in 2023 and 16.09% in 2022. The increase in 2023, compared to 2022, resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts and the 2023 OG&A Adjusted Items, partially offset by the 2022 OG&A Adjusted Items, broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs.​Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the Extra Week, the 2023 OG&A Adjusted Items, the 2022 OG&A Adjusted Items, our OG&A rate increased 21 basis points in 2023, compared to 2022. This increase resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts, partially offset by broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs.​Rent Expense​Rent expense remained relatively consistent, as a percentage of sales, for 2023 compared to 2022.​Depreciation and Amortization Expense​Depreciation and amortization expense increased, as a percentage of sales, in 2023, compared to 2022, primarily due to depreciation of equipment recorded under finance leases related to our Kroger Delivery customer fulfillment center location openings and additional depreciation associated with higher capital investments, partially offset by the Extra Week.​Operating Profit and FIFO Operating Profit​Operating profit was $3.1 billion, or 2.06% of sales, for 2023, compared to $4.1 billion, or 2.78% of sales, for 2022. Operating profit, as a percentage of sales, decreased 72 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales, and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate, a decreased LIFO charge and the Extra Week.​FIFO operating profit was $3.2 billion, or 2.14% of sales, for 2023, compared to $4.8 billion, or 3.21% of sales, for 2022. FIFO operating profit, as a percentage of sales, excluding the 2023 and 2022 Adjusted Items and the Extra Week, decreased 15 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate.​Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.​35 ​ ​ Operating, General and Administrative Expenses​OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A.​OG&A expenses, as a percentage of sales, were 17.50% in 2023 and 16.09% in 2022. The increase in 2023, compared to 2022, resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts and the 2023 OG&A Adjusted Items, partially offset by the 2022 OG&A Adjusted Items, broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs.​Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the Extra Week, the 2023 OG&A Adjusted Items, the 2022 OG&A Adjusted Items, our OG&A rate increased 21 basis points in 2023, compared to 2022. This increase resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts, partially offset by broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs.​Rent Expense​Rent expense remained relatively consistent, as a percentage of sales, for 2023 compared to 2022.​Depreciation and Amortization Expense​Depreciation and amortization expense increased, as a percentage of sales, in 2023, compared to 2022, primarily due to depreciation of equipment recorded under finance leases related to our Kroger Delivery customer fulfillment center location openings and additional depreciation associated with higher capital investments, partially offset by the Extra Week.​Operating Profit and FIFO Operating Profit​Operating profit was $3.1 billion, or 2.06% of sales, for 2023, compared to $4.1 billion, or 2.78% of sales, for 2022. Operating profit, as a percentage of sales, decreased 72 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales, and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate, a decreased LIFO charge and the Extra Week.​FIFO operating profit was $3.2 billion, or 2.14% of sales, for 2023, compared to $4.8 billion, or 3.21% of sales, for 2022. FIFO operating profit, as a percentage of sales, excluding the 2023 and 2022 Adjusted Items and the Extra Week, decreased 15 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate.​Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.​ Operating, General and Administrative Expenses ​ OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A. ​ OG&A expenses, as a percentage of sales, were 17.50% in 2023 and 16.09% in 2022. The increase in 2023, compared to 2022, resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts and the 2023 OG&A Adjusted Items, partially offset by the 2022 OG&A Adjusted Items, broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs. ​ Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the Extra Week, the 2023 OG&A Adjusted Items, the 2022 OG&A Adjusted Items, our OG&A rate increased 21 basis points in 2023, compared to 2022. This increase resulted primarily from planned investments in associates, costs related to strategic investments that are expected to drive future growth and the effect of our terminated agreement with Express Scripts, partially offset by broad-based cost savings initiatives that drive administrative efficiencies, store productivity and sourcing cost reductions and lower incentive plan costs. ​ Rent Expense ​ Rent expense remained relatively consistent, as a percentage of sales, for 2023 compared to 2022. ​ Depreciation and Amortization Expense ​ Depreciation and amortization expense increased, as a percentage of sales, in 2023, compared to 2022, primarily due to depreciation of equipment recorded under finance leases related to our Kroger Delivery customer fulfillment center location openings and additional depreciation associated with higher capital investments, partially offset by the Extra Week. ​ Operating Profit and FIFO Operating Profit ​ Operating profit was $3.1 billion, or 2.06% of sales, for 2023, compared to $4.1 billion, or 2.78% of sales, for 2022. Operating profit, as a percentage of sales, decreased 72 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales, and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate, a decreased LIFO charge and the Extra Week. ​ FIFO operating profit was $3.2 billion, or 2.14% of sales, for 2023, compared to $4.8 billion, or 3.21% of sales, for 2022. FIFO operating profit, as a percentage of sales, excluding the 2023 and 2022 Adjusted Items and the Extra Week, decreased 15 basis points in 2023, compared to 2022, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate. ​ Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section. ​ 35 35 35 ​The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2023 and 2022 Adjusted Items:​Operating Profit excluding the Adjusted Items($ in millions)​​​​​​​​​​ 2023 2022​Operating profit​$ 3,096​$ 4,126​LIFO charge​​ 113​​ 626​​​ ​​​​​FIFO Operating profit​ 3,209​ 4,752​​​​​​​​​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for merger related costs(1)​​ 316​​ 44​Adjustment for opioid settlement charges(2)​​ 1,475​​ 85​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Other​​ (14)​​ (11)​​​​​​​​​2023 and 2022 Adjusted items​​ 1,777​​ 327​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above​$ 4,986​$ 5,079​​​​​​​​​Extra Week adjustment​​ (187)​​  - ​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above and the Extra Week​$ 4,799​$ 5,079​(1)Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(2)Opioid settlement charges include settlements with the nationwide opioid settlement framework and the States of West Virginia and New Mexico.​Interest Expense​Interest expense totaled $441 million in 2023 and $535 million in 2022. The decrease in interest expense in 2023, compared to 2022, was primarily due to decreased average total outstanding debt throughout 2023, compared to 2022, including both the current and long-term portions of obligations under finance leases and increased interest income earned on our cash and temporary cash investments due to rising interest rates and higher cash and temporary cash investment balances throughout 2023, compared to 2022, partially offset by the Extra Week.​Income Taxes​Our effective income tax rate was 23.5% in 2023 and 22.5% in 2022. The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits.​36 ​ ​ The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2023 and 2022 Adjusted Items:​Operating Profit excluding the Adjusted Items($ in millions)​​​​​​​​​​ 2023 2022​Operating profit​$ 3,096​$ 4,126​LIFO charge​​ 113​​ 626​​​ ​​​​​FIFO Operating profit​ 3,209​ 4,752​​​​​​​​​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for merger related costs(1)​​ 316​​ 44​Adjustment for opioid settlement charges(2)​​ 1,475​​ 85​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Other​​ (14)​​ (11)​​​​​​​​​2023 and 2022 Adjusted items​​ 1,777​​ 327​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above​$ 4,986​$ 5,079​​​​​​​​​Extra Week adjustment​​ (187)​​  - ​​​​​​​​​Adjusted FIFO operating profit excluding the adjusted items above and the Extra Week​$ 4,799​$ 5,079​(1)Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons.(2)Opioid settlement charges include settlements with the nationwide opioid settlement framework and the States of West Virginia and New Mexico.​Interest Expense​Interest expense totaled $441 million in 2023 and $535 million in 2022. The decrease in interest expense in 2023, compared to 2022, was primarily due to decreased average total outstanding debt throughout 2023, compared to 2022, including both the current and long-term portions of obligations under finance leases and increased interest income earned on our cash and temporary cash investments due to rising interest rates and higher cash and temporary cash investment balances throughout 2023, compared to 2022, partially offset by the Extra Week.​Income Taxes​Our effective income tax rate was 23.5% in 2023 and 22.5% in 2022. The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits.​ The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2023 and 2022 Adjusted Items: ​

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## Modified: SHAREOWNERS' EQUITY

**Key changes:**

- Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred shares, $100 par per share, 5 shares authorized and unissued ​ ​  -   -  ​ ​  -   -  ​ Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2023 and 2022 ​ 1,918 ​ 1,918 ​ Additional paid-in capital ​ 3,922 ​ 3,805 ​ Accumulated other comprehensive loss ​ (489) ​ (632) ​ Accumulated earnings ​ 26,946 ​ 25,601 ​ Common shares in treasury, at cost, 1,198 shares in 2023 and 1,202 shares in 2022 ​ (20,682) ​ (20,650) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareowners' Equity - The Kroger Co."

**Prior (2023):**

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred shares, $100 par per share, 5 shares authorized and unissued ​ ​  -   -  ​ ​  -   -  ​ Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2022 and 2021 ​ 1,918 ​ 1,918 ​ Additional paid-in capital ​ 3,805 ​ 3,657 ​ Accumulated other comprehensive loss ​ (632) ​ (467) ​ Accumulated earnings ​ 25,601 ​ 24,066 ​ Common shares in treasury, at cost, 1,202 shares in 2022 and 1,191 shares in 2021 ​ (20,650) ​ (19,722) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareowners' Equity - The Kroger Co. ​ 10,042 ​ 9,452 ​ Noncontrolling interests ​ (28) ​ (23) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Equity ​ 10,014 ​ 9,429 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Equity ​ $ 49,623 ​ $ 49,086 ​ ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 52 52 52 THE KROGER CO.CONSOLIDATED STATEMENTS OF OPERATIONS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​​​​ ​​​2022 2021 2020​(In millions, except per share amounts) (52 weeks)​(52 weeks)​(52 weeks) Sales​​$ 148,258​$ 137,888​$ 132,498​​​​​​​​​​​​​Operating expenses​​​​​​​​​​​Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below​​ 116,480​ 107,539​ 101,597​Operating, general and administrative​​ 23,848​ 23,203​ 24,500​Rent​​ 839​ 845​ 874​Depreciation and amortization​​ 2,965​ 2,824​ 2,747​​​​​​​​​​​​​Operating profit​​ 4,126​ 3,477​ 2,780​​​​​​​​​​​​​Other income (expense)​​​​​​​​​​​Interest expense​​ (535)​ (571)​ (544)​Non-service component of company-sponsored pension plan benefits (costs)​​​ 39​​ (34)​​ 29​(Loss) gain on investments​​​ (728)​​ (821)​​ 1,105​​​​​​​​​​​​​Net earnings before income tax expense​​ 2,902​ 2,051​ 3,370​​​​​​​​​​​​​Income tax expense​​ 653​ 385​ 782​​​​​​​​​​​​​Net earnings including noncontrolling interests​​ 2,249​ 1,666​ 2,588​Net income attributable to noncontrolling interests​​ 5​ 11​ 3​​​​​​​​​​​​​Net earnings attributable to The Kroger Co.​​$ 2,244​$ 1,655​$ 2,585​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per basic common share​​$ 3.10​$ 2.20​$ 3.31​​​​​​​​​​​​​Average number of common shares used in basic calculation​​ 718​ 744​ 773​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​​$ 3.06​$ 2.17​$ 3.27​​​​​​​​​​​​​Average number of common shares used in diluted calculation​​ 727​ 754​ 781​​​The accompanying notes are an integral part of the consolidated financial statements.​53 THE KROGER CO.CONSOLIDATED STATEMENTS OF OPERATIONS​Years Ended January 28, 2023, January 29, 2022 and January 30, 2021​​​​​​​​​​​​​​​​​​​​​ ​​​2022 2021 2020​(In millions, except per share amounts) (52 weeks)​(52 weeks)​(52 weeks) Sales​​$ 148,258​$ 137,888​$ 132,498​​​​​​​​​​​​​Operating expenses​​​​​​​​​​​Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below​​ 116,480​ 107,539​ 101,597​Operating, general and administrative​​ 23,848​ 23,203​ 24,500​Rent​​ 839​ 845​ 874​Depreciation and amortization​​ 2,965​ 2,824​ 2,747​​​​​​​​​​​​​Operating profit​​ 4,126​ 3,477​ 2,780​​​​​​​​​​​​​Other income (expense)​​​​​​​​​​​Interest expense​​ (535)​ (571)​ (544)​Non-service component of company-sponsored pension plan benefits (costs)​​​ 39​​ (34)​​ 29​(Loss) gain on investments​​​ (728)​​ (821)​​ 1,105​​​​​​​​​​​​​Net earnings before income tax expense​​ 2,902​ 2,051​ 3,370​​​​​​​​​​​​​Income tax expense​​ 653​ 385​ 782​​​​​​​​​​​​​Net earnings including noncontrolling interests​​ 2,249​ 1,666​ 2,588​Net income attributable to noncontrolling interests​​ 5​ 11​ 3​​​​​​​​​​​​​Net earnings attributable to The Kroger Co.​​$ 2,244​$ 1,655​$ 2,585​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per basic common share​​$ 3.10​$ 2.20​$ 3.31​​​​​​​​​​​​​Average number of common shares used in basic calculation​​ 718​ 744​ 773​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​​$ 3.06​$ 2.17​$ 3.27​​​​​​​​​​​​​Average number of common shares used in diluted calculation​​ 727​ 754​ 781​​​The accompanying notes are an integral part of the consolidated financial statements.​

**Current (2024):**

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred shares, $100 par per share, 5 shares authorized and unissued ​ ​  -   -  ​ ​  -   -  ​ Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2023 and 2022 ​ 1,918 ​ 1,918 ​ Additional paid-in capital ​ 3,922 ​ 3,805 ​ Accumulated other comprehensive loss ​ (489) ​ (632) ​ Accumulated earnings ​ 26,946 ​ 25,601 ​ Common shares in treasury, at cost, 1,198 shares in 2023 and 1,202 shares in 2022 ​ (20,682) ​ (20,650) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareowners' Equity - The Kroger Co. ​ 11,615 ​ 10,042 ​ Noncontrolling interests ​ (14) ​ (28) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Equity ​ 11,601 ​ 10,014 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Equity ​ $ 50,505 ​ $ 49,623 ​ ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 55 55 55 ​THE KROGER CO.CONSOLIDATED STATEMENTS OF OPERATIONS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​​​​ ​​​2023 2022 2021​(In millions, except per share amounts) (53 weeks)​(52 weeks)​(52 weeks) Sales​​$ 150,039​$ 148,258​$ 137,888​​​​​​​​​​​​​Operating expenses​​​​​​​​​​​Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below​​ 116,675​ 116,480​ 107,539​Operating, general and administrative​​ 26,252​ 23,848​ 23,203​Rent​​ 891​ 839​ 845​Depreciation and amortization​​ 3,125​ 2,965​ 2,824​​​​​​​​​​​​​Operating profit​​ 3,096​ 4,126​ 3,477​​​​​​​​​​​​​Other income (expense)​​​​​​​​​​​Interest expense​​ (441)​ (535)​ (571)​Non-service component of company-sponsored pension plan benefits (costs)​​​ 30​​ 39​​ (34)​Gain (loss) on investments​​​ 151​​ (728)​​ (821)​​​​​​​​​​​​​Net earnings before income tax expense​​ 2,836​ 2,902​ 2,051​​​​​​​​​​​​​Income tax expense​​ 667​ 653​ 385​​​​​​​​​​​​​Net earnings including noncontrolling interests​​ 2,169​ 2,249​ 1,666​Net income attributable to noncontrolling interests​​ 5​ 5​ 11​​​​​​​​​​​​​Net earnings attributable to The Kroger Co.​​$ 2,164​$ 2,244​$ 1,655​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per basic common share​​$ 2.99​$ 3.10​$ 2.20​​​​​​​​​​​​​Average number of common shares used in basic calculation​​ 718​ 718​ 744​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​​$ 2.96​$ 3.06​$ 2.17​​​​​​​​​​​​​Average number of common shares used in diluted calculation​​ 725​ 727​ 754​​​The accompanying notes are an integral part of the consolidated financial statements.​56 ​ ​ THE KROGER CO.CONSOLIDATED STATEMENTS OF OPERATIONS​Years Ended February 3, 2024, January 28, 2023 and January 29, 2022​​​​​​​​​​​​​​​​​​​​​ ​​​2023 2022 2021​(In millions, except per share amounts) (53 weeks)​(52 weeks)​(52 weeks) Sales​​$ 150,039​$ 148,258​$ 137,888​​​​​​​​​​​​​Operating expenses​​​​​​​​​​​Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below​​ 116,675​ 116,480​ 107,539​Operating, general and administrative​​ 26,252​ 23,848​ 23,203​Rent​​ 891​ 839​ 845​Depreciation and amortization​​ 3,125​ 2,965​ 2,824​​​​​​​​​​​​​Operating profit​​ 3,096​ 4,126​ 3,477​​​​​​​​​​​​​Other income (expense)​​​​​​​​​​​Interest expense​​ (441)​ (535)​ (571)​Non-service component of company-sponsored pension plan benefits (costs)​​​ 30​​ 39​​ (34)​Gain (loss) on investments​​​ 151​​ (728)​​ (821)​​​​​​​​​​​​​Net earnings before income tax expense​​ 2,836​ 2,902​ 2,051​​​​​​​​​​​​​Income tax expense​​ 667​ 653​ 385​​​​​​​​​​​​​Net earnings including noncontrolling interests​​ 2,169​ 2,249​ 1,666​Net income attributable to noncontrolling interests​​ 5​ 5​ 11​​​​​​​​​​​​​Net earnings attributable to The Kroger Co.​​$ 2,164​$ 2,244​$ 1,655​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per basic common share​​$ 2.99​$ 3.10​$ 2.20​​​​​​​​​​​​​Average number of common shares used in basic calculation​​ 718​ 718​ 744​​​​​​​​​​​​​Net earnings attributable to The Kroger Co. per diluted common share​​$ 2.96​$ 3.06​$ 2.17​​​​​​​​​​​​​Average number of common shares used in diluted calculation​​ 725​ 727​ 754​​​The accompanying notes are an integral part of the consolidated financial statements.​

---

## Modified: amortization(1)

**Key changes:**

- Reworded sentence: "Definite-lived pharmacy prescription files ​ $ 360 ​ $ (259) ​ $ 325 ​ $ (230) ​ Definite-lived customer relationships ​ ​ 186 ​ ​ (179) ​ ​ 186 ​ ​ (173) ​ Definite-lived other ​ 118 ​ (103) ​ 112 ​ (96) ​ Indefinite-lived trade name ​ 685 ​  -  ​ 685 ​  -  ​ Indefinite-lived liquor licenses ​ 91 ​  -  ​ 90 ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 1,440 ​ $ (541) ​ $ 1,398 ​ $ (499) ​ ​ Amortization expense associated with intangible assets totaled approximately $42, $52 and $59, during fiscal years 2023, 2022 and 2021, respectively."

**Prior (2023):**

Definite-lived pharmacy prescription files ​ $ 325 ​ $ (230) ​ $ 317 ​ $ (199) ​ Definite-lived customer relationships ​ ​ 186 ​ ​ (173) ​ ​ 186 ​ ​ (160) ​ Definite-lived other ​ 112 ​ (96) ​ 111 ​ (88) ​ Indefinite-lived trade name ​ 685 ​  -  ​ 685 ​  -  ​ Indefinite-lived liquor licenses ​ 90 ​  -  ​ 90 ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 1,398 ​ $ (499) ​ $ 1,389 ​ $ (447) ​ ​ Amortization expense associated with intangible assets totaled approximately $52, $59 and $67, during fiscal years 2022, 2021 and 2020, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2022 is estimated to be approximately: ​ ​ ​ ​ ​ 2023 $ 41 2024 ​ 36 2025 ​ 32 2026 ​ 11 2027 ​ 2 Thereafter ​ 2 ​ ​ ​ ​ Total future estimated amortization associated with definite-lived intangible assets ​ $ 124 ​ ​ 3.

**Current (2024):**

Definite-lived pharmacy prescription files ​ $ 360 ​ $ (259) ​ $ 325 ​ $ (230) ​ Definite-lived customer relationships ​ ​ 186 ​ ​ (179) ​ ​ 186 ​ ​ (173) ​ Definite-lived other ​ 118 ​ (103) ​ 112 ​ (96) ​ Indefinite-lived trade name ​ 685 ​  -  ​ 685 ​  -  ​ Indefinite-lived liquor licenses ​ 91 ​  -  ​ 90 ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 1,440 ​ $ (541) ​ $ 1,398 ​ $ (499) ​ ​ Amortization expense associated with intangible assets totaled approximately $42, $52 and $59, during fiscal years 2023, 2022 and 2021, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2023 is estimated to be approximately: ​ ​ ​ ​ ​ 2024 $ 42 2025 ​ 38 2026 ​ 17 2027 ​ 8 2028 ​ 8 Thereafter ​ 10 ​ ​ ​ ​ Total future estimated amortization associated with definite-lived intangible assets ​ $ 123 ​ ​ 3.

---

## Modified: Operating Profit excluding the Adjusted Items

**Key changes:**

- Reworded sentence: "($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 ​ Operating profit ​ $ 3,096 ​ $ 4,126 ​ LIFO charge ​ ​ 113 ​ ​ 626 ​ ​ ​ ​ ​ ​ ​ ​ FIFO Operating profit ​ 3,209 ​ 4,752 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities ​ ​  -  ​ ​ 25 ​ Adjustment for Home Chef contingent consideration ​ ​  -  ​ ​ 20 ​ Adjustment for merger related costs(1) ​ ​ 316 ​ ​ 44 ​ Adjustment for opioid settlement charges(2) ​ ​ 1,475 ​ ​ 85 ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com ​ ​  -  ​ ​ 164 ​ Other ​ ​ (14) ​ ​ (11) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 and 2022 Adjusted items ​ ​ 1,777 ​ ​ 327 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted FIFO operating profit excluding the adjusted items above ​ $ 4,986 ​ $ 5,079 ​ ​ ​ ​ ​ ​ ​ ​ ​ Extra Week adjustment ​ ​ (187) ​ ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted FIFO operating profit excluding the adjusted items above and the Extra Week ​ $ 4,799 ​ $ 5,079 ​ ​ Interest Expense ​ Interest expense totaled $441 million in 2023 and $535 million in 2022."
- Reworded sentence: "We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​37 ​ ​ Net Earnings and Net Earnings Per Diluted Share​Our net earnings are based on the factors discussed in the Results of Operations section.​Net earnings of $2.96 per diluted share for 2023 represented a decrease of 3.3% compared to net earnings of $3.06 per diluted share for 2022."
- Reworded sentence: "We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​ Net Earnings and Net Earnings Per Diluted Share ​ Our net earnings are based on the factors discussed in the Results of Operations section."

**Prior (2023):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 ​ Operating profit ​ $ 4,126 ​ $ 3,477 ​ LIFO charge ​ ​ 626 ​ ​ 197 ​ ​ ​ ​ ​ ​ ​ ​ FIFO Operating profit ​ 4,752 ​ 3,674 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities ​ ​ 25 ​ ​ 449 ​ Adjustment for Home Chef contingent consideration ​ ​ 20 ​ ​ 66 ​ Adjustment for transformation costs(1) ​ ​  -  ​ ​ 136 ​ Adjustment for merger related costs(2) ​ ​ 44 ​ ​  -  ​ Adjustment for legal settlement costs ​ ​ 85 ​ ​  -  ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com ​ ​ 164 ​ ​  -  ​ Other ​ ​ (11) ​ ​ (15) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 and 2021 Adjusted items ​ ​ 327 ​ ​ 636 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted FIFO operating profit excluding the adjusted items above ​ $ 5,079 ​ $ 4,310 ​ ​ Interest Expense ​ Interest expense totaled $535 million in 2022 and $571 million in 2021. The decrease in interest expense in 2022, compared to 2021, was primarily due to decreased average total outstanding debt throughout 2022, compared to 2021, including both the current and long-term portions of obligations under finance leases, and increased interest income earned on our cash and temporary cash investments due to rising interest rates throughout 2022, compared to 2021. ​ Income Taxes ​ Our effective income tax rate was 22.5% in 2022 and 18.8% in 2021. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2021 tax rate differed from the federal statutory rate due to a discrete benefit of $47 million which was primarily from the favorable outcome of income tax audit examinations covering multiple years, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes. ​ Net Earnings and Net Earnings Per Diluted Share ​ Our net earnings are based on the factors discussed in the Results of Operations section. ​ Net earnings of $3.06 per diluted share for 2022 represented an increase of 41.0% compared to net earnings of $2.17 per diluted share for 2021. Adjusted net earnings of $4.23 per diluted share for 2022 represented an increase of 14.9% compared to adjusted net earnings of $3.68 per diluted share for 2021. The increase in adjusted net earnings per diluted share resulted primarily from increased FIFO operating profit, excluding fuel, increased fuel earnings and lower weighted average common shares outstanding due to common share repurchases, partially offset by a higher LIFO charge and higher income tax expense. ​ 33 33 33 RETURN ON INVESTED CAPITAL​We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets.​Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​The following table provides a calculation of ROIC for 2022 and 2021 on a 52 week basis ($ in millions): ​​​​​​​​​​​Fiscal Year Ended​​​January 28,​January 29,​​ 2023​2022 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit​$ 4,126​$ 3,477​LIFO charge​ 626​ 197​Depreciation and amortization​ 2,965​ 2,824​Rent​ 839​ 845​Adjustment for Home Chef contingent consideration​​ 20​​ 66​Adjustment for pension plan withdrawal liabilities​​ 25​​ 449​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​Adjustment for merger related costs​​ 44​​  - ​Adjustment for transformation costs ​​  - ​​ 136​Adjustment for legal settlement costs​​ 85​​  - ​Adjusted ROIC operating profit​$ 8,894​$ 7,994​​​​​​​​​Denominator​​​​​​​Average total assets​$ 49,355​$ 48,874​Average taxes receivable(1)​ (137)​ (54)​Average LIFO reserve​ 1,883​ 1,472​Average accumulated depreciation and amortization(2)​ 27,843​ 24,868​Average trade accounts payable​ (7,118)​ (6,898)​Average accrued salaries and wages​ (1,741)​ (1,575)​Average other current liabilities(3)​ (6,333)​ (5,976)​Average invested capital​$ 63,752​$ 60,711​Return on Invested Capital​ 13.95% 13.17%(1)Taxes receivable were $231 as of January 28, 2023, $42 as of January 29, 2022 and $66 as of January 30, 2021.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.(3)Other current liabilities included accrued income taxes of $9 as of January 30, 2021. We did not have any accrued income taxes as of January 28, 2023 or January 29, 2022. Accrued income taxes are removed from other current liabilities in the calculation of average invested capital.​34 RETURN ON INVESTED CAPITAL​We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets.​Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​The following table provides a calculation of ROIC for 2022 and 2021 on a 52 week basis ($ in millions): ​​​​​​​​​​​Fiscal Year Ended​​​January 28,​January 29,​​ 2023​2022 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit​$ 4,126​$ 3,477​LIFO charge​ 626​ 197​Depreciation and amortization​ 2,965​ 2,824​Rent​ 839​ 845​Adjustment for Home Chef contingent consideration​​ 20​​ 66​Adjustment for pension plan withdrawal liabilities​​ 25​​ 449​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​ 164​​  - ​Adjustment for merger related costs​​ 44​​  - ​Adjustment for transformation costs ​​  - ​​ 136​Adjustment for legal settlement costs​​ 85​​  - ​Adjusted ROIC operating profit​$ 8,894​$ 7,994​​​​​​​​​Denominator​​​​​​​Average total assets​$ 49,355​$ 48,874​Average taxes receivable(1)​ (137)​ (54)​Average LIFO reserve​ 1,883​ 1,472​Average accumulated depreciation and amortization(2)​ 27,843​ 24,868​Average trade accounts payable​ (7,118)​ (6,898)​Average accrued salaries and wages​ (1,741)​ (1,575)​Average other current liabilities(3)​ (6,333)​ (5,976)​Average invested capital​$ 63,752​$ 60,711​Return on Invested Capital​ 13.95% 13.17%(1)Taxes receivable were $231 as of January 28, 2023, $42 as of January 29, 2022 and $66 as of January 30, 2021.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.(3)Other current liabilities included accrued income taxes of $9 as of January 30, 2021. We did not have any accrued income taxes as of January 28, 2023 or January 29, 2022. Accrued income taxes are removed from other current liabilities in the calculation of average invested capital.​

**Current (2024):**

($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 ​ Operating profit ​ $ 3,096 ​ $ 4,126 ​ LIFO charge ​ ​ 113 ​ ​ 626 ​ ​ ​ ​ ​ ​ ​ ​ FIFO Operating profit ​ 3,209 ​ 4,752 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustment for pension plan withdrawal liabilities ​ ​  -  ​ ​ 25 ​ Adjustment for Home Chef contingent consideration ​ ​  -  ​ ​ 20 ​ Adjustment for merger related costs(1) ​ ​ 316 ​ ​ 44 ​ Adjustment for opioid settlement charges(2) ​ ​ 1,475 ​ ​ 85 ​ Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com ​ ​  -  ​ ​ 164 ​ Other ​ ​ (14) ​ ​ (11) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 and 2022 Adjusted items ​ ​ 1,777 ​ ​ 327 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted FIFO operating profit excluding the adjusted items above ​ $ 4,986 ​ $ 5,079 ​ ​ ​ ​ ​ ​ ​ ​ ​ Extra Week adjustment ​ ​ (187) ​ ​  -  ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted FIFO operating profit excluding the adjusted items above and the Extra Week ​ $ 4,799 ​ $ 5,079 ​ ​ Interest Expense ​ Interest expense totaled $441 million in 2023 and $535 million in 2022. The decrease in interest expense in 2023, compared to 2022, was primarily due to decreased average total outstanding debt throughout 2023, compared to 2022, including both the current and long-term portions of obligations under finance leases and increased interest income earned on our cash and temporary cash investments due to rising interest rates and higher cash and temporary cash investment balances throughout 2023, compared to 2022, partially offset by the Extra Week. ​ Income Taxes ​ Our effective income tax rate was 23.5% in 2023 and 22.5% in 2022. The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits. ​ 36 36 36 ​Net Earnings and Net Earnings Per Diluted Share​Our net earnings are based on the factors discussed in the Results of Operations section.​Net earnings of $2.96 per diluted share for 2023 represented a decrease of 3.3% compared to net earnings of $3.06 per diluted share for 2022. Excluding the 2023 and 2022 Adjusted Items and the Extra Week, adjusted net earnings of $4.56 per diluted share for 2023 represented an increase of 7.8% compared to adjusted net earnings of $4.23 per diluted share for 2022. The increase in adjusted net earnings per diluted share resulted primarily from a decreased LIFO charge and lower interest expense, partially offset by decreased fuel earnings, higher income tax expense and decreased FIFO operating profit, excluding fuel.​RETURN ON INVESTED CAPITAL​We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets.​Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​37 ​ ​ Net Earnings and Net Earnings Per Diluted Share​Our net earnings are based on the factors discussed in the Results of Operations section.​Net earnings of $2.96 per diluted share for 2023 represented a decrease of 3.3% compared to net earnings of $3.06 per diluted share for 2022. Excluding the 2023 and 2022 Adjusted Items and the Extra Week, adjusted net earnings of $4.56 per diluted share for 2023 represented an increase of 7.8% compared to adjusted net earnings of $4.23 per diluted share for 2022. The increase in adjusted net earnings per diluted share resulted primarily from a decreased LIFO charge and lower interest expense, partially offset by decreased fuel earnings, higher income tax expense and decreased FIFO operating profit, excluding fuel.​RETURN ON INVESTED CAPITAL​We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets.​Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.​ Net Earnings and Net Earnings Per Diluted Share ​ Our net earnings are based on the factors discussed in the Results of Operations section. ​ Net earnings of $2.96 per diluted share for 2023 represented a decrease of 3.3% compared to net earnings of $3.06 per diluted share for 2022. Excluding the 2023 and 2022 Adjusted Items and the Extra Week, adjusted net earnings of $4.56 per diluted share for 2023 represented an increase of 7.8% compared to adjusted net earnings of $4.23 per diluted share for 2022. The increase in adjusted net earnings per diluted share resulted primarily from a decreased LIFO charge and lower interest expense, partially offset by decreased fuel earnings, higher income tax expense and decreased FIFO operating profit, excluding fuel. ​

---

## Modified: (in millions)

**Key changes:**

- Reworded sentence: "Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed rate principal payments(1) ​ $ (1,127) ​ $ (10) ​ $ (10) ​ $ (1,392) ​ $ (612) ​ $ (8,085) ​ $ (11,236) ​ $ (10,455) ​ Average interest rate(1) ​ 3.89 % 2.67 % 2.68 % 3.04 % 3.68 % 4.56 % ​ ​ ​ ​ ​ ​ Variable rate principal payments ​ $ (35) ​ $ (22) ​ $ (81) ​ $  -  ​ $  -  ​ $  -  ​ $ (138) ​ $ (138) ​ Average interest rate ​ 6.32 % 7.07 % 1.70 %  -  ​  -  ​  -  ​ ​ ​ ​ ​ ​ ​ ​ Based on our year-end 2023 variable rate debt levels, a 10 percent change in interest rates would be immaterial."
- Reworded sentence: "The price and availability of these commodities directly affects our results of operations."
- Added sentence: "​ 49 49 49 ​We manage our exposure to diesel fuel price changes through the strategic use of diesel fuel hedge contracts."
- Added sentence: "When we use fuel hedge contracts, it is primarily to manage our exposure to fluctuations in diesel fuel prices for our logistics operations."
- Added sentence: "We do not enter into fuel hedge arrangements for trading purposes."

**Prior (2023):**

First four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 6, 2022 to December 3, 2022 26,566 ​ $ 47.90 26,566 ​ $ 1,000 ​ Second four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 4, 2022 to December 31, 2022 87,928 ​ $ 45.83 66,804 ​ $ 1,000 ​ Third four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2023 to January 28, 2023 83,500 ​ $ 45.15 83,500 ​ $ 1,000 ​ Total 197,994 ​ $ 45.82 176,870 ​ $ 1,000 ​ ​ ​ ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 22 22 22 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​23 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 29, 2022, which provides additional information on comparisons of fiscal years 2021 and 2020. Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our supermarket business and is supported by continued strategic investments in our customers, associates, and our seamless ecosystem to ensure we deliver a full, friendly and fresh experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates' wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and Our Brands initiatives, and (iii) growing our alternative profit businesses.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

**Current (2024):**

First period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 5, 2023 to December 2, 2023 7,093 ​ $ 44.09 6,900 ​ $ 1,000 ​ Second period - four weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 3, 2023 to December 30, 2023 82,059 ​ $ 44.75 64,200 ​ $ 1,000 ​ Third period - five weeks ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 to February 3, 2024 96,000 ​ $ 46.07 96,000 ​ $ 1,000 ​ Total 185,152 ​ $ 45.41 167,100 ​ $ 1,000 ​ ​ ITEM 6. RESERVED. ​ Not applicable. ​ ​ 24 24 24 ​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​25 ​ ​ ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.​The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the "Forward-looking Statements" section set forth in Part I and the "Risk Factors" section set forth in Item 1A of Part I. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended January 28, 2023, which provides additional information on comparisons of fiscal years 2022 and 2021.​OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN​Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​This will be achieved by:​●Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates, greater value for our customers and our seamless ecosystem to ensure we deliver a full, fresh and friendly experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate - a faster pace than other food at home sales - over time; and​●Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.​We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.​We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​ ITEM 7.

---

## Modified: RETURN ON INVESTED CAPITAL

**Key changes:**

- Reworded sentence: "​ 37 37 37 ​The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions):​​​​​​​​​​​Fiscal Year Ended​​​February 3, ​January 28, ​​ 2024​2023 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit on a 53 week basis in fiscal year 2023​$ 3,096​$ 4,126​Extra Week operating profit adjustment​​ (187)​​  - ​LIFO charge​ 113​ 626​Depreciation and amortization​ 3,125​ 2,965​Rent on a 53 week basis in fiscal year 2023​ 891​ 839​Extra Week rent adjustment​​ (17)​​  - ​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Adjustment for merger related costs​​ 316​​ 44​Adjustment for opioid settlement charges​​ 1,475​​ 85​Adjusted ROIC operating profit​$ 8,812​$ 8,894​​​​​​​​​Denominator​​​​​​​Average total assets​$ 50,064​$ 49,355​Average taxes receivable(1)​ (197)​ (137)​Average LIFO reserve​ 2,253​ 1,883​Average accumulated depreciation and amortization(2)​ 30,573​ 27,843​Average accounts payable​ (10,280)​ (10,016)​Average accrued salaries and wages​ (1,535)​ (1,741)​Average other current liabilities​ (3,414)​ (3,435)​Average invested capital​$ 67,464​$ 63,752​Return on Invested Capital​ 13.06% 13.95%(1)Taxes receivable were $163 as of February 3, 2024, $231 as of January 28, 2023 and $42 as of January 29, 2022.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.​38 ​ ​ The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions):​​​​​​​​​​​Fiscal Year Ended​​​February 3, ​January 28, ​​ 2024​2023 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit on a 53 week basis in fiscal year 2023​$ 3,096​$ 4,126​Extra Week operating profit adjustment​​ (187)​​  - ​LIFO charge​ 113​ 626​Depreciation and amortization​ 3,125​ 2,965​Rent on a 53 week basis in fiscal year 2023​ 891​ 839​Extra Week rent adjustment​​ (17)​​  - ​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Adjustment for merger related costs​​ 316​​ 44​Adjustment for opioid settlement charges​​ 1,475​​ 85​Adjusted ROIC operating profit​$ 8,812​$ 8,894​​​​​​​​​Denominator​​​​​​​Average total assets​$ 50,064​$ 49,355​Average taxes receivable(1)​ (197)​ (137)​Average LIFO reserve​ 2,253​ 1,883​Average accumulated depreciation and amortization(2)​ 30,573​ 27,843​Average accounts payable​ (10,280)​ (10,016)​Average accrued salaries and wages​ (1,535)​ (1,741)​Average other current liabilities​ (3,414)​ (3,435)​Average invested capital​$ 67,464​$ 63,752​Return on Invested Capital​ 13.06% 13.95%(1)Taxes receivable were $163 as of February 3, 2024, $231 as of January 28, 2023 and $42 as of January 29, 2022.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.​ The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​"

**Prior (2023):**

​ We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets. ​ Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies. ​ The following table provides a calculation of ROIC for 2022 and 2021 on a 52 week basis ($ in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

**Current (2024):**

​ We calculate return on invested capital ("ROIC") by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets. ​ Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company's ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies. ​ 37 37 37 ​The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions):​​​​​​​​​​​Fiscal Year Ended​​​February 3, ​January 28, ​​ 2024​2023 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit on a 53 week basis in fiscal year 2023​$ 3,096​$ 4,126​Extra Week operating profit adjustment​​ (187)​​  - ​LIFO charge​ 113​ 626​Depreciation and amortization​ 3,125​ 2,965​Rent on a 53 week basis in fiscal year 2023​ 891​ 839​Extra Week rent adjustment​​ (17)​​  - ​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Adjustment for merger related costs​​ 316​​ 44​Adjustment for opioid settlement charges​​ 1,475​​ 85​Adjusted ROIC operating profit​$ 8,812​$ 8,894​​​​​​​​​Denominator​​​​​​​Average total assets​$ 50,064​$ 49,355​Average taxes receivable(1)​ (197)​ (137)​Average LIFO reserve​ 2,253​ 1,883​Average accumulated depreciation and amortization(2)​ 30,573​ 27,843​Average accounts payable​ (10,280)​ (10,016)​Average accrued salaries and wages​ (1,535)​ (1,741)​Average other current liabilities​ (3,414)​ (3,435)​Average invested capital​$ 67,464​$ 63,752​Return on Invested Capital​ 13.06% 13.95%(1)Taxes receivable were $163 as of February 3, 2024, $231 as of January 28, 2023 and $42 as of January 29, 2022.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.​38 ​ ​ The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions):​​​​​​​​​​​Fiscal Year Ended​​​February 3, ​January 28, ​​ 2024​2023 Return on Invested Capital​​​​​​​Numerator​​​​​​​Operating profit on a 53 week basis in fiscal year 2023​$ 3,096​$ 4,126​Extra Week operating profit adjustment​​ (187)​​  - ​LIFO charge​ 113​ 626​Depreciation and amortization​ 3,125​ 2,965​Rent on a 53 week basis in fiscal year 2023​ 891​ 839​Extra Week rent adjustment​​ (17)​​  - ​Adjustment for Home Chef contingent consideration​​  - ​​ 20​Adjustment for pension plan withdrawal liabilities​​  - ​​ 25​Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com​​  - ​​ 164​Adjustment for merger related costs​​ 316​​ 44​Adjustment for opioid settlement charges​​ 1,475​​ 85​Adjusted ROIC operating profit​$ 8,812​$ 8,894​​​​​​​​​Denominator​​​​​​​Average total assets​$ 50,064​$ 49,355​Average taxes receivable(1)​ (197)​ (137)​Average LIFO reserve​ 2,253​ 1,883​Average accumulated depreciation and amortization(2)​ 30,573​ 27,843​Average accounts payable​ (10,280)​ (10,016)​Average accrued salaries and wages​ (1,535)​ (1,741)​Average other current liabilities​ (3,414)​ (3,435)​Average invested capital​$ 67,464​$ 63,752​Return on Invested Capital​ 13.06% 13.95%(1)Taxes receivable were $163 as of February 3, 2024, $231 as of January 28, 2023 and $42 as of January 29, 2022.(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.​ The following table provides a calculation of ROIC for 2023 and 2022 on a 52 week basis ($ in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

---

## Modified: Fiscal Year

**Key changes:**

- Reworded sentence: "​ ​ ​ ​ Percentage ​ ​ ​ ​ 2023 ​ Change ​ 2022 ​ Sales ​ $ 150,039 ​ 1.2 % $ 148,258 ​ Sales without fuel and the Extra Week ​ $ 130,988 ​ 1.1 % $ 129,626 ​ Net earnings attributable to The Kroger Co."
- Added sentence: "Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms."
- Added sentence: "Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022."
- Added sentence: "The decrease in LIFO charge was due to lower product cost inflation year-over-year.​●Alternative profit streams contributed $1.3 billion of operating profit in 2023."
- Added sentence: "​27 ​ ​ OVERVIEW Notable items for 2023 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co."

**Prior (2023):**

​ ​ ​ ​ Percentage ​ ​ ​ ​ 2022 ​ Change ​ 2021 ​ Sales ​ $ 148,258 ​ 7.5 % $ 137,888 ​ Sales without fuel ​ $ 129,626 ​ 5.2 % $ 123,210 ​ Net earnings attributable to The Kroger Co. ​ $ 2,244 ​ 35.6 % $ 1,655 ​ Adjusted net earnings attributable to The Kroger Co. ​ $ 3,104 ​ 10.8 % $ 2,802 ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 3.06 ​ 41.0 % $ 2.17 ​ Adjusted net earnings attributable to The Kroger Co. per diluted common share ​ $ 4.23 ​ 14.9 % $ 3.68 ​ Operating profit ​ $ 4,126 ​ 18.7 % $ 3,477 ​ Adjusted FIFO operating profit ​ $ 5,079 ​ 17.8 % $ 4,310 ​ Dividends paid ​ $ 682 ​ 15.8 % $ 589 ​ Dividends paid per common share ​ $ 0.94 ​ 20.5 % $ 0.78 ​ Identical sales excluding fuel ​ ​ 5.6 % N/A ​ ​ 0.2 % FIFO gross margin rate, excluding fuel, bps decrease ​ ​ (0.09) ​ N/A ​ ​ (0.43) ​ OG&A rate, excluding fuel and Adjusted Items, bps decrease ​ ​ 0.19 ​ N/A ​ ​ 0.61 ​ Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end ​ $ 14 ​ N/A ​ $ (49) ​ Share repurchases ​ $ 993 ​ N/A ​ $ 1,647 ​ ​ ​ 24 24 24 OVERVIEW Notable items for 2022 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $3.06, which represents a 41% increase compared to 2021.​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $4.23, which represents a 15% increase compared to 2021.​●Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021.​●Achieved adjusted FIFO operating profit of $5.1 billion, which represents an 18% increase compared to 2021.​●Generated cash flows from operations of $4.5 billion.​●Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons.​Other Financial Results​●Identical sales, excluding fuel, increased 5.6%, which included identical sales growth in Our Brands categories of 9.0%. Identical sales, excluding fuel, would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales increased 4%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation during 2022, compared to 2021. Our LIFO charge for 2022 was $626 million, compared to $197 million in 2021. This increase was attributable to higher product cost inflation primarily in grocery.​● Achieved cost savings greater than $1 billion for the fifth consecutive year. ​Significant Events​●As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements.​●During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado's automated smart platform  -  one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado.​25 OVERVIEW Notable items for 2022 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $3.06, which represents a 41% increase compared to 2021.​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $4.23, which represents a 15% increase compared to 2021.​●Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021.​●Achieved adjusted FIFO operating profit of $5.1 billion, which represents an 18% increase compared to 2021.​●Generated cash flows from operations of $4.5 billion.​●Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons.​Other Financial Results​●Identical sales, excluding fuel, increased 5.6%, which included identical sales growth in Our Brands categories of 9.0%. Identical sales, excluding fuel, would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales increased 4%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation during 2022, compared to 2021. Our LIFO charge for 2022 was $626 million, compared to $197 million in 2021. This increase was attributable to higher product cost inflation primarily in grocery.​● Achieved cost savings greater than $1 billion for the fifth consecutive year. ​Significant Events​●As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements.​●During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado's automated smart platform  -  one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado.​ OVERVIEW Notable items for 2022 are: ​ Shareholder Return ​ ​ ​ ​ ​ ​ ​ Other Financial Results ​ ​ ​ ​ ​ Significant Events ​ ​ ​ 25 25 25 ●During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure.​●During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger's digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers.​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of January 28, 2023, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 28, 2023, Kroger operated, either directly or through its subsidiaries, 2,719 supermarkets, of which 2,252 had pharmacies and 1,637 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​26 ●During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure.​●During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger's digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers.​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of January 28, 2023, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 28, 2023, Kroger operated, either directly or through its subsidiaries, 2,719 supermarkets, of which 2,252 had pharmacies and 1,637 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​ ​ ​

**Current (2024):**

​ ​ ​ ​ Percentage ​ ​ ​ ​ 2023 ​ Change ​ 2022 ​ Sales ​ $ 150,039 ​ 1.2 % $ 148,258 ​ Sales without fuel and the Extra Week ​ $ 130,988 ​ 1.1 % $ 129,626 ​ Net earnings attributable to The Kroger Co. ​ $ 2,164 ​ (3.6) % $ 2,244 ​ Adjusted net earnings attributable to The Kroger Co. excluding the Extra Week ​ $ 3,335 ​ 7.4 % $ 3,104 ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 2.96 ​ (3.3) % $ 3.06 ​ Adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week ​ $ 4.56 ​ 7.8 % $ 4.23 ​ Operating profit ​ $ 3,096 ​ (25.0) % $ 4,126 ​ Adjusted FIFO operating profit excluding the Extra Week ​ $ 4,799 ​ (5.5) % $ 5,079 ​ Dividends paid ​ $ 796 ​ 16.7 % $ 682 ​ Dividends paid per common share ​ $ 1.10 ​ 17.0 % $ 0.94 ​ Identical sales excluding fuel(1) ​ ​ 0.9 % N/A ​ ​ 5.6 % FIFO gross margin rate, excluding fuel and the Extra Week, bps increase (decrease)(1) ​ ​ 0.18 ​ N/A ​ ​ (0.09) ​ OG&A rate, excluding fuel, Adjusted Items and the Extra Week, bps increase (decrease)(1) ​ ​ 0.21 ​ N/A ​ ​ (0.19) ​ (Decrease)/increase in total debt, including obligations under finance leases compared to prior fiscal year end ​ $ (1,152) ​ N/A ​ $ 14 ​ Share repurchases ​ $ 62 ​ N/A ​ $ 993 ​ 26 26 26 ​OVERVIEW Notable items for 2023 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $2.96, which represents a 3.3% decrease compared to 2022. The 2023 results include losses per diluted common share of $1.60 related to our opioid settlement charges. ​●Net earnings include $179 million, $144 million net of tax, due to the Extra Week. The Extra Week in 2023 contributed $0.20 to our net earnings per diluted common share result for 2023. ​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week of $4.56, which represents an 8% increase compared to 2022. Including the Extra Week, adjusted net earnings per diluted common share increased 13% compared to 2022. ​●Achieved operating profit of $3.1 billion, which represents a 25% decrease compared to 2022. The 2023 results reflect charges of $1.5 billion related to our opioid settlement charges. ​●Achieved adjusted FIFO operating profit excluding the Extra Week of $4.8 billion, which represents a 6% decrease compared to 2022. Including the Extra Week, adjusted FIFO operating profit decreased 2% compared to 2022.​●Generated cash flows from operations of $6.8 billion, which represents a 51% increase compared to 2022.​●Returned $0.8 billion to shareholders through dividend payments.​Other Financial Results​●Identical sales, excluding fuel, increased 0.9%. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales grew to $12 billion in annual sales. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Excluding the Extra Week, digital sales increased 12%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022. The decrease in LIFO charge was due to lower product cost inflation year-over-year.​●Alternative profit streams contributed $1.3 billion of operating profit in 2023. ​27 ​ ​ OVERVIEW Notable items for 2023 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $2.96, which represents a 3.3% decrease compared to 2022. The 2023 results include losses per diluted common share of $1.60 related to our opioid settlement charges. ​●Net earnings include $179 million, $144 million net of tax, due to the Extra Week. The Extra Week in 2023 contributed $0.20 to our net earnings per diluted common share result for 2023. ​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week of $4.56, which represents an 8% increase compared to 2022. Including the Extra Week, adjusted net earnings per diluted common share increased 13% compared to 2022. ​●Achieved operating profit of $3.1 billion, which represents a 25% decrease compared to 2022. The 2023 results reflect charges of $1.5 billion related to our opioid settlement charges. ​●Achieved adjusted FIFO operating profit excluding the Extra Week of $4.8 billion, which represents a 6% decrease compared to 2022. Including the Extra Week, adjusted FIFO operating profit decreased 2% compared to 2022.​●Generated cash flows from operations of $6.8 billion, which represents a 51% increase compared to 2022.​●Returned $0.8 billion to shareholders through dividend payments.​Other Financial Results​●Identical sales, excluding fuel, increased 0.9%. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales grew to $12 billion in annual sales. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Excluding the Extra Week, digital sales increased 12%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022. The decrease in LIFO charge was due to lower product cost inflation year-over-year.​●Alternative profit streams contributed $1.3 billion of operating profit in 2023. ​ OVERVIEW Notable items for 2023 are: ​ Shareholder Return ​ ​ ​ ​ ​ ​ ​ ​ Other Financial Results ​ ​ ​ ​ ​ 27 27 27 ​Significant Events​●During the second quarter of 2023, we recognized opioid settlement charges of $1.4 billion, $1.1 billion net of tax, related to the nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. We have agreed to make settlement payments related to the nationwide settlement framework of approximately $1.2 billion in equal installments over 11 years, and $177 million in equal installments over six years. During the first quarter of 2023, we recognized opioid settlement charges of $62 million, $49 million net of tax, related to all pending and future opioid litigation claims with the State of West Virginia, which are payable over 10 years. For additional information about our opioid settlement charges in 2023, see Note 12 to the Consolidated Financial Statements.​●On September 8, 2023, Kroger and Albertsons announced they have entered a definitive agreement with C&S Wholesale Grocers, LLC for the combined sale of 413 stores, eight distribution centers, two offices and five private label brands for approximately $1.9 billion cash, in connection with the proposed merger, subject to customary adjustments. The financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the shareholder value creation opportunity the proposed merger creates. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. ​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generate alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of February 3, 2024, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of February 3, 2024, Kroger operated, either directly or through its subsidiaries, 2,722 supermarkets, of which 2,257 had pharmacies and 1,665 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​28 ​ ​ Significant Events​●During the second quarter of 2023, we recognized opioid settlement charges of $1.4 billion, $1.1 billion net of tax, related to the nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. We have agreed to make settlement payments related to the nationwide settlement framework of approximately $1.2 billion in equal installments over 11 years, and $177 million in equal installments over six years. During the first quarter of 2023, we recognized opioid settlement charges of $62 million, $49 million net of tax, related to all pending and future opioid litigation claims with the State of West Virginia, which are payable over 10 years. For additional information about our opioid settlement charges in 2023, see Note 12 to the Consolidated Financial Statements.​●On September 8, 2023, Kroger and Albertsons announced they have entered a definitive agreement with C&S Wholesale Grocers, LLC for the combined sale of 413 stores, eight distribution centers, two offices and five private label brands for approximately $1.9 billion cash, in connection with the proposed merger, subject to customary adjustments. The financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the shareholder value creation opportunity the proposed merger creates. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. ​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generate alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of February 3, 2024, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of February 3, 2024, Kroger operated, either directly or through its subsidiaries, 2,722 supermarkets, of which 2,257 had pharmacies and 1,665 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​ Significant Events ​ ​ ​

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## Modified: Fiscal Year

**Key changes:**

- Reworded sentence: "​ ​ ​ ​ ​ ​ ​ 2023 2022 Net cash provided by (used in) ​ ​ ​ ​ ​ ​ Operating activities ​ $ 6,788 ​ $ 4,498 Investing activities ​ ​ (3,750) ​ ​ (3,015) Financing activities ​ ​ (2,170) ​ ​ (2,289) Net increase (decrease) in cash and temporary cash investments ​ $ 868 ​ $ (806) ​ Net cash provided by operating activities ​ We generated $6.8 billion of cash from operations in 2023, compared to $4.5 billion in 2022."
- Reworded sentence: "We did not purchase any leased facilities in 2023."
- Reworded sentence: "Capital investments increased in 2023, compared to 2022, due to increasing our store capital investments compared to prior years."
- Reworded sentence: "We did not purchase any leased facilities in 2023."
- Reworded sentence: "Capital investments increased in 2023, compared to 2022, due to increasing our store capital investments compared to prior years."

**Prior (2023):**

​ ​ ​ ​ Percentage ​ ​ ​ ​ 2022 ​ Change ​ 2021 ​ Sales ​ $ 148,258 ​ 7.5 % $ 137,888 ​ Sales without fuel ​ $ 129,626 ​ 5.2 % $ 123,210 ​ Net earnings attributable to The Kroger Co. ​ $ 2,244 ​ 35.6 % $ 1,655 ​ Adjusted net earnings attributable to The Kroger Co. ​ $ 3,104 ​ 10.8 % $ 2,802 ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 3.06 ​ 41.0 % $ 2.17 ​ Adjusted net earnings attributable to The Kroger Co. per diluted common share ​ $ 4.23 ​ 14.9 % $ 3.68 ​ Operating profit ​ $ 4,126 ​ 18.7 % $ 3,477 ​ Adjusted FIFO operating profit ​ $ 5,079 ​ 17.8 % $ 4,310 ​ Dividends paid ​ $ 682 ​ 15.8 % $ 589 ​ Dividends paid per common share ​ $ 0.94 ​ 20.5 % $ 0.78 ​ Identical sales excluding fuel ​ ​ 5.6 % N/A ​ ​ 0.2 % FIFO gross margin rate, excluding fuel, bps decrease ​ ​ (0.09) ​ N/A ​ ​ (0.43) ​ OG&A rate, excluding fuel and Adjusted Items, bps decrease ​ ​ 0.19 ​ N/A ​ ​ 0.61 ​ Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end ​ $ 14 ​ N/A ​ $ (49) ​ Share repurchases ​ $ 993 ​ N/A ​ $ 1,647 ​ ​ ​ 24 24 24 OVERVIEW Notable items for 2022 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $3.06, which represents a 41% increase compared to 2021.​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $4.23, which represents a 15% increase compared to 2021.​●Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021.​●Achieved adjusted FIFO operating profit of $5.1 billion, which represents an 18% increase compared to 2021.​●Generated cash flows from operations of $4.5 billion.​●Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons.​Other Financial Results​●Identical sales, excluding fuel, increased 5.6%, which included identical sales growth in Our Brands categories of 9.0%. Identical sales, excluding fuel, would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales increased 4%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation during 2022, compared to 2021. Our LIFO charge for 2022 was $626 million, compared to $197 million in 2021. This increase was attributable to higher product cost inflation primarily in grocery.​● Achieved cost savings greater than $1 billion for the fifth consecutive year. ​Significant Events​●As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements.​●During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado's automated smart platform  -  one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado.​25 OVERVIEW Notable items for 2022 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $3.06, which represents a 41% increase compared to 2021.​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $4.23, which represents a 15% increase compared to 2021.​●Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021.​●Achieved adjusted FIFO operating profit of $5.1 billion, which represents an 18% increase compared to 2021.​●Generated cash flows from operations of $4.5 billion.​●Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons.​Other Financial Results​●Identical sales, excluding fuel, increased 5.6%, which included identical sales growth in Our Brands categories of 9.0%. Identical sales, excluding fuel, would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales increased 4%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation during 2022, compared to 2021. Our LIFO charge for 2022 was $626 million, compared to $197 million in 2021. This increase was attributable to higher product cost inflation primarily in grocery.​● Achieved cost savings greater than $1 billion for the fifth consecutive year. ​Significant Events​●As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements.​●During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado's automated smart platform  -  one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado.​ OVERVIEW Notable items for 2022 are: ​ Shareholder Return ​ ​ ​ ​ ​ ​ ​ Other Financial Results ​ ​ ​ ​ ​ Significant Events ​ ​ ​ 25 25 25 ●During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure.​●During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger's digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers.​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of January 28, 2023, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 28, 2023, Kroger operated, either directly or through its subsidiaries, 2,719 supermarkets, of which 2,252 had pharmacies and 1,637 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​26 ●During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure.​●During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger's digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers.​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of January 28, 2023, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 28, 2023, Kroger operated, either directly or through its subsidiaries, 2,719 supermarkets, of which 2,252 had pharmacies and 1,637 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​ ​ ​

**Current (2024):**

​ ​ ​ ​ Percentage ​ ​ ​ ​ 2023 ​ Change ​ 2022 ​ Sales ​ $ 150,039 ​ 1.2 % $ 148,258 ​ Sales without fuel and the Extra Week ​ $ 130,988 ​ 1.1 % $ 129,626 ​ Net earnings attributable to The Kroger Co. ​ $ 2,164 ​ (3.6) % $ 2,244 ​ Adjusted net earnings attributable to The Kroger Co. excluding the Extra Week ​ $ 3,335 ​ 7.4 % $ 3,104 ​ Net earnings attributable to The Kroger Co. per diluted common share ​ $ 2.96 ​ (3.3) % $ 3.06 ​ Adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week ​ $ 4.56 ​ 7.8 % $ 4.23 ​ Operating profit ​ $ 3,096 ​ (25.0) % $ 4,126 ​ Adjusted FIFO operating profit excluding the Extra Week ​ $ 4,799 ​ (5.5) % $ 5,079 ​ Dividends paid ​ $ 796 ​ 16.7 % $ 682 ​ Dividends paid per common share ​ $ 1.10 ​ 17.0 % $ 0.94 ​ Identical sales excluding fuel(1) ​ ​ 0.9 % N/A ​ ​ 5.6 % FIFO gross margin rate, excluding fuel and the Extra Week, bps increase (decrease)(1) ​ ​ 0.18 ​ N/A ​ ​ (0.09) ​ OG&A rate, excluding fuel, Adjusted Items and the Extra Week, bps increase (decrease)(1) ​ ​ 0.21 ​ N/A ​ ​ (0.19) ​ (Decrease)/increase in total debt, including obligations under finance leases compared to prior fiscal year end ​ $ (1,152) ​ N/A ​ $ 14 ​ Share repurchases ​ $ 62 ​ N/A ​ $ 993 ​ 26 26 26 ​OVERVIEW Notable items for 2023 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $2.96, which represents a 3.3% decrease compared to 2022. The 2023 results include losses per diluted common share of $1.60 related to our opioid settlement charges. ​●Net earnings include $179 million, $144 million net of tax, due to the Extra Week. The Extra Week in 2023 contributed $0.20 to our net earnings per diluted common share result for 2023. ​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week of $4.56, which represents an 8% increase compared to 2022. Including the Extra Week, adjusted net earnings per diluted common share increased 13% compared to 2022. ​●Achieved operating profit of $3.1 billion, which represents a 25% decrease compared to 2022. The 2023 results reflect charges of $1.5 billion related to our opioid settlement charges. ​●Achieved adjusted FIFO operating profit excluding the Extra Week of $4.8 billion, which represents a 6% decrease compared to 2022. Including the Extra Week, adjusted FIFO operating profit decreased 2% compared to 2022.​●Generated cash flows from operations of $6.8 billion, which represents a 51% increase compared to 2022.​●Returned $0.8 billion to shareholders through dividend payments.​Other Financial Results​●Identical sales, excluding fuel, increased 0.9%. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales grew to $12 billion in annual sales. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Excluding the Extra Week, digital sales increased 12%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022. The decrease in LIFO charge was due to lower product cost inflation year-over-year.​●Alternative profit streams contributed $1.3 billion of operating profit in 2023. ​27 ​ ​ OVERVIEW Notable items for 2023 are: ​Shareholder Return​●Achieved net earnings attributable to The Kroger Co. per diluted common share of $2.96, which represents a 3.3% decrease compared to 2022. The 2023 results include losses per diluted common share of $1.60 related to our opioid settlement charges. ​●Net earnings include $179 million, $144 million net of tax, due to the Extra Week. The Extra Week in 2023 contributed $0.20 to our net earnings per diluted common share result for 2023. ​●Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week of $4.56, which represents an 8% increase compared to 2022. Including the Extra Week, adjusted net earnings per diluted common share increased 13% compared to 2022. ​●Achieved operating profit of $3.1 billion, which represents a 25% decrease compared to 2022. The 2023 results reflect charges of $1.5 billion related to our opioid settlement charges. ​●Achieved adjusted FIFO operating profit excluding the Extra Week of $4.8 billion, which represents a 6% decrease compared to 2022. Including the Extra Week, adjusted FIFO operating profit decreased 2% compared to 2022.​●Generated cash flows from operations of $6.8 billion, which represents a 51% increase compared to 2022.​●Returned $0.8 billion to shareholders through dividend payments.​Other Financial Results​●Identical sales, excluding fuel, increased 0.9%. Identical sales, excluding fuel, would have grown 2.3% in 2023 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability.​●Digital sales grew to $12 billion in annual sales. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Excluding the Extra Week, digital sales increased 12%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier.​●Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022. The decrease in LIFO charge was due to lower product cost inflation year-over-year.​●Alternative profit streams contributed $1.3 billion of operating profit in 2023. ​ OVERVIEW Notable items for 2023 are: ​ Shareholder Return ​ ​ ​ ​ ​ ​ ​ ​ Other Financial Results ​ ​ ​ ​ ​ 27 27 27 ​Significant Events​●During the second quarter of 2023, we recognized opioid settlement charges of $1.4 billion, $1.1 billion net of tax, related to the nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. We have agreed to make settlement payments related to the nationwide settlement framework of approximately $1.2 billion in equal installments over 11 years, and $177 million in equal installments over six years. During the first quarter of 2023, we recognized opioid settlement charges of $62 million, $49 million net of tax, related to all pending and future opioid litigation claims with the State of West Virginia, which are payable over 10 years. For additional information about our opioid settlement charges in 2023, see Note 12 to the Consolidated Financial Statements.​●On September 8, 2023, Kroger and Albertsons announced they have entered a definitive agreement with C&S Wholesale Grocers, LLC for the combined sale of 413 stores, eight distribution centers, two offices and five private label brands for approximately $1.9 billion cash, in connection with the proposed merger, subject to customary adjustments. The financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the shareholder value creation opportunity the proposed merger creates. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. ​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generate alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of February 3, 2024, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of February 3, 2024, Kroger operated, either directly or through its subsidiaries, 2,722 supermarkets, of which 2,257 had pharmacies and 1,665 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​28 ​ ​ Significant Events​●During the second quarter of 2023, we recognized opioid settlement charges of $1.4 billion, $1.1 billion net of tax, related to the nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. We have agreed to make settlement payments related to the nationwide settlement framework of approximately $1.2 billion in equal installments over 11 years, and $177 million in equal installments over six years. During the first quarter of 2023, we recognized opioid settlement charges of $62 million, $49 million net of tax, related to all pending and future opioid litigation claims with the State of West Virginia, which are payable over 10 years. For additional information about our opioid settlement charges in 2023, see Note 12 to the Consolidated Financial Statements.​●On September 8, 2023, Kroger and Albertsons announced they have entered a definitive agreement with C&S Wholesale Grocers, LLC for the combined sale of 413 stores, eight distribution centers, two offices and five private label brands for approximately $1.9 billion cash, in connection with the proposed merger, subject to customary adjustments. The financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the shareholder value creation opportunity the proposed merger creates. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. ​OUR BUSINESS​The Kroger Co. (the "Company" or "Kroger") was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our food retail business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, Our Brands, Data & Personalization and Seamless. ​We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generate alternative profit streams. These alternative profit streams would not exist without our core retail business. ​Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.​Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets include the following:​Stores​As of February 3, 2024, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of February 3, 2024, Kroger operated, either directly or through its subsidiaries, 2,722 supermarkets, of which 2,257 had pharmacies and 1,665 had fuel centers. We connect with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.​ Significant Events ​ ​ ​

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## Modified: LIABILITIES

**Key changes:**

- Reworded sentence: "​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ Current portion of long-term debt including obligations under finance leases ​ $ 198 ​ $ 1,310 ​ Current portion of operating lease liabilities ​ ​ 670 ​ ​ 662 ​ Accounts payable ​ 10,381 ​ 10,179 ​ Accrued salaries and wages ​ 1,323 ​ 1,746 ​ Other current liabilities ​ 3,486 ​ 3,341 ​ Total current liabilities ​ 16,058 ​ 17,238 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt including obligations under finance leases ​ ​ 12,028 ​ ​ 12,068 ​ Noncurrent operating lease liabilities ​ ​ 6,351 ​ ​ 6,372 ​ Deferred income taxes ​ 1,579 ​ 1,672 ​ Pension and postretirement benefit obligations ​ 385 ​ 436 ​ Other long-term liabilities ​ 2,503 ​ 1,823 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ​ 38,904 ​ 39,609 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies see Note 12 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​"

**Prior (2023):**

​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ Current portion of long-term debt including obligations under finance leases ​ $ 1,310 ​ $ 555 ​ Current portion of operating lease liabilities ​ ​ 662 ​ ​ 650 ​ Trade accounts payable ​ 7,119 ​ 7,117 ​ Accrued salaries and wages ​ 1,746 ​ 1,736 ​ Other current liabilities ​ 6,401 ​ 6,265 ​ Total current liabilities ​ 17,238 ​ 16,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt including obligations under finance leases ​ ​ 12,068 ​ ​ 12,809 ​ Noncurrent operating lease liabilities ​ ​ 6,372 ​ ​ 6,426 ​ Deferred income taxes ​ 1,672 ​ 1,562 ​ Pension and postretirement benefit obligations ​ 436 ​ 478 ​ Other long-term liabilities ​ 1,823 ​ 2,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ​ 39,609 ​ 39,657 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies see Note 12 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

**Current (2024):**

​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ Current portion of long-term debt including obligations under finance leases ​ $ 198 ​ $ 1,310 ​ Current portion of operating lease liabilities ​ ​ 670 ​ ​ 662 ​ Accounts payable ​ 10,381 ​ 10,179 ​ Accrued salaries and wages ​ 1,323 ​ 1,746 ​ Other current liabilities ​ 3,486 ​ 3,341 ​ Total current liabilities ​ 16,058 ​ 17,238 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt including obligations under finance leases ​ ​ 12,028 ​ ​ 12,068 ​ Noncurrent operating lease liabilities ​ ​ 6,351 ​ ​ 6,372 ​ Deferred income taxes ​ 1,579 ​ 1,672 ​ Pension and postretirement benefit obligations ​ 385 ​ 436 ​ Other long-term liabilities ​ 2,503 ​ 1,823 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ​ 38,904 ​ 39,609 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies see Note 12 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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## Modified: (In millions, except par amounts)

**Key changes:**

- Reworded sentence: "​ 2024 ​ 2023 ASSETS ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ ​ Cash and temporary cash investments ​ $ 1,883 ​ $ 1,015 ​ Store deposits in-transit ​ 1,215 ​ 1,127 ​ Receivables ​ 2,136 ​ 2,234 ​ FIFO inventory ​ 9,414 ​ 9,756 ​ LIFO reserve ​ (2,309) ​ (2,196) ​ Prepaid and other current assets ​ ​ 609 ​ ​ 734 ​ Total current assets ​ 12,948 ​ 12,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ 25,230 ​ 24,726 ​ Operating lease assets ​ ​ 6,692 ​ ​ 6,662 ​ Intangibles, net ​ 899 ​ 899 ​ Goodwill ​ 2,916 ​ 2,916 ​ Other assets ​ 1,820 ​ 1,750 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 50,505 ​ $ 49,623 ​ ​ ​ ​ ​ ​ ​ ​ ​"

**Prior (2023):**

​ 2023 ​ 2022 ASSETS ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ ​ Cash and temporary cash investments ​ $ 1,015 ​ $ 1,821 ​ Store deposits in-transit ​ 1,127 ​ 1,082 ​ Receivables ​ 2,234 ​ 1,828 ​ FIFO inventory ​ 9,756 ​ 8,353 ​ LIFO reserve ​ (2,196) ​ (1,570) ​ Prepaid and other current assets ​ ​ 734 ​ ​ 660 ​ Total current assets ​ 12,670 ​ 12,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ 24,726 ​ 23,789 ​ Operating lease assets ​ ​ 6,662 ​ ​ 6,695 ​ Intangibles, net ​ 899 ​ 942 ​ Goodwill ​ 2,916 ​ 3,076 ​ Other assets ​ 1,750 ​ 2,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 49,623 ​ $ 49,086 ​ ​ ​ ​ ​ ​ ​ ​ ​

**Current (2024):**

​ 2024 ​ 2023 ASSETS ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ ​ Cash and temporary cash investments ​ $ 1,883 ​ $ 1,015 ​ Store deposits in-transit ​ 1,215 ​ 1,127 ​ Receivables ​ 2,136 ​ 2,234 ​ FIFO inventory ​ 9,414 ​ 9,756 ​ LIFO reserve ​ (2,309) ​ (2,196) ​ Prepaid and other current assets ​ ​ 609 ​ ​ 734 ​ Total current assets ​ 12,948 ​ 12,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ 25,230 ​ 24,726 ​ Operating lease assets ​ ​ 6,692 ​ ​ 6,662 ​ Intangibles, net ​ 899 ​ 899 ​ Goodwill ​ 2,916 ​ 2,916 ​ Other assets ​ 1,820 ​ 1,750 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 50,505 ​ $ 49,623 ​ ​ ​ ​ ​ ​ ​ ​ ​

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## Modified: OUR VALUE CREATION MODEL - DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN

**Key changes:**

- Reworded sentence: "The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness."
- Reworded sentence: "​ 25 25 25 ​2023 EXECUTIVE SUMMARY ​We achieved strong results in 2023, in line with our long-term growth model and built on three consecutive years of growth, despite navigating a challenging operating environment."

**Prior (2023):**

​ Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel food retail business, which is built on Kroger's strategic assets: our stores, digital ecosystem, Our Brands and our data. These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers. We continue to build long-term customer loyalty through Fresh, Our Brands, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness. This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses. We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future. This will be achieved by: ​ ​ ​ We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons. ​ 23 23 23 2022 EXECUTIVE SUMMARY ​We achieved exceptional results in 2022 as we executed on our Leading with Fresh and Accelerating with Digital strategy, building on record years in 2020 and 2021. These results were driven by positive identical sales without fuel of 5.6%, disciplined margin management and strong fuel profitability. Our proven go-to-market strategy enables us to successfully navigate many operating environments, which has allowed us to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets. ​Our value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted Our Brands products and our fuel rewards program, is resonating with shoppers and driving total household growth and enhanced customer loyalty. During the year, we continued to invest in wages and the associate experience and in creating zero hunger, zero waste communities, as we believe these components of our strategy are critical to achieving long term sustainable growth. In 2022, our average hourly rates increased by more than 6% and we have now invested an incremental $1.9 billion in associate wages since 2018. Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included.​In 2023, we expect to build on this momentum and deliver revenue and adjusted net earnings per diluted share growth on top of the record results achieved over the past three years. We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience. Building on our significant investments over the past four years, we will also continue to increase associate wages. We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses. Looking forward, we believe we are well positioned to successfully operate in an evolving economic environment and continue to deliver attractive and sustainable total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​The following table provides highlights of our financial performance:​Financial Performance Data($ in millions, except per share amounts)​​​​​​​​​​​​​Fiscal Year​​​​ Percentage ​​​​2022​Change​2021​Sales​$ 148,258​ 7.5% $ 137,888​Sales without fuel​$ 129,626​ 5.2% $ 123,210​Net earnings attributable to The Kroger Co.​$ 2,244​ 35.6% $ 1,655​Adjusted net earnings attributable to The Kroger Co.​$ 3,104​ 10.8% $ 2,802​Net earnings attributable to The Kroger Co. per diluted common share​$ 3.06​ 41.0% $ 2.17​Adjusted net earnings attributable to The Kroger Co. per diluted common share​$ 4.23​ 14.9% $ 3.68​Operating profit​$ 4,126​ 18.7% $ 3,477​Adjusted FIFO operating profit​$ 5,079​ 17.8% $ 4,310​Dividends paid​$ 682​ 15.8% $ 589​Dividends paid per common share​$ 0.94​ 20.5% $ 0.78​Identical sales excluding fuel​​ 5.6% N/A​​ 0.2%FIFO gross margin rate, excluding fuel, bps decrease​​ (0.09)​N/A​​ (0.43)​OG&A rate, excluding fuel and Adjusted Items, bps decrease​​ 0.19​N/A​​ 0.61​Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end​$ 14​N/A​$ (49)​Share repurchases​$ 993​N/A​$ 1,647​​​24 2022 EXECUTIVE SUMMARY ​We achieved exceptional results in 2022 as we executed on our Leading with Fresh and Accelerating with Digital strategy, building on record years in 2020 and 2021. These results were driven by positive identical sales without fuel of 5.6%, disciplined margin management and strong fuel profitability. Our proven go-to-market strategy enables us to successfully navigate many operating environments, which has allowed us to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets. ​Our value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted Our Brands products and our fuel rewards program, is resonating with shoppers and driving total household growth and enhanced customer loyalty. During the year, we continued to invest in wages and the associate experience and in creating zero hunger, zero waste communities, as we believe these components of our strategy are critical to achieving long term sustainable growth. In 2022, our average hourly rates increased by more than 6% and we have now invested an incremental $1.9 billion in associate wages since 2018. Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included.​In 2023, we expect to build on this momentum and deliver revenue and adjusted net earnings per diluted share growth on top of the record results achieved over the past three years. We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience. Building on our significant investments over the past four years, we will also continue to increase associate wages. We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses. Looking forward, we believe we are well positioned to successfully operate in an evolving economic environment and continue to deliver attractive and sustainable total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.​The following table provides highlights of our financial performance:​Financial Performance Data($ in millions, except per share amounts)​​​​​​​​​​​​​Fiscal Year​​​​ Percentage ​​​​2022​Change​2021​Sales​$ 148,258​ 7.5% $ 137,888​Sales without fuel​$ 129,626​ 5.2% $ 123,210​Net earnings attributable to The Kroger Co.​$ 2,244​ 35.6% $ 1,655​Adjusted net earnings attributable to The Kroger Co.​$ 3,104​ 10.8% $ 2,802​Net earnings attributable to The Kroger Co. per diluted common share​$ 3.06​ 41.0% $ 2.17​Adjusted net earnings attributable to The Kroger Co. per diluted common share​$ 4.23​ 14.9% $ 3.68​Operating profit​$ 4,126​ 18.7% $ 3,477​Adjusted FIFO operating profit​$ 5,079​ 17.8% $ 4,310​Dividends paid​$ 682​ 15.8% $ 589​Dividends paid per common share​$ 0.94​ 20.5% $ 0.78​Identical sales excluding fuel​​ 5.6% N/A​​ 0.2%FIFO gross margin rate, excluding fuel, bps decrease​​ (0.09)​N/A​​ (0.43)​OG&A rate, excluding fuel and Adjusted Items, bps decrease​​ 0.19​N/A​​ 0.61​Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end​$ 14​N/A​$ (49)​Share repurchases​$ 993​N/A​$ 1,647​​​

**Current (2024):**

​ Kroger's proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business. ​ We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales. Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth. ​ This will be achieved by: ​ ​ ​ We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. ​ We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons. ​ 25 25 25 ​2023 EXECUTIVE SUMMARY ​We achieved strong results in 2023, in line with our long-term growth model and built on three consecutive years of growth, despite navigating a challenging operating environment. By maintaining our long-term commitment to lower prices, through personalized promotions and rewards, we are increasing customer visits and growing loyal households through the strength of our retail business, continuing our evolution into a more diverse business, and our value creation model is providing us multiple ways to drive sustainable future growth.​Our results provided another proof point of the strength and resilience of our value creation model, which supported another year of strong free cash flow and adjusted net earnings per diluted share growth, excluding the 53rd week in fiscal year 2023 (the "Extra Week"). This was the result of continued momentum across several margin expansion initiatives, strong Our Brands performance, strong growth in alternative profit businesses, our ability to effectively manage product cost through strong sourcing practices, lower supply chain costs and a lower year-over-year LIFO charge. During the year, we continued to invest in wages and the associate experience as a way to support the delivery of a full, fresh and friendly customer experience. In 2023, we increased associate wages resulting in an average hourly rate of nearly $19, and a rate of nearly $25 with comprehensive benefits factored in, which is a 33% increase in rate in the last five years.​The following table provides highlights of our financial performance:​Financial Performance Data($ in millions, except per share amounts)​​​​​​​​​​​​​​Fiscal Year​​​​ Percentage ​​​​2023​Change​2022​Sales​$ 150,039​ 1.2% $ 148,258​Sales without fuel and the Extra Week​$ 130,988​ 1.1% $ 129,626​Net earnings attributable to The Kroger Co.​$ 2,164​ (3.6)% $ 2,244​Adjusted net earnings attributable to The Kroger Co. excluding the Extra Week​$ 3,335​ 7.4% $ 3,104​Net earnings attributable to The Kroger Co. per diluted common share​$ 2.96​ (3.3)% $ 3.06​Adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week​$ 4.56​ 7.8% $ 4.23​Operating profit​$ 3,096​ (25.0)% $ 4,126​Adjusted FIFO operating profit excluding the Extra Week​$ 4,799​ (5.5)% $ 5,079​Dividends paid​$ 796​ 16.7% $ 682​Dividends paid per common share​$ 1.10​ 17.0% $ 0.94​Identical sales excluding fuel(1)​​ 0.9% N/A​​ 5.6%FIFO gross margin rate, excluding fuel and the Extra Week, bps increase (decrease)(1)​​ 0.18​N/A​​ (0.09)​OG&A rate, excluding fuel, Adjusted Items and the Extra Week, bps increase (decrease)(1)​​ 0.21​N/A​​ (0.19)​(Decrease)/increase in total debt, including obligations under finance leases compared to prior fiscal year end​$ (1,152)​N/A​$ 14​Share repurchases​$ 62​N/A​$ 993​(1)Identical sales without fuel would have grown 2.3% in fiscal 2023 if not for the reduction in pharmacy sales from the previously communicated termination of our agreement with Express Scripts effective December 31, 2022. In fiscal 2023, the terminated agreement had a positive effect on the FIFO gross margin rate, excluding fuel and the Extra Week, and a negative effect on the OG&A rate, excluding fuel, the Extra Week and the 2023 and 2022 Adjusted Items, as defined below. The overall net effect on adjusted FIFO operating profit was slightly positive.26 ​ ​ 2023 EXECUTIVE SUMMARY ​We achieved strong results in 2023, in line with our long-term growth model and built on three consecutive years of growth, despite navigating a challenging operating environment. By maintaining our long-term commitment to lower prices, through personalized promotions and rewards, we are increasing customer visits and growing loyal households through the strength of our retail business, continuing our evolution into a more diverse business, and our value creation model is providing us multiple ways to drive sustainable future growth.​Our results provided another proof point of the strength and resilience of our value creation model, which supported another year of strong free cash flow and adjusted net earnings per diluted share growth, excluding the 53rd week in fiscal year 2023 (the "Extra Week"). This was the result of continued momentum across several margin expansion initiatives, strong Our Brands performance, strong growth in alternative profit businesses, our ability to effectively manage product cost through strong sourcing practices, lower supply chain costs and a lower year-over-year LIFO charge. During the year, we continued to invest in wages and the associate experience as a way to support the delivery of a full, fresh and friendly customer experience. In 2023, we increased associate wages resulting in an average hourly rate of nearly $19, and a rate of nearly $25 with comprehensive benefits factored in, which is a 33% increase in rate in the last five years.​The following table provides highlights of our financial performance:​Financial Performance Data($ in millions, except per share amounts)​​​​​​​​​​​​​​Fiscal Year​​​​ Percentage ​​​​2023​Change​2022​Sales​$ 150,039​ 1.2% $ 148,258​Sales without fuel and the Extra Week​$ 130,988​ 1.1% $ 129,626​Net earnings attributable to The Kroger Co.​$ 2,164​ (3.6)% $ 2,244​Adjusted net earnings attributable to The Kroger Co. excluding the Extra Week​$ 3,335​ 7.4% $ 3,104​Net earnings attributable to The Kroger Co. per diluted common share​$ 2.96​ (3.3)% $ 3.06​Adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the Extra Week​$ 4.56​ 7.8% $ 4.23​Operating profit​$ 3,096​ (25.0)% $ 4,126​Adjusted FIFO operating profit excluding the Extra Week​$ 4,799​ (5.5)% $ 5,079​Dividends paid​$ 796​ 16.7% $ 682​Dividends paid per common share​$ 1.10​ 17.0% $ 0.94​Identical sales excluding fuel(1)​​ 0.9% N/A​​ 5.6%FIFO gross margin rate, excluding fuel and the Extra Week, bps increase (decrease)(1)​​ 0.18​N/A​​ (0.09)​OG&A rate, excluding fuel, Adjusted Items and the Extra Week, bps increase (decrease)(1)​​ 0.21​N/A​​ (0.19)​(Decrease)/increase in total debt, including obligations under finance leases compared to prior fiscal year end​$ (1,152)​N/A​$ 14​Share repurchases​$ 62​N/A​$ 993​(1)Identical sales without fuel would have grown 2.3% in fiscal 2023 if not for the reduction in pharmacy sales from the previously communicated termination of our agreement with Express Scripts effective December 31, 2022. In fiscal 2023, the terminated agreement had a positive effect on the FIFO gross margin rate, excluding fuel and the Extra Week, and a negative effect on the OG&A rate, excluding fuel, the Extra Week and the 2023 and 2022 Adjusted Items, as defined below. The overall net effect on adjusted FIFO operating profit was slightly positive.

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*Data sourced from SEC EDGAR. Last updated 2026-06-01.*