KR » Topics » Table 3. PREVIOUSLY REPORTED ESTIMATED EFFECT OF LABOR DISPUTES

This excerpt taken from the KR 8-K filed Mar 8, 2005.

Table 3. PREVIOUSLY REPORTED ESTIMATED EFFECT OF LABOR DISPUTES

(in millions, except per share amounts)

 

Items identified in this table should not be considered alternatives to net earnings, net cash provided by operating activities or any other Generally Accepted Accounting Principles (“GAAP”) measure of performance or liquidity. These items should not be reviewed in isolation or considered substitutes for Kroger’s financial results as reported in accordance with GAAP. Due to the nature of these items, as further described below, it is important to review them in conjunction with Kroger’s financial results reported in accordance with GAAP.

 

The following table summarizes the estimated effect of labor disputes on Kroger’s financial results that were previously reported for the periods presented. In the third quarter of 2004 we discontinued reporting the strike effect related to southern California.

 

Included in the estimated strike effect for prior periods were charges and credits that were recorded as components of merchandise costs and operating, general and administrative (“OG&A”) expense. The estimated effect of the labor disputes is the difference between actual results and budgeted results for strike-affected stores. The 2003 calculation includes the effect of both the southern California and the West Virginia strikes. The estimated strike effect includes all costs associated with the work stoppages, including expenses under the mutual strike assistance agreement in southern California entered into with Safeway Inc. and Albertson’s, Inc., and post-strike recovery expenses in southern California through the second quarter of 2004.

 

     FOURTH QUARTER

    YEAR TO DATE

 
     2004

   2003

    2004

    2003

 

EFFECT OF LABOR DISPUTES ON FIFO GROSS MARGIN (a)

   $ —      $ 80.5     $ 132.6     $ 177.1  

EFFECT OF LABOR DISPUTES ON OG&A

     —        169.8       18.5       215.4  
    

  


 


 


TOTAL PRE-TAX LOSS

     —        250.3       151.1       392.5  

INCOME-TAX EFFECT

     —        (93.9 )     (56.3 )     (147.1 )
    

  


 


 


AFTER-TAX LOSS

   $ —      $ 156.4     $ 94.8     $ 245.4  
    

  


 


 


SHARES USED IN DILUTED CALCULATION

     730.2      742.9       736.4       753.8  

ESTIMATED DILUTED PER SHARE EFFECT

   $ —      $ 0.21     $ 0.13     $ 0.32  
    

  


 


 



(a) Kroger calculates FIFO Gross Margin as follows: Sales minus merchandise costs (including advertising, warehousing and transportation, excluding rent and depreciation, which are shown separately in Table 1) plus LIFO charge.


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