MERGER

4 Months Ended

May 24, 2014

MERGER

MERGER

2. MERGER

On January 28, 2014, the Company closed its merger with Harris Teeter Supermarkets, Inc. (“Harris Teeter”) and there have not been any changes in the Company’s preliminary purchase price allocation in the first quarter of 2014.

As of May 24, 2014, the fair value step up adjustment to Harris Teeter inventory as of the merger date is recorded in the LIFO reserve.  This resulted in a $53 decrease in LIFO reserve, when compared to fiscal year end 2013.

Pro forma results of operations, assuming the transaction had taken place at the beginning of 2012, are included in the following table.  The pro forma information includes historical results of operations of Harris Teeter and adjustments for interest expense that would have been incurred due to financing the acquisition, depreciation and amortization of the assets acquired and excludes the pre-acquisition transaction related expenses incurred by Harris Teeter and the Company.  The pro forma information does not include efficiencies, cost reductions, synergies and investments in lower prices for our customers expected to result from the merger.  The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the merger been completed at the beginning of the 2012.

	First Quarter Ended May 25, 2013
Sales	$	31,342
Net earnings including noncontrolling interests	518
Net earnings attributable to noncontrolling interests	3
Net earnings attributable to The Kroger Co.	$	515