KROGER CO Income Taxes Disclosure

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The provision for taxes based on income consists of:

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A reconciliation of the U.S federal statutory tax rate to the Company’s effective income tax rate in accordance with the updated requirements of ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” is as follows:

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As previously disclosed for the tax years 2024 and 2023, prior to the adoption of ASU 2023-09, a reconciliation of the U.S federal statutory tax rate to the effective income tax rate follows:

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The 2025 tax rate differed from the federal statutory rate due to a tax benefit from share-based payments, recognizing deferred tax assets related to the sale of Vitacost.com and the utilization of tax credits and deductions, partially offset by the effect of state income taxes.

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The 2024 tax rate differed from the federal statutory rate due to a tax benefit from recognizing deferred tax assets related to the sale of Kroger Specialty Pharmacy, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.

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The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and the nondeductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits.

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The tax effects of significant temporary differences that comprise tax balances were as follows:

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As of January 31, 2026, deferred tax assets of $11 are included in “Other Assets” in the Company’s Consolidated Balance Sheets.

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At January 31, 2026, the Company had net operating loss carryforwards for state income tax purposes of $1,655. The majority of these net operating loss carryforwards expire from 2026 through 2045.  The utilization of certain of the Company’s state net operating loss carryforwards may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state net operating losses.

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At January 31, 2026, the Company had state credit carryforwards of $6 that expire from 2026 through 2039.  The utilization of certain of the Company’s credits may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state credits.

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At January 31, 2026, the Company had a capital loss carryforward for federal income tax purposes of $165 that expires in 2030. The utilization of certain of the Company’s capital loss may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its capital loss.

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The Company regularly reviews all deferred tax assets on a tax filer and jurisdictional basis to estimate whether these assets are more likely than not to be realized based on all available evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and the Company’s tax methods of accounting. Unless deferred tax assets are more likely than not to be realized, a valuation allowance is established to reduce the carrying value of the deferred tax asset until such time that realization becomes more likely than not. Increases and decreases in these valuation allowances are included in "Income tax expense" in the Consolidated Statements of Operations. As of January 31, 2026, February 1, 2025, and February 3, 2024, the total valuation allowance was $72, $54, and $55, respectively.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits, including positions affecting only the timing of tax benefits, is as follows:

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As of January 31, 2026, February 1, 2025, and February 3, 2024 the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $57, $70, and $62 respectively.

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To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and classified as a component of income tax expense. During the years ended February 1, 2025 and February 3, 2024, the Company recognized approximately $4 and $1, respectively, in interest and penalties. During the year ended January 31, 2026, the Company did not recognize any interest and penalties. The Company had accrued approximately $20, $19, and $15 for the payment of interest and penalties as of January 31, 2026, February 1, 2025, and February 3, 2024, respectively.

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As of January 31, 2026, the years ended January 29, 2022 and forward remain open for review for federal income tax purposes.

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The components of cash paid for income taxes, net of refunds, are as follows:

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Income taxes paid (net of refunds) did not exceed five percent of total income taxes paid (net of refunds) in any jurisdiction other than in Switzerland.