David B. Dillon
So you can see it’s pretty important though.
W. Rodney McMullen
And the diesel fuel comment is not necessarily the absolute cost of diesel fuel this year versus last year. It’s more relevant to what our expectations and our guidance of 2 to 2.05 was, so it’s more a comparison of what our internal expectations were for diesel fuel. The actual prices in the first quarter were below our expectations and they appear to be trending at or slightly above our internal expectations. I just don’t want people to think that we were doing something magical and buying diesel fuel differently last year versus this year.
Edward Kelly - Credit Suisse
Okay, and then lastly for you, on SG&A, could you provide a little bit more color on those three wholly-owned investments that you talked about and why we’re sort of hearing about them this quarter? I mean, it seems like it could be a few cents a share impact, based on the numbers you gave. And just how that variable sort of plays out the rest of the year -- is it really just a one-time issue?
W. Rodney McMullen
It’s really not anywhere near that size of an effect. You can see the portion of the entities that we don’t own on the very bottom line. If you notice, we don’t have net earnings anymore. We have net earnings attributable to Kroger and that line right above there represents the amount that’s not attributable to Kroger backing out, so it’s a relatively small effect because that’s the portion that we don’t own and they are pretty much not entirely 50-50 but close enough for conversation. The impact is that on the individual lines of the income statement, we have to put all those entities in on every individual line of the income statement now and that’s a result of FASB-160 and two of those are actually entities that are appearing for the first time in that manner because they are new investments as compared to this time last year, that being i-wireless and the Little Clinic.
My hope is that as we cycle this and at this time next year, the effect on our OG&A and gross lines won’t be dramatic and we won’t have to talk about them but putting things in for the first time, because these are start-up entities by and large, so they have fairly high expense rates, relatively low revenue, so when you consolidate them it can make your comparisons look kind of strange, and that’s why we called it out.
Edward Kelly - Credit Suisse
Okay. And was there anything else non-operating or non-recurring in SG&A? I mean, you had about 4% growth excluding that. I would have thought that maybe it could have been a little bit better, given the environment. And can it get better than that the rest of the year?
J. Michael Schlotman
You’re looking at the total OG&A as reported?
Edward Kelly - Credit Suisse
Yes, as a growth rate year over year.
J. Michael Schlotman
I’m looking up what it was without some of the -- because you can’t see it -- you can’t see it with the entities pulled out. It wasn’t as high as that when you pull out fuel and you pull out the one-time entities, so if you look at the absolute growth in dollars without that, it would have been -- it would not have been a 4% growth rate.
Edward Kelly - Credit Suisse
Okay.
David B. Dillon
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