Consolidated Statements of Operations (Unaudited)(Note 1)
(All amounts in millions except percentages and per share figures)
| |
26 Weeks Ended
July 31, 2010 |
|
26 Weeks Ended
August 1, 2009 |
| |
|
$ |
|
% to
Net Sales |
|
$ |
|
% to
Net Sales |
| |
| Net sales |
|
$11,111 |
|
|
|
$10,363 |
|
|
| |
| Cost of sales (Note 2) |
|
6,592 |
|
59.3% |
|
6,240 |
|
60.2% |
| |
| Gross margin |
|
4,519 |
|
40.7% |
|
4,123 |
|
39.8% |
| |
| Selling, general and administrative expenses |
|
(3,946) |
|
(35.5%) |
|
(3,817) |
|
(36.8%) |
| |
| Division consolidation costs (Note 3) |
|
- |
|
-% |
|
(172) |
|
(1.7%) |
| |
| |
| Operating income |
|
573 |
|
5.2% |
|
134 |
|
1.3% |
| |
| Interest expense - net (Note 4) |
|
(292) |
|
|
|
(280) |
|
|
| |
| Income (loss) before income taxes |
|
281 |
|
|
|
(146) |
|
|
| |
Federal, state and local income tax
benefit (expense) (Note 5) |
|
(111) |
|
|
|
65 |
|
|
| |
| Net income (loss) |
|
$170 |
|
|
|
$(81) |
|
|
| |
| Basic earnings (loss) per share |
|
$.40 |
|
|
|
$(.19) |
|
|
| |
| Diluted earnings (loss) per share |
|
$.40 |
|
|
|
$(.19) |
|
|
| |
| Average common shares: |
| Basic |
|
422.8 |
|
|
|
421.5 |
|
|
| Diluted |
|
426.3 |
|
|
|
421.5 |
|
|
| |
| End of period common shares outstanding |
|
422.2 |
|
|
|
420.5 |
|
|
| |
| Depreciation and amortization expense |
|
$575 |
|
|
|
$604 |
|
|
Notes:
(1) Because of the seasonal nature of the retail business, the results of operations for the 26 weeks ended July 31, 2010 and August 1, 2009 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.
(2) Merchandise inventories are primarily valued at the lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Application of this method did not impact cost of sales for the 26 weeks ended July 31, 2010 or August 1, 2009.
(3) Represents restructuring-related costs and expenses associated with the division consolidation and localization initiatives, primarily severance and other human resource related costs. For the 26 weeks ended August 1, 2009, restructuring-related costs associated with the division consolidation and localization initiatives announced in February 2009 amounted to $97 million after tax or $.23 per diluted share.
(4) Interest expense for the 26 weeks ended July 31, 2010, includes approximately $27 million of expenses associated with the early retirement of approximately $500 million of outstanding debt.
(5) Federal, state and local income taxes differ from the federal income tax statutory rate of 35%, principally because of the effect of state and local taxes, including the settlement of various tax issues and tax examinations. Additionally, income tax expense for the 26 weeks ended July 31, 2010 reflects a $4 million reduction of deferred tax assets due to the enactment of recent healthcare reform legislation. The reduction was required as a result of the elimination of the deductibility of retiree health care payments to the extent of tax-free Medicare Part D subsidies that are received. The change in deductibility is effective February 3, 2013.
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Historical Data:
Consolidated Financial Statements: