Saks Fifth Avenue 2008 Annual Report Download - page 63

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from these
estimates.
The accompanying consolidated financial statements include the accounts of the Company and its
subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal year 2008 contained 52 weeks
and ended on January 31, 2009, while fiscal year 2007 contained 52 weeks and ended on February 2, 2008. Fiscal
year 2006 contained 53 weeks and ended on February 3, 2007.
Certain 2007 and 2006 amounts in the accompanying consolidated statements of income and consolidated
statements of cash flows have been revised to reflect the CLL results of operations and cash flows as
discontinued operations.
NET SALES
Net sales include sales of merchandise (net of returns and exclusive of sales taxes), commissions from
leased departments, shipping and handling revenues related to merchandise sold and breakage income from
unredeemed gift cards. Net sales are recognized at the time customers provide a satisfactory form of payment and
take ownership of the merchandise or direct its shipment. Revenue associated with gift cards is recognized upon
redemption of the card.
The Company estimates the amount of goods that will be returned for a refund and reduces sales and gross
margin by that amount.
Commissions from leased departments included in net sales were $28,083, $30,189, $26,558 in 2008, 2007,
and 2006, respectively. Leased department sales were $210,284, $217,636, and $180,639 in 2008, 2007, and
2006, respectively, and were excluded from net sales.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents primarily consist of cash on hand in the stores, deposits with banks, and
investments with banks and financial institutions that have original maturities of three months or less. Cash
equivalents are stated at cost, which approximates fair value. Cash equivalents totaled $236 and $85,492 at
January 31, 2009 and February 2, 2008, respectively, primarily consisting of money market funds, demand and
time deposits. Income earned on cash equivalents was $1,958, $6,190, and $27,963 for the fiscal years ended
January 31, 2009, February 2, 2008, and February 3, 2007, respectively, and was reflected in Other Income in the
accompanying consolidated statements of income. There were no balances of restricted cash at January 31, 2009
and February 2, 2008.
On March 6, 2006, the Company’s Board of Directors declared a cash dividend of $4.00 per common share
to shareholders of record as of April 14, 2006, and the Company reduced shareholders’ equity for the $547,537
dividend. On October 3, 2006 the Company’s Board of Directors declared another cash dividend of $4.00 per
common share to shareholders of record as of November 15, 2006, and the Company reduced shareholders’
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