Sears 2007 Annual Report Download - page 99

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
millions, except per share data
2006
First
Quarter
Second
Quarter(2)
Third
Quarter(3)
Fourth
Quarter(4)
Total revenues
Before change in Canadian year end ........................... $11,998 $12,785 $11,941 $16,288
Impact of change in Canadian year end ........................ 50 (4) 64 (106)
After change in Canadian year end ............................ $12,048 $12,781 $12,005 $16,182
Cost of sales, buying and occupancy
Before change in Canadian year end ........................... $ 8,665 $ 9,158 $ 8,557 $11,440
Impact of change in Canadian year end ........................ 32 (5) 44 (67)
After change in Canadian year end ............................ $ 8,697 $ 9,153 $ 8,601 $11,373
Selling and administrative
Before change in Canadian year end ........................... $ 2,721 $ 2,827 $ 2,834 $ 3,199
Impact of change in Canadian year end ........................ 4 (7) 16 (20)
After change in Canadian year end ............................ $ 2,725 $ 2,820 $ 2,850 $ 3,179
Net income
Before change in Canadian year end ........................... $ 180 $ 294 $ 196 $ 820
Impact of change in Canadian year end ........................ 5 4 2 (9)
After change in Canadian year end ............................ $ 185 $ 298 $ 198 $ 811
Basic and diluted net income per share
Before change in Canadian year end ........................... $ 1.14 $ 1.88 $ 1.27 $ 5.33
Impact of change in Canadian year end ........................ 0.03 0.03 0.01 (0.06)
After change in Canadian year end ............................ $ 1.17 $ 1.91 $ 1.28 $ 5.27
Earnings per share amounts for each quarter are required to be computed independently and may not equal
the amount computed for the total year.
Quarterly Items:
(1) The first quarter of 2007 includes (i) a $30 million gain ($18 million after tax or $0.12 per diluted share)
related to the legal settlement of a contractual dispute and (ii) a curtailment gain of $27 million ($16 million
after tax or $0.11 per diluted share) related to certain amendments made to Sears Canada’s post-retirement
benefit plans.
(2) The second quarter of 2006 includes a $36 million pre-tax gain ($0.14 per diluted share) representing the
Company’s portion of proceeds received related to the settlement of Visa/MasterCard antitrust litigation.
(3) The third quarter of 2006 includes (i) pre-tax gains of $101 million ($0.42 per diluted share) on the
Company’s total return swap investments and (ii) $6 million of net income ($0.04 per diluted share) related
to the resolution of certain income tax matters.
(4) The fourth quarter of 2006 includes: (i) $27 million in pre-tax losses ($0.11 per diluted share) on the
Company’s total return swap investments; (ii) pre-tax gains of $50 million ($0.20 per diluted share) on the
sale of assets; (iii) a tax benefit of $25 million ($0.17 per diluted share) related to the resolution of certain
income tax matters and (iv) a pre-tax charge of $74 million ($0.29 per diluted share) related to an
unfavorable verdict in connection with a pre-merger legal matter concerning Sears’ redemption of certain
bonds in 2004. The fourth quarter of fiscal 2006 included 14 weeks.
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