Sears 2009 Annual Report Download - page 22

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Holdings’ Consolidated Results
Holdings’ consolidated results of operations for fiscal 2009, 2008, and 2007 are summarized as follows:
millions, except per share data 2009 2008 2007(1)
REVENUES
Merchandise sales and services ........................................ $44,043 $46,770 $50,703
COSTS AND EXPENSES
Cost of sales, buying and occupancy .................................... 31,824 34,118 36,638
Gross margin dollars ................................................ 12,219 12,652 14,065
Gross margin rate .................................................. 27.7% 27.1% 27.7%
Selling and administrative ............................................ 10,654 11,060 11,468
Selling and administrative expense as a percentage of total revenues .......... 24.2% 23.6% 22.6%
Depreciation and amortization ......................................... 926 981 1,049
Impairment charges ................................................. — 360 —
Gain on sales of assets ............................................... (74) (51) (38)
Total costs and expenses ......................................... 43,330 46,468 49,117
Operating income ................................................... 713 302 1,586
Interest expense .................................................... (265) (272) (286)
Interest and investment income ........................................ 33 46 135
Other income (loss) ................................................. (61) 108 17
Income before income taxes ........................................... 420 184 1,452
Income taxes ....................................................... (123) (85) (550)
Net income ........................................................ 297 99 902
Income attributable to noncontrolling interests ............................ (62) (46) (76)
NET INCOME ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS . . . $ 235 $ 53 $ 826
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’
SHAREHOLDERS
Diluted earnings per share ............................................ $ 1.99 $ 0.42 $ 5.70
Diluted weighted average common shares outstanding ...................... 117.9 127.0 144.8
(1) During the fourth quarter of 2007, Sears Canada changed its fiscal year end from the Saturday nearest
December 31st to the Saturday nearest January 31st.
References to comparable store sales amounts within the following discussion include sales for all stores
operating for a period of at least 12 full months, including remodeled and expanded stores, but excluding store
relocations and stores that have undergone format changes. Comparable store sales results for fiscal 2009 were
calculated based on the 52-week period ended January 30, 2010.
Fiscal 2009 Compared to Fiscal 2008
Net Income Attributable to Holdings’ Shareholders
We recorded net income attributable to Holdings’ shareholders of $235 million ($1.99 per diluted share) for
fiscal 2009 and $53 million ($0.42 per diluted share) in fiscal 2008. Our results for fiscal 2009 and 2008 were
affected by a number of significant items. Our net income, as adjusted for these significant items was $376
million ($3.19 per diluted share) for fiscal 2009 and $215 million ($1.69 per diluted share) for fiscal 2008. The
increase in net income for the year reflects an increase in operating income of $411 million, primarily due to a
decline in selling and administrative expenses and the below noted significant items, partially offset by a decline
in gross margin dollars.
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