Sears 2009 Annual Report Download - page 24

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Fiscal 2008 (Year ended January 31, 2009)
millions, except per share data GAAP Impairments
Mark-to-
Market
Gains
Closed Store
Reserve and
Severance
Legal
Settlement
Repurchase
of Debt
Securities
Tax
Matters
As
Adjusted
Cost of sales, buying and
occupancy impact ......... $34,118 $ — $ — $ (36) $ — $ — $ — $34,082
Selling and administrative
impact .................. 11,060 — — (41) 62 — — 11,081
Impairment charges impact . . . 360 (360) — — — — — —
Operating income impact ..... 302 360 — 77 (62) — — 677
Interest expense impact ...... (272) — — — — (13) — (285)
Other income impact ........ 108 — (81) — — — — 27
Income tax expense impact . . . (85) (107) 26 (30) 25 5 (8) (174)
Noncontrolling interest
impact .................. (46) (52) 22 — — — — (76)
After tax and noncontrolling
interest impact ........... 53 201 (33) 47 (37) (8) (8) 215
Diluted income per share
impact .................. $ 0.42 $1.57 $(0.26) $0.37 $(0.29) $(0.06) $(0.06) $ 1.69
Fiscal 2007 (Year ended February 2, 2008)
millions, except per share data GAAP
Hurricane
Related
Recoveries
Sears Canada Post-
retirement Curtailment
Gain
Total Return
Swap Loss As Adjusted
Selling and administrative impact ........... $11,468 $ 19 $ 27 $ — $11,514
Operating income impact .................. 1,586 (19) (27) — 1,540
Interest and investment income impact ....... 135 — — 14 149
Income tax expense impact ................. (550) 7 10 (5) (538)
After tax and noncontrolling interest impact . . . 826 (12) (17) 9 806
Diluted income per share impact ............ $ 5.70 $(0.08) $(0.12) $0.06 $ 5.56
Contributions to our pension plans remain a significant use of our cash on an annual basis. While Sears
Holdings’ pension plan is frozen, and thus associates do not currently earn pension benefits, we have a legacy
pension obligation for past service performed by Kmart and Sears, Roebuck and Co. associates. The annual
pension expense included in our financial statements related to these legacy domestic pension plans was
relatively minimal in years prior to fiscal 2009. However, due to the severe decline in the capital markets that
occurred in the latter part of 2008, our domestic pension expense increased by $170 million in 2009.
Total Revenues and Comparable Store Sales
Total revenues declined $2.8 billion, or 5.8%, to $44 billion, in fiscal 2009 from $46.8 billion in fiscal 2008.
The decrease was primarily due to lower comparable store sales and the impact of having 62 fewer Kmart and
Sears full-line stores in operation during 2009, and includes a $142 million decline due to foreign currency
exchange rates.
Domestic comparable store sales declined 5.1% in the aggregate, and included a modest decline at Kmart of
0.8% and a decline at Sears Domestic of 8.7% in fiscal 2009. The decline in comparable store sales at Kmart was
primarily driven by lower sales in the apparel and food and consumables categories, partially offset by increases
in the toys category, as well as the benefit of assuming the operations of its footwear business from a third party
effective January 2009. Declines in sales at Sears Domestic reflect decreases in the home appliance, lawn &
garden, and home electronics categories.
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