Sears 2009 Annual Report Download - page 96

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability
for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated
and we do not record liabilities when the likelihood that the liability has been incurred is probable but the amount
cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.
Because litigation outcomes are inherently unpredictable, these assessments often involve a series of complex
assessments by management about future events and can rely heavily on estimates and assumptions. While the
consequences of certain unresolved proceedings are not presently determinable, an adverse outcome from certain
matters could have a material adverse effect on our earnings in any given reporting period. However, in the
opinion of our management, after consulting with legal counsel, and taking into account insurance and reserves,
the ultimate liability is not expected to have a material adverse effect on our financial position, liquidity or
capital resources.
NOTE 20—QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
2009
millions, except per share data
First
Quarter(1)
Second
Quarter(2)
Third
Quarter(3)
Fourth
Quarter(4)
Total revenues ............................................ $10,055 $10,551 $10,190 $13,247
Cost of sales, buying and occupancy .......................... 7,182 7,756 7,419 9,467
Selling and administrative .................................. 2,573 2,630 2,664 2,787
Net income (loss) attributable to Holdings’ shareholders .......... 26 (94) (127) 430
Basic net income (loss) per share attributable to Holdings’
shareholders ........................................... 0.22 (0.79) (1.09) 3.75
Diluted net income (loss) per share attributable to Holdings’
shareholders ........................................... 0.21 (0.79) (1.09) 3.74
2008
millions, except per share data
First
Quarter
Second
Quarter(5)
Third
Quarter(6)
Fourth
Quarter(7)
Total revenues ............................................ $11,068 $11,762 $10,660 $13,280
Cost of sales, buying and occupancy ........................... 8,045 8,640 7,806 9,627
Selling and administrative ................................... 2,815 2,694 2,731 2,820
Net income (loss) attributable to Holdings’ shareholders ........... (56) 65 (146) 190
Basic and diluted net income (loss) per share attributable to Holdings’
shareholders ............................................ (0.43) 0.50 (1.16) 1.55
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 2009 includes a previously deferred gain on the August 2007 sale of Sears Canada’s
former headquarters building of $44 million ($19 million after tax and noncontrolling interest or $0.16 per
diluted share), which was recognized as Sears Canada ceased use of the building under the lease-back
agreement signed at the time of the sale; domestic pension plan expense of $42 million ($25 million after
tax or $0.20 per diluted share); mark-to-market losses on Sears Canada hedge transactions of $14 million
($6 million after tax and noncontrolling interest or $0.05 per diluted share); and a charge of $17 million ($9
million after tax and noncontrolling interest or $0.08 per diluted share) related to costs associated with store
closings and severance.
96