Express 2011 Annual Report Download - page 46

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The $8.1 million increase in other operating expense, net in 2010 compared to 2009 was driven by the
termination fees noted above paid to Golden Gate and Limited Brands. This increase was partially offset by the
elimination of the advisory fees in the third and fourth quarter of 2010, which were previously incurred under the
Advisory Agreement and the LLC Agreement. Fees under both the Advisory Agreement and the LLC Agreement
were incurred during all of 2009.
Interest Expense
The following table shows interest expense in dollars for the stated periods:
Year Ended
2011 2010 2009
(in thousands)
Interest expense ................................. $35,804 $59,493 $53,222
The $23.7 million decrease in interest expense in 2011 compared to 2010 resulted primarily from the $20.8
million loss on extinguishment of debt associated with the early repayment of the Topco Credit Facility in 2010,
which, along with the repurchase of the Senior Notes in 2011, also led to $9.2 million in interest savings during
2011. These reductions were partially offset by a $9.6 million loss on extinguishments related to the repurchases
of $49.2 million of Senior Notes, the amendment of the Opco Credit Facility, and the prepayment of the Opco
Term Loan in 2011.
The $6.3 million increase in interest expense in 2010 compared to 2009 resulted primarily from the $20.8 million
loss on extinguishment of debt associated with the early repayment of the Topco Credit Facility in 2010, partially
offset by $14.3 million lower interest expense on the Senior Notes at an interest rate of 8 3/4% versus the Term C
and Term B Loans at an interest rate of 14.5% and 13.5%, respectively.
Income Tax Expense
The following table shows income tax expense in dollars for the stated periods:
Year Ended
2011 2010 2009
(in thousands)
Income tax expense ............................... $94,868 $14,354 $1,236
The effective tax rate for 2011 was 40.3% compared to 10.1% for 2010 and 1.6% for 2009. The higher rate was
primarily due to our becoming subject to taxation as a corporation on May 2, 2010 in connection with our
conversion to a corporation. We were previously treated as a partnership for tax purposes through May 1, 2010
and therefore, generally were not subject to federal and state income taxes.
We anticipate our effective tax rate will be between 39.9% and 40.1% in 2012.
Adjusted Net Income and Adjusted Earnings Per Diluted Share
The following table presents Adjusted Net Income and Adjusted Earnings Per Diluted Share for the stated
periods:
Year Ended
2011 2010 2009
(in thousands)
Adjusted Net Income ........................... $147,126 $121,790 $75,307*
Adjusted Earnings Per Diluted Share ............... $ 1.66 $ 1.42 $ 1.00 *
* No adjustments were made to net income or earnings per diluted share in 2009.
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