Express 2011 Annual Report Download - page 47

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We supplement the reporting of our financial information determined under United States generally accepted accounting
principles (“GAAP”) with certain non-GAAP financial measures: adjusted net income and adjusted earnings per diluted
share. We believe that these non-GAAP measures provide meaningful information to assist stockholders in
understanding our financial results and assessing our prospects for future performance. Management believes adjusted
net income and adjusted earnings per diluted share are important indicators of our operations because they exclude items
that may not be indicative of, or are unrelated to, our core operating results, and provide a better baseline for analyzing
trends in our underlying business. Because non-GAAP financial measures are not standardized, it may not be possible to
compare these financial measures with other companies’ non-GAAP financial measures having the same or similar
names. These adjusted financial measures should not be considered in isolation or as a substitute for reported net income
and earnings per diluted share. These non-GAAP financial measures reflect an additional way of viewing our operations
that, when viewed with our GAAP results and the below reconciliations to the corresponding GAAP financial measures,
provide a more complete understanding of our business. We strongly encourage investors and stockholders to review
our financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.
The tables below reconcile the non-GAAP financial measures, adjusted net income and adjusted earnings per diluted
share, with the most directly comparable GAAP financial measures, net income and earnings per diluted share.
2011
(in thousands, except per share amounts) Net Income
Earnings per
Diluted Share
Weighted Average
Diluted Shares
Outstanding
Reported GAAP Measure ............... $140,697 $1.58 88,896
Transaction Costs (a) * ................. 614 0.01
Interest Expense (b) * .................. 5,815 0.07
Adjusted Non-GAAP Measure ........... $147,126 $1.66
(a) Includes transaction costs related to the secondary offerings of our common stock completed in April 2011
and December 2011.
(b) Includes premium paid and accelerated amortization of debt issuance costs and debt discount related to the
repurchases of $49.2 million of Senior Notes, the amendment of the $200 million Opco Revolving Credit
Facility, and the prepayment of the $125 million Opco Term Loan outstanding balance.
* Items were tax affected at our statutory rate of approximately 39% for 2011.
2010
(in thousands, except per share amounts) Net Income
Earnings per
Diluted Share
Weighted Average
Diluted Shares
Outstanding
Reported GAAP Measure ............... $127,388 $ 1.48 86,050
Transaction Costs (a) * ................. 2,718 0.03
Advisory/LLC Fees (b) * ............... 8,121 0.10
Interest Expense (c) * .................. 15,370 0.18
Non-Cash Tax Benefit (d) ............... (31,807) (0.37)
Adjusted Non-GAAP Measure ........... $121,790 $ 1.42
(a) Includes transaction costs related to the Senior Notes offering, the IPO, and the secondary offering
completed in December 2010.
(b) Includes one-time fees paid to Golden Gate and Limited Brands for terminating advisory arrangements with them.
(c) Includes prepayment penalty and accelerated amortization of debt issuance costs and debt discount related
to the early repayment of the Topco Credit Facility.
(d) Represents one-time, non-cash tax benefit in connection with the conversion to a corporation.
* Items were tax affected at approximately 1.2% for the thirteen weeks ended May 1, 2010 and at our
statutory rate of approximately 39.1% for the remainder of the year.
39