| Quarterly Results of Operations (Unaudited) |
Quarterly Results of Operations (Unaudited) The following is a summary of our quarterly unaudited consolidated results of operations for 2013 and 2012: | | | | | | | | | | | | | | | | | | 2013 | | | | | | | | | ($ in millions, except EPS) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Total net sales | $ | 2,635 |
| | $ | 2,663 |
| | $ | 2,779 |
| | $ | 3,782 |
| | Gross margin | 812 |
| | 787 |
| | 819 |
| | 1,074 |
| (1) | SG&A expenses | 1,078 |
| | 1,026 |
| | 1,006 |
| | 1,004 |
| | Restructuring and management transition(2) | 72 |
| | 47 |
| | 46 |
| | 50 |
| | Net income/(loss) | (348 | ) | | (586 | ) | (3) | (489 | ) | (3) | 35 |
| (3) | Diluted earnings/(loss) per share(4) | $ | (1.58 | ) | | $ | (2.66 | ) | | $ | (1.94 | ) | | $ | 0.11 |
| | 2012 | | | | | | | | | ($ in millions, except EPS) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Total net sales | $ | 3,152 |
| | $ | 3,022 |
| | $ | 2,927 |
| | $ | 3,884 |
| (5) | Gross margin | 1,186 |
| (6) | 1,004 |
| (6) | 952 |
| | 924 |
|
| SG&A expenses | 1,160 |
| | 1,050 |
| | 1,087 |
| | 1,209 |
| | Restructuring and management transition(7) | 76 |
| | 159 |
| | 34 |
| | 29 |
| | Net income/(loss) | (163 | ) | | (147 | ) | (8) | (123 | ) | (9) | (552 | ) | (10) | Diluted earnings/(loss) per share(4) | $ | (0.75 | ) | | $ | (0.67 | ) | | $ | (0.56 | ) | | $ | (2.51 | ) | |
| | (1) | Includes a negative impact of $72 million related to the discontinuation of brands that are not part of our go-forward merchandising strategy. |
| | (2) | Restructuring and management transition charges (See Note 16) by quarter for 2013 consisted of the following: |
| | | | | | | | | | | | | | | | | ($ in million) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | Home office and stores | 28 |
| | 4 |
| | (6 | ) | | 22 |
| Store fixtures | 28 |
| | 17 |
| | 10 |
| | — |
| Management transition | 16 |
| | 13 |
| | 3 |
| | 5 |
| Other | — |
| | 13 |
| | 39 |
| | 23 |
| Total | $ | 72 |
| | $ | 47 |
| | $ | 46 |
| | $ | 50 |
|
| | (3) | The second and third quarters of 2013 contained increases to our tax valuation allowance of $218 million and $184 million, respectively and a decrease of $178 million to our valuation allowance in the fourth quarter. The second, third and fourth quarters of 2013 contained gains from non-operating assets sales (see Note 17) of $62 million, $24 million and $46 million, respectively. The fourth quarter of 2013 includes $12 million of store impairments charges and a $9 million impairment to our monet trade name recorded in Real estate and other, net (see Note 17) Additionally, during the fourth quarter of 2013 we recognized a tax benefit of $270 million from income related to actuarial gains included in other comprehensive income. This tax benefit was offset by tax expense recorded for such gains in other comprehensive income. |
| | (4) | EPS is computed independently for each of the quarters presented. The sum of the quarters may not equal the total year amount due to the impact of changes in average quarterly shares outstanding. |
| | (5) | Sales for the 53rd week were $163 million. |
| | (6) | The first and second quarters of 2012 include $53 million and $102 million, respectively, of markdowns related to the alignment of inventory with our prior strategy. |
| | (7) | Restructuring and management transition charges (See Note 16) by quarter for 2012 consisted of the following: |
| | | | | | | | | | | | | | | | | ($ in millions) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | Supply chain | $ | 6 |
| | $ | 10 |
| | $ | 3 |
| | $ | — |
| Home office and stores | 45 |
| | 56 |
| | 4 |
| | 4 |
| Software and systems | — |
| | 36 |
| | — |
| | — |
| Store fixtures | — |
| | 42 |
| | 18 |
| | 18 |
| Management transition | 20 |
| | 10 |
| | 6 |
| | 5 |
| Other | 5 |
| | 5 |
| | 3 |
| | 2 |
| Total | $ | 76 |
| | $ | 159 |
| | $ | 34 |
| | $ | 29 |
|
| | (8) | Includes a gain of $200 million related to the redemption of REIT units, net of fees, included in Real estate and other, net (see Note 17). |
| | (9) | Includes a net gain of $197 million related to the sale of non-operating assets, net of fees, included in Real estate and other, net (see Note 17). |
| | (10) | Includes $26 million of store impairments charges and the write-off of $60 million of operating assets that were no longer being used in our operations recorded in Real estate and other, net (see Note 17). |
|