| Schedule of Quarterly Results of Operations (Unaudited) |
The following is a summary of our quarterly unaudited consolidated results of operations for 2014 and 2013: | | | | | | | | | | | | | | | | | | 2014 | | | | | | | | | ($ in millions, except EPS) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Total net sales | $ | 2,801 |
| | $ | 2,799 |
| | $ | 2,764 |
| | $ | 3,893 |
| | Gross margin | 926 |
| | 1,008 |
| | 1,013 |
| | 1,314 |
| | SG&A expenses | 1,009 |
| | 964 |
| | 988 |
| | 1,032 |
| | Restructuring and management transition(1) | 22 |
| | 5 |
| | 12 |
| | 48 |
| | Net income/(loss)(2) | (352 | ) | | (172 | ) | | (188 | ) | | (59 | ) |
| Diluted earnings/(loss) per share(3) | $ | (1.15 | ) | | $ | (0.56 | ) | | $ | (0.62 | ) | | $ | (0.19 | ) | | 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 |
| (4) | SG&A expenses | 1,078 |
| | 1,026 |
| | 1,006 |
| | 1,004 |
| | Restructuring and management transition(5) | 72 |
| | 47 |
| | 46 |
| | 50 |
| | Net income/(loss) | (348 | ) | | (586 | ) | (6) | (489 | ) | (6) | 35 |
| (6) | Diluted earnings/(loss) per share(3) | $ | (1.58 | ) | | $ | (2.66 | ) | | $ | (1.94 | ) | | $ | 0.11 |
| |
| | (1) | Restructuring and management transition charges (Note 15) by quarter for 2014 consisted of the following: |
| | | | | | | | | | | | | | | | | ($ in million) | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | Home office and stores | $ | 12 |
| | $ | — |
| | $ | 3 |
| | $ | 30 |
| Management transition | 7 |
| | 1 |
| | 7 |
| | 1 |
| Other | 3 |
| | 4 |
| | 2 |
| | 17 |
| Total | $ | 22 |
| | $ | 5 |
| | $ | 12 |
| | $ | 48 |
|
| | (2) | The first, second, third and fourth quarters of 2014 contained increases to our tax valuation allowance of $120 million, $28 million, $107 million and $56 million, respectively. The first, second, third and fourth quarters of 2014 contained gains from non-operating assets sales (Note 16) of $12 million, $9 million, $2 million and $2 million, respectively. The fourth quarter of 2014 includes $30 million of store impairments charges recorded in Real estate and other, net (Note 16). |
| | (3) | 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. |
| | (4) | Includes a negative impact of $72 million related to the discontinuation of brands that are not part of our go-forward merchandising strategy. |
| | (5) | Restructuring and management transition charges (Note 15) by quarter for 2013 consisted of the following: |
| | | | | | | | | | | | | | | | | ($ in millions) | 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 |
|
| | (6) | 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 (Note 16) 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 (Note 16) 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. |
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