financial summary

2017 financial summary

  2017 (a) 2016 2015 2014 2013
Financial Results: (in millions)          
Sales (b) $71,879 $69,495 $73,785 $72,618 $71,279
Cost of sales (c) 51,125 49,145 52,241 51,506 50,243
Gross margin 20,754 20,350 21,544 21,112 21,036
Selling, general and administrative expenses (SG&A) 14,248 13,356 14,665 14,676 14,465
Depreciation and amortization (exclusive of depreciation included on cost of sales) (c) 2,194 2,025 1,969 1,901 1,792
Gain on sale (d) (620) (391)
Earnings from continuing operations before interest expense and income taxes (EBIT) 4,312 4,969 5,530 4,535 5,170
Net interest expense (e) 666 1,004 607 882 1,049
Earnings from continuing operations before income taxes 3,646 3,965 4,923 3,653 4,121
Provision for income taxes (f) 718 1,296 1,602 1,204 1,427
Net earnings from continuing operations 2,928 2,669 3,321 2,449 2,694
Discontinued operations, net of tax 6 68 42 (4,085) (723)
Net earnings / (loss) $2,934 $2,737 $3,363 $(1,636) $1,971
Per Share:          
Basic earnings / (loss) per share          
Continuing operations $5.35 $4.62 $5.29 $3.86 $4.24
Discontinued operations 0.01 0.12 0.07 (6.44) (1.14)
Net earnings / (loss) per share $5.36 $4.74 $5.35 $(2.58) $3.10
Diluted earnings / (loss) per share          
Continuing operations $5.32 $4.58 $5.25 $3.83 $4.20
Discontinued operations 0.01 0.12 0.07 (6.38) (1.13)
Net earnings / (loss) per share $5.33 $4.70 $5.31 $(2.56) $3.07
Cash dividends declared $2.46 $2.36 $2.20 $1.99 $1.65
Financial Position: (in millions)          
Total assets $38,999 $37,431 $40,262 $41,172 $44,325
Capital expenditures (g) $2,533 $1,547 $1,438 $1,786 $1,886
Long-term debt, including current portion (g) $11,587 $12,749 $12,760 $12,725 $12,494
Net debt (g)(h) $10,456 $11,639 $9,752 $11,205 $12,491
Shareholders' investment $11,709 $10,953 $12,957 $13,997 $16,231
Segment Financial Ratios: (i)          
Comparable sales growth (j) 1.3% (0.5)% 2.1% 1.3% (0.4)%
Gross margin (% of sales) (c) 28.9% 29.3% 29.2% 29.1% 29.5%
SG&A (% of sales) 19.8% 19.2% 19.6% 20.0% 20.2%
EBIT margin (% of sales) 6.0% 7.1% 6.9% 6.5% 6.8%
Other:          
Common shares outstanding (in millions) 541.7 556.2 602.2 640.2 632.9
Operating cash flow provided by continuing operations (in millions) $6,849 $5,329 $5,254 $5,157 $7,572
Sales per square foot (g)(k) $295 $290 $307 $302 $298
Retail square feet (in thousands) (g) 239,355 239,502 239,539 239,963 240,054
Square footage growth (g) (0.1)% —% (0.2)% —% 0.9%
Total number of stores (g) 1,822 1,802 1,792 1,790 1,793
Total number of distribution centers (g) 41 40 40 38 37
  1. (a) Consisted of 53 weeks.
  2. (b) The 2016 sales decline is primarily due to the December 2015 sale of our pharmacy and clinic businesses (Pharmacy Transaction) to CVS Pharmacy, Inc. 2015 sales includes $3,815 million related to our former pharmacy and clinic businesses.
  3. (c) Beginning in the second quarter of 2017, we reclassified supply chain-related depreciation expense into cost of sales and out of depreciation and amortization on our Consolidated Statements of Operations. Prior year amounts have been reclassified to reflect this change.
  4. (d) For 2015, includes the gain on the Pharmacy Transaction. For 2013, includes the gain related to the sale of our U.S. credit card receivables portfolio.
  5. (e) Includes losses on early retirement of debt of $123 million, $422 million, $285 million, and $445 million for 2017, 2016, 2014, and 2013, respectively.
  6. (f) For 2017, includes $352 million of discrete tax benefits related to the Tax Cuts and Jobs Act enacted in December 2017.
  7. (g) Represents amounts attributable to continuing operations.
  8. (h) Including current portion and short-term notes payable, net of short-term investments of $1,131 million, $1,110 million, $3,008 million, $1,520 million, and $3 million in 2017, 2016, 2015, 2014, and 2013, respectively. Management believes this measure is an indicator of our level of financial leverage because short-term investments are available to pay debt maturity obligations.
  9. (i) Effective January 15, 2015, we operate as a single segment which includes all of our continuing operations, excluding net interest expense and the impact of certain other discretely managed items.
  10. (j) See definition of comparable sales in Form 10-K, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
  11. (k) Represents sales per square foot which is calculated using rolling four quarters average square feet. In 2017, sales per square foot was calculated excluding the 53rd week in order to provide a more useful comparison to other years.  Using total reported sales for 2017 (including the 53rd week) resulted in sales per square foot of $300. The 2016 decrease is primarily due to the Pharmacy Transaction. Our former pharmacy and clinic businesses contributed approximately $16 to 2015 sales per square foot.