1
EXHIBIT 11
KMART CORPORATION
INFORMATION ON COMPUTATION OF PER SHARE EARNINGS
($ Millions) Fiscal Year Ended
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January 29, January 31, January 25, January 26, January 27
1997 1996* 1995* 1994* 1993*
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I. Earnings per common and common equivalent share:
Income (loss) from continuing retail operations before
extraordinary item and the effect of accounting changes $ 231 $(230) $ 96 $ (179) $ 745
Less: Series B and C convertible preferred shares dividend
payment - (6) (9) (9) (3)
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(a) Adjusted income (loss) from continuing retail operations before
extraordinary item and the effect of accounting changes 231 (236) 87 (188) 742
(b) Discontinued operations including the effect of accounting
changes, net of income taxes (5) (260) 83 (234) 196
(c) Gain (loss) on disposal of discontinued operations,
net of income taxes (446) (30) 117 (520) -
(d) Extraordinary item, net of income taxes - (51) - (10) -
(e) Effect of accounting changes, net of income taxes - - - (31) -
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(f) Adjusted net income (loss) (1) $ (220) $(577) $ 287 $ (983) $ 938
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Weighted average common shares outstanding 483.6 459.8 427.2 408.1 405.7
Weighted average $3.41 Depositary Shares outstanding
(each representing 1/4 share Series A conversion preferred) - - 29.2 46.0 46.0
Stock Options:
Common shares assumed issued 13.0 1.6 2.2 16.1 17.2
Less: common shares assumed repurchased (10.5) (1.5) (2.0) (13.5) (13.3)
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2.5 0.1 0.2 2.6 3.9
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(g) Applicable common shares, as adjusted 486.1 459.9 456.6 456.7 455.6
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Earnings per common and common equivalent share:
Adjusted income (loss) from continuing retail operations before
extraordinary item and the effect of accounting
changes (a)/(g) $ 0.48 $(0.51) $ 0.19 $(0.41) $ 1.63
Discontinued operations including the effect of accounting
changes, net of income taxes (b)/(g) (0.01) (0.57) 0.19 (0.51) 0.43
Gain (loss) on disposal of discontinued operations,
net of income taxes (c)/(g) (0.92) (0.06) 0.25 (1.14) -
Extraordinary item, net of income taxes (d)/(g) - (0.11) - (0.02) -
Effect of accounting changes, net of income taxes (e)/(g) - - - (0.07) -
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Net income (loss) (f)/(g) $(0.45) $(1.25) $ 0.63 $(2.15) $ 2.06
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* Prior year amounts have been restated for the effect of discontinued
operations.
(1) Adjusted net income (loss) included an after-tax provision of $150 million
or $0.33 per share for fiscal 1995 related to the adoption of Financial
Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" and an after-tax provision of $579
million or $1.27 per share for fiscal 1993 for store restructuring and other
charges.
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EXHIBIT 11
KMART CORPORATION
INFORMATION ON COMPUTATION OF PER SHARE EARNINGS
($ Millions) Fiscal Year Ended
---------------------------------------------------------------
January 29, January 31, January 25, January 26, January 27,
1997 1996* 1995* 1994* 1993*
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II. Earnings per common and common equivalent share
assuming full dilution:
Income (loss) from continuing retail operations before
extraordinary item and the effect of accounting changes $ 231 $ (230) $ 96 $ (179) $ 745
Add: Dividend on Convertible Preferred, Net 31 - - - -
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(h) Adjusted Income (loss) from continuing retail operations before
extraordinary item and the effect of accounting changes 262 (230) 96 (179) 745
(i) Discontinued operations including the effect of accounting
changes, net of income taxes (5) (260) 83 (234) 196
(j) Gain (loss) on disposal of discontinued operations,
net of income taxes (446) (30) 117 (520) -
(k) Extraordinary item, net of income taxes - (51) - (10) -
(l) Effect of accounting changes, net of income taxes - - - (31) -
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(m) Adjusted net income (loss) (1) $ (189) $ (571) $ 296 $ (974) $ 941
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Weighted average common shares outstanding 483.6 459.8 427.2 408.1 405.7
Weighted average $3.41 Depositary Shares outstanding
(each representing 1/4 share Series A conversion preferred) - - 29.2 46.0 46.0
Weighted average Series B and C convertible preferred shares
outstanding - - 9.7 8.0 1.7
Weighted Average Trust Convertible Preferred 41.4 - - - -
Stock Options:
Common shares assumed issued 14.1 1.6 2.2 16.6 18.1
Less: common shares assumed repurchased (10.8) (1.4) (2.0) (14.5) (13.7)
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3.3 0.2 0.2 2.1 4.4
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(n) Applicable common shares, as adjusted 528.3 460.0 466.3 464.2 457.8
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Earnings per common and common equivalent share:
Adjusted income (loss) from continuing retail operations before
extraordinary item and the effect of accounting
changes (h)/(n) $ 0.50 $(0.50) $ 0.21 $(0.39) $ 1.63
Discontinued operations including the effect of accounting
changes, net of income taxes (i)/(n) (0.01) (0.57) 0.17 (0.50) 0.42
Gain (loss) on disposal of discontinued operations,
net of income taxes (j)/(n) (0.84) (0.06) 0.25 (1.12) -
Extraordinary item, net of income taxes (k)/(n) - (0.11) - (0.02) -
Effect of accounting changes, net of income taxes (l)/(n) - - - (0.07) -
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Net income (loss) (m)/(n) $(0.35) $(1.24) $ 0.63 $(2.10) $ 2.05
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(2) (2) (2) (2) (3)
*Prior year amounts have been restated for the effect of discontinued
operations.
(1) Adjusted net income (loss) included an after tax provision of $150 million
or $0.33 per share for fiscal 1995 related to the adoption of Financial
Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" and an after tax provision of $579
million or $1.25 per share for fiscal 1993 for store restructuring and other
charges.
(2) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because
it produces an anti-dilutive result.
(3) This calculation is submitted in accordance with Regulation S-K item 601(b)
(11) although not required by footnote 2 paragraph 14 of APB Opinion No. 15
because it results in dilution of less than 3%.