SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended August 3, 2002 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission file number: 1-13113
SAKS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
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Tennesee |
62-0331040 |
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(205) 940-4000
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common Stock, $.10 Par Value -- 143,059,732 shares as of August 3, 2002
SAKS INCORPORATED
Index
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Page No. |
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PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements |
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Condensed Consolidated Balance Sheets -- August 3, 2002, February 2, 2002 and August 4, 2001 |
3 |
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Condensed Consolidated Statements of Income -- Three Months and Six Months Ended August 3, 2002 and August 4, 2001 |
4 |
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Condensed Consolidated Statements of Cash Flows -- Six Months Ended August 3, 2002 and August 4, 2001 |
5 |
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Notes to Condensed Consolidated Financial Statements |
6 - 26 |
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
27 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
38 |
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| Item 4. Internal Controls |
39 |
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PART II. OTHER INFORMATION |
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| Item 4. Submission of Matters to a Vote of Security Holders |
40 |
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Item 6. Exhibits and Reports on Form 8-K |
41 |
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SIGNATURES |
42 |
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| CERTIFICATIONS |
43 - 44 |
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2
SAKS INCORPORATED and
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
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August 3, |
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February 2, |
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August 4, |
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2002 |
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2002 |
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2001 |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
$ 88,649 |
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$ 99,102 |
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$ 20,293 |
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Retained interest in accounts receivable |
251,954 |
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239,420 |
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214,641 |
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Merchandise inventories |
1,318,748 |
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1,295,878 |
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1,491,512 |
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Other current assets |
77,838 |
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74,960 |
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64,381 |
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Deferred income taxes, net |
54,192 |
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60,569 |
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33,267 |
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Total current assets |
1,791,381 |
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1,769,929 |
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1,824,094 |
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Property and Equipment, net |
2,214,397 |
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2,246,818 |
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2,295,777 |
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Goodwill and Intangibles, net |
314,717 |
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360,580 |
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367,378 |
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Deferred Income Taxes, net |
179,173 |
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173,077 |
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206,772 |
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Other Assets |
52,075 |
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45,117 |
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49,200 |
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TOTAL ASSETS |
$ 4,551,743 |
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$ 4,595,521 |
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$ 4,743,221 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities |
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Trade accounts payable |
$ 321,003 |
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$ 282,750 |
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$ 345,382 |
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Accrued expenses and other current liabilities |
474,081 |
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498,967 |
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448,552 |
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Current portion of long-term debt |
4,743 |
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5,061 |
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5,452 |
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Total current liabilities |
799,827 |
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786,778 |
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799,386 |
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Long-Term Debt |
1,329,689 |
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1,356,580 |
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1,551,944 |
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Other Long-Term Liabilities |
185,014 |
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180,726 |
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125,792 |
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Total liabilities |
2,314,530 |
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2,324,084 |
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2,477,122 |
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Commitments and Contingencies |
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Shareholders' Equity |
2,237,213 |
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2,271,437 |
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2,266,099 |
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TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY |
$4,551,743 |
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$4,595,521 |
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$4,743,221 |
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See notes to condensed consolidated financial statements. |
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3
SAKS INCORPORATED and
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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August 3, |
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August 4, |
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August 3, |
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August 4, |
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2002 |
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2001 |
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2002 |
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2001 |
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Net sales |
$ 1,237,232 |
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$ 1,270,708 |
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$ 2,663,459 |
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$ 2,735,058 |
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Cost of sales (excluding depreciation and amortization) |
787,485 |
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848,290 |
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1,676,858 |
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1,766,079 |
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Gross margin |
449,747 |
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422,418 |
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986,601 |
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968,979 |
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Selling, general and administrative expenses |
313,165 |
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329,925 |
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645,943 |
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673,167 |
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Other operating expenses |
138,233 |
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138,939 |
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278,245 |
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280,787 |
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Store pre-opening costs |
61 |
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1,020 |
|
896 |
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1,602 |
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Integration charges |
- |
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325 |
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- |
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1,448 |
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Losses from long-lived assets |
- |
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20,818 |
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926 |
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20,506 |
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Operating income (loss) |
(1,712) |
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(68,609) |
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60,591 |
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(8,531) |
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Other income (expense): |
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Interest expense |
(31,119) |
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(32,450) |
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(62,193) |
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(67,051) |
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Other income, net |
196 |
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60 |
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581 |
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283 |
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Income (loss) before income taxes, |
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extraordinary items and cumulative effect |
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of a change in accounting principle |
(32,635) |
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(100,999) |
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(1,021) |
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(75,299) |
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Provision (benefit) for income taxes |
(12,235) |
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(38,834) |
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(379) |
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(28,991) |
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Income (loss) before extraordinary items and |
(20,400) |
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(62,165) |
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(642) |
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(46,308) |
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Extraordinary gain on extinguishment of |
- |
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3,776 |
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443 |
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14,417 |
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Cumulative effect of a change in |
- |
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- |
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(45,593) |
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- |
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Net income (loss) |
$ (20,400) |
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$ (58,389) |
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$ (45,792) |
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$ (31,891) |
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Basic and diluted earnings (loss) per |
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Income before extraordinary items and |
$ (0.14) |
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$ (0.44) |
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$ (0.00) |
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$ (0.33) |
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Extraordinary items |
- |
|
0.03 |
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- |
|
0.11 |
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Cumulative effect of accounting change |
- |
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- |
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(0.32) |
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- |
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Net income (loss) |
$ (0.14) |
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$ (0.41) |
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$ (0.32) |
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$ (0.22) |
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Weighted average common shares: |
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Basic |
142,942 |
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141,995 |
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142,685 |
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141,948 |
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Diluted |
142,942 |
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141,995 |
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142,685 |
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141,948 |
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