Mergers & Acquisitions
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For Sears Holdings Corp, why do we need to adjust the "Gain on sale of assets" from operating income?
Here is the footnote:
NOTE 16—REAL ESTATE TRANSACTIONS
The Company recognized $39 million, $946 million and $89 million in gains on sales of assets during fiscal 2005, fiscal 2004 and for the
39 weeks ended January 28, 2004, respectively. These gains were primarily a function of several large real estate transactions and are included
in operating income in the consolidated statements of operations.........................
During the fiscal 2005, fiscal 2004 and the 39 weeks ended January 28, 2004, the Company purchased 19, 31 and 18 previously leased
operating properties for $98 million, $124 million and $51 million, respectively. In the normal course of business, the Company considers
opportunities to purchase leased operating properties, as well as offers to sell owned, or assign leased, operating and non- operating properties.
These transactions may, individually or in the aggregate, result in material proceeds or outlays of cash. In addition, the Company reviews leases
that will expire in the short-term in order to determine the appropriate action to take with respect to them.
From my understanding, looks like transactions of real estate is a normal course of business, not a one time item. So why do we need to adjust this amount from pro forma operating income?
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