Q1 2014 Earnings Call Transcript

Transcript Call Date 04/24/2014

As we describe in more detail in our public filings, issues such as settling intercompany balances and foreign currencies amongst our subsidiaries, unfavorable resolution of legal matters and changes to our effective tax rates can all have a material effect on guidance.

Our guidance further assumes that we don't conclude any additional business acquisitions, investments, restructurings or legal settlements, record any further revisions to stock-based compensation estimates and that foreign exchange rates remain approximately where they have been recently.

For Q2, 2014, we expect net sales of between $18.1 billion and $19.8 billion, a growth of between 15% and 26%. This guidance anticipates approximately 160 basis points of favorable impact from foreign exchange rates.

GAAP operating income or loss to be between a $455 million loss and $55 million loss, compared to $79 million in income in the second quarter 2013. This includes approximately $455 million for stock-based compensation and amortization of intangible assets.

We anticipate consolidated segment operating income, which excludes stock-based compensation and other operating expense to be between zero and $400 million, compared to $409 million in the second quarter of 2013.

We remain heads down focused on driving a better customer experience through price, selection and convenience. We believe putting customers first is the only reliable way to create lasting value for shareholders.

Thanks. With that, Dave, let's move to questions.

Dave Fildes - Senior Manager of IR: Thanks, Tom. Let's move onto the Q&A portion of the call. Operator, will you please remind our listeners how to initiate a question?

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