Gross margin rate represents sales less cost of sales expressed as a percentage of sales. Expense rate represents selling, general and administrative expenses expressed as a percentage of sales.
Net interest expense for the quarter increased $31 million compared with third quarter 2005, primarily due to growth in the cost of funding our credit card operations.
Earnings before taxes (EBT) in the third quarter totaled $808 million, representing an increase of $95 million, or 13.2 percent, from the same period in 2005. The contribution from the company's credit card operations to these results was $176 million, an increase of $68 million, or 62.9 percent, from a year ago.
Other Factors The company's effective income tax rate for the third quarter was 37.4 percent in 2006 compared with 39.0 percent in 2005. For the full year, the effective income tax rate is now expected to be between 37.9 and 38.4 percent.
The company repurchased $59 million of its common stock during the third quarter of 2006, acquiring 1.2 million shares at an average price of $48.86 per share, under a $5 billion program which began in 2004.
Program to-date, the company has acquired 70.7 million shares of its common stock at an average price per share of $48.56, reflecting a total investment of approximately $3.43 billion.
The company expects to continue to execute this program primarily in open market transactions, subject to market conditions,and expects to complete the total program by year-end 2008, or sooner.