Net interest expense for the quarter increased $14 million compared with second quarter 2006 primarily due to higher average debt balances, including the debt to fund the growth in our accounts receivable.
The contribution from the company's credit card operations to second quarter earnings before taxes (EBT), net of the allocated interest expense, was $163 million, an increase of $41 million, or 34.0 percent, from the same period in 2006. This favorability is attributable to growth in net interest income as well as other finance charges.
Other Factors:
The company's effective income tax rate for the second quarter was 38.4 percent in 2007 compared with 38.8 percent in 2006. For the full year, the effective income tax rate is still expected to increase modestly from last year's 38.0 percent rate.
Under a share repurchase program that began in 2004 and was increased by the Board to an $8 billion authorization in June 2007, the company repurchased $476 million of its common stock during the second quarter of 2007, acquiring 7.5 million shares at an average price of $63.23 per share.
During the first half of 2007, the company repurchased $1,025 million of its common stock, acquiring 16.7 million shares at an average price of $61.34 per share. Program-to-date, the company has acquired 87.8 million shares of its common stock at an average price per share of $50.99, reflecting a total investment of approximately $4.5 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 2010, or sooner.
marketing@alchempro.com
