Famous Footwear 2012 Annual Report Download - page 59

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2012 BROWN SHOE COMPANY, INC. FORM 10-K 57
Edelman Shoe, Inc.
Edelman Shoe is a leading designer and marketer of fashion footwear. In 2007, the Company invested cash of $7.1 million
in Edelman Shoe, acquiring 42.5% of the outstanding stock. On November 3, 2008, the Company invested an additional
$4.1 million of cash in Edelman Shoe, acquiring 7.5% of the outstanding stock, bringing the Company’s total equity
interest to 50%.
Beginning November 3, 2008, the Company’s consolidated financial statements included the accounts of Edelman Shoe as
a result of the Company’s determination that Edelman Shoe was a variable interest entity (“VIE”), for which the Company
was the primary beneficiary. At the beginning of fiscal 2010, the Company adopted amended consolidation guidance
applicable to VIEs, evaluated the impact on the existing variable interests in Edelman Shoe and determined that Edelman
Shoe continued to be a VIE that was appropriately consolidated by the Company.
On June 4, 2010, the Company acquired the remaining 50% of the outstanding stock of Edelman Shoe for $40.0 million,
consisting of a combination of $32.7 million of cash, including transaction fees, and $7.3 million in shares of the Company’s
common stock. The stock consideration consisted of 473,081 shares of the Company’s common stock. The acquisition of
the remaining interest in Edelman Shoe was accounted for in accordance with the consolidation guidance applicable to
noncontrolling interests, which requires changes in a parent’s ownership interest in a subsidiary, without loss of control, to
be reflected as an adjustment to the carrying amount of the noncontrolling interest with excess consideration recognized
directly to equity attributable to the controlling interest. As a result, the Company’s acquisition of the remaining interest in
Edelman Shoe resulted in a reduction to total equity of $32.7 million, consisting of a net reduction of $24.1 million to total
Brown Shoe Company, Inc. shareholders’ equity and the elimination of $8.6 million of the noncontrolling interest in Edelman
Shoe. As of June 4, 2010, Edelman Shoe became a wholly-owned subsidiary of the Company.
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per common share attributable to Brown Shoe
Company, Inc. shareholders:
(in thousands, except per share amounts) 2012 2011 2010
NUMERATOR
Net earnings from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,204 $ 8,724 $ 37,060
Net loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 199 173
Net earnings allocated to participating securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,365) (529) (1,283)
Net earnings from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,126 8,394 35,950
Net earnings from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 15,666 –
Net earnings allocated to participating securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (668) –
Net earnings from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 14,998 –
Net earnings attributable to Brown Shoe Company, Inc.
after allocation of earnings to participating securities . . . . . . . . . . . . . . . . . . . . . . . $ 26,126 $ 23,392 $ 35,950
DENOMINATOR
Denominator for basic continuing and discontinued earnings
per common share attributable to Brown Shoe Company, Inc. shareholders . . . . . . . . . . 40,659 41,126 42,156
Dilutive eect of share-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 542 331
Denominator for diluted continuing and discontinued earnings
per common share attributable to Brown Shoe Company, Inc. shareholders . . . . . . . . . . 40,794 41,668 42,487
Basic earnings per common share:
From continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.64 $ 0.20 $ 0.85
From discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 0.37 –
Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders . . . . $ 0.64 $ 0.57 $ 0.85
Diluted earnings per common share:
From continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.64 $ 0.20 $ 0.85
From discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 0.36 –
Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders . . . $ 0.64 $ 0.56 $ 0.85
Options to purchase 998,701, 1,415,696 and 1,186,570 shares of common stock in 2012, 2011 and 2010, respectively, were not
included in the denominator for diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
because the eect would be antidilutive.