Famous Footwear 2014 Annual Report Download - page 54

2014 BROWN SHOE COMPANY, INC. FORM 10-K 53
$4.7 million, representing the dierence in the fair value of proceeds less costs to sell, as compared to the carrying value
of the net assets. In response to the sale, the Company incurred restructuring and other special charges of $1.5 million,
primarily for severance, to eliminate certain positions supporting the Company’s e-commerce platforms as well as
positions in other administrative functions. These charges include $0.8 million within the Famous Footwear segment,
$0.3 million within the Brand Portfolio segment and $0.4 million within the Other category. The Company also recognized
tax benefits of $6.6 million associated with the disposition. These tax benefits were driven in part by the utilization of
operating and capital loss carryforwards that previously were not anticipated to be utilized, and therefore, fully reserved
on the Company’s consolidated balance sheet.
The operating results of Shoes.com were included in the Famous Footwear segment in continuing operations through
December 12, 2014. The operations of Shoes.com were not significant to the Famous Footwear segment or the
Company’s financial results. In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures
of Disposals of Components of an Entity, which the Company adopted during the third quarter of 2014, the financial
position and operating results of Shoes.com have not been classified as a discontinued operation as the disposition
did not represent a strategic shift resulting in a major impact on the Company’s operations or financial results.
3. EARNINGS PER SHARE
The Company uses the two-class method to compute basic and diluted earnings (loss) per common share attributable to
Brown Shoe Company, Inc. shareholders. In periods of net loss, no eect is given to the Company’s participating securities
since they do not contractually participate in the losses of the Company. 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) 2014 2013 2012
NUMERATOR
Net earnings from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,943 $ 53,982 $ 35,171
Net (earnings) loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . (93) 177 287
Net earnings allocated to participating securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,068) (2,304) (1,757)
Net earnings from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,782 51,855 33,701
Net loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (16,086) (7,967)
Net loss allocated to participating securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 687 392
Net loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (15,399) (7,575)
Net earnings attributable to Brown Shoe Company, Inc.
after allocation of earnings to participating securities . . . . . . . . . . . . . . . . . . . . . . . $ 79,782 $ 36,456 $ 26,126
DENOMINATOR
Denominator for basic continuing and discontinued earnings per
common share attributable to Brown Shoe Company, Inc. shareholders. . . . . . . . . . . . . 42,071 41,356 40,659
Dilutive eect of share-based awards for continuing operations and discontinued operations . . 203 297 135
Denominator for diluted continuing and discontinued earnings
per common share attributable to Brown Shoe Company, Inc. shareholders . . . . . . . . . . 42,274 41,653 40,794
Basic earnings (loss) per common share:
From continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.90 $ 1.25 $ 0.83
From discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (0.37) (0.19)
Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders . . . . $ 1.90 $ 0.88 $ 0.64
Diluted earnings (loss) per common share:
From continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.89 $ 1.25 $ 0.83
From discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (0.37) (0.19)
Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders . . . $ 1.89 $ 0.88 $ 0.64
Options to purchase 64,497, 86,247 and 998,701 shares of common stock in 2014, 2013 and 2012, 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.
4. RESTRUCTURING AND OTHER INITIATIVES
Portfolio Realignment
The Company’s portfolio realignment eorts included the sale of ASG; the sale and closure of sourcing and supply chain
assets; closing or relocating numerous underperforming or poorly aligned retail stores; the termination of the Etienne
Aigner license agreement; the election not to renew the Vera Wang license in accordance with agreement terms, and other
infrastructure changes. These portfolio realignment eorts began in 2011 and were completed in 2013. Expenses for these
initiatives are reflected in both continuing operations and discontinued operations.