Foot Locker 2002 Annual Report Download - page 53

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28 . Subsequent Event ( Unaudited)
On May 6, 2003, the amendments to the No rthern No te were exe-
cuted and a c ash payment o f CAD$5.2 millio n ( approximately
US$3.5 millio n) was received representing principal and interest
thro ugh the date o f the amendment. After taking into acco unt
this payment, the remaining principal due under the No te is
CAD$17.5 millio n ( appro ximately US$12 millio n) . Under the terms
of the renego tiated No te, a principal payment o f CAD$1 millio n is
due January 15, 2004. An ac celerated princ ipal payment o f
CAD$1 millio n may be due if certain events o ccur. The remaining
amo unt of the No te is required to be repaid upo n the o ccurrence
of “ payment events,” as defined in the purchase agreement, but
no later than September 28, 2008. Interest is payable semiannu-
ally and will accrue beg inning o n May 1, 2003 at a rate o f 7. 0
percent per annum.
27 . Quart erly Results ( Unaudited)
( in millio ns, exc ept per share amo unts) 1st Q 2nd Q 3 rd Q 4th Q Ye ar
Sales
2002 $1,090 1,085 1,120 1,214 4,509
2001 $1,072 1,048 1,104 1,155 4,379
Gross margin( a)
2002 $ 320 312 343 369( c ) 1,344
2001 $ 326 306 327 349( d) 1,308
Operating profi t ( b)
2002 $ 64 55 72( e ) 78( f ) 269
2001 $ 57 9 59 73( g ) 198
I ncome f rom continuing operations
2002 $ 38( h) 33 43( h ) 48 162(h )
2001 $ 32 4 33( i) 42 111( i )
Net income ( loss)
2002 $ 20( h) 31 45( h ) 57 153(h )
2001 $ 37 (14) 33( i ) 36 92( i)
Basic earnings per share:
2002
Inco me from co ntinuing o perations $ 0.27( h ) 0.23 0.30( h) 0.35 1.15( h)
Inco me ( lo ss) from disc ontinued o peratio ns $ ( 0.13) (0.01) 0.02 0.06 ( 0.06)
Net inc ome $ 0.14( h) 0.22 0.32( h) 0.41 1.09( h)
2001
Inco me from co ntinuing o perations $ 0.23 0.03 0.24( i ) 0.29 0. 79( i)
Inco me ( lo ss) from disc ontinued o peratio ns $ 0.04 ( 0. 13) — (0.04) (0.13)
Net inc ome ( lo ss) $ 0.27 ( 0.10) 0.24( i ) 0.25 0. 66( i)
Dilut ed earnings per share:
2002
Inco me from co ntinuing o perations $ 0.26( h ) 0.22 0.29( h) 0.33 1.10( h)
Inco me ( lo ss) from disc ontinued o peratio ns $ ( 0.12) (0.01) 0.02 0.06 ( 0.05)
Net inc ome $ 0.14( h) 0.21 0.31( h) 0.39 1.05( h)
2001
Inco me from co ntinuing o perations $ 0.23 0.03 0.23( i ) 0.28 0. 77( i)
Inco me ( lo ss) from disc ontinued o peratio ns $ 0.04 ( 0. 13) — (0.04) (0.13)
Net inc ome ( lo ss) $ 0.27 ( 0.10) 0.23( i ) 0.24 0. 64( i)
( a) Gross margin represe nts sale s less co st o f sale s.
( b) Operating profit represe nts inco me from co ntinuing o peratio ns befo re inco me taxes, interest expense, net and no n-o perating inc o me.
( c) Includes an increase in ve ndo r allo wances o f $1 0 millio n as co mpared with the prio r ye ar fo urth quarter.
( d) Includes inco me from ve ndo r settleme nts related to prio r ye ars of $7 millio n.
( e) Inc ludes asset impairment charg e o f $ 1 millio n.
( f) Includes asset impairment charge o f $6 millio n.
( g) Include s a $2 millio n asset impairment charge.
( h) As mo re fully de scribed in no te 2, in applying EITF 90-16 to the first quarter o f 200 2, the $18 millio n No rthern charge reco rded within disco ntinued o peratio ns wo uld have been classified as co ntinuing
o peratio ns. Similarly, the $1 millio n bene fit reco rded in the third quarter of 2002 would have bee n classified as co ntinuing o peratio ns. Inc o me from co ntinuing o pe ratio ns for the first and third
quarters wo uld have be en $2 0 millio n and $44 millio n, respe ctively. Diluted e arnings per share would have bee n $0.14 and $0. 30 fo r the first and third quarters, respe ctively. Repo rte d net inco me fo r
the first and third quarters wo uld have remained unchanged. After achieving dive stiture ac co unting fo r No rthern in the fourth quarter o f 2002, these amo unts would have bee n rec lassified to reflec t
the results as sho wn above and as o riginally reported by the Co mpany. As such, the Co mpany has not ame nded these prio r filings.
( i) As mo re fully desc ribe d in no te 2, applying EITF 9 0- 16 in the third quarter of fiscal 2 001, inc o me from co ntinuing o peratio ns wo uld have been $13 millio n o r $0. 10 pe r basic and dilute d earning s per
share. This change wo uld have represe nted the remaining ac crue d lo ss o n dispo sal at the date of the Northe rn Canada sto ck transfer, which would have bee n repo rte d within c o ntinuing o peratio ns. As
such, inc o me from co ntinuing o peratio ns of fiscal year 2001 wo uld have be en $9 1 millio n o r $0. 65 and $0. 64 per basic and diluted earnings per share, respectively. After achieving dive stiture
ac co unting fo r No rthern in the fo urth quarter of 2002 , these amo unts wo uld have bee n rec lassified to reflec t the results as sho wn ab o ve and as o rig inally repo rte d by the Company. As such, the
Co mpany has no t amended the se prio r filings.