Foot Locker 2007 Annual Report Download - page 70

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In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans- An Amendment of FASB Statements No. 87, 88, 106, and 132(R),” (“SFAS No. 158”).
This standard requires an employer to: recognize in its statement of financial position an asset for a plan’s overfunded
status or a liability for a plan’s underfunded status; measure a plan’s assets and its obligations that determine its
funded status as of the end of the employer’s fiscal year (with limited exceptions); and recognize changes in the
funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be
reported in accumulated comprehensive loss. The initial effect of the standard, due to unrecognized prior service cost
and net actuarial gains or losses, as well as subsequent changes in the funded status, is recognized as a component of
accumulated comprehensive income/loss within shareholders’ equity. Additional minimum pension liabilities (“AML”)
and related intangible assets are derecognized upon the adoption of SFAS No. 158. The Company adopted this standard
as of February 3, 2007.
The following tables set forth the plans’ changes in benefit obligations and plan assets, funded status and
amounts recognized in the Consolidated Balance Sheets, measured at February 2, 2008 and February 3, 2007:
Pension Benefits Postretirement Benefits
2007 2006 2007 2006
(in millions)
Change in benefit obligation
Benefit obligation at beginning of year.................. $662 $689 $ 13 $17
Service cost ...................................... 10 10 — —
Interest cost...................................... 36 36 — 1
Plan participants’ contributions ....................... — — 4 5
Actuarial gain .................................... (13) (12) (2) (3)
Foreign currency translation adjustments ................ 15 (2) — —
Plan amendment................................... — 1 — —
Benefits paid ..................................... (61) (60) (5) (7)
Benefit obligation at end of year ...................... $649 $662 $ 10 $13
Change in plan assets
Fair value of plan assets at beginning of year ............. $647 $579
Actual return on plan assets .......................... 11 60
Employer contribution .............................. —70
Foreign currency translation adjustments ................ 14 (2)
Benefits paid ..................................... (61) (60)
Fair value of plan assets at end of year .................. $611 $647
Funded status..................................... $ (38) $ (15) $(10) $(13)
Balance Sheet caption reported in:
Other assets ...................................... $ — $ 8 $ — $ —
Accrued and other liabilities ......................... (3) (2) (1) (2)
Other liabilities ................................... (35) (21) (9) (11)
$ (38) $ (15) $(10) $(13)
At February 2, 2008, the aggregate amount of accumulated benefit obligations which exceed plan assets totaled
$648 million representing both the qualified and non qualified pension plans. At February 3, 2007, the accumulated
benefit obligations which exceed plan assets totaled $23 million representing the Company’s non qualified pension
plans. The Company’s qualified pension plans were fully funded as of February 3, 2007.