Foot Locker 2008 Annual Report Download - page 55

39
In December 2008, the FASB issued FASB Staff Position (“FSP”) FAS No. 132(R)-1, “Employers’ Disclosures about
Postretirement Benefit Plan Assets” (“FSP FAS No. 132(R)-1”), which amends SFAS No. 132(R) “Employers’ Disclosures
about Pensions and Other Postretirement Benefits – an Amendment of FASB Statements No. 87, 88, and 106” (“SFAS No.
132(R)”). FSP FAS No. 132(R)-1 requires more detailed disclosures about the assets of a defined benefit pension or other
postretirement plan and is effective for fiscal years ending after December 15, 2009. The Company is in the process
of evaluating FSP FAS No. 132(R)-1 and does not expect it will have a significant impact on its Consolidated Financial
Statements.
2. Immaterial Revision of Previously Issued Financial Statements
The 2007 results as presented in this Annual Report have been corrected to reflect an immaterial revision to its
fourth quarter and full year 2007 results in accordance with Staff Accounting Bulletin 108, “Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” The income tax
benefit of $99 million related to continuing operations, as reported for the full year of 2007 within the Form 10-K,
was overstated by $6 million. This overstatement comprises primarily five items. First, the Company understated its
income taxes payable by $9 million due to incorrectly accounting for foreign dividend withholding taxes. Second,
the Company noted that certain foreign currency fluctuations related to the tax assets and liabilities, totaling $5
million, should have been reflected as part of the foreign currency translation adjustment within accumulated other
comprehensive loss. The Company had incorrectly reflected these foreign exchange movements within the income
tax provision, thereby increasing the income tax provision erroneously. Third, the Company overstated the value
of a portion of its Canadian deferred tax assets by $3 million as a result of using incorrect tax rates. Fourth, the
Company understated a deferred tax liability of $2 million related to goodwill. Finally, various state and international
depreciation corrections totaling $3 million were overstated in the income tax provision.
The table below reflects these adjustments on each financial statement line item and per-share amounts
affected:
Year ended February 2, 2008
(in millions)
As
Originally
Reported Revision As Adjusted
Other current assets ........................ $ 290 $ (1) $ 289
Deferred taxes ............................ 243 (4) 239
Total assets .............................. 3,248 (5) 3,243
Accrued expenses and other current liabilities .... 268 10 278
Other liabilities ........................... 255 (5) 250
Retained earnings .......................... 1,760 (6) 1,754
Accumulated other comprehensive loss .......... (66) (4) (70)
Total shareholders’ equity .................... 2,271 (10) 2,261
Total liabilities and shareholders’ equity ......... $ 3,248 $ (5) $ 3,243
Year ended February 2, 2008
As
Originally
(in millions) Reported Revision As Adjusted
Loss from continuing operations before
income taxes ........................... $ (50) $ — $ (50)
Income tax benefit ......................... (99) 6 (93)
Income from continuing operations ............ $ 49 $ (6) $ 43
Basic earnings per share:
Income from continuing operations ......... $ 0.32 $(0.03) $ 0.29
Diluted earnings per share:
Income from continuing operations ......... $ 0.32 $(0.04) $ 0.28