Foot Locker 2008 Annual Report Download - page 65

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18. Other Liabilities
2008 2007
(in millions)
Pension benefits ............................................................ $183 $ 35
Postretirement benefits ...................................................... 11 9
Straight-line rent liability ..................................................... 98 99
Income taxes .............................................................. 30 29
Deferred taxes ............................................................. 12 10
Workers’ compensation and general liability reserves ................................ 13 13
Reserve for discontinued operations ............................................. 10 9
Repositioning and restructuring reserves ......................................... 1 2
Fair value of derivatives ...................................................... 24 32
Other .................................................................... 11 12
$393 $250
19. Discontinued Operations
In 1997, the Company exited its Domestic General Merchandise segment. In 1998, the Company exited both its
International General Merchandise and Specialty Footwear segments. In 2001, the Company discontinued its Northern
Group segment.
During 2008, the Company adjusted its Northern Group reserve by $1 million and recorded a charge of $2 million
related to the Domestic General Merchandise reserve representing revisions to the lease liability. During 2007, the
Company adjusted the International General Merchandise reserve by $3 million, reflecting favorable lease terminations
and to revise estimates on its lease liability. During 2006, the Company adjusted its Northern Group and International
General Merchandise reserve by $4 million, primarily reflecting favorable lease terminations.
The major components of the pre-tax losses (gains) on disposal and disposition activity related to the reserves
are presented below. The remaining reserve balances as of January 31, 2009 primarily represent lease obligations;
$2 million is expected to be utilized within twelve months and the remaining $10 million thereafter.
2005 2006 2007 2008
Balance
Charge/
(Income)
Net
Usage(1) Balance
Charge/
(Income)
Net
Usage(1) Balance
Charge/
(Income)
Net
Usage(1) Balance
(in millions)
Northern Group ............................. $ 5 $(2) $(1) $ 2 $— $10 $12 $(1) $(11) $—
International General Merchandise .............. 8 (2) — 6 (3) 1 4 — (1) 3
Specialty Footwear ........................... 1 — — 1 — (1) — — — —
Domestic General Merchandise .................. 8 — (2) 6 — 1 7 2 — 9
Total ...................................... $22 $(4) $(3) $15 $(3) $11 $23 $ 1 $(12) $12
(1) Net usage includes the effect of foreign exchange translation adjustments.
20. Repositioning and Restructuring Reserves
The Company recorded charges in 1993 and in 1991 to reflect the anticipated costs to sell or close under-
performing specialty and general merchandise stores in the United States and Canada. During 2007, the Company
adjusted the reserve by $2 million primarily due to favorable lease terminations. The Company recorded restructuring
charges in 1999 for programs to sell or liquidate eight non-core businesses. The restructuring plan also included an
accelerated store-closing program in North America and Asia, corporate headcount reduction, and a distribution center
shutdown. For both reserves the balance was $1 million as of January 31, 2009 and $2 million as of February 2, 2008,
classified as a non current liability.