Foot Locker 2008 Annual Report Download - page 73

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24. Retirement Plans and Other Benefits
Pension and Other Postretirement Plans
The Company has defined benefit pension plans covering most of its North American employees, which are
funded in accordance with the provisions of the laws where the plans are in effect. In addition to providing pension
benefits, the Company sponsors postretirement medical and life insurance plans, which are available to most of its
retired U.S. employees. These plans are contributory and are not funded. The measurement date of the assets and
liabilities is the last day of the fiscal year.
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 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 January 31, 2009 and February 2, 2008:
Pension Benefits
Postretirement
Benefits
2008 2007 2008 2007
(in millions)
Change in benefit obligation
Benefit obligation at beginning of year.................... $ 649 $662 $ 10 $ 13
Service cost ........................................ 10 10 — —
Interest cost........................................ 36 36 1 —
Plan participants’ contributions ......................... — — 4 4
Actuarial gain ...................................... (15) (13) (2) (2)
Foreign currency translation adjustments .................. (18) 15 — —
Plan amendment..................................... — — 3 —
Benefits paid ....................................... (58) (61) (4) (5)
Benefit obligation at end of year ........................ $ 604 $649 $ 12 $ 10
Change in plan assets
Fair value of plan assets at beginning of year ............... $ 611 $647
Actual return on plan assets ............................ (127) 9
Employer contribution ................................ 8 2
Foreign currency translation adjustments .................. (16) 14
Benefits paid ....................................... (58) (61)
Fair value of plan assets at end of year .................... $ 418 $611
Funded status ....................................... $(186) $(38) $(12) $(10)
Balance Sheet caption reported in:
Accrued and other liabilities............................ (3) (3) (1) (1)
Other liabilities ..................................... (183) (35) (11) (9)
$(186) $ (38) $(12) $(10)
At January 31, 2009 and February 2, 2008, the aggregate amount of accumulated benefit obligations, which
exceed plan assets, totaled $603 million and $648 million, respectively, representing both the qualified and non
qualified pension plans.