Foot Locker 2008 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2008 Foot Locker annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 99

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99

64
29. Quarterly Results (Unaudited)
1st Q2
nd Q3
rd Q4
th Q(a) Year(a)
(in millions, except per share amounts)
Sales
2008 ..................................... $1,309 1,302 1,309 1,317 5,237
2007...................................... 1,316 1,283 1,356 1,482 5,437
Gross margin(b)
2008 ..................................... $ 366 361 355 378 1,460
2007...................................... 360 302 381 377 1,420
Operating profit (loss)(c)
2008 ..................................... $ 16 28 33 (180)
(d) (103)
2007...................................... 27 (28) (58) 9 (d) (50)
Income (loss) from continuing operations
2008 ..................................... $ 3 18 24 (124) (79)
2007...................................... 17 (18) (34) 78
(e) 43
Net income (loss)
2008 ..................................... $ 3 18 24 (125) (80)
2007...................................... 17 (18) (33) 79 45
Basic earnings (loss) per share:
2008
Income (loss) from continuing operations ....... $ 0.02 0.11 0.16 (0.81) (0.52)
Income from discontinued operations .......... — — — — —
Net income (loss) ......................... 0.02 0.11 0.16 (0.81) (0.52)
2007
Income (loss) from continuing operations ....... $ 0.11 (0.12) (0.22) 0.51 0.29
Income from discontinued operations .......... — — — 0.01 0.01
Net income (loss) ......................... 0.11 (0.12) (0.22) 0.52 0.30
Diluted earnings (loss) per share:
2008
Income (loss) from continuing operations ....... $ 0.02 0.11 0.16 (0.81) (0.52)
Income from discontinued operations .......... — — — — —
Net income (loss) ......................... 0.02 0.11 0.16 (0.81) (0.52)
2007
Income (loss) from continuing operations ....... $ 0.11 (0.12) (0.22) 0.50 0.28
Income from discontinued operations .......... — — — 0.01 0.01
Net income (loss) ......................... 0.11 (0.12) (0.22) 0.51 0.29
(a) The 2007 results 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.” See note 2.
(b) Gross margin represents sales less cost of sales.
(c) Operating profit (loss) represents income (loss) from continuing operations before income taxes, interest expense, net and non-operating income.
(d) During the fourth quarter of 2008, the Company recorded $236 million in impairment charges representing $67 million of store long-
lived assets and $169 million of goodwill and other intangibles. During the fourth quarter of 2007, the Company recognized an additional
impairment charge of $22 million reflecting the continued downturn of the U.S. formats. The projected cash flows used in the third quarter
impairment analysis were significantly reduced reflecting the poor performance during the fourth quarter and the expected continued
difficult retail environment.
(e) Net income includes an income tax benefit of $62 million representing a reduction of a Canadian income tax valuation allowance primarily
related to income tax deductions that the Company now expects will be utilized.