Foot Locker 2011 Annual Report Download - page 36

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Reconciliation of Non-GAAP Measures
In the following tables, the Company has presented certain financial measures and ratios identified as
non-GAAP. The Company believes this non-GAAP information is a useful measure to investors because it
allows for a more direct comparison of the Company’s performance for 2011 as compared with 2010 and
is useful in assessing the Company’s progress in achieving its long-term financial objectives. The
following represents a reconciliation of the non-GAAP measures discussed throughout the Overview of
Consolidated Results:
2011 2010 2009
(in millions, except per share amounts)
Pre-tax income:
Income from continuing operations before income taxes $ 435 $ 257 $ 73
Pre-tax amounts excluded from GAAP:
Impairment of goodwill and other intangible assets 5 10 —
Impairment of assets — — 36
Reorganization costs — — 5
Impairment and other charges 5 10 41
Inventory reserve − recorded within cost of sales — — 14
Money market realized gain − recorded within other income — (2) —
Total pre-tax amounts excluded 5 8 55
Income from continuing operations before income taxes
(non-GAAP) $ 440 $ 265 $ 128
Calculation of Earnings Before Interest and Taxes (EBIT):
Income from continuing operations before income taxes $ 435 $ 257 $ 73
Interest expense, net 6 9 10
EBIT $ 441 $ 266 $ 83
Income from continuing operations before income taxes
(non-GAAP) $ 440 $ 265 $ 128
Interest expense, net 6 9 10
EBIT (non-GAAP) $ 446 $ 274 $ 138
EBIT margin% 7.8% 5.3% 1.7%
EBIT margin% (non-GAAP) 7.9% 5.4% 2.8%
After-tax income:
Income from continuing operations $ 278 $ 169 $ 47
After-tax amounts excluded 3 4 34
Canadian tax rate changes excluded — — 4
Income from continuing operations after-tax (non-GAAP) $ 281 $ 173 $ 85
Net income margin% 4.9% 3.3% 1.0%
Net income margin% (non-GAAP) 5.0% 3.4% 1.8%
Diluted earnings per share:
Income from continuing operations $1.80 $ 1.07 $0.30
Impairment and other charges 0.02 0.04 0.16
Inventory reserve — — 0.06
Money-market realized gain — (0.01) —
Canadian tax rate changes — — 0.02
Income from continuing operations (non-GAAP) $1.82 $ 1.10 $0.54
16