Pier 1 2008 Annual Report Download - page 45

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SFAS 123R requires disclosure of pro forma information for periods prior to adoption. The following
table details the effect on net loss and loss per share from continuing operations, illustrating the effect of
applying the fair value recognition provisions of SFAS 123R for fiscal 2006 (in thousands except per share
amounts):
Pro forma
2006
Loss from continuing operations, as reported .................................. $(27,471)
Stock-based employee compensation expense included in reported net loss, net of related
tax effects .......................................................... 417
Less total stock-based employee compensation expense determined under fair value-based
method, net of related tax effects ......................................... (25,519)
Loss from continuing operations . . ......................................... $(52,573)
Loss per share from continuing operations:
Basic — as reported .................................................. $ (.32)
Basic — pro forma ................................................... $ (.61)
Diluted — as reported ................................................. $ (.32)
Diluted — pro forma .................................................. $ (.61)
NOTE 2 — OFFICE BUILDING HELD FOR SALE
During February 2008, the Company began pursuing the sale of its corporate headquarters. The building,
accompanying land and certain fixtures met the criteria of SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets” (“SFAS 144”) to be classified as held for sale in all periods presented.
NOTE 3 — SUBSEQUENT EVENT (UNAUDITED)
Subsequent to fiscal 2008 year end, the Company entered into an agreement to sell its corporate
headquarters building and accompanying land for $104,000,000 to an unrelated party. As part of the
transaction, the Company expects to enter into a lease agreement to rent office space in the building. The lease
will have a primary term of seven years beginning on the closing date, with one three-year renewal option and
the right to terminate the lease at the end of the fifth lease year. The Company expects a gain on the sale of
the property, the amount and timing of recognition of which will be determined upon finalization of the
agreement. Closing of the transaction is expected to occur no later than June 30, 2008, if all conditions to
closing have occurred.
43
Pier 1 Imports, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)