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This excerpt taken from the FL 10-Q filed Jun 1, 2006. 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 medical and life insurance plans are contributory and are not funded. The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income:
The Company disclosed in its financial statements for the year ended January 28, 2006 that it expected to contribute $68 million to its pension plans during 2006, to the extent that the contributions were tax deductible. As of April 29, 2006 contributions of $68 million have been made. 10. Recent Pronouncements In November 2004, the FASB issued SFAS No. 151, “Inventory Costs — an amendment of ARB 43, Chapter 4.” This Statement amends the guidance to clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversions be based on the normal capacity of the production facilities. The Statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company adopted SFAS No. 151 as of January 29, 2006, resulting in increased freight costs of approximately $2 million, which is included in cost of sales. In March 2006, the EITF reached a consensus on EITF Issue No. 06-3,”How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That is, Gross versus Net Presentation)” that the entities may adopt a policy of presenting taxes in the income statement on either a gross or net basis. Gross or net presentation may be elected for each different type of tax, but similar taxes should be presented consistently. Taxes within the scope of this EITF would include taxes that are imposed on a revenue transaction between a seller and a customer, for example, sales taxes, use taxes, value-added taxes, and some types of excise taxes. EITF 06-3 will not impact the method for recording these sales taxes in the Company’s consolidated financial statements as the Company’s sales excludes all taxes. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This excerpt taken from the FL 10-Q filed Jun 2, 2005. 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 medical and life insurance plans are contributory and are not funded. The following are the components of net periodic pension benefit cost and net period postretirement benefit income for the thirteen weeks ended April 30, 2005 and May 1, 2004.
-9- The Company disclosed in its financial statements for the year ended January 29, 2005, that it expected to contribute $22 million to its pension plans during 2005, to the extent that the contributions were tax deductible. As of April 30, 2005, contributions of $19 million have been made. The Company has reviewed its retiree health care benefit plans in light of the final regulations for implementing the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “Act”) provided by the Centers for Medicare and Medicaid Services. The Company now believes that it may be able to qualify for the subsidy. However, net periodic postretirement benefit income for the period ended April 30, 2005 does not reflect any amount associated with the Act, as the Company does not anticipate that the subsidy, if any, will be significant. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | EXCERPTS ON THIS PAGE:
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