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$11 million. The effect of these exchange transactions is included in the pension tables below. There were
no such exchange transactions during 2006 or 2004.
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 158). SFAS 158 requires plan sponsors of defined benefit pension and other postretirement benefit
plans (collectively postretirement benefit plans) to: recognize the funded status of their postretirement benefit
plans in the statement of financial position, measure the fair value of plan assets and benefit obligations as
of the date of the fiscal year-end statement of financial position and provide additional disclosures. On
February 3, 2007, we adopted the recognition and disclosure provisions of SFAS 158. The effect of
adopting SFAS 158 on our financial condition at February 3, 2007 has been included in the accompanying
consolidated financial statements as described below. SFAS 158 did not have an effect on our consolidated
financial condition at January 28, 2006 or January 29, 2005. SFAS 158’s provisions regarding the change
in the measurement date of postretirement benefit plans will require us to change our measurement date
from October 31 to our fiscal year end date beginning with fiscal year 2008; however, we are currently
evaluating whether we will early adopt the measurement date provisions in fiscal 2007.
SFAS 158 required us to recognize the funded status, which is the difference between the fair value of
plan assets and the projected benefit obligations, of our postretirement benefit plans in the February 3,
2007 Consolidated Statement of Financial Position, with a corresponding adjustment to accumulated other
comprehensive loss, net of tax. The adjustment to accumulated other comprehensive loss at adoption
represents the net unrecognized actuarial losses and unrecognized prior service costs, both of which were
previously netted against the plans’ funded status in our Consolidated Statements of Financial Position
pursuant to the provisions of SFAS No. 87, ‘‘Employers’ Accounting for Pensions’’ (SFAS 87). These
amounts will be subsequently recognized as net periodic pension expense pursuant to our historical
accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent
periods and are not recognized as net periodic pension expense in the same periods will be recognized as a
component of other comprehensive income. Those amounts will be subsequently recognized as a
component of net periodic pension expense on the same basis as the amounts recognized in accumulated
other comprehensive loss at adoption of SFAS 158.
The effects of adopting the provisions of SFAS 158 on our Consolidated Statement of Financial Position
at February 3, 2007 are presented in the following table. The adoption of SFAS 158 had no effect on our
Consolidated Statement of Operations for the year ended February 3, 2007, or for any prior period. Had
we not been required to adopt SFAS 158 at February 3, 2007, we would have recognized an additional
minimum liability pursuant to the provisions of SFAS 87. The effect of recognizing the additional minimum
liability is included in the table below in the column labeled ‘‘Prior to Adopting SFAS 158.’’
Pension and Postretirement Balances Recorded
At February 3, 2007
Prior to Adopting Effect of Adopting As Reported at
(millions) SFAS 158 SFAS 158 February 3, 2007
Other non-current assets $1,569 $(357) $1,212
Accrued and other current liabilities $2,742 $ 16 $2,758
Deferred income taxes $ 729 $(152) $ 577
Other non-current liabilities $1,334 $ 13 $1,347
Accumulated other comprehensive loss $ (9) $(234) $ (243)
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PART II