- the tax benefit due to certain foreign tax credits which totaled $9.5 million;
- $9.4 million, pre-tax, in costs paid or accrued in connection with the stock option investigation and tax implications related to certain employee options;
- write-offs totaling $8.3 million, pre-tax, due primarily to: i.) the Company's decision not to proceed with the 42nd Street store location in New York City; and ii.) infrastructure investments that had been made in connection with Disneystore.com, as the Company is moving forward with the Walt Disney Company to form an e-commerce alliance in which Disneystore.com would maintain a presence within Disney website.
- In addition, preliminary fourth quarter net income includes a pre-tax impairment charge of approximately $9.4 million, related to the write-down of fixed assets at 28 recently remodeled Disney Stores.
• Excluding the four unusual items above, preliminary fourth quarter net income was $53.6 million, which is above previous guidance. The Company has excluded these items because it does not believe they are indicative of the core business and that it is a beneficial supplemental disclosure to investors in analyzing its past and future performance.
• Preliminary net income does not reflect any adjustments that may be required as a result of the Company's review of the appropriate accounting for its previous issuance of stock options and related discussions with the staff of the Securities and Exchange Commission. In addition, the tax costs are subject to adjustment pending clarification of the application of certain tax laws.
• Preliminary diluted shares outstanding in the fourth quarter is estimated at approximately 30 million shares.
• During the fourth quarter, the Company opened 17 Children's Place stores and closed two. In addition, the Company opened three Disney Stores and closed six.
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The Children's Place Retail Stores Inc
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