2. Explain how management’s discussion and analysis of its
operations and liquidity may be helpful to investors.

3. In a recent press release, Foot Locker Inc. reported that
its fiscal first-quarter net income fell 46% due to losses related to
discontinued operations, but earnings from continuing operations jumped 19%
amid a modest increase in sales. The specialty athletic retailer said net was $20
million for the quarter ended May 4, compared with net of $37 million a year
earlier. The latest results included a loss of $18 million from discontinued
operations. Last year, the company had earnings of $5 million, or four cents a
share, from discontinued operations. Foot Locker said earnings from continuing
operations were $38 million, compared with $32 million a year earlier. Discuss
how Foot Locker’s press release relates to its earnings quality.

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