##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 WASHINGTON, D.C.
    20549
  Form 10-K
  (Mark one)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to  Commission file number
    001-00091
  Furniture Brands International,
    Inc.
 (Exact Name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

43-0337683(I.R.S. Employer
    Identification No.)1 North Brentwood Blvd., St. Louis, Missouri(Address of principal
    executive offices)

63105(Zip Code)   Registrants telephone number, including area code
    (314) 863-1100
  SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock  $1.00 Stated Value

New York Stock Exchangewith Preferred Stock Purchase Rights   SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT:
  None
  (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer þ

Non-accelerated filero(Do not check if a smaller reporting company)

Smaller reporting company o   Rule 12b-2 o þ
      48,293,607 shares
    as of February 28, 2010
  DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





FURNITURE BRANDS
    INTERNATIONAL, INC.
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


8Item 1B.


Unresolved Staff Comments


13Item 2.


Properties


14Item 3.


Legal Proceedings


15Item 4.


ReservedPART IIItem 5.


Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


16Item 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


31Item 8.


Financial Statements and Supplementary Data


32Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


63Item 9A.


Controls and Procedures


63Item 9B.


Other Information


64PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


64Item 11.


Executive Compensation


64Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholders Matters


65Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


65Item 14.


Principal Accountant Fees and Services


65PART IVItem 15.


Exhibits and Financial Statement Schedules


66EX-10.24EX-21 1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2     2




---



##### Table of Contents



PART I  Item 1.
    Business  Overview
      Brands and
    Products
    
    Broyhill has collections of mid-priced furniture, including both
    wood furniture and upholstered products, in a wide range of
    styles and product categories including bedroom, dining room,
    living room, occasional, youth, home office, and home
    entertainment.
    Lane focuses primarily on mid-priced upholstered furniture,
    including motion and stationary furniture with an emphasis on
    home entertainment and family rooms.
    Thomasville has both wood furniture and upholstered products in
    the mid- to upper-price ranges and also manufactures and markets
    promotional-priced case goods and
    ready-to-assemble
    furniture.
    Drexel Heritage markets both casegoods and upholstered furniture
    under the brand names Heritage, Drexel, and dh, in categories
    ranging from mid- to premium-priced.
    Henredon specializes in both wood furniture and upholstered
    products in the premium-price category.
    Hickory Chair manufactures a premium-priced brand of wood and
    upholstered furniture, offering traditional and modern styles.
    Pearson offers contemporary and traditional styles of finely
    tailored upholstered furniture in the premium-price category.
    Laneventure markets a premium-priced outdoor line of wicker,
    rattan, bamboo, exposed aluminum, and teak furniture.
    Maitland-Smith designs and manufactures premium hand crafted,
    antique-inspired furniture, accessories, and lighting, utilizing
    a wide range of unique materials. Maitland-Smith markets under
    both the Maitland-Smith and LaBarge brand names.  Form 10-K.
 3




---



##### Table of Contents



Distribution
                Manufacturing and
    Sourcing
  Form 10-K.
   4




---



##### Table of Contents



Raw Materials and
    Suppliers
      Marketing and
    Advertising
    Management and
    Employees
    Environmental
    matters
   5




---



##### Table of Contents



Competition
  La-Z-Boy
  Backlog
    Trademarks and
    Trade Names
      Working
    Capital
  Form 10-K
  Internet
    Access
  Forms 10-K, 10-Q, 8-K, Form 10-K.
 6




---



##### Table of Contents



Executive
    Officers
    Name

Age

Position HeldRalph P. Scozzafava


51


Chairman of the Board and Chief Executive OfficerSteven G. Rolls


55


Senior Vice President and Chief Financial OfficerMary E. Sweetman


46


Senior Vice President, Human ResourcesJon D. Botsford


55


Senior Vice President, General Counsel and Corporate SecretaryRaymond J. Johnson


54


Senior Vice President, Global Supply ChainRichard R. Isaak


42


Controller and Chief Accounting OfficerJeffrey L. Cook


54


President-Broyhill Furniture Industries, Inc.Gregory P. Roy


44


President-Lane Furniture Industries, Inc.Edward D. Teplitz


48


President-Thomasville Furniture Industries, Inc.Daniel R. Bradley


53


President-Furniture Brands Designer GroupDaniel J. Stone


49


Vice President, Strategy and Business Development   Ralph P. Scozzafava
  Steven G. Rolls
  Mary E. Sweetman
  Jon D. Botsford
  Raymond J. Johnson
 7




---



##### Table of Contents



Richard R. Isaak
  Jeffrey L. Cook
  Gregory P. Roy
  Edward D. Teplitz
  Daniel R. Bradley
  Daniel J. Stone
    Item 1A.
    Risk
    Factors  The risks and uncertainties described below are those that we
    currently believe may materially affect our company. Additional
    risks and uncertainties that we are unaware of or that we
    currently deem immaterial also may become important factors that
    affect our company. You should carefully consider the risks
    described below in addition to all other information provided to
    you in this document and our subsequent filings with the
    Securities and Exchange Commission. Any of the following risks
    could materially and adversely affect our business, results of
    operations, and financial condition.
  The continued
    economic downturn could result in a decrease in our future
    sales, earnings, and liquidity.
   8




---



##### Table of Contents



Depressed
    market returns could have a negative impact on the return on
    plan assets for our qualified pension plan, which may require
    significant funding.
    Loss of market
    share and other financial or operational difficulties due to
    competition would likely result in a decrease in our sales and
    earnings.
    An inability
    to forecast demand or respond to changes in consumer tastes and
    fashion trends in a timely manner could result in a decrease in
    our future sales and earnings.
    A failure to
    achieve our projected mix of product sales could result in a
    decrease in our future earnings.
   9




---



##### Table of Contents



Business
    failures of large dealers, a group of customers or our own
    retail stores could result in a decrease in our future sales and
    earnings.
    Inventory
    write-downs or write-offs could result in a decrease in our
    earnings.
    Sales
    distribution realignments can result in a decrease in our
    near-term sales and earnings.
    Manufacturing
    realignments and cost savings programs could result in a
    decrease in our near-term earnings and liquidity.
    Reliance on
    offshore sourcing of our products subjects us to changes in
    local government regulations and currency fluctuations which
    could result in a decrease in our earnings.
   10




---



##### Table of Contents



Our operations
    depend on production facilities located outside the United
    States which are subject to increased risks of disrupted
    production which could cause delays in shipments, loss of
    customers, and decreases in sales and earnings.
    Fluctuations
    in the price, availability, and quality of raw materials could
    cause delays in production and could increase the costs of
    materials which could result in a decrease in our sales and
    earnings.
    We are subject
    to litigation, environmental regulations, and governmental
    matters that could adversely impact our sales, earnings, and
    liquidity.
    We may not
    realize the anticipated benefits of mergers, acquisitions, or
    dispositions.
   11




---



##### Table of Contents



Loss of key
    personnel or the inability to hire qualified personnel could
    adversely affect our business.
    Impairment of
    our trade name intangible assets would result in a decrease in
    our earnings and net worth.
    Provisions in
    our certificate of incorporation and our shareholders
    rights plan could discourage a takeover and could result in a
    decrease in a potential acquirers valuation of our common
    stock.
    A change in
    control could limit the use of our net operating loss carry
    forwards and decrease a potential acquirers valuation of
    our businesses, both of which could decrease our liquidity and
    earnings.
    If we and our
    dealers are not able to open new stores or effectively manage
    the growth of these stores, our ability to grow sales and
    profitability could be adversely affected.
   12




---



##### Table of Contents



We may not be
    able to comply with our debt agreement or secure additional
    financing on favorable terms to meet our future capital needs,
    which could significantly adversely impact our liquidity and our
    business.
  Form 10-K.
    Item 1B.
    Unresolved
    Staff Comments   13




---



##### Table of Contents



Item 2.
    Properties    LeaseFloor Space


Owned


ExpirationLocation

Type of Facility

(Sq. ft.)


or Leased


DateSt. Louis, MO

Headquarters


53,467



Leased



2019Saltillo, MS

Upholstery plant/distribution center


830,200



OwnedTupelo, MS

Upholstery plant/distribution center


715,951



OwnedConover, NC

Upholstery plant/distribution center


347,500



OwnedHigh Point, NC

Upholstery plant/distribution center


178,500



OwnedConover, NC

Upholstery plant


192,015



OwnedConover, NC

Upholstery plant


123,200



OwnedMt. Airy, NC

Upholstery plant


102,500



OwnedLenoir, NC

Upholstery plant


395,000



OwnedLongview, NC

Upholstery plant


334,000



Leased



2015Hickory, NC

Upholstery plant/distribution center


209,800



Leased



2010Appomattox, VA

Case goods plant/distribution center


829,800



OwnedLenoir, NC

Case goods plant/distribution center


828,000



OwnedThomasville, NC

Case goods plant


325,000



OwnedHickory, NC

Case goods plant/upholstery plant/distribution center


519,011



OwnedHigh Point, NC

Component plant


187,162



OwnedRutherfordton, NC

Distribution center


1,009,253



OwnedThomasville, NC

Distribution center


731,000



OwnedMorganton, NC

Distribution center


513,800



OwnedRialto, CA

Distribution center


703,176



Leased



2012Lenoir, NC

Distribution center


502,420



Leased



2013Wren, MS

Distribution center


494,813



Leased



2012Lenoir, NC

Distribution center


205,964



Leased



2021Verona, MS

Distribution center/offices


423,392



OwnedThomasville, NC

Offices/showroom


256,000



OwnedHigh Point, NC

Offices/showroom


100,000



OwnedLenoir, NC

Offices


136,000



OwnedCebu, Philippines

Case goods plant


480,338



Leased



2038Tambak Aji, Indonesia

Case goods plant/distribution center


1,485,419



OwnedSemarang, Indonesia

Case goods plant/distribution center


330,000



OwnedDongguan, China

Offices


159,000



Leased



2011    14




---



##### Table of Contents



Floor SpaceLocation

Property Description

(sq. ft.)Morganton, NC

Manufacturing Facility


874,506Morganton, NC

Manufacturing Facility


150,000Ponotoc, MS

Manufacturing Facility


369,899Lenoir, NC

Manufacturing Facility


268,172Conover, NC

Manufacturing Facility


159,000Lenoir, NC

Truck Maintenance Facility


96,000Allentown, PA

Warehouse


105,000Lenoir, NC

Sample Shop and Research Facility


56,250     Item 3.
    Legal
    Proceedings     15




---



##### Table of Contents



PART II  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity
    Securities  1)
    Market
    Information  Form 10-K
  Holders
    Dividends
    Form 10-K.
  Form 10-K.
 16




---



##### Table of Contents



Performance
    Graph
    COMPARISON OF 5
    YEAR CUMULATIVE TOTAL RETURN*
    Among Furniture Brands International, Inc., The S&P 500
    Index
    And The Dow Jones US Furnishings Index
  
 * $100 invested on 12/31/04 in
    stock or index, including reinvestment of dividends.
    Fiscal year ending December 31.
  Copyright©

    2010 S&P, a division of The McGraw-Hill Companies Inc. All
    rights reserved.
    Copyright©

    2010 Dow Jones & Co. All rights reserved.
  2)
    Repurchase of
    Equity Securities   17




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  FIVE-YEAR
    CONSOLIDATED FINANCIAL REVIEW
  Year Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands except per share data)Summary of operations(1)(2):Net sales

$
1,224,370


$
1,743,176


$
2,082,056


$
2,361,680


$
2,342,526Gross profit


230,000



314,535



416,095



507,875



523,088Interest expense


5,342



12,510



37,388



17,665



11,877Earnings (loss) from continuing operations before income tax
    expense (benefit)


(176,479
)


(418,958
)


(80,478
)


72,699



86,804Income tax expense (benefit)


(67,793
)


(3,157
)


(29,261
)


22,784



28,781Net earnings (loss) from continuing operations


(108,686
)


(415,801
)


(51,217
)


49,915



58,023Net earnings from discontinued operations






29,920



5,568



5,140



3,413Net earnings (loss)

$
(108,686
)

$
(385,881
)

$
(45,649
)

$
55,055


$
61,436Per share of common stock:Net earnings (loss)  diluted:Continuing operations

$
(2.25
)

$
(8.53
)

$
(1.06
)

$
1.02


$
1.11Discontinued operations






0.61



0.12


$
0.11


$
0.07Total

$
(2.25
)

$
(7.92
)

$
(0.94
)

$
1.13


$
1.18Dividends

$



$
0.12


$
0.64


$
0.64


$
0.60Weighted average common shares  diluted (in thousands)


48,302



48,739



48,446



48,753



52,104Other information(2):Working capital

$
326,952


$
458,376


$
712,455


$
752,618


$
718,183Property, plant, and equipment, net


134,352



150,864



178,564



221,398



250,817Capital expenditures


9,777



18,977



14,374



24,713



28,541Total assets


758,105



999,518



1,463,078



1,558,203



1,582,224Long-term debt


78,000



160,000



280,000



300,800



301,600Shareholders equity

$
262,791


$
366,494


$
844,766


$
910,715


$
903,952     (1)
    
    The companys fiscal year ends on December 31. The
    subsidiaries included in the consolidated financial statements
    report their results of operations as of the Saturday closest to
    December 31. Accordingly, the results of operations of our
    subsidiaries periodically include a 53-week fiscal year. Fiscal
    year 2008 was a 53-week fiscal year for our subsidiaries.(2)
    
    Results of operations for all periods presented have been
    restated to reflect the classification of Hickory Business
    Furniture (HBF) as a discontinued operation. HBF was
    sold in the first quarter of 2008. 18




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS
  Forward-Looking
    Statements
  Form 10-K.
  Overview
      Form 10-K.
  Business Trends
    and Strategy
       19




---



##### Table of Contents




    We incurred costs of $11.3 million in 2009, reduced from
    $21.4 million in 2008, related to downtime in our factories.
    We incurred expense of $16.0 million in 2009, reduced from
    $39.9 million in 2008, which related primarily to occupancy
    costs, lease termination costs, and lease liabilities of retail
    stores that we ultimately closed.
    We incurred charges of $3.6 million in 2009, reduced from
    $35.2 million in 2008, related to accounts receivable.
    We incurred charges of $33.0 million in 2009 and
    $39.8 million in 2008 to reduce the carrying value of
    inventory to market value, which was primarily driven by our
    efforts to accelerate the sale of slow-moving inventory.
    We incurred charges of $9.1 million in 2009 and
    $13.1 million in 2008 related to severance actions, which
    in 2009 related to reductions of approximately
    900 employees. These reductions related to direct labor
    employees and indirect support employees in our manufacturing
    facilities and employees in our administrative offices.
    We incurred costs and charges of $3.2 million in 2009,
    reduced from $16.6 million in 2008, associated with
    facility closures and related impairment charges on idle
    facilities.  Form 10-K.
      
    Increasing our online presence to help drive more consumer
    interest in our products and create more demand for our retail
    partners.
    Offering products that are differentiated from our competition
    through pre-launch testing that helps predict end-market
    acceptance.
    Conducting consumer segmentation analysis to assist retailers in
    allocating marketing resources.
    Growing a global supply chain that minimizes dealer inventory
    requirements. 20




---



##### Table of Contents




    Improving product development and managing product inventory
    levels better to reflect consumer demand.    Results of
    Operations
    Year Ended December 31,2009


2008


2007% of





% of





% ofNet





Net





NetDollars


Sales


Dollars


Sales


Dollars


Sales(Dollars in millions)Net sales

$
1,224.4



100.0
%

$
1,743.2



100.0
%

$
2,082.1



100.0
%Cost of sales


994.4



81.2



1,428.7



82.0



1,666.0



80.0Gross Profit


230.0



18.8



314.5



18.0



416.1



20.0Selling, general, and administrative expenses


363.6



29.7



524.4



30.1



462.3



22.2Impairment of goodwill










166.7



9.6







Impairment of trade names


39.1



3.2



35.3



2.0



7.1



0.4Loss from operations


(172.7
)


(14.1
)


(411.9
)


(23.6
)


(53.3
)


(2.6
)Interest expense


5.3



0.4



12.5



0.7



37.4



1.8Other income, net


1.5



0.1



5.4



0.3



10.2



0.5Loss from continuing operations before income tax benefit


(176.5
)


(14.4
)


(419.0
)


(24.0
)


(80.5
)


(3.9
)Income tax benefit


(67.8
)


(5.5
)


(3.2
)


(0.2
)


(29.3
)


(1.4
)Net loss from continuing operations

$
(108.7
)


(8.9
)%

$
(415.8
)


(23.8
)%

$
(51.2
)


(2.5
)%Net loss per common share  diluted:Net loss from continuing operations

$
(2.25
)





$
(8.53
)





$
(1.06
)   Year Ended
    December 31, 2009 Compared to Year Ended December 31,
    2008
       21




---



##### Table of Contents



Year Ended December 31,2009


2008Interest income

$
1.9


$
2.8Other


(0.4
)


2.6$
1.5


$
5.4           Year Ended
    December 31, 2008 Compared to Year Ended December 31,
    2007
       22




---



##### Table of Contents



held-for-sale
      Year Ended December 31,2008


2007Interest expense

$
12.5


$
21.1Waiver fees and write off of deferred financing fees






2.1Make-whole premium, net of swap gain






14.2$
12.5


$
37.4       Year Ended December 31,2008


2007Interest income

$
2.8


$
3.7Gain on termination of hedge accounting






4.1Other


2.6



2.4$
5.4


$
10.2          23




---



##### Table of Contents



Retail Results of
    Operations
  Form 10-K,
  Thomasville Stores(a)


All Other Retail Stores(b)Year Ended December 31,


Year Ended December 31,2009


2008


2009


2008(Dollars in millions)Net sales

$
84.9


$
61.3


$
43.0


$
73.8Cost of sales


49.8



38.6



28.2



46.9Gross profit


35.1



22.7



14.8



26.9SG&A expenses  open stores


56.5



36.9



27.8



40.4Operating loss  open stores(d)

$
(21.4
)

$
(14.2
)

$
(13.0
)

$
(13.5
)SG&A expenses  closed stores










16.0



39.9Operating loss(d)

$
(21.4
)

$
(14.2
)

$
(29.0
)

$
(53.4
)Number of open stores at end of period


49



44



15



16Number of closed locations at end of period










31



26Same-store-sales(c):Annual percentage


(20.3
)%


(4.5
)%



(e)



(e)Number of stores


25



12     a)
    
    This supplemental data includes company-owned Thomasville retail
    store locations that were open at the end of 2009 and 2008.b)
    
    This supplemental data includes all company-owned retail stores
    other than open Thomasville stores (all other retail
    stores). This data also includes costs of
    $16.0 million in 2009 and $39.9 million in 2008
    associated with closed retail locations which includes occupancy
    costs, lease termination costs, and costs associated with closed
    store lease liabilities.c)
    
    The same-store-sales percentage is based on sales from stores
    that have been in operation and company-owned for at least
    15 months.d)
    
    Operating loss does not include our wholesale profit on the
    above retail net sales.e)
    
    Same-store-sales information is not meaningful and is not
    presented for all other retail stores because 1) results
    include retail store locations of multiple brands, including
    eleven Drexel, two Lane, one Henredon, and one Broyhill at
    December 31, 2009; and 2) it is not our long-term
    strategic initiative to grow non-Thomasville company-owned
    retail store locations.   24




---



##### Table of Contents



Financial
    Condition and Liquidity
  Liquidity
           25




---



##### Table of Contents



Financing
    Arrangements
    December 31,


December 31,2009


2008Asset-based loan

$
95.0


$
190.0Less: current maturities


17.0



30.0Long-term debt

$
78.0


$
160.0             1 2
 26




---



##### Table of Contents



Form 10-K
  Form 10-Q
      Funded Status
    of Qualified Defined Benefit Pension Plan
     27




---



##### Table of Contents



Contractual
    Obligations and Other Commitments
    Less








MoreThan 1


1-3


4-5


Than 5Year


Years


Years


Years


TotalLong-term debt obligations:Asset-based loan

$
17.0


$
78.0


$



$



$
95.0Interest expense(1)


1.6



2.6











4.2Operating lease obligations (net of subleases)


51.3



81.6



54.1



39.6



226.6Purchase obligations(2)


















$
69.9


$
162.2


$
54.1


$
39.6


$
325.8     (1)
    
    Interest payments calculated at rates in effect at
    December 31, 2009.(2)
    
    We are not a party to any long-term supply contracts. We do, in
    the normal course of business, initiate purchase orders for the
    procurement of finished goods, raw materials, and other
    services. All purchase orders are based upon current
    requirements and are fulfilled within a short period of time.    Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies
   28




---



##### Table of Contents



Revenue
    Recognition
    Allowance for
    Doubtful Accounts
    Inventories
  (first-in,
  Intangible
    Assets
       29




---



##### Table of Contents



Lease
    Termination Costs
    Retirement
    Plans
        Recently Issued
    Statements of Financial Accounting Standards
   30




---



##### Table of Contents



Form 10-K.
  The FASB
    Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles, a replacement of FASB
    Statement No. 162
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   31




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  FURNITURE BRANDS
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Index to
    Consolidated Financial Statements and Schedules
   
 Page No.Report of Independent Registered Public
    Accounting Firm


33Consolidated Financial Statements:Consolidated Balance Sheets as of
    December 31, 2009 and 2008


34Consolidated Statements of Operations for each of
    the years in the three-year period ended December 31,
    2009


35Consolidated Statements of Cash Flows for each of
    the years in the three-year period ended December 31,
    2009


36Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss) for each of the years in
    the three-year period ended December 31, 2009


37Notes to Consolidated Financial Statements


38Consolidated Financial Statement Schedules:Schedule IIValuation and qualifying accounts


67   32




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           Internal Control 
    Integrated Framework
  KPMG
    LLP
    33




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,


December 31,2009


2008(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
83,872


$
106,580Receivables, less allowances of $26,225 ($34,372 at
    December 31, 2008)


125,513



178,590Income tax refund receivable


58,976



38,090Inventories


226,078



350,026Prepaid expenses and other current assets


9,274



12,592Total current assets


503,713



685,878Property, plant, and equipment, net


134,352



150,864Trade names


87,608



127,300Other assets


32,342



35,476Total assets

$
758,105


$
999,518LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current maturities of long-term debt

$
17,000


$
30,000Accounts payable


83,813



85,206Accrued employee compensation


21,036



49,082Other accrued expenses


54,912



63,214Total current liabilities


176,761



227,502Long-term debt


78,000



160,000Deferred income taxes


25,737



27,917Pension liability


135,557



137,199Other long-term liabilities


79,259



80,406Shareholders equity:Preferred stock, 10,000,000 shares authorized, no par
    value  none issued






Common stock, 200,000,000 shares authorized,
    $1.00 stated value  56,482,541 shares
    issued at December 31, 2009 and December 31, 2008


56,483



56,483Paid-in capital


224,133



224,419Retained earnings


267,829



376,515Accumulated other comprehensive loss


(111,471
)


(116,988
)Treasury stock at cost 7,797,319 shares at
    December 31, 2009 and 7,704,764 shares at
    December 31, 2008


(174,183
)


(173,935
)Total shareholders equity


262,791



366,494Total liabilities and shareholders equity

$
758,105


$
999,518    34




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2009


2008


2007(In thousands except per share data)Net sales

$
1,224,370


$
1,743,176


$
2,082,056Cost of sales


994,370



1,428,641



1,665,961Gross profit


230,000



314,535



416,095Selling, general, and administrative expenses


363,636



524,457



462,334Impairment of goodwill






166,680



Impairment of trade names


39,050



35,271



7,100Operating loss


(172,686
)


(411,873
)


(53,339
)Interest expense


5,342



12,510



37,388Other income, net


1,549



5,425



10,249Loss from continuing operations before income tax benefit


(176,479
)


(418,958
)


(80,478
)Income tax benefit


(67,793
)


(3,157
)


(29,261
)Net loss from continuing operations


(108,686
)


(415,801
)


(51,217
)Net earnings from discontinued operations






29,920



5,568Net loss

$
(108,686
)

$
(385,881
)

$
(45,649
)Net earnings (loss) per common share  basic and
    diluted:Net loss from continuing operations

$
(2.25
)

$
(8.53
)

$
(1.06
)Net earnings from discontinued operations






0.61



0.12Net loss

$
(2.25
)

$
(7.92
)

$
(0.94
)Weighted average shares of common stock outstanding:Basic


48,302



48,739



48,446Diluted


48,302



48,739



48,446    35




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2009


2008


2007(Dollars in thousands)Cash flows from operating activities:Net loss

$
(108,686
)

$
(385,881
)

$
(45,649
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Depreciation


20,738



25,307



31,473Compensation expense (credit) related to stock option grants and
    restricted stock awards


(524
)


4,310



3,251Provision (benefit) for deferred income taxes


(8,034
)


41,799



(20,080
)Gain on sale of discontinued operations






(48,109
)


Impairment of intangible assets


39,050



201,951



7,100Other, net


3,545



16,360



6,713Changes in operating assets and liabilities:Accounts receivable


50,764



110,073



63,627Income tax refund receivable


(20,886
)


(31,041
)


(7,049
)Inventories


126,944



66,548



100,019Prepaid expenses and other assets


5,164



4,741



9,708Accounts payable and other accrued expenses


(32,769
)


24,295



(12,482
)Other long-term liabilities


2,293



11,029



16,258Net cash provided by operating activities


77,599



41,382



152,889Cash flows from investing activities:Acquisition of stores, net of cash acquired






(14,659
)


(4,241
)Proceeds from the sale of business, net of cash sold






73,359



Proceeds from the disposal of assets


4,480



3,363



23,161Additions to property, plant, and equipment


(9,777
)


(18,977
)


(14,374
)Net cash provided (used) by investing activities


(5,297
)


43,086



4,546Cash flows from financing activities:Payments for debt issuance costs










(3,424
)Additions to long-term debt










325,401Payments of long-term debt


(95,000
)


(110,800
)


(336,201
)Funding of restricted cash account










(20,000
)Restricted cash used for the payment of long-term debt






20,000



Payments of cash dividends






(5,844
)


(31,012
)Other


(10
)


(8
)


Net cash used in financing activities


(95,010
)


(96,652
)


(65,236
)Net increase (decrease) in cash and cash equivalents


(22,708
)


(12,184
)


92,199Cash and cash equivalents at beginning of year


106,580



118,764



26,565Cash and cash equivalents at end of year

$
83,872


$
106,580


$
118,764Supplemental Disclosure:Cash payments (refunds) for income taxes, net

$
(36,731
)

$
2,039


$
1,776Cash payments for interest expense

$
5,234


$
13,372


$
34,689    36




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY ANDCOMPREHENSIVE INCOME (LOSS)
  Year Ended December 31,2009


2008


2007(Dollars in thousands)Common Stock:Beginning balance

$
56,483


$
56,483


$
56,483Stock plans activity










Ending balance

$
56,483


$
56,483


$
56,483Paid-In Capital:Beginning balance

$
224,419


$
226,773


$
227,520Stock plans activity


(286
)


(2,354
)


(747
)Ending balance

$
224,133


$
224,419


$
226,773Retained Earnings:Beginning balance

$
376,515


$
768,731


$
843,811Net loss


(108,686
)


(385,881
)


(45,649
)Adjustment to adopt FIN 48










1,581Adjustment to adopt EITF
    06-4






(491
)


Cash dividends (per share 2008-$0.12, 2007-$0.64)






(5,844
)


(31,012
)Ending balance

$
267,829


$
376,515


$
768,731Accumulated Other Comprehensive Income (Loss):Beginning balance

$
(116,988
)

$
(26,965
)

$
(33,188
)Other comprehensive income (loss)


5,517



(90,023
)


6,223Ending balance

$
(111,471
)

$
(116,988
)

$
(26,965
)Treasury Stock:Beginning balance

$
(173,935
)

$
(180,256
)

$
(183,911
)Stock plans activity


(248
)


6,321



3,655Ending balance

$
(174,183
)

$
(173,935
)

$
(180,256
)Total Shareholders Equity

$
262,791


$
366,494


$
844,766Comprehensive Loss:Net loss

$
(108,686
)

$
(385,881
)

$
(45,649
)Other comprehensive income (loss), net of tax:Pension liability


4,330



(85,632
)


2,784Foreign currency translation


1,187



(4,391
)


3,439Other Comprehensive Income (Loss)

$
5,517


$
(90,023
)

$
6,223Total Comprehensive Loss

$
(103,169
)

$
(475,904
)

$
(39,426
)    37




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in
    thousands except per share data)
  1.
    THE
    COMPANY        2.
    SIGNIFICANT
    ACCOUNTING POLICIES        Cash and Cash
    Equivalents
    Allowance for
    Doubtful Accounts
   38




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Inventories
  (first-in,
  Property,
    Plant, and Equipment
    Fair Value of
    Financial Instruments
      Revenue
    Recognition
    Advertising
    Costs
    Reclassifications
  205-20 Discontinued Operations
 39




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    ACQUISITIONS          4.
    RESTRUCTURING AND
    ASSET IMPAIRMENT CHARGES        Year Ended December 31,2009


2008


2007Restructuring charges:Facility costs to shutdown, cleanup, and vacate

$
250


$
586


$
681Termination benefits


9,119



13,132



8,475Closed store occupancy and lease costs


16,008



37,053



7,217Loss (gain) on the sale of assets


337



(724
)


(1,673
)25,714



50,047



14,700Impairment charges


2,608



18,317



13,175$
28,322


$
68,364


$
27,875Statement of Operations classification:Cost of sales

$
8,215


$
7,007


$
5,784Selling, general, and administrative expenses


20,107



61,357



22,091$
28,322


$
68,364


$
27,875    40




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year Ended December 31,2009


2008Accrual for closed store lease liabilities at beginning of
    period:

$
27,918


$
7,217Charges to expense


7,537



23,158Less cash payments


8,810



2,457Accrual for closed store lease liabilities at end of period

$
26,645


$
27,918       Year Ended December 31,2009


2008Accrual for termination benefits at beginning of period

$
10,012


$
Charges to expense


9,119



13,132Less cash payments


14,993



3,120Accrual for termination benefits at end of period

$
4,138


$
10,012     5.
    INVENTORIES    December 31,


December 31,2009


2008Finished products

$
142,982


$
238,908Work-in-process


15,320



21,405Raw materials


67,776



89,713$
226,078


$
350,026  41




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    PROPERTY, PLANT,
    AND EQUIPMENT    December 31,


December 31,2009


2008Land

$
15,318


$
16,027Buildings and improvements


186,884



198,836Machinery and equipment


251,046



270,597453,248



485,460Less accumulated depreciation


318,896



334,596$
134,352


$
150,864     7.
    TRADE
    NAMES    December 31,


December 31,2009


2008Beginning balance

$
127,300


$
162,571Impairment


(39,050
)


(35,271
)Income tax benefit of deductible goodwill


(642
)


Ending balance

$
87,608


$
127,300        42




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          8.
    LONG-TERM
    DEBT    December 31,


December 31,2009


2008Asset-based loan

$
95,000


$
190,000Less: current maturities


17,000



30,000Long-term debt

$
78,000


$
160,000          43




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Form 10-K
  Form 10-Q
  9.
    LIQUIDITY     44




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        10.
    EMPLOYEE
    BENEFITS    Year Ended December 31,2009


2008


2007Defined benefit plans

$
7,038


$
3,906


$
8,065Defined contribution plan (401k plan)  company match


7,269



9,245



10,348Other


604



425



1,019$
14,911


$
13,576


$
19,432   Company-Sponsored
    Defined Benefit Plans
     45




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        December 31, 2009


December 31, 2008Qualified


Non-Qualified


Qualified


Non-QualifiedPlan


Plan


Plan


PlanProjected benefit obligation:Beginning of year

$
400,291


$
21,366


$
403,994


$
26,810Service cost


2,306



2



3,196



344Interest cost


24,681



1,258



24,318



1,422Actuarial (gain) loss


17,029



548



(9,297
)


(4,806
)Benefits paid


(23,402
)


(2,140
)


(21,954
)


(1,679
)Curtailments


107







34



(725
)End of year

$
421,013


$
21,034


$
400,291


$
21,366Fair value of plan assets:Beginning of year

$
284,376


$



$
380,743


$
Actual return on plan assets


44,551







(74,413
)


Employer contributions






2,140







1,679Benefits paid


(23,402
)


(2,140
)


(21,954
)


(1,679
)End of year

$
305,525


$



$
284,376


$
Accrued pension cost

$
115,488


$
21,034


$
115,915


$
21,366Accumulated benefit obligation

$
420,732


$
21,034


$
399,372


$
21,366     Year Ended December 31,2009


2008


2007Service cost-benefits earned during the period

$
2,308


$
3,539


$
4,498Interest cost on the projected benefit obligation


25,939



25,740



25,228Expected return on plan assets


(26,139
)


(27,610
)


(26,265
)Net amortization and deferral


4,821



2,685



4,604Curtailment (gain)/loss


109



(448
)


Net periodic pension expense

$
7,038


$
3,906


$
8,065  46




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2009


2008


2007Actuarial loss

$
493


$
89,413


$
149Recognition of actuarial loss


(4,794
)


(2,631
)


(4,532
)Recognition of prior service cost


(29
)


(296
)


(73
)Total recognized in other comprehensive loss

$
(4,330
)

$
86,486


$
(4,456
)     December 31,


December 31,2009


2008Net actuarial loss

$
131,882


$
136,183Prior service cost


94



123Tax benefits


(19,536
)


(19,536
)$
112,440


$
116,770     Actuarial loss

$
7,453Prior service cost


26Total estimated amortization into net periodic benefit cost in
    2010

$
7,479     2009

2008

2007Assumptions used to determine net pension expense for the year
    ended December 31:Expected long-term rate of return on plan assets


7.50
%


7.50
%


7.50
%Average discount rate


6.25
%


6.25
%


6.00
%Long-term rate of compensation increase


1.50
%


3.50
%


3.50
%Assumptions used to determine benefit obligation as of December
    31:Average discount rate


6.00
%


6.25
%


6.25
%Long-term rate of compensation increase


1.50
%


1.50
%


3.50
%    47




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Percentage of Plan AssetsDecember 31,


December 31,Target


2009


2008Global equity securities


55
%


56
%


48
%Fixed income securities


45
%


44
%


52
%100
%


100
%


100
%       Total


Level 1


Level 2


Level 3Global equity securities:Domestic equities

$
146,698


$
146,698


$



$
International equities


25,461



25,461







Fixed income securities:Cash and cash equivalents


11,693







11,693



Domestic corporate and agency bonds


56,752







56,752



International corporate and government bonds


1,068







1,068



Domestic government securities


63,853







63,853



Total fair value of plan assets

$
305,525


$
172,159


$
133,366


$
  48




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year

Amount2010

$
26,7382011


27,9792012


29,2722013


30,6262014


32,0562015  2019

$
184,398   Defined
    Contribution Plan
    11.
    STOCK OPTIONS,
    RESTRICTED STOCK, AND RESTRICTED STOCK UNITS      WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term (Years)


ValueOutstanding at December 31, 2008


3,610,692


$
20.54Granted


365,500



4.88Exercised






Forfeited or expired


(903,475
)


22.65Outstanding at December 31, 2009


3,072,717


$
18.06



5.4


$
209Exercisable at December 31, 2009


1,970,939


$
23.11



3.6


$
    49




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007Risk-free interest rate


2.3
%


2.6
%


4.9
%Expected dividend yield


0.0
%


1.4
%


4.2
%Expected life (in years)


4.1



5.1



6.0Expected volatility


91.3
%


41.1
%


36.5
%       2009

2008

2007Weighted average fair value per share of options granted

$
3.22


$
3.91


$
4.25Total intrinsic value of stock options exercised

$



$



$
1,481       WeightedAverageGrant-DateShares


Fair ValueOutstanding at December 31, 2008


451,501


$
12.61Granted


83,275



3.81Vested


(46,337
)


14.38Forfeited


(290,886
)


11.93Outstanding at December 31, 2009


197,553


$
9.48        50




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Units with


Units withShare Price


Share PriceObjective of


Objective of$6.26


$9.39Outstanding at December 31, 2008


1,425,710



1,425,710Granted


33,928



33,928Vested






Forfeited


(199,680
)


(199,680
)Outstanding at December 31, 2009


1,259,958



1,259,958       Risk-free interest rate


2.1
%Expected dividend yield


0.0
%Expected volatility


88.6
%     12.
    COMMON
    STOCK     51




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007Weighted average shares used for basic earnings (loss) per
    common share


48,302,027



48,738,788



48,445,948Effect of dilutive securities:Stock options










Weighted average shares used for diluted earnings (loss) per
    common share


48,302,027



48,738,788



48,445,948          52




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    INCOME
    TAXES  Year Ended December 31,2009


2008


2007Loss from continuing operations before income tax benefit:United States operations

$
168,429


$
411,558


$
80,074Foreign operations


8,050



7,400



404$
176,479


$
418,958


$
80,478     Year Ended December 31,2009


2008


2007Current:Federal

$
(55,800
)

$
(50,186
)

$
(11,742
)State and local


(3,467
)


(600
)


1,487Foreign


493



539



1,074(58,774
)


(50,247
)


(9,181
)Deferred


(9,019
)


47,090



(20,080
)Income tax benefit

$
(67,793
)

$
(3,157
)

$
(29,261
)     Year Ended December 31,2009


2008


2007Federal corporate statutory rate


(35.0
)%


(35.0
)%


(35.0
)%State and local income taxes, net of federal tax benefit


(9.2
)


(1.0
)


(4.6
)Foreign rate differential


2.1



0.6



0.8Non-deductible goodwill


0.0



6.4



0.0Valuation allowance


5.3



28.2



0.9Other


(1.6
)


(0.0
)


1.5Effective income tax rate


(38.4
)%


(0.8
)%


(36.4
)%  53




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,


December 31,2009


2008Deferred tax assets attributable to:Expense accruals

$
60,619


$
70,392Employee pension and other benefit plans


58,059



56,280Property, plant, and equipment


3,240



9,550Goodwill


5,884



9,057Net operating loss and tax credit carry forward


38,320



23,180Other


8,311



2,050Total deferred tax assets


174,433



170,509Deferred tax liabilities attributable to:Intangible assets


(27,023
)


(38,627
)Inventory costs capitalized


(1,019
)


(2,993
)Prepaid expenses


(2,153
)


(1,234
)Total deferred tax liabilities


(30,195
)


(42,854
)Valuation allowance


(169,975
)


(161,426
)Net deferred tax liabilities

$
(25,737
)

$
(33,771
)        54




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    non-U.S. income
  Accounting for Uncertainty in
    Income Taxes
  2009


2008


2007Beginning balance  January 1

$
10,297


$
9,559


$
12,697Tax positions related to prior yearsAdditions


22



1,173



964Reductions


(201
)






Tax positions related to current yearAdditions


151



1,567



396Reductions










Settlements






(419
)


(2,761
)Lapses in statute of limitations


(1,968
)


(1,583
)


(1,737
)Ending balance  December 31

$
8,301


$
10,297


$
9,559     14.
    OTHER LONG-TERM
    LIABILITIES   55




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    OTHER
    COMPREHENSIVE INCOME (LOSS)    Year Ended December 31,2009


2008


2007Pension liability

$
4,330


$
(86,486
)

$
4,456Foreign currency translation


1,187



(4,391
)


3,4395,517



(90,877
)


7,895Income tax expense (benefit)






(854
)


1,672$
5,517


$
(90,023
)

$
6,223     December 31,


December 31,2009


2008Pension liability

$
(112,440
)

$
(116,770
)Foreign currency translation


969



(218
)$
(111,471
)

$
(116,988
)   16.
    LEASES    Year Ended December 31,2009


2008


2007Rent expense

$
77,956


$
91,433


$
71,046Sublease income


(7,547
)


(8,692
)


(13,707
)Net rent expense

$
70,409


$
82,741


$
57,339       Minimum


Minimum


TotalLease


Lease


Minimum





Net MinimumPayments


Payments


Lease


Sublease


LeaseYear

Open Facilities


Closed Stores


Payments


Income


Payments2010

$
47,403


$
9,328


$
56,731


$
5,473


$
51,2582011


40,547



8,473



49,020



5,256



43,7642012


34,812



8,048



42,860



4,984



37,8762013


25,726



7,940



33,666



3,616



30,0502014


19,753



6,827



26,580



2,563



24,017thereafter


35,370



5,111



40,481



897



39,584$
203,611


$
45,727


$
249,338


$
22,789


$
226,549  56




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    17.
    CONTINGENT
    LIABILITIES        2009


2008


2007Beginning balance

$
10,662


$
11,024


$
10,334Additions to reserves


10,777



19,014



26,797Deductions from reserves


15,977



19,376



26,107Ending balance

$
5,462


$
10,662


$
11,024  57




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   18.
    OTHER INCOME,
    NET    2009


2008


2007Interest income

$
1,982


$
2,845


$
3,686Gain on termination of hedge accounting










4,094Other, net


(433
)


2,580



2,469$
1,549


$
5,425


$
10,249   19.
    DISCONTINUED
    OPERATIONS  Discontinued
    Operations.
    :
  2009


2008


2007Net sales

$



$
15,348


$
63,606Earnings before income tax expense






1,734



9,086Net earnings

$



$
1,052


$
5,568   20.
    CHANGE IN
    ESTIMATES        21.
    RECENTLY ISSUED
    STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS   58




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          The FASB
    Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles, a replacement of FASB
    Statement No. 162
  22.
    CORRECTION OF
    IMMATERIAL ERRORS   59




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   23.
    QUARTERLY
    FINANCIAL INFORMATION (UNAUDITED)    Fourth


Third


Second


FirstQuarter


Quarter


Quarter


QuarterYear ended December 31, 2009:Net sales

$
285,574


$
293,662


$
288,263


$
356,871Gross profit


20,289



67,742



61,628



80,341Net earnings/(loss):Continuing operations

$
(64,981
)

$
(23,536
)

$
(15,993
)

$
(4,176
)Discontinued operations














Total

$
(64,981
)

$
(23,536
)

$
(15,993
)

$
(4,176
)Earnings/(loss) per common share  Diluted:Continuing operations

$
(1.35
)

$
(0.48
)

$
(0.33
)

$
(0.09
)Discontinued operations














Total

$
(1.35
)

$
(0.48
)

$
(0.33
)

$
(0.09
)Dividends declared per common share

$



$



$



$
Common stock price range:High

$
5.70


$
6.04


$
4.44


$
2.99Low

$
3.61


$
2.47


$
1.54


$
0.70Year ended December 31, 2008:Net sales

$
403,353


$
412,753


$
449,870


$
477,200Gross profit


36,044



67,122



100,350



111,019Net earnings/(loss):Continuing operations

$
(353,832
)

$
(41,721
)

$
(23,996
)

$
3,748Discontinued operations










52



29,868Total

$
(353,832
)

$
(41,721
)

$
(23,944
)

$
33,616Earnings/(loss) per common share  Diluted:Continuing operations

$
(7.25
)

$
(0.86
)

$
(0.49
)

$
0.08Discontinued operations














0.62Total

$
(7.25
)

$
(0.86
)

$
(0.49
)

$
0.69Dividends declared per common share

$



$
0.04


$
0.04


$
0.04Common stock price range:High

$
11.24


$
13.61


$
15.46


$
13.64Low

$
1.66


$
8.48


$
11.80


$
6.82      60




---



##### Table of Contents



FURNITURE BRANDS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    We incurred costs of $4,124 in 2009, reduced from $7,480 in
    2008, related to downtime in our factories.
    We incurred expense of $10,725 in 2009, reduced from $16,572 in
    2008, which related primarily to occupancy costs, lease
    termination costs, and lease liabilities of retail stores that
    we ultimately closed.
    We incurred charges of $3,608 in 2009, reduced from $10,500 in
    2008, related to accounts receivable.
    We incurred charges of $32,981 in 2009 and $24,200 in 2008 to
    reduce the carrying value of inventory to market value, which
    was driven by our efforts to accelerate the sale of slow-moving
    inventory.
    We incurred charges of $4,877 in 2009 and $11,345 in 2008
    related to severance actions, which in 2009 related to
    reductions of approximately 200 employees. These reductions
    related to direct labor employees and indirect support employees
    in our manufacturing facilities and employees in our
    administrative offices.
    We incurred costs and charges of $2,950 in 2009, reduced from
    $16,515 in 2008, associated with facility closures and related
    impairment charges on idle facilities.
    We incurred charges of $39,050 in 2009 and $201,951 in 2008
    related to impairment of our intangible assets. The 2009 charge
    was primarily driven by increases in the discount rate used to
    value our trade names.
    We recorded an adjustment to correct immaterial errors from
    prior periods that increased selling, general and administrative
    expenses by $10,479 in 2009. We concluded that the impact on the
    current and prior periods was not material. See Note 22.
    Correction of Immaterial Errors for further information.
    In 2008, we recorded a valuation allowance on our deferred tax
    assets of $153,630, of which $115,026 was charged to income tax
    expense.
    In 2009, we recorded income tax benefit of $69,969, $58,444 of
    which resulted from our ability to carry back 2009 losses for a
    period of five years under the provisions of the Worker, Home
    Ownership and Business Assistance Act of 2009 which was signed
    into law on November 6, 2009. At December 31, 2009, we
    also have net operating loss carry forwards that may be applied
    against future taxable income, subject to certain limitations.   61




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     Internal Control  Integrated Framework
        Internal Control 
    Integrated Framework
    KPMG
    LLP
    62




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (a)
    Managements
    Report on Internal Control over Financial Reporting  Rule 13a-15(f)
              Form 10-K.
  (b)
    Changes in
    Internal Control over Financial Reporting  Form 10-K
 63




---



##### Table of Contents



(c)
    Evaluation of
    Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e) Form 10-K.
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
  www.furniturebrands.com
  Item 11.
    Executive
    Compensation  Form 10-K
 64




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholders Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   65




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Financial Statements:
              Financial Statement Schedules:
      Exhibits:
  Form 10-K.
 66




---



##### Table of Contents



Schedule II  FURNITURE BRANDS
    INTERNATIONAL, INC.Valuation and Qualifying Accounts
  AdditionsBalance at


Charged to


Deductions


Balance atBeginning


Costs and


From


End ofDescription

of Period


Expenses


Reserves


Period(Dollars in Thousands)Year Ended December 31, 2009Allowances deducted from receivables on balance sheet:Allowance for doubtful accounts

$
27,074


$
9,424


$
(14,807
)

$
21,691Allowance for cash discounts/ chargebacks/other


7,298



14,288



(17,052
)


4,534$
34,372


$
23,712


$
(31,859
)

$
26,225Year Ended December 31, 2008Allowances deducted from receivables on balance sheet:Allowance for doubtful accounts

$
36,645


$
40,819


$
(50,390
)

$
27,074Allowance for cash discounts/ chargebacks/other


8,822



19,235



(20,759
)


7,298$
45,467


$
60,054


$
(71,149
)

$
34,372Year Ended December 31, 2007Allowances deducted from receivables on balance sheet:Allowance for doubtful accounts

$
21,595


$
24,994


$
(9,944
)

$
36,645Allowance for cash discounts/ chargebacks/other


7,430



26,715



(25,323
)


8,822$
29,025


$
51,709


$
35,267


$
45,467  67




---



##### Table of Contents



SIGNATURES
    Furniture Brands International, Inc.By: /s/  Ralph
    P.
    ScozzafavaRalph
    P. ScozzafavaDate: March 2, 2010

Chairman of the Board and Chief Executive Officer     Signature

Title

Date/s/  Ralph
    P. ScozzafavaRalph
    P. Scozzafava

Chairman of the Board, Chief Executive Officer and Director 
    (Principal Executive Officer)

March 2, 2010/s/  Steven
    G. RollsSteven
    G. Rolls

Chief Financial Officer
    (Principal Financial Officer)

March 2, 2010/s/  Richard
    R. IsaakRichard
    R. Isaak

Controller
    (Principal Accounting Officer)

March 2, 2010/s/  Wilbert
    G. Holliman, Jr.Wilbert
    G. Holliman, Jr.

Director

March 2, 2010/s/  John
    R. Jordan, Jr.John
    R. Jordan, Jr.

Director

March 2, 2010/s/  Ira
    D. KaplanIra
    D. Kaplan

Director

March 2, 2010/s/  Bobby
    L. MartinBobby
    L. Martin

Director

March 2, 2010/s/  Maureen
    A. McGuireMaureen
    A. McGuire

Director

March 2, 2010/s/  Aubrey
    B. PattersonAubrey
    B. Patterson

Director

March 2, 2010/s/  Alan
    G. SchwartzAlan
    G. Schwartz

Director

March 2, 2010  68




---



##### Table of Contents



EXHIBIT INDEX
  IncorporatedFiled with



by ReferenceExhibit



the Form



Filing Date with

ExhibitIndex No.

Exhibit Description

10-K

Form

the SEC

No.3
.1

Restated Certificate of Incorporation of the Company, as amended



10-Q

May 14, 2002

33
.2

By-Laws of the Company, as amended effective as of August 7, 2008



8-K

August 13, 2008

3.13
.3

Certificate of Designation Series B Junior Participating
    Preferred Stock of the Company



8-K

August 4, 2009

3.14
.1

Stockholder Rights Agreement, dated as of August 3, 2009,
    between the Company and American Stock Transfer and Trust
    Company, LLC, as Rights Agent



8-K

August 4, 2009

4.110
.1*

1992 Stock Option Plan, as amended



10-Q

May 12, 1999

10(a)10
.2*

1999 Long-Term Incentive Plan, as amended



S-8

September 27, 2002

4(f)10
.3*

2005 Long-Term Performance Bonus Plan



8-K

May 3, 2005

10(a)10
.4*

Form of Stock Option Grant Letter



8-K

February 2, 2005

10(b)10
.5*

Form of Restricted Stock Grant Letter



8-K

February 11, 2005

10(c)10
.6*

2008 Incentive Plan



S-8

December 19, 2008

4.110
.7*

Form of Restricted Stock Unit Agreement under the 2008 Incentive
    Plan



8-K

December 22, 2008

10.110
.8*

Form of Restricted Stock Award Agreement under the 2008
    Incentive Plan



10-Q

May 8, 2009

10.410
.9*

Form of Nonqualified Stock Option Agreement under the 2008
    Incentive Plan



10-Q

May 8, 2009

10.510
.10*

Form of Performance Based Restricted Stock Award Agreement under
    the 2008 Incentive Plan



10-Q

May 8, 2009

10.610
.11*

Form of Indemnification Agreement between the Company and the
    Companys directors



10-Q

August 7, 2009

10.110
.12*

Amended and Restated Restricted Stock Plan for Outside
    Directors, dated as of May 7, 2009



10-Q

August 7, 2009

10.210
.13*

Employment Agreement dated June 14, 2007 between the Company and
    Ralph P. Scozzafava



8-K

June 18, 2007

10.110
.14*

Amendment to Executive Employment Agreement between the Company
    and Ralph P. Scozzafava, effective as of June 18, 2007



8-K

May 7, 2008

10.310
.15*

Form of Change of Control Agreement



8-K

June 26, 2007

10.110
.16*

Furniture Brands International, Inc. Executive Severance Plan



8-K

June 27, 2007

10.110
.17*

Form of Amendment to the Furniture Brands International, Inc.
    Executive Severance Plan



8-K

May 7, 2008

10.610
.18*

Furniture Brands Supplemental Executive Retirement Plan, dated
    as of January 1, 2002



10-K

March 25, 2003

10(v)10
.19*

First Amendment to the Furniture Brands Supplemental Executive
    Retirement Plan, effective December 31, 2005



10-Q

May 8, 2009

10.110
.20*

Second Amendment to the Furniture Brands Supplemental Executive
    Retirement Plan, effective January 1, 2005



10-Q

May 8, 2009

10.210
.21*

Third Amendment to the Furniture Brands Supplemental Executive
    Retirement Plan, effective March 14, 2008



10-Q

May 8, 2009

10.3 69




---



##### Table of Contents



IncorporatedFiled with



by ReferenceExhibit



the Form



Filing Date with

ExhibitIndex No.

Exhibit Description

10-K

Form

the SEC

No.10
.22*

Deferred Compensation Plan, effective January 1, 2006



S-8

December 14, 2005

4.110
.23*

Amendment to Deferred Compensation Plan effective
    December 31, 2008



10-K

March 2, 2009

10.2310
.24*

Agreement between W.G. Holliman and the Company dated as of
    June 23, 2008

X10
.25

Credit Agreement, dated August 9, 2007, among the Company,
    Broyhill Furniture Industries, Inc., HDM Furniture Industries,
    Inc., Lane Furniture Industries, Inc., and Thomasville Furniture
    Industries, Inc, the Loan Parties named therein, the Lender
    Parties thereto, and JPMorgan Chase Bank, N.A., as
    Administrative Agent



8-K

August 10, 2007

10.110
.26

First Amendment, dated March 17, 2008, to Credit Agreement,
    dated August 9, 2007, among the Company, Broyhill Furniture
    Industries, Inc., HDM Furniture Industries, Inc., Lane Furniture
    Industries, Inc., and Thomasville Furniture Industries, Inc, the
    Loan Parties named therein, the Lender Parties thereto, and
    JPMorgan Chase Bank, N.A., as Administrative Agent



10-Q

May 12, 2008

10.210
.27

Amendment No. 2 to Credit Agreement and Waiver, dated February
    20, 2009, among the Company, Broyhill Furniture Industries,
    Inc., HDM Furniture Industries, Inc., Lane Furniture Industries,
    Inc., and Thomasville Furniture Industries, Inc, the Loan
    Parties named therein, the Lender Parties thereto, and JPMorgan
    Chase Bank, N.A., as Administrative Agent



10-K

March 2, 2009

10.2721
.1

List of Subsidiaries of the Company

X23
.1

Consent of Independent Registered Public Accounting Firm

X31
.1

Certification of Ralph P. Scozzafava, Chairman of the Board and
    Chief Executive Officer of the Company, Pursuant to Rule
    13a-14(a)/15d-14(a)

X31
.2

Certification of Steven G. Rolls, Chief Financial Officer
    (Principal Financial Officer) of the Company, Pursuant to Rule
    13a-14(a)/15d-14(a)

X32
.1

Certification of Ralph P. Scozzafava, Chairman of the Board and
    Chief Executive Officer of the Company, Pursuant to 18 U.S.C.
    Section 1350

X32
.2

Certification of Steven G. Rolls, Chief Financial Officer
    (Principal Financial Officer) of the Company, Pursuant to 18

XU.S.C. Section 1350     *
    
    Indicates management contact or compensatory plan, contract or
    arrangement. 70