Foot Locker 2005 Annual Report Download - page 51

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The changes in the carrying amount of intangibles subject to amortization for the year ended January 28, 2006 are
as follows:
2004 Additions
Amortization
/ Other
(1)
2005
Wtd.
Avg.
Useful Life
in Years
(in millions)
Finite life intangible assets
Lease acquisition costs ........................ $102 $ 8 $(22) $ 88 11.9
Trademark ..................................... 20 — (1) 19 20.0
Loyalty program ............................... 1 — (1) — 2.0
Favorable leases ............................... 8 — (2) 6 3.8
Total ....................................... $131 $ 8 $(26) $113 12.3
(1) Includes effect of foreign currency translation of $8 million primarily related to the decline in the value of the euro in relation to the U.S. dollar.
Lease acquisition costs represent amounts that are required to secure prime lease locations and other lease rights,
primarily in Europe. Included in finite life intangibles, as a result of the Footaction and Republic of Ireland purchases,
are the trademark for the Footaction name, amounts paid for leased locations with rents below their fair value for both
acquisitions and amounts paid to obtain names of members of the Footaction loyalty program.
Amortization expense for the intangibles subject to amortization was approximately $18 million, $17 million and
$11 million for 2005, 2004 and 2003, respectively. Annual estimated amortization expense for finite life intangible assets
is expected to approximate $19 million for 2006, $18 million for 2007, $16 million for 2008, $13 million for 2009 and
$12 million for 2010.
4 Segment Information
The Company has determined that its reportable segments are those that are based on its method of internal
reporting. As of January 28, 2006, the Company has two reportable segments, Athletic Stores, which sells athletic
footwear and apparel through its various retail stores, and Direct-to-Customers, which includes the Company’s catalogs
and Internet business.
The accounting policies of both segments are the same as those described in the “Summary of Significant Accounting
Policies.” The Company evaluates performance based on several factors, of which the primary financial measure is division
results. Division profit reflects income from continuing operations before income taxes, corporate expense, non-operating
income and net interest expense.
Sales
2005 2004 2003
(in millions)
Athletic Stores ............................................. $5,272 $4,989 $4,413
Direct-to-Customers ........................................ 381 366 366
Total sales ............................................... $5,653 $5,355 $4,779
35