Foot Locker 2005 Annual Report Download - page 66

The Company’s pension plan weighted-average asset allocations at January 28, 2006 and January 29, 2005, by asset
category are as follows:
2005 2004
Asset Category
Equity securities .......................................................... 62% 63%
Foot Locker, Inc. common stock ........................................... 2% 2%
Debt securities ............................................................ 34% 33%
Real estate ................................................................ 1% 1%
Other ...................................................................... 1% 1%
Total ...................................................................... 100% 100%
The U.S. defined benefit plan held 396,000 shares of Foot Locker, Inc. common stock as of January 28, 2006 and
January 29, 2005. Currently, the target composition of the weighted-average plan assets is 64 percent equity and 36
percent fixed income securities, although the Company may alter the targets from time to time depending on market
conditions and the funding requirements of the pension plans. The Company believes that plan assets are invested in a
prudent manner with an objective of providing a total return that, over the long term, provides sufficient assets to fund
benefit obligations, taking into account the Company’s expected contributions and the level of risk deemed appropriate.
The Company’s investment strategy is to utilize asset classes with differing rates of return, volatility and correlation to
reduce risk by providing diversification relative to equities. Diversification within asset classes is also utilized to reduce
the effect that the return of any single investment may have on the entire portfolio. The Company contributed $68 million
to its pension plans in February 2006.
Estimated future benefit payments for each of the next five years and the five years thereafter are as follows:
Pension
Benefits
Postretirement
Benefits
(in millions)
2006 ...................................................................... $ 64 $2
2007 ...................................................................... 62 3
2008 ...................................................................... 60 3
2009 ...................................................................... 60 2
2010 ...................................................................... 58 2
2011–2015 ...................................................................... 263 6
Savings Plans
The Company has two qualified savings plans, a 401(k) Plan that is available to employees whose primary place of
employment is the U.S., and an 1165 (e) Plan, which began during 2004 that is available to employees whose primary
place of employment is in Puerto Rico. Both plans require that the employees have attained at least the age of twenty-one
and have completed one year of service consisting of at least 1,000 hours. The savings plans allow eligible employees to
contribute up to 25 percent and 10 percent, for the U.S. and Puerto Rico plans, respectively, of their compensation on
a pre-tax basis. The Company matches 25 percent of the first 4 percent of the employees’ contributions with Company
stock and such matching Company contributions are vested incrementally over 5 years for both plans. The charge to
operations for the Company’s matching contribution for the U.S. plan was $1.6 million, $1.3 million and $1.5 million in
2005, 2004 and 2003, respectively.
21 Stock Plans
In 2003, the Company adopted the 2003 Stock Option and Award Plan (the “2003 Stock Option Plan”) and the 2003
Employees Stock Purchase Plan (the “2003 Stock Purchase Plan”). Under the 2003 Stock Option Plan, options, restricted
stock, stock appreciation rights (SARs), or other stock-based awards may be granted to officers and other employees at
not less than the market price on the date of the grant. Unless a longer or shorter period is established at the time of
the option grant, generally, one-third of each stock option grant becomes exercisable on each of the first three anniversary
dates of the date of grant. The maximum number of shares of stock reserved for issuance pursuant to the 2003 Stock Option
Plan is 4,000,000 shares. The number of shares reserved for issuance as restricted stock and other stock-based awards
cannot exceed 1,000,000 shares. The Company adopted the 2003 Stock Purchase Plan whose terms are substantially the
same as the 1994 Employees Stock Purchase Plan (the “1994 Stock Purchase Plan”), which expired in June 2004. Under
the 2003 Stock Purchase Plan, 3,000,000 shares of common stock became available for purchase beginning June 2005.
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