Foot Locker 2006 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2006 Foot Locker annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

16
2006 2005
(in millions)
Cash, cash equivalents and short-term investments, net of debt and
capital lease obligations .................................. $ 236 $ 261
Present value of operating leases .............................. 2,069 1,934
Total net debt........................................... 1,833 1,673
Shareholders’ equity ........................................ 2,295 2,027
Total capitalization ......................................... $4,128 $3,700
Net debt capitalization percent................................ 44.4% 45.2%
Net debt capitalization percent without operating leases ............ —% —%
Excluding the present value of operating leases, the Company’s cash, cash equivalents, and short-term investments,
net of debt and capital lease obligations, decreased to $236 million at February 3, 2007 from $261 million at January
28, 2006. The Company reduced debt and capital lease obligations by $92 million, and decreased cash, cash equivalents,
and short-term investments by $117 million. Additionally, the present value of the operating leases increased by $135
million representing the net change of lease renewals and the effect of foreign currency fluctuations primarily related
to the euro. Including the present value of operating leases, the Company’s net debt capitalization percent decreased
80 basis points in 2006. The increase in shareholders’ equity relates to net income of $251 million in 2006, $17 million
related to stock plans, an increase of $27 million in the foreign exchange currency translation adjustment, primarily
related to the value of the euro in relation to the U.S. dollar and a decrease of $6 million resulting from the adoption
of SAB 108. The Company recorded a reduction to shareholders’ equity as permitted by SAB 108 to correct for previous
misstatements. The Company declared and paid dividends totaling $61 million during 2006. The Company repurchased
334,200 million shares for approximately $8 million during the year. During 2006, the Company adopted SFAS No. 158
which resulted in the elimination of the additional minimum liability adjustment of $181 million. SFAS No.158 requires
that unamortized prior service cost and unamortized gains or losses for both the pension and postretirement plans,
which totaled $133 million, be recognized as a component of other comprehensive income. The Company contributed
$51 million and $17 million to the Company’s U.S. and Canadian qualified pension plans, respectively, in 2006.
Excluding the present value of operating leases, the Company’s cash, cash equivalents and short-term investments,
net of debt and capital lease obligations, increased to $261 million at January 28, 2006 from $127 million at January 29,
2005. The Company reduced debt and capital lease obligations by $39 million, while increasing cash, cash equivalents
and short-term investments by $95 million. Additionally, the present value of the operating leases decreased by $55
million representing the net change of lease renewals, the effect of foreign currency fluctuations primarily related
to the euro and the result of the closure of 25 stores due to the hurricanes. Including the present value of operating
leases, the Company’s net debt capitalization percent decreased 520 basis points in 2005. The increase in shareholders’
equity relates to net income of $264 million in 2005, $26 million related to stock plans, and a decrease of $25 million
in the foreign exchange currency translation adjustment, primarily related to the value of the euro in relation to
the U.S. dollar. The Company declared and paid dividends totaling $49 million during 2005.The Company repurchased
approximately 1.6 million shares for $35 million during the year. During 2005, the Company reduced its minimum liability
for the Company’s pension plans by $15 million, primarily as a result of the plans’ asset performance. The Company
contributed $19 million and $7 million to the Company’s U.S. and Canadian qualified pension plans, respectively, in
2005.