Foot Locker 2007 Annual Report Download - page 58

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42
6. Short-Term Investments
The Company’s auction rate security investments are accounted for as available-for-sale securities. The following
represents the composition of the Company’s auction rate securities by underlying investment.
2007 2006
(in millions)
Tax exempt municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 44
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 205
$ 5 $ 249
With the liquidity issues experienced in the global credit and capital markets, the Company’s preferred stock
auction rate security, having a face value of $7 million, has experienced failed auctions. The Company determined
that a temporary impairment has occurred and therefore has recorded a charge of $2 million, with no tax benefit,
to accumulated other comprehensive loss as of February 2, 2008. This security will continue to accrue interest at the
contractual rate and will be auctioned every 90 days until the auction succeeds. Based on the relatively small size of
this investment and the Company’s ability to access cash and other short-term investments, and expected operating
cash flows, we do not anticipate the lack of liquidity on this investment will affect our ability to operate our business
as usual.
7. Merchandise Inventories
2007 2006
(in millions)
LIFO inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 907 $967
FIFO inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 336
Total merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,281 $1,303
The value of the Company’s LIFO inventories, as calculated on a LIFO basis, approximates their value as calculated
on a FIFO basis.
8. Other Current Assets
2007 2006
(in millions)
Net receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 $59
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 36
Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 62
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 67
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 21
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 14
Northern Group note receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1
Current tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 —
Fair value of derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1
$290 $ 261