Foot Locker 2009 Annual Report Download - page 37

Cash Flow
Operating activities from continuing operations provided cash of $346 million in 2009 as compared with
$383 million in 2008. These amounts reflect income from continuing operations adjusted for non-cash items and
working capital changes. During 2009, the Company recorded non-cash impairment and other charges of
$36 million primarily related to impairment of store-level assets in the domestic operations. Merchandise
inventories represented a $111 million source of cash in 2009 as inventory purchases were reduced to keep
inventory levels in line with sales as well as reflecting the affect of the store closings. During 2009, the Company
contributed $100 million to its U.S. and Canadian qualified pension plans as compared with $6 million
contributed in 2008. Additionally, during 2009 the Company terminated its interest rate swaps for a gain of
$19 million. The other changes primarily reflect the timing of February 2010 rent payments, which totaled
$34 million and were due and paid in 2010 as compared with the February 2009 rent payments that were due and
paid in 2008, as well as income tax refunds of $32 million.
Operating activities from continuing operations provided cash of $383 million in 2008 as compared with
$283 million in 2007. During 2008, the Company recorded non-cash impairment charges and store closing
program costs of $259 million primarily related to its domestic operations. Merchandise inventories represented a
$128 million source of cash in 2008 as inventory purchases were reduced to keep inventory levels in line with
sales. Additionally, the Company contributed $6 million to its Canadian qualified pension plan in 2008.
Net cash used by investing activities of the Company’s continuing operations was $72 million in 2009 as
compared with $272 million used in investing activities in 2008. During 2009, the Company received $16 million
from the Reserve International Liquidity Fund representing further redemptions. Capital expenditures were
$89 million primarily related to store remodeling and to the development of information systems and other
support facilities, representing a decrease of $57 million as compared with the prior year. The Company made a
strategic decision to conserve cash in 2009 and, therefore, reduced capital spending, focusing on projects that
improved the customer experience.
Net cash used by investing activities of the Company’s continuing operations was $272 million in 2008 as
compared with $117 million provided by investing activities in 2007. The net cash used by investing activities for
2008 reflects the asset purchase from dELiA*s, Inc. of CCS for $106 million (including capitalized acquisition
costs). Investing activities in 2008 also included a $3 million gain related to the sale of two lease interests in
Europe. The Company did not purchase or sell short-term investments during 2008. Reflected in investing
activities in 2008 is the reclassification of the $23 million investment in the Reserve International Liquidity Fund
from cash and cash equivalents to short-term investments. Capital expenditures of $146 million in 2008 and
$148 million in 2007 were primarily related to store remodeling and new stores.
Net cash used in financing activities of continuing operations was $94 million in 2009 as compared with
$185 million in 2008. During 2009 and 2008, the Company purchased and retired $3 million and $6 million,
respectively, of its 8.50 percent debentures. During 2008, the Company reduced its long-term debt by repaying
the balance of its term loan of $88 million. Additionally, the Company declared and paid dividends totaling
$94 million and $93 million in 2009 and 2008, respectively, representing a quarterly rate of $0.15 per share in
both 2009 and 2008. During 2009 and 2008, the Company received proceeds from the issuance of common stock
and treasury stock in connection with the employee stock programs of $3 million and $2 million, respectively.
Net cash used in financing activities of continuing operations was $185 million in 2008 as compared with
$138 million in 2007. The Company declared and paid dividends totaling $93 million in 2008 and $77 million in
2007. During 2008 and 2007, the Company received proceeds from the issuance of common stock and treasury
stock in connection with the employee stock programs of $2 million and $9 million, respectively.
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