Foot Locker 2009 Annual Report Download - page 60

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Another wholly owned subsidiary of the Company was the assignor of the store leases involved in the
Northern Group transaction and, therefore, retains potential liability for such leases. As the assignor of the
Northern Canada leases, the Company remained secondarily liable under these leases. At January 30, 2010, the
Company estimates that its gross contingent lease liability is CAD$1 million. The Company currently estimates
the expected value of the lease liability to be insignificant. The Company believes that, because it is secondarily
liable on the leases, it is unlikely that it would be required to make such contingent payments.
4. Other Income
Other income was $3 million, $8 million and $1 million for 2009, 2008 and 2007, respectively. For the year
ended January 30, 2010, other income includes $4 million related to gains from insurance recoveries, gains on the
purchase and retirement of bonds, and royalty income partially offset by $1 million of foreign currency option
contract premiums. Other income in 2008 primarily reflects a $4 million net gain related to the Company’s foreign
currency options contracts and a $3 million gain on lease terminations related to two lease interests in Europe.
For 2007, other income includes a $1 million gain related to a final settlement with the Company’s insurance
carriers of a claim related to a store damaged by fire in 2006. Additionally, the Company sold two of its lease
interests in Europe for a gain of $1 million. These gains were offset primarily by premiums paid for foreign
currency option contracts.
5. Merchandise Inventories
2009 2008
(in millions)
LIFO inventories ......................................... $ 682 $ 788
FIFO inventories ......................................... 355 332
Total merchandise inventories ................................ $1,037 $1,120
The value of the Company’s LIFO inventories, as calculated on a LIFO basis, approximates their value as
calculated on a FIFO basis.
6. Other Current Assets
2009 2008
(in millions)
Net receivables .......................................... $ 37 $ 53
Prepaid expenses and other current assets ........................ 33 33
Prepaid rent ............................................ 28 62
Prepaid income taxes ...................................... 25 47
Income tax receivable ..................................... 5 7
Fair value of derivative contracts .............................. 1 5
Deferred taxes .......................................... 17 29
$146 $236
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