Foot Locker 2010 Annual Report Download - page 34

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Other highlights include:
• Cash and cash equivalents at January 29, 2011 were $696 million, representing an increase of
$114 million.
• Cash flow provided from operations was $326 million, which included the payment on the settlement of
the net investment hedge of $24 million and qualified pension contribution totaling $32 million. The
funded status of the qualified plans improved to 93 percent as compared with 87 percent in 2009.
• Dividends totaling $93 million were declared and paid. Effective with the first quarter 2011 dividend
payment, the dividend was increased by 10 percent to $0.165 per share.
In March 2010, the Company announced a new strategic plan, which includes a series of operating initiatives
and long-term financial objectives. We consider the following financial objectives in assessing our performance
pursuant to the strategic plan:
• Sales of $6 billion
• Sales per gross square foot of $400
• EBIT margin of 8 percent
• Net income margin of 5 percent
• Return on Invested Capital of 10 percent
In the following tables, the Company has presented certain financial measures and ratios identified as
non-GAAP. The Company believes this non-GAAP information is a useful measure to investors because it allows
for a more direct comparison of the Company’s performance for 2010 as compared with 2009 and is useful in
assessing the Company’s progress in achieving its long-term financial objectives noted above. The following
represents a reconciliation of the non-GAAP measures: 2010 2009 2008
(in millions)
Pre-tax income:
Income (loss) from continuing operations before income
taxes − Reported ............................. $257 $ 73 $(100)
Pre-tax amounts excluded from GAAP
Impairment of goodwill and other intangible assets ....... 10 — 169
Impairment of assets ........................... — 36 67
Reorganization costs ........................... — 5 —
Store closing program .......................... — — 5
Money market impairment ....................... — — 3
Northern Group note impairment ................... — — 15
Impairment and other charges ..................... 10 41 259
Inventory reserve − recorded within cost of sales ........ — 14 —
Money market realized gain − recorded within other income . (2) — —
Total pre-tax amounts excluded ..................... $ 8 $ 55 $259
Income (loss) from continuing operations before income
taxes − Adjusted .............................. $265 $128 $ 159
Calculation of EBIT:
Income (loss) from continuing operations before income
taxes − Reported ............................. $257 $ 73 $(100)
Interest expense, net ............................ 9 10 5
EBIT ....................................... $266 $ 83 $ (95)
EBIT margin % ................................. 5.3% 1.7% (1.8%)
Income (loss) from continuing operations before income
taxes − Adjusted .............................. $265 $128 $ 159
Interest expense, net ............................ 9 10 5
Adjusted EBIT ................................. $274 $138 $ 164
Adjusted EBIT margin % .......................... 5.4% 2.8% 3.1%
15