Foot Locker 2010 Annual Report Download - page 83

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23. Commitments
In connection with the sale of various businesses and assets, the Company may be obligated for certain lease
commitments transferred to third parties and pursuant to certain normal representations, warranties, or
indemnifications entered into with the purchasers of such businesses or assets. Although the maximum potential
amounts for such obligations cannot be readily determined, management believes that the resolution of such
contingencies will not have a material effect on the Company’s consolidated financial position, liquidity, or
results of operations. The Company is also operating certain stores and making rental payments for which lease
agreements are in the process of being negotiated with landlords. Although there is no contractual commitment
to make these payments, it is likely that a lease will be executed.
The Company does not have any off-balance sheet financing, other than operating leases entered into in the
normal course of business and disclosed above, or unconsolidated special purpose entities. The Company does
not participate in transactions that generate relationships with unconsolidated entities or financial partnerships,
including variable interest entities.
24. Quarterly Results (Unaudited)
1
st
Q2
nd
Q3
rd
Q4
th
Q Year
(in millions, except per share amounts)
Sales
2010.............................. $1,281 1,096 1,280 1,392 5,049
2009.............................. 1,216 1,099 1,214 1,325 4,854
Gross margin
(a)
2010.............................. $ 393 305 388 430 1,516
2009.............................. 356 280 329 367
(b)
1,332
Operating profit (loss)
(c)
2010.............................. $ 87 11 74 90 262
2009.............................. 50 — (10) 40 80
Income (loss) from continuing operations
2010.............................. $ 54 6 52 57
(d)
169
2009.............................. 31 (1) (6) 23
(e)
47
Net income (loss)
2010.............................. $ 54 6 52 57 169
2009.............................. 31 — (6) 23 48
Basic earnings (loss) per share:
2010
Income from continuing operations ........ $0.35 0.04 0.33 0.36 1.08
Income from discontinued operations ...... — — — — —
Net income ........................ 0.35 0.04 0.33 0.36 1.08
2009
Income (loss) from continuing operations.... $0.20 — (0.04) 0.14 0.30
Income from discontinued operations ...... — — — — —
Net income (loss) .................... 0.20 — (0.04) 0.14 0.30
Diluted earnings (loss) per share:
2010
Income from continuing operations ........ $0.34 0.04 0.33 0.36 1.07
Income from discontinued operations ...... — — — — —
Net income ........................ 0.34 0.04 0.33 0.36 1.07
2009
Income (loss) from continuing operations.... $0.20 — (0.04) 0.14 0.30
Income from discontinued operations ...... — — — — —
Net income (loss) .................... 0.20 — (0.04) 0.14 0.30
(a) Gross margin represents sales less cost of sales.
(b) Included in the results for the fourth quarter of 2009 is an inventory reserve charge of $14 million for certain aged apparel.
(c) Operating profit (loss) represents income (loss) from continuing operations before income taxes, interest expense, net, and
non-operating income.
(d) During the fourth quarter of 2010, the Company recorded a $10 million charge related to its CCS tradename. Additionally, a realized gain
of $2 million was recorded related to the Reserve International Fund, a money-market investment.
(e) During the fourth quarter of 2009, the Company recorded a charge of $4 million to reflect the write-down of certain Canadian deferred
tax assets as a result of certain Canadian provincial rate reductions enacted during the quarter.
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