Foot Locker 2011 Annual Report Download

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2011 ANNUAL REPORT
THE NEXT LEVEL

Table of contents

  • Page 1
    2011 a n n u a l r e p o r t the next level

  • Page 2
    ... inspired shoes and apparel. Headquartered in New york City, the Company operates 3,369 athletic retail stores in 23 countries in north america, europe, Australia, and New Zealand under the brand names Foot Locker, Lady Foot Locker, Kids Foot Locker, Footaction, Champs sports, and CCs. FinanCial...

  • Page 3
    ... Performance...7 Exciting Places to Shop ...10 Deliver Exceptional Growth ...11 Expansion Opportunities ...13 Increase Productivity ...15 Leading Retail Team...16 Community Involvement ...17 Form 10-K ...18 Board of Directors, Corporate Management, Division Management, Corporate Information ...iBC 2

  • Page 4
    ... and operational performance to new heights. Other key financial accomplishments in 2011 include earning $1.82 per share, a 68 percent increase over 2010, and the highest level the Company has achieved since becoming Foot Locker, Inc. in 2001. This result was driven by a comparable store sales gain...

  • Page 5
    ...guidance and support as we work to position Foot Locker, Inc. as an industry leader, both operationally and financially. This spring, James Preston will step down as our lead director and Nicholas DiPaolo will take his place. I want to express to Jim my great appreciation for his years of service as...

  • Page 6
    ...VISION Be the leading global retailer of athletically inspired shoes and apparel. CORE VALUES INTEGRIT y act honestly, ethically and honorably SERVICE satisfy our customers every time LEADERSHIP respect, inspire, develop and empower TEAM WORK collaborate, trust, support, commit exCellenCe strive to...

  • Page 7
    ... leading retail team • make our stores and internet • aggressively pursue brand sites more exciting, relevant expansion opportunities places to shop and buy L O N G -T E R M F I N A N C I A L O B J E C T I V E S • Sales of $7.5 billion • Sales per Gross Square Foot of $500 • Earnings...

  • Page 8
    ..., with several vendor partners delivering new technologies and updated styles. Innovations by our brand partners in silhouettes, fabrication, colors, and design are helping to sustain customer excitement and interest across multiple product categories. In fact, our vendor partnerships have never...

  • Page 9
    EBIT Margin 7.9% 5.4% 2.8% 2009 2010 2011 510 Basis Point Improvement by effectively differentiating our brand banners and expanding our product assortments, especially in apparel and running shoes, we elevated our earnings before interest and taxes to 7.9 percent of sales in 2011. 8

  • Page 10
    $1 Billion Club champs sports became the third member of our $1 billion club by achieving that level of sales in 2011, joining foot Locker in the U.s. and foot Locker europe. 9

  • Page 11
    ... new format for Foot Locker in the United States. We have also introduced new selling skills training, focused on customer needs, in stores around the world. Second, we have upgraded the features and functionality of our Internet and mobile sites, significantly improving the cross-channel experience...

  • Page 12
    ... additional energy and resources on our high-potential families of business in order to: • develop a leadership position in the Athletic Apparel business • expand Kids' and Women's to play more significant roles in all of our businesses • build a meaningful Team Services and Sales business 11

  • Page 13
    ... product categories - footwear, apparel, and accessories. These improvements came in all channels, including in-store and on-line. The gains were also worldwide, as every region in which we operate - North america, europe, and asia/Pacific - delivered higher profits. 1.8% 3.4% 5.0% 2009 2010 2011...

  • Page 14
    ... brand expansion opportunities Through our cross-channel efforts, we have driven growth in our store banner.com sales well into the double digits, while at the same time leveraging our industry-leading Eastbay direct-to-customer business. On the ground, we accelerated our new store openings in...

  • Page 15
    sales (millions) 2011 2010 2009 $5,049 $4,854 $5,623 11.4 Percent Annual Sales Gain The increase was driven by strong overall comparable sales of 9.8 percent, which was composed of an 8.9 percent gain in comparable sales in our stores and an 18.8 percent gain in internet, mobile, and catalog sales....

  • Page 16
    ... of productivity in 2011. First, we surpassed our sales per gross square foot target of $400, achieving sales of $406 per square foot. Similarly, our sales per payroll hour have grown over 15 percent since 2009. Second, we continued our long-standing history of disciplined expense management by...

  • Page 17
    ... are key to our strategy; therefore, attracting, developing, and retaining the industry's leading retail team is critical to our success. Every day, our associates work on the sales floors in our stores, on the loading docks at distribution centers, and at headquarters offices around the world. It...

  • Page 18
    ... of our Company extend beyond the workplace. Just as we are elevating our strategic goals and financial objectives, we are also elevating our efforts to serve the communities in which we work and live. A prime example of such efforts is the Foot Locker Scholar Athletes program that the Foot Locker...

  • Page 19
    ... File No. 1-10299 â-¡ FOOT LOCKER, INC. (Exact name of Registrant as specified in its charter) New York (State or other jurisdiction of incorporation or organization) 13-3513936 (I.R.S. Employer Identification No.) 112 West 34th Street, New York, New York (Address of principal executive offices...

  • Page 20
    ...PART II Item 5 Item 6 Item 7 Item 7A Item 8 Item 9 Item 9A Item 9B Market for the Company's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative...

  • Page 21
    ... shoes and apparel, operating 3,369 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of January 28, 2012. Foot Locker, Inc. and its subsidiaries hereafter are referred to as the ''Registrant,'' ''Company,'' ''we,'' ''our,'' or ''us.'' Information...

  • Page 22
    ...to purchasing athletic footwear, athletic apparel, and sporting goods via the Internet could have a material adverse effect on our business results. In addition, all of our significant vendors distribute products directly through the Internet and others may follow. Some vendors operate retail stores...

  • Page 23
    ...customers' purchasing habits, we may be forced to rely on markdowns or promotional sales to dispose of excess or slow moving inventory, which could have a material adverse effect on our business, financial condition, and results of operations. A change in the relationship with any of our key vendors...

  • Page 24
    ...business, financial condition, and results of operations. Our operations may be adversely affected by economic or political conditions in other countries. A significant portion of our sales and operating income for 2011 was attributable to our operations in Europe, Canada, New Zealand, and Australia...

  • Page 25
    ... products and services and the Company's financial condition and operating results. Instability in the financial markets may adversely affect our business. Past disruptions in the U.S. and global credit and equity markets made it difficult for many businesses to obtain financing on acceptable terms...

  • Page 26
    ...provision for income taxes and in evaluating our tax positions on a worldwide basis. Our effective tax rate could be adversely affected by a number of factors, including shifts in the mix of pretax profits and losses by tax jurisdiction, our ability to use tax credits, changes in tax laws or related...

  • Page 27
    ... technology is a critically important part of our business operations. We depend on information systems to process transactions, manage inventory, operate our websites, purchase, sell and ship goods on a timely basis, and maintain cost-efficient operations. There is a risk that we could experience...

  • Page 28
    ... both upon the continued services of our current executive and senior management team, as well as our ability to attract, hire, motivate, and retain additional qualified management in the future. Competition for key executives in the retail industry is intense, and our operations could be adversely...

  • Page 29
    ... the end of 2011 were approximately 12.45 and 7.38 million square feet, respectively. These properties, which are primarily leased, are located in the United States, Canada, various European countries, Australia, and New Zealand. The Company currently operates four distribution centers, of which two...

  • Page 30
    ... Group President - Retail Stores Executive Vice President - Operations Support Executive Vice President and Chief Financial Officer Senior Vice President, General Counsel and Secretary Senior Vice President - Real Estate Senior Vice President and Chief Information Officer Senior Vice President and...

  • Page 31
    ...63 During each of the quarters of 2011 the Company declared dividends of $0.165 per share. The Board of Directors reviews the dividend policy and rate, taking into consideration the overall financial and strategic outlook for our earnings, liquidity and cash flow projections, as well as competitive...

  • Page 32
    ... Russell family of indices to the Company's. The next graph compares the cumulative five-year total return to shareholders on Foot Locker, Inc.'s common stock relative to the total returns of the S&P 400 Retailing Index and the Russell Midcap Index. It is the Company's intention to use the Russell...

  • Page 33
    ... Financial Ratios Sales per average gross square foot(1) Earnings before interest and taxes (EBIT)(2) EBIT margin(2) Net income margin(2) Return on assets (ROA) Net debt capitalization percent(3) Current ratio Other Data Capital expenditures Number of stores at year end Total selling square footage...

  • Page 34
    ... a full-service environment. Store Profile Square Footage (in thousands) Selling Gross January 29, 2011 Opened Closed January 28, Relocations/ 2012 Remodels Foot Locker U.S. Foot Locker International Lady Foot Locker Kids Foot Locker Footaction Champs Sports CCS Total Athletic Stores 1,144 751...

  • Page 35
    ... Company purchased CCS, an Internet and catalog retailer of skateboard equipment, apparel, footwear, and accessories targeted primarily to teenaged boys. The retail store operations of CCS are included in the Athletic Stores segment. The Direct-to-Customers segment operates the websites for eastbay...

  • Page 36
    ... 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 2011 as compared with 2010 and is useful in assessing the Company's progress in achieving its long-term financial objectives. The following represents...

  • Page 37
    ...also used as a measure in executive long-term incentive compensation. The closest GAAP measure is Return on Assets (''ROA'') and is also represented below. ROA increased to 9.4 percent as compared with 5.9 percent in the prior year reflecting the Company's overall performance in 2011. 2011 2010 2009...

  • Page 38
    ...-term financial objectives were announced in light of our progress over the first two years of our long-range plan. Our updated objectives and 2011 results are presented below: Prior Long-term Objectives Updated Long-term Objectives 2011 Sales (in millions) Sales per gross square foot EBIT margin...

  • Page 39
    ... improvements at the Company's Lady Foot Locker, Kids Foot Locker, Footaction, and Champs Sports divisions. Included in the results for the year ended January 28, 2012 and January 29, 2011 are non-cash impairment charges of $5 million and $10 million, respectively, to write down the CCS tradename...

  • Page 40
    ... to an improved inventory position, better merchandise flow, and lower markdowns as the Company was less promotional during 2011. The effect of vendor allowances, as compared with the prior year, contributed 10 basis points to this improvement. The increase in the gross margin rate also included...

  • Page 41
    ...million in 2010 as compared with 2009 primarily related to increased income earned on higher cash and cash equivalent balances, partially offset by an increase in interest expense due to higher fees associated with the revolving credit facility. The Company did not have any short-term borrowings for...

  • Page 42
    ... profit reflects income from continuing operations before income taxes, corporate expense, non-operating income, and net interest expense. Athletic Stores 2011 2010 (in millions) 2009 Sales Division profit Division profit margin Number of stores at year end Sales per average gross square foot 2011...

  • Page 43
    ..., store remodelings, Internet and mobile sites, information systems, and other support facilities; make retirement plan contributions, quarterly dividend payments, and interest payments; and fund other cash requirements to support the development of its short-term and long-term operating strategies...

  • Page 44
    ...and the planned opening of 82 new stores, as well as $37 million for the development of information systems and infrastructure. The Company has the ability to revise and reschedule much of the anticipated capital expenditure program, should the Company's financial position require it. Free Cash Flow...

  • Page 45
    ... such as store fixtures and leasehold improvements at the Company's Lady Foot Locker, Kids Foot Locker, Footaction, and Champs Sports divisions and $4 million to write off software development costs. During 2010, the Company contributed $32 million to its U.S. and Canadian qualified pension plans as...

  • Page 46
    ... employee stock programs of $13 million and $3 million, respectively. During 2010, in connection with stock option exercises, the Company recorded excess tax benefits related to share-based compensation of $3 million as a financing activity. Capital Structure On January 27, 2012, the Company entered...

  • Page 47
    ... cash payment is uncertain. The timing of the remaining amounts that are known has not been included as they are minimal and not useful to the presentation. Additional information is included in the Other Liabilities, Financial Instruments and Risk Management, and Retirement Plans and Other Benefits...

  • Page 48
    ... contributed 30 basis points to the 2011 gross margin rate. The Company also has volume-related agreements with certain vendors, under which it receives rebates based on fixed percentages of cost purchases. These volume-related rebates are recorded in cost of sales when the product is sold and...

  • Page 49
    ... value. The Company used a combination of a discounted cash flow approach and market-based approach to determine the fair value of a reporting unit. The determination of discounted cash flows of the reporting units and assets and liabilities within the reporting units requires us to make significant...

  • Page 50
    ... future contributions by the Company. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in the financial markets and our investment strategy. The weighted-average long-term rate of return used to determine 2011 pension expense was 6.59...

  • Page 51
    ... purchased to settle the plan's anticipated cash outflows. The discount rate selected to measure the present value of the Company's Canadian benefit obligations was developed by using the plan's bond portfolio indices, which match the benefit obligations. The fluctuations in stock and bond markets...

  • Page 52
    ..., expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company's business and operations, including future cash flows, revenues, and earnings, and other such matters, are forward-looking statements. These forward-looking statements are based on...

  • Page 53
    ... of Foot Locker, Inc. and subsidiaries as of January 28, 2012 and January 29, 2011, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended January 28, 2012. These consolidated financial...

  • Page 54
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2011 2010 2009 (in millions, except per share amounts) Sales Cost of sales Selling, general and administrative expenses Depreciation and amortization Impairment and other charges Interest expense, net Other income Income from continuing ...

  • Page 55
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2011 2010 (in millions) 2009 Net income Other comprehensive income, net of tax Foreign currency translation adjustment: Translation adjustment arising during the period, net of tax Cash flow hedges: Change in fair value of ...

  • Page 56
    FOOT LOCKER, INC. CONSOLIDATED BALANCE SHEETS 2011 2010 (in millions) ASSETS Current assets Cash and cash equivalents Merchandise inventories Other current assets Property and equipment, net Deferred taxes Goodwill Other intangible assets, net Other assets LIABILITIES AND SHAREHOLDERS' EQUITY ...

  • Page 57
    ... stock Shares of common stock used to satisfy tax withholding obligations Acquired in exchange of stock options Share repurchases Reissued under employee stock purchase plan Net income Cash dividends declared on common stock ($0.60 per share) Translation adjustment, net of tax Change in cash flow...

  • Page 58
    ...-term debt Dividends paid on common stock Issuance of common stock Purchase of treasury shares Treasury stock reissued under employee stock plan Excess tax benefits on share-based compensation Net cash used in financing activities of continuing operations Effect of Exchange Rate Fluctuations on Cash...

  • Page 59
    ... 28, 2012, January 29, 2011, and January 30, 2010, respectively. References to years in this annual report relate to fiscal years rather than calendar years. Revenue Recognition Revenue from retail stores is recognized at the point of sale when the product is delivered to customers. Internet and...

  • Page 60
    ... of selling, general and administrative expenses, were as follows: 2011 2010 (in millions) 2009 Catalog costs Cooperative reimbursements Net catalog expense Earnings Per Share $ $ 44 (5) 39 $ $ 45 (5) 40 $ $ 48 (4) 44 The Company accounts for and discloses earnings per share using the...

  • Page 61
    ... employees stock purchase plan, the Company will issue authorized but unissued common stock or use common stock held in treasury. The Company may make repurchases of its common stock from time to time, subject to legal and contractual restrictions, market conditions, and other factors. Cash and Cash...

  • Page 62
    ...first quarter of its fiscal year or more frequently if impairment indicators arise. The fair value of each reporting unit is determined using a combination of market and discounted cash flow approaches. Derivative Financial Instruments All derivative financial instruments are recorded in the Company...

  • Page 63
    ... based on the individual facts and circumstances of that position evaluated in light of all available evidence. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statement of operations. Accrued interest and...

  • Page 64
    .... The Company discounts its workers' compensation and general liability reserves using a risk-free interest rate. Imputed interest expense related to these liabilities was not significant for 2011, 2010, and 2009. Accounting for Leases The Company recognizes rent expense for operating leases as...

  • Page 65
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Segment Information The Company has determined that its reportable segments are those that are based on its method of internal reporting. As of January 28, 2012, the Company has two reportable segments, Athletic Stores and Direct-to-...

  • Page 66
    ... arise and, at a minimum, annually. During the fourth quarters of 2011 and 2010, the Company determined that triggering events had occurred related to its CCS intangible assets, which is part of the Direct-to-Customers segment, reflecting decreases in projected revenues. Accordingly, a charge of...

  • Page 67
    ... software development costs for the Direct-to-Customers segment as a result of management's decision to terminate the project. Reorganization Costs In 2009, the Company consolidated the management team of the Lady Foot Locker business with the team that managed the Foot Locker U.S., Kids Foot Locker...

  • Page 68
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. Other Current Assets 2011 2010 (in millions) Net receivables Prepaid income taxes Prepaid expenses and other current assets Prepaid rent Deferred taxes and costs Income tax receivable Fair value of derivative contracts $ 49 36 33 27 ...

  • Page 69
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9. Other Intangible Assets, net Gross value January 28, 2012 Accum. Net amort. Value Wtd. Avg. Life in Years Gross value January 29, 2011 Accum. Net amort. Value ($ in millions) Amortized intangible assets:(1),(2) Lease acquisition costs...

  • Page 70
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Other Assets 2011 2010 (in millions) Funds deposited in insurance trust(1) Pension asset Auction rate security Prepaid income taxes Deferred tax costs Income tax asset Other $ $ (1) 9 8 5 4 1 1 34 62 $ $ 10 2 5 5 3 1 37 63 The ...

  • Page 71
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. Revolving Credit Facility âˆ' (continued) The 2011 Restated Credit Agreement provides for a security interest in certain of the Company's domestic assets, including certain inventory assets, but excluding intellectual property. The ...

  • Page 72
    ... LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. Leases The Company is obligated under operating leases for almost all of its store properties. Some of the store leases contain renewal options with varying terms and conditions. Management expects that in the normal course of business...

  • Page 73
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. Income Taxes Following are the domestic and international components of pre-tax income from continuing operations: 2011 2010 (in millions) 2009 Domestic International Total pre-tax income The income tax provision consists of the ...

  • Page 74
    ...filings have been examined by the Internal Revenue Service through 2010. The Company is participating in the IRS's Compliance Assurance Process (''CAP'') for 2011, which is expected to conclude during 2012. The Company has started the CAP for 2012. Due to the recent utilization of net operating loss...

  • Page 75
    ... the activity related to unrecognized tax benefits: 2011 2010 (in millions) 2009 Unrecognized tax benefits at beginning of year Foreign currency translation adjustments Increases related to current year tax positions Increases related to prior period tax positions Decreases related to prior...

  • Page 76
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. Financial Instruments and Risk Management The Company operates internationally and utilizes certain derivative financial instruments to mitigate its foreign currency exposures, primarily related to third party and intercompany ...

  • Page 77
    ..., reputation, store location, advertising, and customer service are important competitive factors in the Company's business. The Company operates in 23 countries and purchased approximately 82 percent of its merchandise in 2011 from its top 5 vendors. In 2011, the Company purchased approximately 61...

  • Page 78
    ... various market sources. At January 28, 2012 and January 29, 2011, the Company held a preferred stock auction rate security with a face value of $7 million. The security earns and pays interest based on the stated terms. The Company classifies the security as long-term available-for-sale and reports...

  • Page 79
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits Pension and Other Postretirement Plans The Company has defined benefit pension plans covering certain of its North American employees, which are funded in accordance with the provisions of the laws ...

  • Page 80
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits âˆ' (continued) As of January 28, 2012 and January 29, 2011, the Canadian qualified pension plan's assets exceeded its accumulated benefit obligation. Information for pension plans with an ...

  • Page 81
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits âˆ' (continued) Pension expense is actuarially calculated annually based on data available at the beginning of each year. The expected return on plan assets is determined by multiplying the expected...

  • Page 82
    ... pension expense due to the lower long-term rate of return associated with fixed-income securities. Due to market conditions and other factors, actual asset allocations may vary from the target allocation outlined above. The Company believes that plan assets are invested in a prudent manner with...

  • Page 83
    ... Company's U.S. pension plan assets at January 28, 2012 and January 29, 2011 are as follows: Level 1 Level 2 Level 3 (in millions) 2011 Total 2010 Total* Cash and cash equivalents Equity securities: U.S. large-cap(1) U.S. mid-cap(1) International(2) Corporate stock(3) Fixed-income securities: Long...

  • Page 84
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits âˆ' (continued) The fair values of the Company's Canadian pension plan assets at January 28, 2012 and January 29, 2011 are as follows: Level 1 Level 2 Level 3 (in millions) 2011 Total 2010 Total* ...

  • Page 85
    ... 1,278,045 shares have been purchased under this plan. Share-Based Compensation Expense Total compensation expense related to the Company's share-based compensation plans was $18 million, $13 million, and $12 million for 2011, 2010, and 2009, respectively. The total related tax benefit realized was...

  • Page 86
    ... from those estimates. The following table shows the Company's assumptions used to compute the share-based compensation expense: 2011 Stock Option Plans 2010 2009 2011 Stock Purchase Plan 2010 2009 Weighted-average risk free rate of interest Expected volatility Weighted-average expected award life...

  • Page 87
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. Share-Based Compensation âˆ' (continued) The information set forth in the following table covers options granted under the Company's stock option plans: 2011 WeightedAverage Exercise Price 2010 WeightedAverage Number of Exercise ...

  • Page 88
    ... officers and key employees of the Company. The Company also issues restricted stock units to its non-employee directors. Each restricted stock unit represents the right to receive one share of the Company's common stock provided that the vesting conditions are satisfied. In 2011, 2010, and 2009...

  • Page 89
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. Share-Based Compensation âˆ' (continued) The Company recorded compensation expense related to restricted shares, net of estimated forfeitures, of $10 million, $8 million, and $8 million for 2011, 2010, and 2009, respectively. At ...

  • Page 90
    ... or financial partnerships, including variable interest entities. 24. Quarterly Results (Unaudited) 1st Q 2nd Q 3rd Q 4th Q (in millions, except per share amounts) Year Sales 2011 2010 Gross margin(1) 2011 2010 Operating profit(2) 2011 2010 Net income 2011 2010 Basic earnings per share: 2011 2010...

  • Page 91
    ... that information relating to the Company that is required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms, and is accumulated and communicated to management...

  • Page 92
    ...related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended January 28, 2012, and our report dated March 26, 2012, expressed an unqualified opinion on these consolidated financial statements. New York...

  • Page 93
    ...of Business Conduct governing our employees, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and the Board of Directors, is set forth under the heading ''Code of Business Conduct'' under the Corporate Governance Information section of the Proxy Statement and...

  • Page 94
    ... 8. ''Consolidated Financial Statements and Supplementary Data.'' (a)(3) and (c) Exhibits An index of the exhibits which are required by this item and which are included or incorporated herein by reference in this report appears on pages 76 through 79. The exhibits filed with this report immediately...

  • Page 95
    ... 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FOOT LOCKER, INC. By: Ken C. Hicks Chairman of the Board, President and Chief Executive Officer Date: March 26, 2012 Pursuant to the...

  • Page 96
    ...to the Registrant's Annual Report on Form 10-K for the year ended January 31, 1998, filed by the Registrant with the SEC on April 21, 1998). Amendment to the Foot Locker 1998 Stock Option and Award Plan (incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10...

  • Page 97
    ... 17, 2007). Amendment to the Foot Locker Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.1 to the Current Report on form 8-K dated May 25, 2011 filed by the Registrant with the SEC on May 27, 2011). Long-Term Incentive Compensation Plan, as amended and restated...

  • Page 98
    ... Long-Term Disability Program for Senior Executives (incorporated herein by reference to Exhibit 10.32 to the 2008 Form 10-K). Foot Locker 2007 Stock Incentive Plan amended and restated as of May 19, 2010 (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form...

  • Page 99
    ... from Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended January 28, 2012, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii...

  • Page 100
    Exhibit 12 FOOT LOCKER, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) ($ in millions) Jan. 28, 2012 Jan. 29, 2011 Fiscal Year Ended Jan. 30, 2010 Jan. 31, 2009 Feb. 2, 2008 NET EARNINGS Income (loss) from continuing operations Income tax expense (benefit) Interest expense, ...

  • Page 101
    ... Germany Holdings GmbH Foot Locker Germany GmbH & Co. KG Foot Locker ETVE, Inc. Foot Locker Europe Holdings, S.L. Foot Locker Spain S.L. Foot Locker Australia, Inc. Foot Locker New Zealand, Inc. Freedom Sportsline Limited Team Edition Apparel, Inc. Foot Locker Specialty, Inc. Foot Locker Retail...

  • Page 102
    ...) Limited FL Retail Operations LLC FL Specialty Operations LLC FL Finance Europe (US) Limited FLE Franchising Limited Foot Locker Asia, Inc. Foot Locker Canada Co. Foot Locker Canada Holdings LP FL Canada Holdings ULC CCS Direct LLC FLE Management B.V. Foot Locker Istanbul Sport Giyim Sanayi ve...

  • Page 103
    ... of Foot Locker, Inc. as of January 28, 2012 and January 29, 2011, and the related statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended January 28, 2012, and the effectiveness of internal control over financial...

  • Page 104
    ...'s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. b) March 26, 2012 Principal Executive Officer

  • Page 105
    ...'s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. b) March 26, 2012 Principal Financial Officer

  • Page 106
    ... the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: March 26, 2012 Ken C. Hicks Chief Executive Officer Lauren B. Peters Chief Financial Officer

  • Page 107
    ... Sports Dowe S. Tillema President and Chief Executive Officer Footlocker.com/Eastbay/CCS Nicholas Jones Managing Director Foot Locker Canada Phillip G. Laing Managing Director Foot Locker Asia/Pacific COR POR ATE INF OR M ATION Corporate Headquarters 112 West 34th Street New York, New York...

  • Page 108
    Foot Locker, Inc. 2011 annual report the next level 112 W e s t 34 t h s t r e e t n e W y o r k , n y 10120