Foot Locker 2012 Annual Report Download

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F L , I .
2012 ANNUAL REPORT
BUILDING MOMENTUM

Table of contents

  • Page 1
    2012 A N N U A L R E P O R T BUILDING MOMENTUM

  • Page 2
    ... 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, SIX:02, and The Locker Room. The Company also operates a direct-to-customers business offering athletic footwear, apparel...

  • Page 3
    ...uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company's merchandise mix and retail locations, the Company's reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), pandemics...

  • Page 4
    ...be the leading global retailer of athletically inspired shoes and apparel. Original Current 5-Year Plan Long-Term 2009 Objective* 2012 Objective $6.0 $400 8.0% 5.0% 10.0% $6.1 $443 9.9% 6.2% 14.2% Sales (billions) Sales per Gross Square Foot Adjusted EBIT Margin Adjusted Net Income Margin Return on...

  • Page 5
    ... pan-European retailer of athletic footwear and apparel. Our direct-to-customers segment attained the highest level of sales and profitability in its history. This business includes the industry-leading Eastbay brand, our fast-growing store banner websites such as footlocker.com, and CCS, where we...

  • Page 6
    ... the leading global retailer of athletically inspired shoes and apparel. Ken C. Hicks Chairman of the Board, President and Chief Executive Officer "We intend to continue building on our momentum in order to achieve the financial goals we updated last year as part of our long-range plan." 5

  • Page 7
    6

  • Page 8
    ... marketing campaigns featuring these star athletes --- campaigns that told our own brand stories. For example, the "We Know Game" program at Champs Sports and the "Foot Locker: Approved" campaign led to increased traffic in our stores and on our websites, solid conversion rates, and strong sales...

  • Page 9
    SALES (IN MILLIONS) $6,101 EBIT MARGIN 9.9% $5,623 7.9% 5.4% $5,049 $4,854 2.8% 2009 2010 2011 2012 2009 2010 2011 2012 8

  • Page 10
    Make Our Stores and Internet Sites Exciting, Relevant Places to Shop and Buy • Tell powerful product stories and clearly communicate to the customer across channels • Create dynamic, productive, engaging store environments • Implement programs to improve customer service and sales productivity...

  • Page 11
    ... Center is an excellent example of how we are creating strong connections with our customers as we engage them before they even go shopping. These efforts are among the many that led to Foot Locker, Inc. being honored in 2012 as the Athletic Retailer of the Year by Footwear News. 2009 2010 2011 2012...

  • Page 12
    ... • Develop a leadership position in the athletic apparel business • Expand Kids' to constitute a more significant role in all of our businesses • Expand Women's to constitute a more significant role in all of our businesses • Build a meaningful Team Services and Sales business Although...

  • Page 13
    ... offer women a broad choice of athletic brands in an environment created especially for her. The stores feature dedicated fit zones and fitting lounge areas for her to find the perfect workout pants, sports bras, tops, and athletic footwear for her body type, activity, and style. A well-trained team...

  • Page 14
    ... in Harlem in 2007, we now have 71 House of Hoops stores, mostly within or adjacent to existing stores. Our first Nike Yardline in Champs Sports was unveiled during 2012, and we opened the first test of an adidas Collective Shop in Footaction prior to the 2013 NBA All-Star game. BRAND EXPANSION 13

  • Page 15
    14

  • Page 16
    ... in our stores, internet and mobile sites, marketing programs, and our people --- through new technology and training --- to drive sales and even higher returns on our invested capital. PRODUCTIVE ASSETS We achieved strong productivity improvements in most areas of the business in 2012. First, we...

  • Page 17
    ... to support our drive to achieve our Company's vision. The success we have had in the last few years is due almost entirely to our industry leading retail team. From our Executive Committee that sets the tone and the strategy, to the buyers who pick the best product, to the allocators who make sure...

  • Page 18
    ... scholarship funding for college. This year's 20 winners will join the program's inaugural class of 20 Foot Locker Scholar Athletes, which will total 40 scholarship recipients in its second year. We also contribute financial support and, often equally important, provide countless volunteer hours to...

  • Page 19
    ... company (as defined in Rule 12b-2 of the Act). Yes â...ª No à š Number of shares of Common Stock outstanding at March 18, 2013: 150,129,128 The aggregate market value of voting stock held by non-affiliates of the Registrant computed by reference to the closing price as of the last business day of...

  • Page 20
    ... Disclosure Controls and Procedures Other Information 11 13 14 33 33 73 73 75 PART III Item 10 Item 11 Item 12 Item 13 Item 14 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...

  • Page 21
    PART I Item 1. General Foot Locker, Inc., incorporated under the laws of the State of New York in 1989, is a leading global retailer of athletically inspired shoes and apparel, operating 3,335 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of February...

  • 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
    ..., the closing of anchor department stores and/or specialty stores, and a decline in the popularity of mall shopping among our target customers. Further, any terrorist act, natural disaster, or public health concern that decreases the level of mall traffic, or that affects our ability to open and...

  • 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 2012 was attributable to our operations in Europe, Canada, Australia, and New Zealand...

  • Page 25
    ... credit issues. Our U.S. pension plan trust holds assets totaling $585 million at February 2, 2013. The fair values of these assets held in the trust are compared to the plan's projected benefit obligation to determine the pension funding liability. We attempt to mitigate funding risk through asset...

  • Page 26
    ... merchandise may affect our business. We operate four distribution centers worldwide to support our businesses. In addition to the distribution centers that we operate, we have third-party arrangements to support our operations in the U.S., Canada, Australia, and New Zealand. If complications arise...

  • Page 27
    ...or security breaches of our information technology infrastructure could harm our business. Information 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...

  • Page 28
    ... management. Our success depends to a significant extent 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...

  • Page 29
    ... the end of 2012 were approximately 12.32 and 7.26 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
    ... 2011 to May 15, 2012; President and Chief Executive Officer of Foot Locker U.S., Lady Foot Locker, Kids Foot Locker, and Footaction from January 2010 to July 2011; President and Chief Executive Officer of Foot Locker Europe from August 2007 to January 2010; and President and Chief Executive Officer...

  • Page 31
    ... Item 5. Market for the Company's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Foot Locker, Inc. common stock (ticker symbol ''FL'') is listed on The New York Stock Exchange as well as on the Börse Stuttgart stock exchange in Germany. As of February 2, 2013...

  • Page 32
    ... 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. The following Performance Graph and related information shall not be deemed ''soliciting material'' or to be filed with the SEC, nor...

  • Page 33
    ... Financial Ratios Sales per average gross square foot(2) Earnings before interest and taxes (EBIT)(3) EBIT margin(3) Net income margin(3) Return on assets (ROA) Return on invested capital (ROIC)(4) Net debt capitalization percent(5) Current ratio Other Data Capital expenditures Number of stores...

  • Page 34
    .... Store Profile Square Footage (in thousands) Selling Gross January 28, 2012 Opened Closed February 2, Relocations/ 2013 Remodels Foot Locker US Foot Locker Europe Foot Locker Canada Foot Locker Asia Pacific Lady Foot Locker Kids Foot Locker Footaction Champs Sports CCS Total Athletic Stores...

  • Page 35
    ... the most powerful athletic brands, sports teams, and athletes in North America. Its 539 stores are located throughout the United States, Canada, Puerto Rico, and the U.S. Virgin Islands. The Champs Sports stores have an average of 3,500 selling square feet. CCS - As of February 2, 2013, we operated...

  • Page 36
    ...weeks in the 2011 and 2010 reporting years. The following represents a reconciliation of the non-GAAP measures discussed throughout the Overview of Consolidated Results: 2012 2011 2010 (in millions, except per share amounts) Sales: Sales 53rd week Sales excluding 53rd week (non-GAAP) Pre-tax income...

  • Page 37
    ... items. The money-market gain recorded in 2010 with respect to The Reserve International Liquidity Fund, Ltd. was recorded with no tax expense due to the fact that the entity that held the investment has a zero statutory tax rate. When assessing Return on Invested Capital (''ROIC''), the Company...

  • Page 38
    ... the continued success of our strategic plan, coupled with the favorable athletic trend. Sales continued to benefit from new exciting assortments across various product lines. 2012 2011 2010 Sales increase Comparable-store sales increase • 8.5% 9.4% 11.4% 9.8% 4.0% 5.8% Gross margin, as...

  • Page 39
    ... before income taxes: 2012 2011 (in millions) 2010 Sales Athletic Stores Direct-to-Customers Operating Results Athletic Stores(1) Direct-to-Customers(2) Restructuring charge(3) Division profit Less: Corporate expense Operating profit Other income(4) Earnings before interest expense and income taxes...

  • Page 40
    ...provide free shipping offers to remain competitive with other Internet retailers. Vendor allowances had no effect on the gross margin rate, as compared with the prior year. Excluding the effect of the 53rd week in 2012, gross margin increased by 90 basis points as compared with 2011. Gross margin as...

  • Page 41
    ... these items, the effective tax rate increased primarily due to the higher proportion of income earned in higher tax jurisdictions in 2011. Segment Information The Company's two reportable segments, Athletic Stores and Direct-to-Customers, are based on its method of internal reporting. The Company...

  • Page 42
    ... 2012, the Company introduced a new banner, SIX:02, an elevated retail concept featuring top brands in fitness apparel and athletic footwear for women. The Company opened 3 SIX:02 stores during the fourth quarter of 2012 and plans to open 4 additional stores in 2013. Management currently believes...

  • Page 43
    ... 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. The Company generally finances real...

  • Page 44
    ... or customer acceptance of the Company's merchandise mix and retail locations, uncertainties related to the effect of competitive products and pricing, the Company's reliance on a few key vendors for a significant portion of its merchandise purchases and risks associated with global product sourcing...

  • Page 45
    ...CCS business. During 2012, the Company contributed $26 million to its U.S. and Canadian qualified pension plans as compared with $28 million contributed in 2011. The increase in merchandise inventories for 2012 was due to the shift caused by the 53rd week, which was planned in order to support sales...

  • Page 46
    ... the employee stock programs of $22 million and $13 million, respectively. In connection with stock option exercises, the Company recorded excess tax benefits related to share-based compensation of $5 million and $3 million in 2011 and 2010, respectively. Capital Structure On January 27, 2012, the...

  • Page 47
    ... commitments as the timing and/or amounts of such payments are unknown. The Company's other liabilities in the Consolidated Balance Sheet at February 2, 2013 primarily comprise pension and postretirement benefits, deferred rent liability, income taxes, workers' compensation and general liability...

  • Page 48
    ...accepted accounting principles. Included in the Summary of Significant Accounting Policies note in ''Item 8. Consolidated Financial Statements and Supplementary Data'' is a summary of the Company's most significant accounting policies. In some cases, management is required to calculate amounts based...

  • Page 49
    ... 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 were not significant to the 2012 gross margin rate. The Company receives support from some of its vendors in the form of reimbursements for...

  • Page 50
    ..., coupled with a decrease in the assumed royalty rate as a result of lower profitability. Additionally in 2012, the Company recorded a long-lived asset impairment charge of $5 million related to the CCS stores, as a result of the decision to close these stores during the first quarter of 2013. 30

  • Page 51
    ...benefit payments and to reduce 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 2012...

  • Page 52
    ... Company's strategic long-range plans. A one percent change in the Company's overall statutory tax rate for 2012 would have resulted in a $7 million change in the carrying value of the net deferred tax asset and a corresponding charge or credit to income tax expense depending on whether the tax rate...

  • Page 53
    ...uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company's merchandise mix and retail locations, the Company's reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), pandemics...

  • Page 54
    ... of Foot Locker, Inc. and subsidiaries as of February 2, 2013 and January 28, 2012, 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 February 2, 2013. These consolidated financial...

  • Page 55
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2012 2011 2010 (in millions, except per share amounts) Sales Cost of sales Selling, general and administrative expenses Depreciation and amortization Impairment charges Interest expense, net Other income Income before income taxes Income tax ...

  • Page 56
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2012 2011 (in millions) 2010 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 57
    FOOT LOCKER, INC. CONSOLIDATED BALANCE SHEETS 2012 2011 (in millions) ASSETS Current assets Cash and cash equivalents Short-term investments Merchandise inventories Other current assets Property and equipment, net Deferred taxes Goodwill Other intangible assets, net Other assets LIABILITIES AND ...

  • Page 58
    ... under director and stock plans Share-based compensation expense Total tax benefit from exercise of options 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...

  • Page 59
    ... Reduction in long-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 Effect of Exchange Rate Fluctuations on Cash and...

  • Page 60
    ... 2013. Fiscal years 2011 and 2010 represent the 52 week periods ending January 28, 2012, and January 29, 2011, 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...

  • Page 61
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Advertising costs, which are included as a component of selling, general and administrative expenses, were as follows: 2012 2011 (in millions) 2010 Advertising expenses ...

  • Page 62
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Potential common shares include the dilutive effect of stock options and restricted stock units. Options to purchase 0.8 million, 3.8 million, and 4.5 million shares of common ...

  • Page 63
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Merchandise Inventories and Cost of Sales Merchandise inventories for the Company's Athletic Stores are valued at the lower of cost or market using the retail inventory method....

  • Page 64
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Recoverability of Long-Lived Assets The Company recognizes impairment losses whenever events or changes in circumstances indicate that the carrying amounts of long-lived ...

  • Page 65
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Income Taxes The Company accounts for its income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the ...

  • Page 66
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Accounting for Leases The Company recognizes rent expense for operating leases as of the possession date for store leases or the commencement of the agreement for a non-store ...

  • Page 67
    ... financial measure is division results. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense. 2012 2011 (in millions) 2010 Sales Athletic Stores Direct-to-Customers Total sales Operating Results Athletic Stores(1) Direct-to-Customers...

  • Page 68
    ..., 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. The 2012 charge also reflected a decrease in the assumed royalty rate as a result of lower profitability...

  • Page 69
    ... 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 2012 2011 (in millions) Prepaid income taxes Prepaid rent Net receivables Prepaid expenses and other current assets Deferred taxes and costs Fair...

  • Page 70
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Goodwill The Athletic Stores segment's goodwill is net of accumulated impairment charges of $167 million for all periods presented. The 2012 and 2011 annual goodwill impairment tests did not result in an impairment charge as the fair ...

  • Page 71
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Other Assets 2012 2011 (in millions) Funds deposited in insurance trust(1) Pension asset Auction rate security Deferred tax costs Income tax receivables Income tax asset Prepaid income taxes Other $ 9 7 6 5 3 2 - 40 $ 72 $ 9 8 5 1 -...

  • Page 72
    ...of the interest rate swaps and the amortization of the associated debt issuance costs, was $9 million for all years presented. 14. Other Liabilities 2012 2011 (in millions) Straight-line rent liability Pension benefits Income taxes Postretirement benefits Workers' compensation and general liability...

  • Page 73
    ... other comprehensive loss, net of tax, is comprised of the following: 2012 2011 (in millions) 2010 Foreign currency translation adjustments Cash flow hedges Unrecognized pension cost and postretirement benefit Unrealized loss on available-for-sale security $ 82 3 (255) (1) $(171) $ 63 (1) (264...

  • Page 74
    ... the federal statutory income tax rate and the effective income tax rate on pre-tax income is as follows: 2012 2011 2010 Federal statutory income tax rate State and local income taxes, net of federal tax benefit International income taxed at varying rates Foreign tax credits Decrease in valuation...

  • Page 75
    ... recognized for financial reporting purposes and the amounts recognized for income tax purposes. Items that give rise to significant portions of the Company's deferred tax assets and deferred tax liabilities are as follows: 2012 2011 (in millions) Deferred tax assets: Tax loss/credit carryforwards...

  • Page 76
    ... related to unrecognized tax benefits: 2012 2011 (in millions) 2010 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 period tax positions...

  • Page 77
    ... months, and the Company expects all derivative-related amounts reported in AOCL to be reclassified to earnings within twelve months. During 2012, the net changes in the fair value of the contracts resulted in a gain of $4 million and therefore decreased AOCL for the year ended February 2, 2013...

  • Page 78
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. Financial Instruments and Risk Management âˆ' (continued) The Company also enters into forward foreign exchange contracts to hedge foreign-currency denominated merchandise purchases and intercompany transactions that are not ...

  • Page 79
    ... STATEMENTS 18. Financial Instruments and Risk Management âˆ' (continued) Business Risk The retailing business is highly competitive. Price, quality, selection of merchandise, reputation, store location, advertising, and customer service are important competitive factors in the Company's business...

  • Page 80
    ... and plan assets, funded status, and amounts recognized in the Consolidated Balance Sheets, measured at February 2, 2013 and January 28, 2012: Pension Benefits 2012 Postretirement Benefits 2011 2012 2011 (in millions) Change in benefit obligation Benefit obligation at beginning of year Service cost...

  • Page 81
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits âˆ' (continued) Pension Benefits 2012 Postretirement Benefits 2011 2012 2011 (in millions) Change in plan assets Fair value of plan assets at beginning of year Actual return on plan assets Employer ...

  • Page 82
    ... reduce future contributions by the Company. The components of net benefit expense (income) are: 2012 Pension Benefits 2011 2010 2012 (in millions) Postretirement Benefits 2011 2010 Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net loss...

  • Page 83
    ... (2) During 2012, the target composition of the Company's U.S. plan assets was 45 percent equity and 55 percent fixed-income securities. The Company may alter the targets from time to time depending on market conditions and the funding requirements of the pension plan. This current asset allocation...

  • Page 84
    ... Company's U.S. pension plan assets at February 2, 2013 and January 28, 2012 are as follows: Level 1 Level 2 Level 3 (in millions) 2012 Total 2011 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 85
    ...2012 Sale of real estate Balance at February 2, 2013 $ 9 (1) $ 8 (8) $ - The fair values of the Company's Canadian pension plan assets at February 2, 2013 and January 28, 2012 are as follows: Level 1 Level 2 Level 3 (in millions) 2012 Total 2011 Total* Cash and cash equivalents Equity securities...

  • Page 86
    ... 2003 Employees Stock Purchase Plan (the ''ESPP''), participating employees are able to contribute up to 10 percent of their annual compensation, not to exceed $25,000 in any plan year, through payroll deductions to acquire shares of the Company's common stock at 85 percent of the lower market price...

  • Page 87
    ... table shows the Company's assumptions used to compute the share-based compensation expense: 2012 Stock Option Plans 2011 2010 2012 Stock Purchase Plan 2011 2010 Weighted-average risk free rate of interest Expected volatility Weighted-average expected award life- in years Dividend yield Weighted...

  • Page 88
    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: 2012 2011 2010 WeightedWeightedWeightedAverage Average Average Exercise Number of...

  • Page 89
    ... 2012, 2011, and 2010, there were 1,254,876, 1,098,177, and 653,535 restricted stock units outstanding, respectively. Generally, awards fully vest after the passage of time, typically three years. However, restricted stock unit grants made in connection with the Company's long-term incentive program...

  • Page 90
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. Share-Based Compensation âˆ' (continued) Restricted share and unit activity is summarized as follows: 2012 Number of Shares and Units 2011 2010 (in thousands) Outstanding at beginning of year Granted Vested Cancelled or forfeited ...

  • Page 91
    ... INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 22. Legal Proceedings âˆ' (continued) The Company and the Company's U.S. retirement plan are defendants in a purported class action (Osberg v. Foot Locker, filed in the U.S. District Court for the Southern District of New York) in which the plaintiff...

  • Page 92
    ...80 The fourth quarter of 2012 represents the 14 weeks ended February 2, 2013. Gross margin represents sales less cost of sales. Operating profit represents income before income taxes, interest expense, net, and non-operating income. During the fourth quarters of 2012 and 2011, the Company recorded...

  • Page 93
    ... 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 94
    ... related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended February 2, 2013, and our report dated April 1, 2013, expressed an unqualified opinion on these consolidated financial statements. New York...

  • Page 95
    ... reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information set forth in the Proxy Statement under the sections captioned ''Equity Compensation Plan Information'' and ''Beneficial Ownership of the Company's Stock'' is incorporated...

  • Page 96
    ... list of financial statements required by this item is set forth in Item 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...

  • Page 97
    .... FOOT LOCKER, INC. By: Ken C. Hicks Chairman of the Board, President and Chief Executive Officer Date: April 1, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on April 1, 2013, by the following persons on behalf of the Company and...

  • Page 98
    ...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 99
    ...on August 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...

  • Page 100
    ...'s Current Report on Form 8-K dated March 23, 2010 filed by the Registrant with the SEC on March 29, 2010). Computation of Ratio of Earnings to Fixed Charges.* Subsidiaries of the Registrant.* Consent of Independent Registered Public Accounting Firm.* Certification of Chief Executive Officer...

  • Page 101
    Exhibit No. in Item 601 of Regulation S-K Description 31.2 32 101 * Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to ...

  • Page 102
    Exhibit 12 FOOT LOCKER, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) ($ in millions) Feb. 2, 2013 Jan. 28, 2012 Fiscal Year Ended Jan. 29, 2011 Jan. 30, 2010 Jan. 31, 2009 NET EARNINGS Income (loss) from continuing operations Income tax expense (benefit) Interest expense, ...

  • Page 103
    ... 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 104
    ...Finance (Europe) 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...

  • Page 105
    ... income, shareholders' equity, and cash flows for each of the years in the three-year period ended February 2, 2013, and the effectiveness of internal control over financial reporting as of February 2, 2013, which reports appear in the February 2, 2013 annual report on Form 10-K of Foot Locker...

  • Page 106
    ... 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) April 1, 2013 Ken C. Hicks Principal Executive Officer

  • Page 107
    ...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) April 1, 2013 Lauren B. Peters Principal Financial Officer

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    ... the Annual Report on Form 10-K of Foot Locker, Inc. (the ''Registrant'') for the period ended February 2, 2013, as filed with the Securities and Exchange Commission on the date hereof (the ''Report''), Ken C. Hicks as Chief Executive Officer of the Registrant and Lauren B. Peters as Chief Financial...

  • Page 109
    ... Foot Locker service marks and trademarks are owned by Foot Locker, Inc. or its affiliates. Worldwide Website Our website at https://www.footlockerinc.com offers information about our Company, as well as online versions of our Form 10-K, SEC reports, quarterly results, press releases, and corporate...

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    Foot Locker, Inc. 112 W E S T 34 T H S T R E E T N E W Y O R K , N E W Y O R K 10120 2012 A N N U A L R E P O R T BUILDING MOMENTUM