Foot Locker 2013 Annual Report Download

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2013 ANNUAL REPORT
BUILDING ON OUR STRENGTHS

Table of contents

  • Page 1
    2013 ANNUAL REPOR T BUILDING ON OUR STRENGTHS

  • Page 2
    ...and apparel. Headquartered in New York City, the Company operates 3,473 athletic retail stores in 23 countries in North America, Europe, Australia, and New Zealand under the brand names Foot Locker, Kids Foot Locker, Footaction, Lady Foot Locker, SIX:02, Runners Point, Sidestep and Champs Sports. In...

  • Page 3
    ...-TO-TOE SPORT-INSPIRED STYLE" champssports.com T H E H I G H S C H O O L AT H L E T E " W E K N O W G A M E " eastbay.com E L I T E VA R S I T Y AT H L E T E "PREPARE TO WIN" ccs.com BOARD INSPIRED LIFESTYLE ENTHUSIAST runnerspoint.com RUNNING ENTHUSIAST sidestep-shoes.com SNEAKER LIFESTYLE 4

  • Page 4
    ...pursue brand expansion opportunities • increase the productivity of all our assets • build on our industry leading retail team A C H I E V E R E S U LT S BE A TOP QUARTILE PERFORMER Sales $7.5 billion Sales per Gross Square Foot $500 Earnings Before Interest and Taxes Net Income Return on...

  • Page 5
    ...500 11.0% 7.0% 14.0% Sales per Gross Square Foot $333 Adjusted Net Income Margin 1.8% *Our original objectives were established in early 2010 and replaced by the current long-term objectives in early 2012. Most of the figures in 2013 represent record performances for our Company, and I am pleased...

  • Page 6
    ... in the United States with Foot Locker, Champs Sports, Footaction, and Eastbay. We will also explore opportunities to thoughtfully expand our newly-acquired banners, Runners Point and Sidestep, outside Germany alongside our existing Foot Locker business. • pay a meaningful dividend, which we have...

  • Page 7
    ... as Foot Locker, Eastbay, Runners Point, and SIX:02, that concentrate on high-performance footwear and apparel, and we have banners, such as Footaction, Sidestep, and CCS, that offer a much more lifestyle product assortment unique to each banner. Our banner with our biggest stores, Champs Sports, is...

  • Page 8
    ... (81) $867 2011 2012 2013 Second, I am very enthusiastic about the potential for accelerated growth in Europe. As I mentioned, last year we bought Runners Point Group, a profitable chain of almost 200 stores with two primary banners, Runners Point and Sidestep. The Group is based in Germany, the...

  • Page 9
    ... in sales and more than $6 billion in market capitalization, with more than 3,500 stores in 30 countries. Our core values are the foundation of our success, upon which we have built a strong company culture rooted in sports, focused on service to our customers, and providing long-term opportunities...

  • Page 10
    NE T I NCO ME (IN MILLIONS) $432 $380 $281 $173 $85 2009 2010 2011 2012 2013 STRENGTHS EB IT MA R GI N 10.4% 9.9% 7.9% 5.4% 2.8% 2009 2010 2011 2012 2013 9

  • Page 11
    ... • Casual • Apparel • Accessories • Leader in Europe • Leader in Australia and New Zealand • Franchise partners in Middle East and South Korea C ATE GORY D I V E RSITY • Men's • Women's • Kids BANNER DIF F ERENT IAT ION PER FORM ANCE Foot Locker Eastbay Runners Point SIX:02...

  • Page 12
    ... of the Kids Foot Locker banner. • We have increased our level of children's sports apparel to support our strong position in sports shoes. • We are driving improved sales in all of the banners and geographies that sell children's products. GROWTH IN EUROPE • We acquired Runners Point Group...

  • Page 13
    ... of associates to help customers choose the right products for their needs ENHANCE CONNECTIVITY BETWEEN OUR STORE BANNERS AND E-COMMERCE SITES • Virtual inventory with improved inventory visibility • Consistent visual instore/online marketing • Improved technological capabilities • More...

  • Page 14
    ... • The potential expansion of Runners Point and Sidestep banners outside their current markets • Our new merchandise allocation system. We expect to begin rolling out that system, one of our most significant technology investments, in 2014, but the real benefits will accrue over time as we hone...

  • Page 15
    SALES PER SQUARE FOOT $460 $443 $406 $360 $333 2009 2010 2011 2012 2013 14

  • Page 16
    ...NET INCOME MARGIN 6.6% 6.2% 5.0% 3.4% 1.8% 2009 2010 2011 2012 2013 T HE REA L B ACKB O N E G IV IN G U S STREN G T H : O UR P E OP L E The success we have achieved in the last few years is due almost entirely to our industry leading retail team. In 2013, we developed a global strategy designed...

  • Page 17
    16

  • Page 18
    ...live and work. The Company created the Foot Locker Foundation, Inc. in 2001 to channel its support for those in need. Now, more than a dozen years later, the Company has developed significant partnerships, programs, and initiatives to promote the key causes that connect so closely with our customers...

  • Page 19
    FORM 10-K 18

  • Page 20

  • Page 21
    ...Number of shares of Common Stock outstanding at March 17, 2014: 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 the Registrant's most recently completed second fiscal quarter, August 3, 2013...

  • Page 22

  • Page 23
    ..., Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services 74 74 74 74 74 Market...

  • Page 24
    ... I Item 1. Business 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 3,473 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of...

  • Page 25
    ... our stock. The retail athletic footwear and apparel business is highly competitive with relatively low barriers to entry. Our athletic footwear and apparel operations compete primarily with athletic footwear specialty stores, sporting goods stores and superstores, department stores, discount stores...

  • Page 26
    ... to acquire merchandise at competitive prices or on competitive terms in the future. These risks could have a material adverse effect on our business, financial condition, and results of operations. We depend on mall traffic and our ability to secure suitable store locations. Our stores are located...

  • Page 27
    ... portion of our sales and operating income for 2013 was attributable to our operations in Europe, Canada, Australia, and New Zealand. As a result, our business is subject to the risks associated with doing business outside of the United States such as foreign customer preferences, political unrest...

  • Page 28
    ... a timely manner from major suppliers could have a material adverse effect on our business, financial condition, and results of operations. Material changes in the market value of the securities we hold may adversely affect our results of operations and financial condition. At February 1, 2014, our...

  • Page 29
    ... customer information could harm our business and standing with our customers. 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 on a timely...

  • Page 30
    ... 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. While we feel that we have adequate succession planning and executive development programs, competition for key executives...

  • Page 31
    ... and health care benefits. Due to the breadth and complexity of the health reform legislation and the large number of eligible employees who currently choose not to participate in our plans, it is difficult to predict the overall effect of the statute and related regulations on our business over the...

  • Page 32
    ... second quarter of 2013, the Company acquired Runners Point Group, a specialty athletic store and online retailer based in Recklinghausen, Germany. The acquisition of Runners Point Group involves a number of risks, which could significantly and adversely affect our business, financial condition, and...

  • Page 33
    ...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 of Footlocker.com/Eastbay from April 2003 to August 2007. Mr. Johnson was a director of Maidenform Brands, Inc. from January 2013 to October 2013...

  • Page 34
    ... 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 1, 2014, the...

  • Page 35
    ... filing. Indexed Share Price Performance $600 $500 $400 $300 $200 $100 $0 1/31/2009 1/30/2010 1/29/2011 1/28/2012 2/2/2013 2/1/2014 Russell Midcap Index 1/28/2012 2/2/2013 2/1/2014 Foot Locker, Inc. 1/31/2009 S&P 400 Retailing Index 1/30/2010 1/29/2011 Foot Locker, Inc. S&P 400 Retailing...

  • Page 36
    ...Net income margin(3) Net income margin (non-GAAP)(4) Return on assets (ROA) Return on invested capital (ROIC)(4) Net debt capitalization percent(4),(5) Current ratio Other Data Capital expenditures Number of stores at year end Total selling square footage at year end (in millions) Total gross square...

  • Page 37
    ... Profile February 2, 2013 February 1, 2014 Relocations/ Remodels Square Footage (in thousands) Selling Gross Opened Closed Foot Locker US Foot Locker Europe Foot Locker Canada Foot Locker Asia Pacific Lady Foot Locker Kids Foot Locker Footaction Champs Sports CCS(1) Runners Point Group(2) Total...

  • Page 38
    ... and Puerto Rico and focus on marquee footwear and branded apparel. The Footaction stores have an average of 2,900 selling square feet. Champs Sports - ''We Know Game'' - Champs Sports is one of the largest mall-based specialty athletic footwear and apparel retailers in North America. Its product...

  • Page 39
    ...to open and operate Foot Locker stores in the Republic of Korea. Additionally, franchise stores located in Germany and Switzerland operate under the Runners Point and Stepside banners. A total of 73 franchised stores were operating at February 1, 2014. Of these stores, 27 are operating in the Middle...

  • Page 40
    2013 2012 2011 (in millions, except per share amounts) Net income margin % Net income margin % (non-GAAP) Diluted earnings per share: Net income Runners Point Group acquisition and integration costs Impairment and other charges 53rd week Settlement of foreign tax audits Canadian tax rate changes ...

  • Page 41
    ... retailer. The acquisition increases the Company's market position in Germany. While only a partial year, its operations were accretive to the 2013 results. Capital expenditures during 2013 totaled $206 million and were primarily directed to the remodeling or relocation of 320 stores, the build...

  • Page 42
    ... of Consolidated Statement of Operations 2013 2012 2011 (in millions, except per share data) Sales Gross margin Selling, general and administrative expenses Depreciation and amortization Interest expense, net Net income Diluted earnings per share $6,505 2,133 1,334 133 5 $ 429 $ 2.85 $6,182...

  • Page 43
    ...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. Selling, General and Administrative Expenses 2013 2012 2011 SG&A as a percentage of sales 20.5% 20.9% 22.1% Selling, general...

  • Page 44
    .... 2013 2012 (in millions) 2011 Sales Athletic Stores Direct-to-Customers $5,790 715 $6,505 $5,568 614 $6,182 $5,110 513 $5,623 Operating Results Athletic Stores(1) Direct-to-Customers(2) Restructuring charge(3) Division profit Less: Corporate expense(4) Operating profit Other income(5) Earnings...

  • Page 45
    ...the ''Go Big'' marketing campaign in Kids Foot Locker. Footwear sales increased in our largest category, basketball, which benefited from key marquee player shoes. Despite the overall decline in Lady Foot Locker sales, our overall women's business modestly increased, as some of those customers found...

  • Page 46
    ... investment in our websites in order to provide excellent service in our digital channels, including easy navigation, timely shipping, helpful call center assistance, and entertaining and engaging content. The Direct-to-Customers business generated division profit of $65 million in 2012, as compared...

  • Page 47
    ... to: fund inventory and other working capital requirements; finance capital expenditures related to store openings, store remodelings, Internet and mobile sites, information systems, and other support facilities; make retirement plan contributions, quarterly dividend payments, and interest payments...

  • Page 48
    ... in 2012. During the second quarter of 2013, the Company completed its purchase of Runners Point Group for $81 million, net of cash acquired. Capital expenditures in 2013 were $206 million, primarily related to the remodeling of 320 stores, the build-out of 84 new stores, and various corporate...

  • Page 49
    ...the employee stock programs of $48 million and $22 million, respectively. In connection with stock option exercises, the Company recorded excess tax benefits related to share-based compensation of $11 million and $5 million for 2012 and 2011, respectively. Capital Structure On January 27, 2012, the...

  • Page 50
    ... value of operating leases in total debt is useful to our investors, credit constituencies, and rating agencies. The following table sets forth the components of the Company's capitalization, both with and without the present value of operating leases: 2013 2012 (in millions) Long-term debt and...

  • Page 51
    ... management currently does not expect to borrow under the facility in 2014, other than amounts used to support standby letters of credit. Represents open purchase orders, as well as other commitments for merchandise purchases, at February 1, 2014. The Company is obligated under the terms of purchase...

  • Page 52
    ...course of business, the Company receives allowances from its vendors for markdowns taken. Vendor allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Vendor allowances contributed 20 basis points to the 2013 gross margin rate. The Company also has...

  • Page 53
    ... related to discount rates, expected long-term rates of return on invested plan assets, salary increases, age, and mortality, among others. Management reviews all assumptions annually with its independent actuaries, taking into consideration existing and future economic conditions and the Company...

  • Page 54
    ...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 2013...

  • Page 55
    ... things as future capital expenditures, 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...

  • Page 56
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders of Foot Locker, Inc.: We have audited the accompanying consolidated balance sheets of Foot Locker, Inc. and subsidiaries as of February 1, 2014 and February 2, 2013, and the related consolidated ...

  • Page 57
    Foot Locker, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS 2013 2012 2011 (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 before income taxes ...

  • Page 58
    Foot Locker, Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2013 2012 (in millions) 2011 Net income Other comprehensive income, net of income tax Foreign currency translation adjustment: Translation adjustment arising during the period, net of income tax Cash flow hedges: Change in fair value...

  • Page 59
    Foot Locker, Inc. CONSOLIDATED BALANCE SHEETS 2013 (in millions) 2012 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 $ 858 9 1,220 263 ...

  • Page 60
    ... 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 âˆ' employee stock purchase plan Net income Cash dividends...

  • Page 61
    ... in long-term debt and obligations under capital leases 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...

  • Page 62
    ... 2, 2013, and the 52 week period ending January 28, 2012, 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...

  • Page 63
    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: 2013 2012 (in millions) 2011 Advertising expenses ...

  • Page 64
    ...inventory at its current owned retail valuation to determine the cost of ending inventory on a department basis. The Company provides reserves based on current selling prices when the inventory has not been marked down to market. Merchandise inventories of the Direct-to-Customers business are valued...

  • Page 65
    ... of materials and services consumed in developing or obtaining internal-use software, and payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs ceases no later than the point at which the...

  • Page 66
    ... 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's Consolidated Balance Sheets at their fair values. For derivatives designated as a hedge...

  • Page 67
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize their deferred tax assets in the future in excess of their ...

  • Page 68
    ... financial statements. 2. Acquisition Effective July 7, 2013, the Company acquired 100 percent of the shares of Runners Point Warenhandelsgesellschaft mbH, (''Runners Point Group'') a specialty athletic store and online retailer based in Recklinghausen, Germany. The aggregate purchase price...

  • Page 69
    ...for Tredex, a direct-to-customers subsidiary of Runners Point Group, are included in the Direct-to-Customers segment since the date of acquisition. 2013 2012 (in millions) 2011 Sales Athletic Stores Direct-to-Customers Total sales Operating Results Athletic Stores(1) Direct-to-Customers (2) $5,790...

  • Page 70
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Segment Information âˆ' (continued) Depreciation and Amortization 2013 2012 2011 Capital Expenditures 2013 2012 (in millions) 2011 2013 Total Assets 2012 2011 Athletic Stores Direct-to-Customers Corporate Total Company $112 9 121 12 $...

  • Page 71
    ..., annually. We estimate the fair value based on an income approach using the relief-from-royalty method. During the fourth quarters of 2012 and 2011, the Company determined that triggering events had occurred related to its CCS intangible assets, which is part of the Direct-to-Customers segment...

  • Page 72
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Property and Equipment, Net 2013 (in millions) 2012 Land Buildings: Owned Furniture, fixtures, equipment and software development costs: Owned Assets under capital leases Less: accumulated depreciation Alterations to leased and owned ...

  • Page 73
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Other Intangible Assets, net âˆ' (continued) As of February 1, 2014, in connection with the allocation of the purchase price of the Runners Point Group acquisition, the Company recognized $30 million of indefinite life intangible ...

  • Page 74
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Revolving Credit Facility On January 27, 2012, the Company entered into an amended and restated credit agreement (the ''2011 Restated Credit Agreement'') with its banks. The 2011 Restated Credit Agreement provides for a $200 million ...

  • Page 75
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. Long-Term Debt and Obligations Under Capital Leases âˆ' (continued) Maturities of long-term debt and minimum rent payments under capital leases in future periods are: Long-Term Debt Capital Leases (in millions) Total 2014 2015 2016 ...

  • Page 76
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16. Leases âˆ' (continued) Future minimum lease payments under non-cancelable operating leases, net of future non-cancelable operating sublease payments, are: (in millions) 2014 2015 2016 2017 2018 Thereafter Total operating lease ...

  • Page 77
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. Income Taxes Following are the domestic and international components of pre-tax income: 2013 2012 (in millions) 2011 Domestic International Total pre-tax income $558 105 $663 $508 99 $607 $321 114 $435 The income tax provision ...

  • Page 78
    ... in filing its income tax returns than for income tax financial reporting. The Company regularly assesses its tax positions for such transactions and records reserves for those differences. The Company's U.S. Federal income tax filings have been examined by the Internal Revenue Service through 2012...

  • Page 79
    ... on management's estimate of when these liabilities will be settled. Interest expense and penalties related to unrecognized tax benefits are classified as income tax expense. The Company recognized $1 million of interest income, in 2013 and 2012, and $1 million of interest expense in 2011. The total...

  • Page 80
    ...the next twelve months, and the Company expects all derivativerelated amounts reported in AOCL to be reclassified to earnings within twelve months. During 2013, the net change in the fair value of the foreign exchange derivative financial instruments designated as cash flow hedges of the purchase of...

  • Page 81
    ...1.0717 $ 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. The Company operates in 23 countries and purchased approximately...

  • Page 82
    ...the Runners Point Group in the second quarter of 2013, the Company recognized capital lease obligations. These were existing agreements primarily related to the financing of certain store fixtures. As of February 1, 2014, $8 million is included in the amounts above. The fair value of long-term debt...

  • Page 83
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. 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 84
    ... Benefits 2013 2012 Discount rate Rate of compensation increase 4.32% 3.69% 3.79% 3.68% 4.20% 3.70% 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 long-term...

  • Page 85
    ...below: 2013 Pension Benefits 2012 2011 2013 Postretirement Benefits 2012 2011 Discount rate Rate of compensation increase Expected long-term rate of return on assets 3.79% 3.69% 6.24% 4.16% 3.68% 6.63% 4.99% 3.69% 6.59% 3.70% 4.00% 4.60% The expected long-term rate of return on invested plan...

  • Page 86
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. Retirement Plans and Other Benefits âˆ' (continued) The following initial and ultimate cost trend rate assumptions were used to determine the net periodic cost under the SERP Medical Plan: 2013 Medical Trend Rate 2012 2011 2013 Dental...

  • Page 87
    ... are designed to track the performance of the Barclays Capital U.S. Intermediate Credit Index. This category consists of one fund that invests in global real estate securities. No Level 3 assets were held by the U.S. pension plan during 2013 and 2012. The fair values of the Company's Canadian...

  • Page 88
    ... Plan In 2013, the Company adopted the 2013 Foot Locker Employees Stock Purchase Plan (''2013 ESPP''), whose terms are substantially the same as the 2003 Employees Stock Purchase Plan (''2003 ESPP''). Under the 2013 ESPP participating employees are able to contribute up to 10 percent of their annual...

  • Page 89
    ... table shows the Company's assumptions used to compute the share-based compensation expense: Stock Option Plans 2013 2012 2011 2013 Stock Purchase Plan 2012 2011 Weighted-average risk free rate of interest Expected volatility Weighted-average expected award life (in years) Dividend yield Weighted...

  • Page 90
    ... FINANCIAL STATEMENTS 22. Share-Based Compensation âˆ' (continued) Compensation expense related to the Company's stock options and employee stock purchase plan was $12 million, $10 million, and $8 million for 2013, 2012, and 2011, respectively. As of February 1, 2014, there was $8 million of total...

  • Page 91
    ... employed by the Company. The Company recorded compensation expense related to restricted shares, net of estimated forfeitures, of $13 million, $10 million, and $10 million for 2013, 2012, and 2011, respectively. At February 1, 2014, there was $11 million of total unrecognized compensation cost net...

  • Page 92
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 22. Share-Based Compensation âˆ' (continued) Restricted share and unit activity is summarized as follows: 2013 Number of Shares and Units 2012 2011 (in thousands) Outstanding at beginning of year Granted Vested Cancelled or forfeited ...

  • Page 93
    ... Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 23. 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 94
    Foot Locker, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 25. Quarterly Results (Unaudited) 1st Q 2nd Q 3rd Q 4th Q(1) (in millions, except per share amounts) Year Sales 2013 2012 Gross margin(2) 2013 2012 Operating profit(3) 2013 2012 Net income 2013 2012 Basic earnings per share: 2013 2012 ...

  • Page 95
    ... Company's Chief Executive Officer (''CEO'') and Chief Financial Officer (''CFO''), and completed an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange...

  • Page 96
    ... the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Foot Locker, Inc. and subsidiaries as of February 1, 2014, and February 2, 2013, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and...

  • Page 97
    ...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 98
    ....'' All other schedules specified under Regulation S-X have been omitted because they are not applicable, because they are not required or because the information required is included in the financial statements or notes thereto. (a)(3) and (c) Exhibits An index of the exhibits which are required...

  • Page 99
    ... 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 31, 2014 Pursuant to the...

  • Page 100
    ... 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-Q for the period ended July 29, 2000, filed by the Registrant with the SEC on September 7, 2000 (the ''July 29, 2000 Form 10-Q'')). Executive Supplemental...

  • Page 101
    ....11 10.12 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 102
    ... Agreement for Non-employee Directors (incorporated herein by reference to Exhibit 10.2 to the July 31, 2004 Form 10-Q). 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...

  • Page 103
    ... FOOT LOCKER, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) ($ in millions) Feb. 1, 2014 Feb. 2, 2013 Fiscal Year Ended Jan. 28, 2012 Jan. 29, 2011 Jan. 30, 2010 NET EARNINGS Income from continuing operations Income tax expense Interest expense, excluding capitalized interest...

  • Page 104
    ... Locker New Zealand, Inc. Freedom Sportsline Limited Team Edition Apparel, Inc. Foot Locker Specialty, Inc. Foot Locker Retail, Inc. Foot Locker Europe.com B.V. Foot Locker Poland Sp. z o.o. Foot Locker Czech Republic s.r.o. FLE Partners C.V. Foot Locker Stores, Inc. Foot Locker Corporate Services...

  • Page 105
    ... statements of Foot Locker, Inc. and subsidiaries of our reports dated March 31, 2014, with respect to the consolidated balance sheets of Foot Locker, Inc. as of February 1, 2014 and February 2, 2013, and the related consolidated statements of operations, comprehensive income, shareholders...

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    ...'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 31, 2014 Principal Executive Officer

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    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who...

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    ... the Annual Report on Form 10-K of Foot Locker, Inc. (the ''Registrant'') for the period ended February 1, 2014, 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...

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    .../Trademarks Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports, footlocker.com, Eastbay, Team Edition, CCS, SIX:02, Runners Point, Sidestep and Run by Foot Locker service marks and trademarks are owned by Foot Locker, Inc. or its affiliates. Worldwide Website Our website at...

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    BUILDING ON OUR STRENGTHS 112 West 34th Street New York, NY 10120 C101537