Foot Locker 2013 Annual Report Download - page 49

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the build-out of 85 new stores, and various corporate technology upgrades and e-commerce website enhance-
ments, representing an increase of $11 million as compared with the prior year.
Financing Activities
Net cash used in financing activities was $309 million in 2013 as compared with $181 million in 2012. During
2013, the Company repurchased 6,424,286 shares of its common stock under its share repurchase program for
$229 million. Additionally, the Company declared and paid dividends totaling $118 million and $109 million in
2013 and 2012, respectively, representing a quarterly rate of $0.20 and $0.18 per share in 2013 and 2012, respec-
tively. During 2013 and 2012, the Company received proceeds from the issuance of common stock and treasury
stock in connection with the employee stock programs of $30 million and $48 million, respectively. In connec-
tion with stock option exercises, the Company recorded excess tax benefits related to share-based
compensation of $9 million and $11 million for 2013 and 2012, respectively.
Net cash used in financing activities was $181 million in 2012 as compared with $178 million in 2011. During
2012, the Company repurchased 4,000,161 shares of its common stock under its share repurchase program for
$129 million. Additionally, the Company declared and paid dividends totaling $109 million and $101 million in
2012 and 2011, respectively, representing a quarterly rate of $0.18 and $0.165 per share in 2012 and 2011,
respectively. During 2012 and 2011, the Company received proceeds from the issuance of common stock and
treasury stock in connection with 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 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 asset based revolving credit facility maturing on January 27, 2017. In addition, during the term of the
2011 Restated Credit Agreement, the Company may make up to four requests for additional credit commit-
ments in an aggregate amount not to exceed $200 million. Interest is based on the LIBOR rate in effect at
the time of the borrowing plus a 1.25 to 1.50 percent margin depending on certain provisions as defined in
the 2011 Restated Credit Agreement. 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 Company is not required to comply with any financial covenants as long as there are no
outstanding borrowings. With regard to the payment of dividends and share repurchases, there are no
restrictions if the Company is not borrowing and the payments are funded through cash on hand. If the
Company is borrowing, Availability as of the end of each fiscal month during the subsequent projected six
fiscal months following the payment must be at least 20 percent of the lesser of the Aggregate Commit-
ments and the Borrowing Base (all terms as defined in the 2011 Restated Credit Agreement). The Company’s
management does not currently expect to borrow under the facility in 2014, other than amounts used to
support standby letters of credit.
Credit Rating
As of March 31, 2014, the Company’s corporate credit ratings from Standard & Poor’s and Moody’s Investors
Service are BB+ and Ba2, respectively. In addition, Moody’s Investors Service has rated the Company’s senior
unsecured notes Ba3.
Debt Capitalization and Equity (non-GAAP Measure)
For purposes of calculating debt to total capitalization, the Company includes the present value of operating
lease commitments in total net debt. Total net debt including the present value of operating leases is consid-
ered a non-GAAP financial measure. The present value of operating leases is discounted using various interest
rates ranging from 2.8 percent to 14.5 percent, which represent the Company’s incremental borrowing rate at
inception of the lease.
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