Foot Locker 2013 Annual Report Download - page 68

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Foot Locker, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies − (continued)
Recent Accounting Pronouncements
During the first quarter of 2013, the Company adopted Accounting Standards Update 2013-02, Comprehensive
Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income
(‘‘ASU 2013-02’’). ASU 2013-02 amended existing guidance by requiring additional disclosure either on the face of
the income statement or in the notes to the financial statements of significant amounts reclassified out of accumu-
lated other comprehensive income. The provisions of this new guidance were effective prospectively as of the
beginning of 2013. Accordingly, enhanced footnote disclosure is included in Note 17, Accumulated Other Compre-
hensive Loss. The adoption of ASU 2013-02 had no effect on our results of operations or financial position.
Other recently issued accounting pronouncements did not, or are not believed by management to, have a
material effect on the Company’s present or future consolidated financial statements.
2. Acquisition
Effective July 7, 2013, the Company acquired 100 percent of the shares of Runners Point Warenhandelsgesell-
schaft mbH, (‘‘Runners Point Group’’) a specialty athletic store and online retailer based in Recklinghausen,
Germany. The aggregate purchase price paid for the acquisition was $87 million in cash, subject to adjustment
for finalization of the purchase price for working capital adjustments. At the date of acquisition, Runners Point
Group operated 194 stores in Germany, Austria, and the Netherlands. Additionally, there were 24 Runners Point
Group franchise stores operating in Germany and Switzerland. The acquisition is intended to enhance the
Company’s position in Germany and also provide additional banners to further diversify and expand the Com-
pany’s European business. Also, the addition of the strong digital capabilities of Tredex, the e-commerce
subsidiary of Runners Point Group, allows for the potential of accelerated e-commerce growth in Europe.
The results of Runners Point Group are included in our consolidated financial statements since the acquisi-
tion date.
The following table summarizes allocation of the purchase price to the fair value of assets acquired, based on
the exchange rate in effect at the date of our acquisition of Runners Point Group. The Company has allocated
the purchase price, in part, upon internal estimates of cash flows and considering the report of a third-party
valuation expert retained to assist the Company.
(in millions)
Assets acquired:
Cash and cash equivalents $6
Inventory 41
Other current assets 11
Property and equipment 24
Other long-term assets 1
Tradenames 29
(1)
Favorable leases 5
Liabilities assumed:
Accounts payable and other accruals (27)
Income taxes and deferred taxes, net (11)
Obligations under capital leases (9)
Other long-term liabilities (1)
Goodwill 18
Total purchase price $87
(1) Due to foreign currency fluctuations, the U.S. dollar value of tradenames increased to $30 million as of February 1, 2014.
45