Foot Locker 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Foot Locker annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

2014 ANNUAL REPORT
SEIZING OPPORTUNITIES

Table of contents

  • Page 1
    2 0 14 AN N UAL REPORT SEIZING OPPORTUNITIES

  • Page 2
    ... in North America, Europe, Australia, and New Zealand under the brand names Foot Locker, Champs Sports, Kids Foot Locker, Footaction, SIX:02, Lady Foot Locker, Runners Point, and Sidestep. The Company also operates a direct-to-customer business offering athletic footwear, apparel, and equipment...

  • Page 3
    OUR BUSINESSES footlocker.com ladyfootlocker.com kidsfootlocker.com APPROVED THE PLACE FOR HER GO BIG footaction.com six02.com champssports.com OWN IT IT'S YOUR TIME WE KNOW GAME eastbay.com runnerspoint.com sidestep-shoes.com FIRST CHOICE FOR ATHLETES YOUR WAY, OUR PASSION SNEAKER...

  • Page 4
    ... to report that we continue to make excellent progress and have, once again, surpassed many of the key goals we set for ourselves, as shown below: Original 5-Year Plan 2009 Objectives 2011 2012-2016 Long-Term 2014 Objectives Sales (billions) Sales per Gross Square Foot Adjusted EBIT Margin Adjusted...

  • Page 5
    ... designed specifically for Foot Locker; • And we celebrated the 40th anniversary of the Foot Locker banner, which started with a single store in California in 1974. New Long-Term Financial Objectives Along with the growth priorities outlined above, we have updated the long-term financial targets...

  • Page 6
    .... Achieving new heights of operational and financial performance will only be possible through continuing to elevate our engagement with our customers, at every point of contact we have with them: in our stores, on their smart phones, on social media, on our websites, at athletic and sporting events...

  • Page 7
    ... growth in Women's • Build on our industry-leading team by embracing the power of our People Customer Engagement People Women's Apparel Europe Digital Kids' Core Business ACHIEVE RESULTS Sales Sales per Earnings Before Interest and Gross Square Taxes Foot Net Income Return on Invested...

  • Page 8
    ... BUSINESS The team at Foot Locker, Inc. has many different opportunities to build an even stronger company, which we describe on the next several pages. At the same time, we always pay close attention to improving our core operations, which we generally define as the business of selling basketball...

  • Page 9
    T O TA L C O M PA N Y GROSS MARGIN T O TA L C O M PA N Y SALES PER SQUARE FOOT 33.2% $443 $406 $333 $360 $460 $490 27.7% 30.0% 31.9% 32.8% 32.8% 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 8

  • Page 10
    ... footwear and apparel to children go even bigger by: • Developing the kids' business globally • Driving a full-family experience by building connectivity with parents, both in store and online • Leveraging our strengths as the power player for kids in basketball, running, and casual shoes, as...

  • Page 11

  • Page 12
    ... the Foot Locker banner in underpenetrated markets • Expanding Runners Point and Sidestep banners into markets beyond Germany • Leveraging our strength as a power player in key product categories - running, basketball, and casual footwear; women's; kids'; and apparel • Building our capability...

  • Page 13
    ...footwear retailer first, athleticallyinspired apparel is a very important category for our customers and a key opportunity for us to continue improving our major productivity measures, such as sales per gross square foot, average transaction size, and sales per payroll hour. We have had good initial...

  • Page 14
    ...the Lady Foot Locker business, driving a positive comparable sales gain for the year, including a double-digit percentage increase in the fourth quarter. To the extent possible in the smaller Lady Foot Locker stores, we have introduced the key apparel items, such as fitness tops, sports bras, shorts...

  • Page 15
    14

  • Page 16
    ... S I N E S S Our digital business has been the fastest growing portion of our Company for the past several years. We have worked diligently to create seamless customer experiences across the store, digital, and mobile channels, and as a result our store banner internet sites collectively have posted...

  • Page 17
    ... a new applicant hiring system in order to identify likely top performers in our stores; installed a new labor scheduling tool that helps ensure that these top performers are on the sales floor at the right time; enhanced our training programs; and created a new, company-specific global leadership...

  • Page 18
    ...our community involvement. Just as Foot Locker, Inc. set financial records in 2014, the Foot Locker Foundation - our charitable arm founded in 2001 - also set a record in terms of our support for young people. Our mission is to promote a better world for today's youth through educational initiatives...

  • Page 19
    FORM 10-K 18

  • Page 20

  • Page 21
    ... 34th Street, New York, New York (Address of principal executive offices) 10120 (Zip Code) Registrant's telephone number, including area code: (212) 720-3700 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, par...

  • Page 22

  • Page 23
    ... Item 9. Item 9A. Item 9B. PA RT I I I Item 10. Item 11. Item 12. Item 13. Item 14. PART I V Item 15. Exhibits and Financial Statement Schedules 75 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related...

  • Page 24
    PART 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 3,423 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as ...

  • Page 25
    ... existing competitors, into our markets could have a material adverse effect on our business, financial condition, and results of operations. Although we sell merchandise via the Internet, a significant shift in customer buying patterns to purchasing athletic footwear, athletic apparel, and sporting...

  • Page 26
    ... of Nike to develop and manufacture products that appeal to our target customers could also have an adverse effect on our business, financial condition, and results of operations. We cannot be certain that we will be able to acquire merchandise at competitive prices or on competitive terms in...

  • Page 27
    ... including fluctuations in foreign currency exchange rates and tax rates may adversely affect our operations. A significant portion of our sales and operating income for 2014 was attributable to our operations in Europe, Canada, Australia, and New Zealand. As a result, our business is subject to the...

  • Page 28
    ... to any number of factors, including general market conditions and bank-specific credit issues. Our U.S. pension plan trust holds assets totaling $613 million at January 31, 2015. The fair values of these assets held in the trust are compared to the plan's projected benefit obligation to determine...

  • 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
    ...extent to which policies can be rescinded, and imposes new and significant taxes on health insurers and health care benefits. Due to the breadth and complexity of the health care reform legislation and the large number of eligible employees who currently choose not to participate in our plans, it is...

  • Page 32
    ..., Canada, various European countries, Australia, and New Zealand. The Company currently operates seven distribution centers, of which three are owned and four are leased, occupying an aggregate of 2.9 million square feet. Three distribution centers are located in the United States, three in Germany...

  • Page 33
    ... Information with respect to Executive Officers of the Company, as of March 30, 2015, is set forth below: Executive Chairman of the Board President and Chief Executive Officer Executive Vice President - Operations Support Executive Vice President and Chief Financial Officer Senior Vice President...

  • Page 34
    ... 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 January 31, 2015...

  • Page 35
    ...into such filing. Indexed Share Price Performance $500 $450 $400 $350 $300 $250 $200 $150 $100 $0 1/30/10 1/29/11 1/28/12 2/2/13 2/1/14 1/31/15 Foot Locker, Inc. 1/30/2010 S&P 400 Retailing Index 1/29/2011 1/28/2012 2/2/2013 Russell Midcap Index 2/1/2014 1/31/2015 Foot Locker, Inc. S&P 400...

  • Page 36
    ... read in conjunction with the Consolidated Financial Statements and the Notes thereto and other information contained elsewhere in this report. ($ in millions, except per share amounts) 2014 2013 2012(1) 2011 2010 Summary of Operations Sales Gross margin Selling, general and administrative expenses...

  • Page 37
    .... Store Profile February 1, 2014 January 31, 2015 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/SIX:02 Kids Foot Locker Footaction Champs Sports Runners Point Sidestep...

  • Page 38
    ... in North America. Of its 547 stores, 517 are located throughout the United States, Puerto Rico, and the U.S. Virgin Islands and 30 in Canada. The Champs Sports stores have an average of 3,500 selling square feet. Runners Point - ''Your Way, Our Passion'' - Runners Point specializes in running...

  • Page 39
    ... the Overview of Consolidated Results: 2014 2013 2012 (in millions, except per share amounts) Sales: Sales 53rd week Sales excluding 53rd week (non-GAAP) Pre-tax income: Income before income taxes Pre-tax amounts excluded from GAAP: Runners Point Group integration and acquisition costs Impairment...

  • Page 40
    ...and income taxes, partially offset by an increase in our average invested capital, primarily related to an increase in capitalized operating leases. This reflected the effect of opening larger stores, and resulting additional rent, supporting the various shop-in-shop initiatives. 2014 2013 2012 ROA...

  • Page 41
    ...to benefit from exciting assortments and enhanced store formats across our various banners, as well as improved performance of the Company's store banner.com websites. 2014 2013 2012 Sales increase Comparable-store sales increase 9.9% 8.0% 6.6% 4.2% 8.5% 9.4% • Sales from Direct-to-Customers...

  • Page 42
    Summary of Consolidated Statements of Operations 2014 2013 2012 (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 $7,151 2,374 1,426 139 5 $ 520 $ 3.56 $6,...

  • Page 43
    ... effective expense management, including store wages, which benefitted from the utilization of hiring and scheduling tools, as well as enhanced associate training. Excluding the effect of foreign currency fluctuations, SG&A increased by $34 million for 2013 as compared with 2012. Runners Point Group...

  • Page 44
    ... on several factors, the primary financial measure of which is division results. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense. 2014 2013 (in millions) 2012 Sales Athletic Stores Direct-to-Customers $6,286 865 $7,151 $5,790...

  • Page 45
    ... in Lady Foot Locker, Footaction, and Champs Sports. Lady Foot Locker's sales declined in 2013 as management closed underperforming stores and redefined the product offerings. Lady Foot Locker's store count declined by 46 stores during 2013. On a comparable-store sales basis, Footaction reported...

  • Page 46
    ...division profit was the result of strong flow-through of sales to profit and good expense management. 2013 compared with 2012 Comparable sales increased 14.8 percent from the prior year. The Direct-to-Customers segment included $18 million of sales related to the e-commerce division of Runners Point...

  • Page 47
    ..., 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. The Company...

  • Page 48
    ... opening of approximately 100 new stores primarily related to Kids Foot Locker, European expansion, and SIX:02. Additionally, the planned spending includes $42 million for the development of information systems and infrastructure, including a new e-commerce order management system, point of sale...

  • Page 49
    ... related to the remodeling of 320 stores, the build-out of 84 new stores, and various corporate technology upgrades. This represented an increase of $43 million as compared with 2012. Net sales and maturities of short-term investments were $37 million during 2013, as compared with net purchases...

  • Page 50
    ... Credit Agreement). The Company's management currently does not expect to borrow under the facility in 2015, other than amounts used to support standby letters of credit. Credit Rating As of March 30, 2015, the Company's corporate credit ratings from Standard & Poor's and Moody's Investors Service...

  • Page 51
    ... Management, and Retirement Plans and Other Benefits notes under ''Item 8. Consolidated Financial Statements and Supplementary Data.'' Represents open purchase orders, as well as other commitments for merchandise purchases, at January 31, 2015. The Company is obligated under the terms of purchase...

  • Page 52
    ... event, comprises measurable operating performance criteria at the division level as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event, the Company uses assumptions, which are predominately identified from the Company's strategic long-range plans...

  • Page 53
    ... to, the discount rate, terminal growth rates, earnings before depreciation and amortization, and capital expenditures forecasts. The market approach requires judgment and uses one or more methods to compare the reporting unit with similar businesses, business ownership interests, or securities that...

  • 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 2014...

  • Page 55
    ... in the Company's filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company's merchandise...

  • Page 56
    ... part of this Report Consolidated Statements of Operations for the Fiscal Years January 31, 2015, February 1, 2014, and February 2, 2013. Consolidated Statements of Comprehensive Income for the Fiscal Years January 31, 2015, February 1, 2014, and February 2, 2013. Consolidated Balance Sheets as of...

  • Page 57
    ... 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 January 31, 2015 and February 1, 2014, and the related consolidated statements of operations...

  • Page 58
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2014 2013 2012 (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 59
    FOOT LOCKER, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2014 2013 (in millions) 2012 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 60
    FOOT LOCKER, INC. CONSOLIDATED BALANCE SHEETS 2014 (in millions) 2013 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 $ 967 - 1,250 239 ...

  • Page 61
    ... of tax Balance at February 1, 2014 Restricted stock issued Issued 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 Share repurchases Reissued âˆ' employee stock purchase plan...

  • Page 62
    ...net income to net cash provided by operating activities: Non-cash impairment charges Depreciation and amortization Deferred tax provision Share-based compensation expense Excess tax benefits on share-based compensation Gain on sale of real estate Qualified pension plan contributions Change in assets...

  • Page 63
    ... February 2, 2013, 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 catalog sales revenue is recognized...

  • Page 64
    ...: 2014 2013 (in millions) 2012 Catalog costs Cooperative reimbursements Net catalog expense $32 (7) $25 $36 (5) $31 $45 (6) $39 Earnings Per Share The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share is computed by dividing reported...

  • Page 65
    ... of shares under the 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...

  • Page 66
    ... exists, a triggering event, comprises measurable operating performance criteria at the division level, as well as qualitative measures. The Company considers historical performance and future estimated results, which are predominately identified from the Company's strategic long-range plans, in its...

  • Page 67
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies âˆ' (continued) Goodwill and Other Intangible Assets Goodwill and intangible assets with indefinite lives are reviewed for impairment annually during the first quarter of its fiscal year or ...

  • Page 68
    ... related to unrecognized tax benefits within income tax expense in the accompanying consolidated statement of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet. Provision for U.S. income taxes on undistributed earnings...

  • Page 69
    ... factors, of which the primary financial measure is division results. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense. 2014 2013 (in millions) 2012 Sales Athletic Stores Direct-to-Customers Total sales $6,286 865 $7,151 $5,790...

  • Page 70
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Segment Information âˆ' (continued) 2014 2013 (in millions) 2012 Operating Results Athletic Stores(1) Direct-to-Customers Division profit Less: Corporate expense(3) Operating profit Other income Interest expense, net Income before ...

  • Page 71
    ... to writedown long-lived assets of the CCS stores. During 2013, the Company recorded $2 million of store closing costs, primarily related to lease buy-out expenses, resulting from the decision to close the CCS store locations. Finally, during 2014 the Company exited the e-commerce business and...

  • Page 72
    ...expenses and other current assets Deferred taxes and costs Income tax receivable $ 78 77 34 32 17 1 $239 $ 99 75 35 34 20 - $263 7. Property and Equipment, Net 2014 (in millions) 2013 Land Buildings: Owned Furniture, fixtures, equipment and software development costs: Owned Assets under capital...

  • Page 73
    ... secure prime lease locations and other lease rights, primarily in Europe. The amortizing intangible asset activity during 2014 of $9 million reflects a $4 million decrease related to foreign currency exchange fluctuations, partially offset by additions of $1 million related to new leases in Europe...

  • Page 74
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. Accrued and Other Liabilities 2014 (in millions) 2013 Taxes other than income taxes Other payroll and payroll related costs, excluding taxes Incentive bonuses Property and equipment(1) Current deferred tax liabilities Customer ...

  • Page 75
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Long-Term Debt and Obligations Under Capital Leases 2014 (in millions) 2013 8.5% debentures payable 2022 Unamortized gain related to interest rate swaps(1) Obligations under capital leases Less: current portion of obligations under ...

  • Page 76
    ... adjustments Items related to pension and postretirement benefits Unrealized loss on available-forsale security (in millions) Cash flow hedges Total Balance as of February 1, 2014 OCI before reclassification Reclassified from AOCI Other comprehensive income/(loss) Balance as of January 31, 2015...

  • Page 77
    ... of actuarial gain Net periodic benefit cost (see Note 20) Income tax expense Net of tax $15 (3) 12 4 $ 8 17. Income Taxes Following are the domestic and international components of pre-tax income: 2014 2013 (in millions) 2012 Domestic International Total pre-tax income $654 155 $809 $558 105...

  • Page 78
    ... 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: 2014 (in millions) 2013 Deferred tax assets: Tax loss/credit carryforwards and capital loss Employee benefits Property and equipment...

  • Page 79
    ... 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 2013...

  • Page 80
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. Income Taxes âˆ' (continued) 2014 2013 (in millions) 2012 The following table summarizes the activity related to unrecognized tax benefits: Unrecognized tax benefits at beginning of year Foreign currency translation adjustments ...

  • Page 81
    ... of the Company's agreements allow for a netting arrangement. The following is presented on a gross basis, by type of contract: (in millions) Balance Sheet Caption 2014 2013 Hedging Instruments: Foreign exchange forward contracts Non-hedging Instruments: Foreign exchange forward contracts Current...

  • Page 82
    ... operating divisions is highly dependent on Nike; they individually purchased 47 to 84 percent of their merchandise from Nike. Included in the Company's Consolidated Balance Sheet at January 31, 2015, are the net assets of the Company's European operations, which total $883 million and are located...

  • Page 83
    ... and plan assets, funded status, and amounts recognized in the Consolidated Balance Sheets, measured at January 31, 2015 and February 1, 2014: Pension Benefits 2014 2013 Postretirement Benefits 2014 (in millions) 2013 Change in benefit obligation Benefit obligation at beginning of year Service cost...

  • Page 84
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 20. Retirement Plans and Other Benefits âˆ' (continued) Pension Benefits 2014 2013 Postretirement Benefits 2014 (in millions) 2013 Funded status Amounts recognized on the balance sheet: Other assets Accrued and other liabilities Other ...

  • Page 85
    ... reduce future contributions by the Company. The components of net benefit expense (income) are: Pension Benefits 2014 2013 2012 2014 (in millions) Postretirement Benefits 2013 2012 Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net loss...

  • Page 86
    ... MP 2014. Plan Assets During 2014, the target composition of the Company's U.S. qualified pension plan assets was 58 percent fixed-income securities, 38 percent equity, and 4 percent real estate investment trust. The Company may alter the targets from time to time depending on market conditions and...

  • Page 87
    ... the plan at year end. Stocks traded on U.S. security exchanges are valued at closing market prices on the measurement date. The fair values of the Company's U.S. pension plan assets at January 31, 2015 and February 1, 2014 were as follows: Level 1 Level 2 Level 3 (in millions) 2014 Total 2013 Total...

  • Page 88
    ...global real estate securities. This category consists primarily of cash related to net pending trade purchases and sales. No Level 3 assets were held by the U.S. pension plan during 2014 and 2013. The fair values of the Company's Canadian pension plan assets at January 31, 2015 and February 1, 2014...

  • Page 89
    ... associated tax benefits recognized related to the Company's share-based compensation plans were as follows: 2014 2013 (in millions) 2012 Options and shares purchased under the employee stock purchase plan Restricted stock and units Total share-based compensation expense Tax benefit Tax deductions...

  • Page 90
    ...differ from those estimates. The following table shows the Company's assumptions used to compute the share-based compensation expense: Stock Option Plans 2014 2013 2012 2014 Stock Purchase Plan 2013 2012 Weighted-average risk free rate of interest Expected volatility Weighted-average expected award...

  • Page 91
    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: 2014 WeightedAverage Exercise Price 2013 WeightedAverage Exercise Price 2012 ...

  • Page 92
    ... executives outside of the United States and to nonemployee directors are made in the form of restricted stock units. 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 2014, 2013, and 2012, there...

  • Page 93
    ... class action (Osberg v. Foot Locker, filed in the U.S. District Court for the Southern District of New York) in which the plaintiff alleges that, in connection with the 1996 conversion of the retirement plan to a defined benefit plan with a cash balance formula, the Company and the retirement plan...

  • Page 94
    FOOT LOCKER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 23. Quarterly Results (Unaudited) 1st Q 2nd Q 3rd Q 4th Q (in millions, except per share amounts) Year Sales 2014 2013 Gross margin(1) 2014 2013 Operating profit(2) 2014 2013 Net income 2014 2013 Basic earnings per share: 2014 2013 ...

  • 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 January 31, 2015 and February 1, 2014, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and...

  • Page 97
    ..., 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 is incorporated herein by reference. Item 11. Executive Compensation Information...

  • Page 98
    ... of financial statements required by this item is set forth in Item 8. ''Consolidated Financial Statements and Supplementary Data.'' 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...

  • Page 99
    ... 30, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 30, 2015, by the following persons on behalf of the Company and in the capacities indicated. /s/ RICHARD A. JOHNSON Richard A. Johnson President, Chief Executive Officer, and...

  • Page 100
    ... Current Report on Form 8-K dated May 25, 2011 filed on May 27, 2011). Amendment Number Two to the Foot Locker Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K dated March 26, 2014 filed on April 1, 2014 (the ''March 26, 2014...

  • Page 101
    ...the March 26, 2014 Form 8-K). Form of Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K dated December 23, 2014 filed on December 30, 2014 (the ''December 23, 2014 Form 8-K'')). Foot Locker 2002 Directors Stock Plan (incorporated herein by...

  • Page 102
    ... 10.1 to the Current Report on Form 8-K dated March 23, 2010 filed 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 Pursuant to Section 302...

  • Page 103
    Exhibit 12 FOOT LOCKER, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) ($in millions) Jan. 31, 2015 Feb. 1, 2014 Fiscal Year Ended Feb. 2, 2013 Jan. 28, 2012 Jan. 29, 2011 NET EARNINGS Net income Income tax expense Interest expense, excluding capitalized interest Portion of ...

  • Page 104
    ... 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, Inc. Foot Locker Europe...

  • Page 105
    ... statements of Foot Locker, Inc. and subsidiaries of our reports dated March 30, 2015, with respect to the consolidated balance sheets of Foot Locker, Inc. and subsidiaries as of January 31, 2015 and February 1, 2014, and the related consolidated statements of operations, comprehensive income...

  • Page 106
    ... over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating...

  • Page 107
    ... over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating...

  • Page 108
    ... of 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 30, 2015 /s/ RICHARD A. JOHNSON Richard A. Johnson Chief Executive Officer /s/ LAUREN...

  • Page 109

  • Page 110

  • Page 111
    ... Public Accounting Firm KPMG LLP 345 Park Avenue New York, New York 10154 (212) 758-9700 Service Marks/Trademarks Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports, footlocker.com, Eastbay, Team Edition, SIX:02, Runners Point, Sidestep, and Run by Foot Locker service...

  • Page 112
    1 1 2 W E ST 34TH STRE E T NE W YO RK, NY 10120 SEIZING OPPORTUNITIES