View Filing Data

Other intangible assets, net

160

163

Other assets

Assets, Total

3,618

3,487

3,477

Current liabilities

Accounts payable

287

263

310

Accrued and other liabilities

358

360

330

Current portion of capital lease obligations

Liabilities, Current, Total

648

626

643

Long-term debt and obligations under capital leases

132

136

137

Other liabilities

236

229

231

Total liabilities

1,016

991

1,011

Shareholders' equity

Common stock and paid-in capital: 170,469,434; 168,675,093; and 169,039,095 shares, respectively

971

921

905

Retained earnings

2,665

2,387

2,295

Accumulated other comprehensive loss

(221)

(186)

(170)

Less: Treasury stock at cost: 27,323,176; 22,035,758; and 23,612,273 shares, respectively

(813)

(626)

(564)

Total shareholders' equity

2,602

2,496

2,466

Liabilites and Shareholders' Equity, Total

$ 3,618

$ 3,487

$ 3,477

[1]

The balance sheet at February 1, 2014 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s 2013 Annual Report on Form 10-K.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Common stock, shares issued	170,469,434	169,039,095	168,675,093
Treasury stock, shares	27,323,176	23,612,273	22,035,758

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions

3 Months Ended

9 Months Ended

Nov. 01, 2014

Nov. 02, 2013

Nov. 01, 2014

Nov. 02, 2013

Selling, general and administrative expenses

$ 1,731

$ 1,622

$ 5,240

$ 4,714

Cost of sales

1,157

1,085

3,495

3,163

353

340

1,051

969

Depreciation and amortization

106

Impairment and other charges

Interest expense, net

Other income

^[1]

(1)

(3)

Costs and Expenses, Total

1,544

1,462

4,655

4,232

Income before income taxes

187

160

585

482

Income tax expense

211

174

Net income

$ 120

$ 104

$ 374

$ 308

Basic earnings per share (in dollars per share)

$ 0.84

$ 0.70

$ 2.59

$ 2.06

Weighted-average common shares outstanding (in shares)

143.6

147.7

144.5

149.2

Diluted earnings per share (in dollars per share)

$ 0.82

$ 0.70

$ 2.55

$ 2.04

Weighted-average common shares assuming dilution (in shares)

145.7

149.5

146.6

151.2

[1]	Other income includes non-operating items, such as lease termination gains, royalty income, and the changes in fair value, premiums paid and realized gains associated with foreign currency option contracts.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Net income	$ 120	$ 104	$ 374	$ 308
Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax	(42)	22	(42)	(5)
Cash flow hedges:
Change in fair value of derivatives, net of income tax	1	(2)	1	(2)
Pension and postretirement adjustments:
Amortization of net actuarial gain/loss included in net periodic benefit costs, net of income tax expense of $2, $1, $4, and $3 million, respectively	2	3	6	7
Available for sale securities:
Comprehensive income	$ 81	$ 127	$ 339	$ 308

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

Adjustments to reconcile net income to net cash provided by operating activities:

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Amortization of net actuarial gain/loss included in net periodic benefit costs, net of income tax expense	$ 2	$ 1	$ 4	$ 3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions

9 Months Ended

Nov. 01, 2014

Nov. 02, 2013

From Operating Activities:

Net income

$ 374

$ 308

Non-cash impairment charges

Depreciation and amortization

106

Share-based compensation expense

Qualified pension plan contributions

(2)

Excess tax benefits on share-based compensation

(11)

(7)

Change in assets and liabilities:

Merchandise inventories

(124)

(108)

Accounts payable

(3)

Accrued and other liabilities

(7)

(44)

Other, net

Net cash provided by operating activities

439

327

From Investing Activities:

Lease termination gains

Sales and maturities of short-term investments

Purchases of short-term investments

(23)

Capital expenditures

(138)

(157)

Purchase of business, net of cash acquired

(81)

Net cash used in investing activities

(129)

(221)

From Financing Activities:

Purchase of treasury shares

(174)

(167)

Dividends paid

(96)

(89)

Issuance of common stock

Treasury stock issued under employee stock purchase plan

Excess tax benefits on share-based compensation

Repayments of long-term debt and obligations under capital leases

(3)

Net cash used in financing activities

(240)

(226)

Effect of exchange rate fluctuations on Cash and Cash Equivalents

(12)

Net change in Cash and Cash Equivalents

(116)

Cash and Cash Equivalents at beginning of year

858

^[1]

880

Cash and Cash Equivalents at end of interim period

916

764

Cash paid during the period:

Interest

Income taxes

$ 200

$ 123

[1]

Summary of Significant Accounting Policies

9 Months Ended

Nov. 01, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements contained in this report are unaudited. In the opinion of the management of Foot Locker, Inc. (the “Company”), the condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods of the fiscal year ending January 31, 2015 and of the fiscal year ended February 1, 2014. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Company’s Form 10-K for the year ended February 1, 2014, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2014.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this update change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results and when the component or group of components meets the criteria to be classified as held for sale, is disposed by sale or is disposed of by other than by sale. ASU 2014-08 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014, with earlier adoption permitted. The adoption of this guidance did not have a significant effect on our consolidated financial position, results of operations or cash flows.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with earlier adoption not permitted. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The adoption of this guidance is not expected to have a significant effect on our consolidated financial position, results of operations or cash flows.

In June 2014, FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period. ASU 2014-12 affects entities that grant their employees share-based payments in which terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, with earlier adoption permitted. The adoption of this guidance is not expected to have a significant effect on our consolidated financial position, results of operations or cash flows.

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.

Impairment and Other Charges

9 Months Ended

Nov. 01, 2014

Asset Impairment Charges [Abstract]

Impairment and Other Charges

2. Impairment and Other Charges

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Impairment of intangibles	$	—	$	—	$	3	$	—
CCS store closure costs		—		—		—		2
	$	—	$	—	$	3	$	2

During the first quarter of 2014, the Company recorded a charge of $1 million to fully write down the tradename related to the Company’s stores in the Republic of Ireland, reflecting historical and projected underperformance. Additionally, during the second quarter of 2014, the Company announced a plan to shut down its e-commerce skate business, CCS.com, and transition customers to its Eastbay brand. Accordingly, an impairment charge of $2 million was recorded to write down the value of the CCS tradename. The liquidation was substantially completed during the third quarter ended November 1, 2014. This closure does not meet the definition of a discontinued operation as it is not considered a strategic shift that will have a major effect on operations.

Segment Information

9 Months Ended

Nov. 01, 2014

Segment Reporting [Abstract]

Segment Information

3. Segment Information

The Company has determined that its reportable segments are those that are based on its method of internal reporting. As of November 1, 2014, the Company has two reportable segments, Athletic Stores and Direct-to-Customers. The Company evaluates performance based on several factors, of which the primary financial measure is division profit. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense. Sales and division profit for the Company’s reportable segments for the thirteen weeks and thirty-nine weeks ended November 1, 2014 and November 2, 2013 are presented below.

	Thirteen weeks ended				Thirty-nine weeks ended
Sales	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Athletic Stores	$	1,521	$	1,444	$	4,646	$	4,228
Direct-to-Customers		210		178		594		486
Total sales	$	1,731	$	1,622	$	5,240	$	4,714

Operating Results
(in millions)
Athletic Stores ⁽¹⁾	$	181	$	159	$	577	$	486
Direct-to-Customers ⁽²⁾		25		20		67		53
Division profit		206		179		644		539
Less: Corporate expense, net		19		17		59		56
Operating profit		187		162		585		483
Other income ⁽³⁾		1		—		3		3
Interest expense, net		1		2		3		4
Income before income taxes	$	187	$	160	$	585	$	482

⁽¹⁾

Included in the Athletic Stores segment for the thirty-nine weeks ended November 1, 2014 is a $1 million tradename impairment charge related to the Company’s stores in the Republic of Ireland. Included in the Athletic Stores segment for the thirty-nine weeks ended November 2, 2013 is a $2 million charge recorded in connection with the closure of all CCS stores.

⁽²⁾

Included in the Direct-to-Customers segment for the thirty-nine weeks ended November 1, 2014 is a $2 million impairment charge related to the CCS tradename.

⁽³⁾

Other income includes non-operating items, such as lease termination gains, royalty income, and the changes in fair value, premiums paid and realized gains associated with foreign currency option contracts.

Goodwill And Intangible Assets Disclosure [Abstract]

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Name Accounting Standards Codification
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+ Details

Goodwill and Other Intangible Assets

9 Months Ended

Nov. 01, 2014

Goodwill and Other Intangible Assets

4. Goodwill and Other Intangible Assets

Annually during the first quarter, or more frequently if impairment indicators arise, the Company reviews goodwill and intangible assets with indefinite lives for impairment. The annual review of goodwill performed during the first quarter of 2014 did not result in impairment charges as the fair value of each of the reporting units substantially exceeded its carrying value. During the second quarter of 2014, in connection with the shutdown of the CCS e-commerce business, the Company recorded a non-cash impairment charge of $2 million to write down the value of the CCS tradename. Additionally, during the first quarter of 2014, the Company recorded a non-cash impairment charge of $1 million to fully write down the remaining value of the tradename related to the Company’s stores in the Republic of Ireland, reflecting historical and projected underperformance.

The following table provides a summary of goodwill by reportable segment. The change represents foreign exchange fluctuations.

Goodwill	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Athletic Stores	$	19	$	21	$	21
Direct-to-Customers		141		142		142
	$	160	$	163	$	163

The components of finite-lived intangible assets and intangible assets not subject to amortization are as follows:

	November 1, 2014						November 2, 2013						February 1, 2014
	Gross		Accum.		Net		Gross		Accum.		Net		Gross		Accum.		Net
(in millions)	value		amort.		Value		value		amort.		value		value		amort.		value
Amortized intangible assets:⁽¹⁾
Lease acquisition costs	$	143	$	(129)	$	14	$	159	$	(140)	$	19	$	155	$	(137)	$	18
Trademarks		21		(11)		10		21		(10)		11		21		(11)		10
Favorable leases		7		(4)		3		9		(4)		5		8		(3)		5
Customer relationships		21		(21)		—		21		(21)		—		21		(21)		—
	$	192	$	(165)	$	27	$	210	$	(175)	$	35	$	205	$	(172)	$	33

Indefinite life intangible assets: ⁽¹⁾
Runners Point Group trademarks						28						30						30
Other trademarks ⁽²⁾						1						5						4
					$	29					$	35					$	34
Other intangible assets, net					$	56					$	70					$	67

(1)	Includes the effect of foreign currency translation related primarily to the movements of the euro in relation to the U.S. dollar.
(2)	The accumulated impairment charge related to other trademarks is $27 million. This includes $3 million of impairment charges recorded during the thirty-nine weeks ended November 1, 2014.

The $11 million change in goodwill and other intangible assets for the thirty-nine week period ended November 1, 2014, included $5 million of amortization expense, $3 million related to the impairment charges noted above, and a $4 million decrease related to foreign currency exchange fluctuations. This was offset by $1 million of lease acquisition additions related to Foot Locker Europe, which are being amortized over a weighted-average life of 9 years.

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Amortization expense	$	2	$	3	$	5	$	9

Future expected amortization expense for finite life intangible assets is estimated as follows:

	(in millions)
Remainder of 2014	$	1
2015		4
2016		4
2017		4
2018		3
2019		3

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

9 Months Ended

Nov. 01, 2014

Equity [Abstract]

5. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss was comprised of the following:

	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Foreign currency translation adjustments	$	15	$	77	$	57
Cash flow hedges		(1)		1		(2)
Unrecognized pension cost and postretirement benefit		(234)		(247)		(240)
Unrealized loss on available-for-sale security		(1)		(1)		(1)
	$	(221)	$	(170)	$	(186)

The changes in accumulated other comprehensive loss for the thirty-nine weeks ended November 1, 2014 were as follows:

(in millions)	Foreign currency translation adjustments		Cash flow hedges		Items related to pension and postretirement benefits		Unrealized loss on available-for- sale security		Total
Balance as of February 1, 2014	$	57		(2)		(240)		(1)	$	(186)
Other comprehensive income before reclassification		(42)		1		—		—		(41)
Amounts reclassified from accumulated other comprehensive income		—		—		6		—		6
Other comprehensive income		(42)		1		6		—		(35)
Balance as of November 1, 2014	$	15		(1)		(234)		(1)	$	(221)

Reclassifications from accumulated other comprehensive loss for the thirty-nine weeks ended November 1, 2014 were as follows:

(in millions)
Amortization of actuarial (gain) loss:
Pension benefits - amortization of actuarial loss	$	12
Postretirement benefits - amortization of actuarial gain		(2)
Net periodic benefit cost (see Note 9)		10
Income tax expense		(4)
Net of tax	$	6

Derivative Instruments And Hedging Activities Disclosure [Abstract]

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

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-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

Financial Instruments

9 Months Ended

Nov. 01, 2014

Financial Instruments

6. Financial Instruments

The Company operates internationally and utilizes certain derivative financial instruments to mitigate its foreign currency exposures, primarily related to third-party and intercompany forecasted transactions. As a result of the use of derivative instruments, the Company is exposed to the risk that counterparties will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a practice of entering into contracts only with major financial institutions selected based upon their credit ratings and other financial factors. The Company monitors the creditworthiness of counterparties throughout the duration of the derivative instrument. Additional information is contained within Note 7, Fair Value Measurements.

Derivative Holdings Designated as Hedges

For a derivative to qualify as a hedge at inception and throughout the hedged period, the Company formally documents the nature of the hedged items and the relationships between the hedging instruments and the hedged items, as well as its risk-management objectives, strategies for undertaking the various hedge transactions, and the methods of assessing hedge effectiveness and ineffectiveness. In addition, for hedges of forecasted transactions, the significant characteristics and expected terms of a forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction would occur. If it were deemed probable that the forecasted transaction would not occur, the gain or loss on the derivative instrument would be recognized in earnings immediately. No such gains or losses were recognized in earnings for any of the periods presented. Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period, which management evaluates periodically.

The primary currencies to which the Company is exposed are the euro, British pound, Canadian dollar, and Australian dollar. For option and foreign exchange forward contracts designated as cash flow hedges of the purchase of inventory, the effective portion of gains and losses is deferred as a component of Accumulated Other Comprehensive Loss (“AOCL”) and is recognized as a component of cost of sales when the related inventory is sold. The amount reclassified to cost of sales related to such contracts was not significant for any of the periods presented. The effective portion of gains or losses associated with other forward contracts is deferred as a component of AOCL until the underlying transaction is reported in earnings. The ineffective portion of gains and losses related to cash flow hedges recorded to earnings was also not significant for any of the periods presented. When using a forward contract as a hedging instrument, the Company excludes the time value of the contract from the assessment of effectiveness. At each quarter-end, substantially all of the Company’s hedged forecasted transactions are less than twelve months, and the Company expects substantially all derivative-related amounts reported in AOCL to be reclassified to earnings within twelve months.

The net change in the fair value of foreign exchange derivative financial instruments designated as cash flow hedges of the purchase of inventory was a $1 million loss for both the thirteen and thirty-nine weeks ended November 1, 2014. The net change in fair value was not significant for the prior-year periods.

The notional value of the contracts outstanding at November 1, 2014 was $77 million, and these contracts extend through January 2016.

Derivative Holdings Designated as Non-Hedges

The Company enters into foreign exchange forward contracts that are not designated as hedges in order to manage the costs of foreign currency-denominated merchandise purchases and intercompany transactions. Changes in the fair value of these foreign exchange forward contracts are recorded in earnings immediately within selling, general and administrative expenses. The net change in fair value was not significant for the thirteen weeks ended November 1, 2014 and resulted in $1 million of income for the thirty-nine weeks ended November 1, 2014. The net change in fair value was not significant for the prior-year periods. The notional value of the contracts outstanding at November 1, 2014 was $18 million and these contracts extend through December 2014.

The Company mitigates the effect of fluctuating foreign exchange rates on the reporting of foreign-currency denominated earnings by entering into currency option contracts. Changes in the fair value of these foreign currency option contracts, which are designated as non-hedges, are recorded in earnings immediately within other income. The realized gains, premiums paid, and changes in the fair market value recorded were $1 million for the thirteen and thirty-nine weeks ended November 1, 2014 and were not significant for the prior-year periods. The notional value of the contract outstanding at November 1, 2014 was $31 million and this contract extends through January 2015.

Fair Value of Derivative Contracts

Many of the Company’s agreements allow for a netting arrangement. The following, presented on a gross basis, by type of contract, represents the fair value of the Company’s derivative contracts:

	Balance Sheet	November 1,		November 2,		February 1,
(in millions)	Caption	2014		2013		2014
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	—	$	1	$	—
Foreign exchange forward contracts	Current liabilities	$	2	$	—	$	2

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Topic 815
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Fair Value Measurements

9 Months Ended

Nov. 01, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

The Company’s financial assets recorded at fair value are categorized as follows:

Level 1 –

Quoted prices for identical instruments in active markets.

Level 2 –

Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 –

Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

The following tables provide a summary of the Company’s recognized assets and liabilities that are measured at fair value on a recurring basis:

	At November 1, 2014						At November 2, 2013						At February 1, 2014
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Short-term investments	$	—	$	—	$	—	$	—	$	32	$	—	$	—	$	9	$	—
Auction rate security		—	$	6		—		—		6		—		—		6		—
Foreign exchange forward contracts		—		—		—		—		1		—		—		—		—
Total Assets	$	—	$	6	$	—	$	—	$	39	$	—	$	—	$	15	$	—

Liabilities
Foreign exchange forward contracts		—	$	2		—		—		—		—		—		2		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	2	$	—

Available-for-sale securities are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. The Company’s short-term investments matured during the second quarter of 2014. In the prior periods presented, these investments represented corporate bonds with maturity dates within one year from the purchase date. These securities were valued using model-derived valuations in which all significant inputs or significant value-drivers were observable in active markets and therefore were classified as Level 2 instruments.

The fair value of the auction rate security is determined by using quoted prices for similar instruments in active markets and accordingly is classified as a Level 2 instrument.

The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility.

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.

The carrying value and estimated fair value of long-term debt and obligations under capital leases were as follows:

	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Carrying value	$	135	$	140	$	139
Fair value	$	161	$	157	$	159

The fair value of long-term debt and obligations under capital leases is determined by using model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets and therefore is classified as Level 2.

The carrying values of cash and cash equivalents, short-term investments, and other current receivables and payables approximate their fair value.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Compensation And Retirement Disclosure [Abstract]

Earnings Per Share

9 Months Ended

Nov. 01, 2014

Earnings Per Share [Abstract]

Earnings Per Share

8. 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 net income for the period by the weighted-average number of common shares outstanding at the end of the period. Restricted stock awards, which contain non-forfeitable rights to dividends, are considered participating securities and are included in the calculation of basic earnings per share. Diluted earnings per share reflects the weighted-average number of common shares outstanding during the period used in the basic earnings per share computation plus dilutive common stock equivalents.

The computation of basic and diluted earnings per share is as follows:

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Weighted-average common shares outstanding		143.6		147.7		144.5		149.2
Effect of Dilution:
Stock options and awards		2.1		1.8		2.1		2.0
Weighted-average common shares assuming dilution		145.7		149.5		146.6		151.2

The number of options excluded from the computation was not significant for the thirteen and thirty-nine weeks ended November 1, 2014. Options to purchase 1.1 million and 0.9 million shares of common stock were not included in the computation for the thirteen and thirty-nine weeks ended November 2, 2013, respectively. These options were not included because the effect would have been antidilutive. Contingently issuable shares of 0.4 million have not been included as the vesting conditions have not been satisfied as of both November 1, 2014 and November 2, 2013.

Pension and Postretirement Plans

9 Months Ended

Nov. 01, 2014

Pension and Postretirement Plans

9. Pension and 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 where the plans are in effect. In addition to providing pension benefits, the Company sponsors postretirement medical and life insurance plans, which are available to most of its retired U.S. employees. These medical and life insurance plans are contributory and are not funded.

The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income, which is recognized as part of SG&A expense:

	Pension Benefits								Postretirement Benefits
	Thirteen weeks				Thirty-nine weeks				Thirteen weeks				Thirty-nine weeks
	ended				ended				ended				ended
	November 1,		November 2,		November 1,		November 2,		November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013		2014		2013		2014		2013
Service cost	$	3	$	4	$	11	$	11	$	—	$	—	$	—	$	—
Interest cost		7		6		21		19		—		—		—		—
Expected return on
plan assets		(9)		(10)		(28)		(30)		—		—		—		—
Amortization of net
loss (gain)		5		4		12		12		(1)		(1)		(2)		(2)
Net benefit expense (income)	$	6	$	4	$	16	$	12	$	(1)	$	(1)	$	(2)	$	(2)

During the first quarters of both 2014 and 2013, the Company made contributions of $2 million to the Canadian qualified plan. No pension contributions to the U.S. qualified plan were made during the thirty-nine weeks ended November 1, 2014 and November 2, 2013. The Company continually evaluates the amount and timing of any future contributions. Additional contributions will depend on the plan asset performance and other factors.

Share-Based Compensation

9 Months Ended

Nov. 01, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

10. Share-Based Compensation

Total compensation expense and the associated tax benefits recognized related to the Company’s share-based compensation plans is as follows:

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
	2014		2013		2014		2013
Share-based compensation expense	$	6	$	6	$	18	$	19
Tax benefit	$	1	$	2	$	5	$	6

Tax deductions in excess of the cumulative compensation cost recognized for share-based compensation arrangements were $11 million for the thirty-nine weeks ended November 1, 2014 and $8 million for the thirty-nine weeks ended November 2, 2013 and are classified as a financing activity within the Condensed Consolidated Statements of Cash Flows.

Valuation Model and Assumptions

The Company uses a Black-Scholes option-pricing model to estimate the fair value of share-based awards. The Black-Scholes option-pricing model incorporates various and highly subjective assumptions, including expected term and expected volatility.

The following table shows the Company’s assumptions used to compute the share-based compensation expense:

	Stock Option Plans Thirty-nine weeks ended						Stock Purchase Plan Thirty-nine weeks ended
	November 1,			November 2,			November 1,			November 2,
	2014			2013			2014			2013
Weighted-average risk free rate of interest		2.12	%		1.02	%		0.14	%		0.17	%
Expected volatility		39	%		42	%		24	%		40	%
Weighted-average expected award life		6.1 years			6.0 years			1.0 year			1.0 year
Dividend yield		2.0	%		2.3	%		2.0	%		2.3	%
Weighted-average fair value	$	14.91		$	10.98		$	7.11		$	5.80

Compensation expense related to the Company’s stock option and stock purchase plans was $3 million and $9 million for both the thirteen and thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively. As of November 1, 2014, there was $10 million of total unrecognized compensation cost, related to nonvested stock options, which is expected to be recognized over a weighted-average period of 1.02 years.

The information in the following table covers options granted under the Company’s stock option plans for the thirty-nine weeks ended November 1, 2014.

(in thousands, except price per share and weighted- average term)	Shares		Weighted- Average Term		Weighted-Average Exercise Price
Options outstanding at the beginning of the year		5,668			$	22.66
Granted		767				45.11
Exercised		(769)				21.58
Expired or cancelled		(62)				39.65
Options outstanding at November 1, 2014		5,604		6.51	$	25.69
Options exercisable at November 1, 2014		3,798		5.49	$	19.78
Options vested and expected to vest at November 1, 2014		5,567		6.50	$	25.59
Options available for future grant at November 1, 2014		14,018

On May 21, 2014, the Foot Locker 2007 Stock Incentive Plan was amended to increase to 14 million shares the number of shares of the Company’s common stock reserved for all awards.

The total intrinsic value of options exercised (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the optionee to exercise the option) is presented below:

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
	2014		2013		2014		2013
Exercised	$	6	$	2	$	21	$	15

The aggregate intrinsic value for stock options outstanding and for stock options exercisable (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) is presented below:

	Thirty-nine weeks ended
	November 1,		November 2,
	2014		2013
Outstanding	$	170	$	74
Outstanding and exercisable	$	138	$	64
Vested and expected to vest	$	169	$	74

The cash received from option exercises for the thirteen and thirty-nine weeks ended November 1, 2014 was $4 million and $17 million, respectively. The cash received from option exercises for the thirteen and thirty-nine weeks ended November 2, 2013 was $4 million and $19 million, respectively. The total tax benefit realized from option exercises for the thirteen and thirty-nine weeks ended November 1, 2014, was $2 million and $7 million respectively, and was $1 million and $5 million for the corresponding prior-year periods.

The following table summarizes information about stock options outstanding and exercisable at November 1, 2014:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
	(in thousands, except prices per share and contractual life)
$9.85 to $15.10		1,470		4.87	$	12.39		1,470	$	12.39
$18.80 to $24.75		1,460		5.27	$	20.11		1,460	$	20.11
$24.76 to $34.24		1,906		7.60	$	32.60		852	$	31.64
$34.27 to $45.08		768		9.31	$	44.62		16	$	38.72
		5,604		6.51	$	25.69		3,798	$	19.78

Restricted Stock and Units

Restricted shares of the Company’s common stock and restricted stock units may be awarded to certain officers and key employees of the Company. Awards made to 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. There were 734,295 and 997,542 restricted stock units outstanding as of November 1, 2014 and November 2, 2013, 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 vest after the attainment of certain performance metrics and the passage of time. Restricted stock is considered outstanding at the time of grant and the holders have voting rights. Dividends are paid to holders of restricted stock that vest with the passage of time; for performance-based restricted stock, dividends will be accumulated and paid after the performance criteria are met. No dividends are paid on restricted stock units.

Compensation expense is recognized using the fair market value at the date of grant and is amortized over the vesting period, provided the recipient continues to be employed by the Company. The Company recorded compensation expense related to restricted stock awards, net of forfeitures, of $3 million for both the thirteen weeks ended November 1, 2014 and November 2, 2013, and $9 million and $10 million for the thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively. As of November 1, 2014, there was $14 million of total unrecognized compensation cost related to nonvested restricted awards.

Restricted shares and units activity for the thirty-nine weeks ended November 1, 2014 are summarized as follows:

(in thousands, except price per share)	Number of Shares		Weighted-Average Grant Date Fair Value per Share
Nonvested at the beginning of the year		1,369	$	27.20
Granted		320		45.24
Vested		(649)		20.84
Expired or cancelled		(42)		24.69
Nonvested at November 1, 2014		998	$	37.23
Aggregate value (in millions)	$	37
Weighted-average remaining contractual life		1.32 years

The weighted-average grant-date fair value per share was $45.24 and $34.59 for the thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively. The total value of awards for which restrictions lapsed during the thirty-nine weeks ended November 1, 2014 and November 2, 2013 was $14 million and $9 million, respectively.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Nov. 01, 2014

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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.

Impairment and Other Charges (Tables)

9 Months Ended

Nov. 01, 2014

Asset Impairment Charges [Abstract]

Impairment Charges

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Impairment of intangibles	$	—	$	—	$	3	$	—
CCS store closure costs		—		—		—		2
	$	—	$	—	$	3	$	2

Segment Information (Tables)

9 Months Ended

Nov. 01, 2014

Segment Reporting [Abstract]

Sales and Division Operating Results for Reportable Segments

Sales and division profit for the Company’s reportable segments for the thirteen weeks and thirty-nine weeks ended November 1, 2014 and November 2, 2013 are presented below.

	Thirteen weeks ended				Thirty-nine weeks ended
Sales	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Athletic Stores	$	1,521	$	1,444	$	4,646	$	4,228
Direct-to-Customers		210		178		594		486
Total sales	$	1,731	$	1,622	$	5,240	$	4,714

Operating Results
(in millions)
Athletic Stores ⁽¹⁾	$	181	$	159	$	577	$	486
Direct-to-Customers ⁽²⁾		25		20		67		53
Division profit		206		179		644		539
Less: Corporate expense, net		19		17		59		56
Operating profit		187		162		585		483
Other income ⁽³⁾		1		—		3		3
Interest expense, net		1		2		3		4
Income before income taxes	$	187	$	160	$	585	$	482

⁽¹⁾

⁽²⁾

Included in the Direct-to-Customers segment for the thirty-nine weeks ended November 1, 2014 is a $2 million impairment charge related to the CCS tradename.

⁽³⁾

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Nov. 01, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill by Reportable Segment

The following table provides a summary of goodwill by reportable segment. The change represents foreign exchange fluctuations.

Goodwill	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Athletic Stores	$	19	$	21	$	21
Direct-to-Customers		141		142		142
	$	160	$	163	$	163

Components of Finite-Lived Intangible Assets and Intangible Assets Not Subject to Amortization

The components of finite-lived intangible assets and intangible assets not subject to amortization are as follows:

	November 1, 2014						November 2, 2013						February 1, 2014
	Gross		Accum.		Net		Gross		Accum.		Net		Gross		Accum.		Net
(in millions)	value		amort.		Value		value		amort.		value		value		amort.		value
Amortized intangible assets:⁽¹⁾
Lease acquisition costs	$	143	$	(129)	$	14	$	159	$	(140)	$	19	$	155	$	(137)	$	18
Trademarks		21		(11)		10		21		(10)		11		21		(11)		10
Favorable leases		7		(4)		3		9		(4)		5		8		(3)		5
Customer relationships		21		(21)		—		21		(21)		—		21		(21)		—
	$	192	$	(165)	$	27	$	210	$	(175)	$	35	$	205	$	(172)	$	33

Indefinite life intangible assets: ⁽¹⁾
Runners Point Group trademarks						28						30						30
Other trademarks ⁽²⁾						1						5						4
					$	29					$	35					$	34
Other intangible assets, net					$	56					$	70					$	67

(1)	Includes the effect of foreign currency translation related primarily to the movements of the euro in relation to the U.S. dollar.
(2)	The accumulated impairment charge related to other trademarks is $27 million. This includes $3 million of impairment charges recorded during the thirty-nine weeks ended November 1, 2014.

Amortization Expense

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Amortization expense	$	2	$	3	$	5	$	9

Estimated Future Expected Amortization Expense for Finite Life Intangible Assets

Future expected amortization expense for finite life intangible assets is estimated as follows:

	(in millions)
Remainder of 2014	$	1
2015		4
2016		4
2017		4
2018		3
2019		3

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Nov. 01, 2014

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss was comprised of the following:

	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Foreign currency translation adjustments	$	15	$	77	$	57
Cash flow hedges		(1)		1		(2)
Unrecognized pension cost and postretirement benefit		(234)		(247)		(240)
Unrealized loss on available-for-sale security		(1)		(1)		(1)
	$	(221)	$	(170)	$	(186)

Changes in Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss for the thirty-nine weeks ended November 1, 2014 were as follows:

(in millions)	Foreign currency translation adjustments		Cash flow hedges		Items related to pension and postretirement benefits		Unrealized loss on available-for- sale security		Total
Balance as of February 1, 2014	$	57		(2)		(240)		(1)	$	(186)
Other comprehensive income before reclassification		(42)		1		—		—		(41)
Amounts reclassified from accumulated other comprehensive income		—		—		6		—		6
Other comprehensive income		(42)		1		6		—		(35)
Balance as of November 1, 2014	$	15		(1)		(234)		(1)	$	(221)

Reclassification from Accumulated Other Comprehensive Loss

Reclassifications from accumulated other comprehensive loss for the thirty-nine weeks ended November 1, 2014 were as follows:

(in millions)
Amortization of actuarial (gain) loss:
Pension benefits - amortization of actuarial loss	$	12
Postretirement benefits - amortization of actuarial gain		(2)
Net periodic benefit cost (see Note 9)		10
Income tax expense		(4)
Net of tax	$	6

Financial Instruments (Tables)

9 Months Ended

Nov. 01, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Contracts on Gross Basis, by Type of Contract

Many of the Company’s agreements allow for a netting arrangement. The following, presented on a gross basis, by type of contract, represents the fair value of the Company’s derivative contracts:

	Balance Sheet	November 1,		November 2,		February 1,
(in millions)	Caption	2014		2013		2014
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	—	$	1	$	—
Foreign exchange forward contracts	Current liabilities	$	2	$	—	$	2

Fair Value Measurements (Tables)

9 Months Ended

Nov. 01, 2014

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables provide a summary of the Company’s recognized assets and liabilities that are measured at fair value on a recurring basis:

	At November 1, 2014						At November 2, 2013						At February 1, 2014
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Short-term investments	$	—	$	—	$	—	$	—	$	32	$	—	$	—	$	9	$	—
Auction rate security		—	$	6		—		—		6		—		—		6		—
Foreign exchange forward contracts		—		—		—		—		1		—		—		—		—
Total Assets	$	—	$	6	$	—	$	—	$	39	$	—	$	—	$	15	$	—

Liabilities
Foreign exchange forward contracts		—	$	2		—		—		—		—		—		2		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	2	$	—

Carrying Value and Estimated Fair Value of Long-Term Debt

The carrying value and estimated fair value of long-term debt and obligations under capital leases were as follows:

	November 1,		November 2,		February 1,
(in millions)	2014		2013		2014
Carrying value	$	135	$	140	$	139
Fair value	$	161	$	157	$	159

Earnings Per Share (Tables)

9 Months Ended

Nov. 01, 2014

Earnings Per Share [Abstract]

Basic and Diluted Weighted-Average Number of Common Shares Outstanding

The computation of basic and diluted earnings per share is as follows:

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013
Weighted-average common shares outstanding		143.6		147.7		144.5		149.2
Effect of Dilution:
Stock options and awards		2.1		1.8		2.1		2.0
Weighted-average common shares assuming dilution		145.7		149.5		146.6		151.2

Pension and Postretirement Plans (Tables)

9 Months Ended

Nov. 01, 2014

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Pension Benefit Cost and Postretirement Benefit Income

The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income, which is recognized as part of SG&A expense:

	Pension Benefits								Postretirement Benefits
	Thirteen weeks				Thirty-nine weeks				Thirteen weeks				Thirty-nine weeks
	ended				ended				ended				ended
	November 1,		November 2,		November 1,		November 2,		November 1,		November 2,		November 1,		November 2,
(in millions)	2014		2013		2014		2013		2014		2013		2014		2013
Service cost	$	3	$	4	$	11	$	11	$	—	$	—	$	—	$	—
Interest cost		7		6		21		19		—		—		—		—
Expected return on
plan assets		(9)		(10)		(28)		(30)		—		—		—		—
Amortization of net
loss (gain)		5		4		12		12		(1)		(1)		(2)		(2)
Net benefit expense (income)	$	6	$	4	$	16	$	12	$	(1)	$	(1)	$	(2)	$	(2)

Share-Based Compensation (Tables)

9 Months Ended

Nov. 01, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Total compensation expense and the related tax benefits recognized

Total compensation expense and the associated tax benefits recognized related to the Company’s share-based compensation plans is as follows:

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
	2014		2013		2014		2013
Share-based compensation expense	$	6	$	6	$	18	$	19
Tax benefit	$	1	$	2	$	5	$	6

Assumptions used to Compute Share-Based Compensation Expense

The following table shows the Company’s assumptions used to compute the share-based compensation expense:

	Stock Option Plans Thirty-nine weeks ended						Stock Purchase Plan Thirty-nine weeks ended
	November 1,			November 2,			November 1,			November 2,
	2014			2013			2014			2013
Weighted-average risk free rate of interest		2.12	%		1.02	%		0.14	%		0.17	%
Expected volatility		39	%		42	%		24	%		40	%
Weighted-average expected award life		6.1 years			6.0 years			1.0 year			1.0 year
Dividend yield		2.0	%		2.3	%		2.0	%		2.3	%
Weighted-average fair value	$	14.91		$	10.98		$	7.11		$	5.80

Options Granted under Stock Option Plans

The information in the following table covers options granted under the Company’s stock option plans for the thirty-nine weeks ended November 1, 2014.

(in thousands, except price per share and weighted- average term)	Shares		Weighted- Average Term		Weighted-Average Exercise Price
Options outstanding at the beginning of the year		5,668			$	22.66
Granted		767				45.11
Exercised		(769)				21.58
Expired or cancelled		(62)				39.65
Options outstanding at November 1, 2014		5,604		6.51	$	25.69
Options exercisable at November 1, 2014		3,798		5.49	$	19.78
Options vested and expected to vest at November 1, 2014		5,567		6.50	$	25.59
Options available for future grant at November 1, 2014		14,018

Total Intrinsic Value of Options Exercised

	Thirteen weeks ended				Thirty-nine weeks ended
	November 1,		November 2,		November 1,		November 2,
	2014		2013		2014		2013
Exercised	$	6	$	2	$	21	$	15

Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable

	Thirty-nine weeks ended
	November 1,		November 2,
	2014		2013
Outstanding	$	170	$	74
Outstanding and exercisable	$	138	$	64
Vested and expected to vest	$	169	$	74

Information about Stock Options Outstanding and Exercisable

The following table summarizes information about stock options outstanding and exercisable at November 1, 2014:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
	(in thousands, except prices per share and contractual life)
$9.85 to $15.10		1,470		4.87	$	12.39		1,470	$	12.39
$18.80 to $24.75		1,460		5.27	$	20.11		1,460	$	20.11
$24.76 to $34.24		1,906		7.60	$	32.60		852	$	31.64
$34.27 to $45.08		768		9.31	$	44.62		16	$	38.72
		5,604		6.51	$	25.69		3,798	$	19.78

Restricted Shares and Units Activity

Restricted shares and units activity for the thirty-nine weeks ended November 1, 2014 are summarized as follows:

(in thousands, except price per share)	Number of Shares		Weighted-Average Grant Date Fair Value per Share
Nonvested at the beginning of the year		1,369	$	27.20
Granted		320		45.24
Vested		(649)		20.84
Expired or cancelled		(42)		24.69
Nonvested at November 1, 2014		998	$	37.23
Aggregate value (in millions)	$	37
Weighted-average remaining contractual life		1.32 years

Impairment and Other Charges - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Nov. 01, 2014	Aug. 02, 2014	May 03, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Impairment Of Assets [Line Items]
Impairment of assets	$ 0	$ 2	$ 1	$ 0	$ 3	$ 0

Impairment and Other Charges (Detail) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Nov. 01, 2014	Aug. 02, 2014	May 03, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Restructuring Cost and Reserve [Line Items]
Impairment of intangibles	$ 0	$ 2	$ 1	$ 0	$ 3	$ 0
CCS store closure costs	0			0	0	2
Total Impairment And Other Charges	$ 0			$ 0	$ 3	$ 2

Segment Information - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Nov. 01, 2014	Aug. 02, 2014	May 03, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Segment Reporting Information [Line Items]
Impairment and other charges	$ 0	$ 2	$ 1	$ 0	$ 3	$ 0
Lease Closure Costs	$ 0			$ 0	0	2
Direct-to-Customers
Segment Reporting Information [Line Items]
Impairment and other charges		$ 2			2
Athletic Store
Segment Reporting Information [Line Items]
Impairment and other charges			$ 1		$ 1	2
Lease Closure Costs						$ 2

Sales and Division Operating Results for Reportable Segments (Detail) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Nov. 01, 2014

Nov. 02, 2013

Nov. 01, 2014

Nov. 02, 2013

Segment Reporting Information [Line Items]

Less: Corporate expense, net

$ 1,731

$ 1,622

$ 5,240

$ 4,714

Division profit

206

179

644

539

Operating profit

187

162

585

483

Other income

^[1]

Interest expense, net

Income before income taxes

187

160

585

482

Athletic Stores

Segment Reporting Information [Line Items]

Segment Reporting Information [Line Items]

1,521

1,444

4,646

4,228

Division profit

^[2],[3]

181

159

577

486

Direct-to-Customers

210

178

594

486

Division profit

^[4],[5]

$ 25

$ 20

$ 67

$ 53

[1]	Other income includes non-operating items, such as lease termination gains, royalty income, and the changes in fair value, premiums paid and realized gains associated with foreign currency option contracts.
[2]	Included in the Athletic Stores segment for the thirty-nine weeks ended November 1, 2014 is a $1 million tradename impairment charge related to the Company’s stores in the Republic of Ireland. Included in the Athletic Stores segment for the thirty-nine weeks ended November 2, 2013 is a $2 million charge recorded in connection with the closure of all CCS stores.
[3]	Included in the Athletic Stores segment for the thirty-nine weeks ended November 1, 2014 is a $1 million tradename impairment charge related to the Company’s stores in the Republic of Ireland. Included in the Athletic Stores segment for the thirty-nine weeks ended November 2, 2013 is a $2 million charge recorded in connection with the closure of all CCS stores.
[4]	Included in the Direct-to-Customers segment for the thirty-nine weeks ended November 1, 2014 is a $2 million impairment charge related to the CCS tradename.
[5]	Included in the Direct-to-Customers segment for the thirty-nine weeks ended November 1, 2014 is a $2 million impairment charge related to the CCS tradename.

Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Nov. 01, 2014	Aug. 02, 2014	May 03, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Goodwill and Intangible Assets Disclosure [Line Items]
Amortization Of Intangible Assets	$ 2			$ 3	$ 5	$ 9
Foreign Currency Transaction Gain (Loss), Realized					4
Impairment of Intangible Assets (Excluding Goodwill), Total	$ 0	$ 2	$ 1	$ 0	$ 3	0
Finite-Lived Intangible Assets, Remaining Amortization Period					9 years
Increase (Decrease) in Lease Acquisition Costs					$ 1
Goodwill and Intangible Asset Impairment					11
Other Trademarks
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment of Intangible Assets (Excluding Goodwill), Total					3
Direct-to-Customers
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment of Intangible Assets (Excluding Goodwill), Total		$ 2			2
Athletic Stores
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment of Intangible Assets (Excluding Goodwill), Total			$ 1		1	$ 2
Accumulated Impairment Charge
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment of Intangible Assets (Excluding Goodwill), Total					$ 27

Summary of Goodwill by Reportable Segment (Detail) - USD ($)
$ in Millions

Nov. 01, 2014

Feb. 01, 2014

Nov. 02, 2013

Goodwill [Line Items]

$ 160

$ 163

^[1]

$ 163

Athletic Stores

Goodwill [Line Items]

Direct-to-Customers

Goodwill [Line Items]

$ 141

$ 142

[1]

Components of Finite-Lived Intangible Assets and Intangible Assets Not Subject To Amortization (Detail) - USD ($)
$ in Millions

Nov. 01, 2014

Feb. 01, 2014

Nov. 02, 2013

^[1]

$ 192

$ 205

$ 210

^[1]

(165)

(172)

(175)

Other intangible assets, net

^[1]

Indefinite life intangible assets:

Net Value

^[1]

^[2]

Lease acquisition costs

^[1]

143

155

159

^[1]

(129)

(137)

(140)

^[1]

Favorable leases

^[1]

^[1]

(4)

(3)

(4)

^[1]

Trademarks

^[1]

^[1]

(11)

(10)

^[1]

Customer relationships

^[1]

^[1]

(21)

Runners Point Group trademarks

^[1]

Other trademarks

Indefinite life intangible assets:

Net Value

^[1],[3]

Indefinite life intangible assets:

Net Value

^[1]

$ 28

$ 30

[1]	Includes the effect of foreign currency translation related primarily to the movements of the euro in relation to the U.S. dollar.
[2]	The balance sheet at February 1, 2014 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s 2013 Annual Report on Form 10-K.
[3]	The accumulated impairment charge related to other trademarks is $27 million. This includes $3 million of impairment charges recorded during the thirty-nine weeks ended November 1, 2014.

Amortization Expense (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Amortization Expense (Detail) - USD ($) $ in Millions	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Goodwill and Intangible Assets Disclosure [Line Items]
Amortization expense	$ 2	$ 3	$ 5	$ 9

Estimated Future Amortization Expense for Finite Lived Intangibles (Detail) $ in Millions	Nov. 01, 2014 USD ($)
Expected Amortization Expense [Line Items]
Remainder of 2014	$ 1
2015	4
2016	4
2017	4
2018	3
2019	$ 3

Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Millions

Nov. 01, 2014

Feb. 01, 2014

Nov. 02, 2013

Accumulated Other Comprehensive Income (Loss) [Line Items]

Foreign currency translation adjustments

$ 15

$ 57

$ 77

Cash flow hedges

(1)

(2)

Unrecognized pension cost and postretirement benefit

(234)

(240)

(247)

Unrealized loss on available-for-sale security

(1)

Accumulated other comprehensive loss

$ (221)

$ (186)

^[1]

$ (170)

[1]

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

Accumulated Other Comprehensive Income (Loss) [Line Items]

Changes in Accumulated Other Comprehensive Loss (Detail)
$ in Millions

9 Months Ended

Nov. 01, 2014

USD ($)

$ (186)

^[1]

Amounts reclassified from accumulated other comprehensive income

(41)

(35)

Foreign currency translation adjustments

(221)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Amounts reclassified from accumulated other comprehensive income

(42)

(42)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Cash flow hedges

(2)

Amounts reclassified from accumulated other comprehensive income

Accumulated Other Comprehensive Income (Loss) [Line Items]

(1)

(240)

Amounts reclassified from accumulated other comprehensive income

Unrealized loss on available-for- sale security

(234)

Accumulated Other Comprehensive Income (Loss) [Line Items]

(1)

Amounts reclassified from accumulated other comprehensive income

$ (1)

[1]