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Other intangible assets, net

158

155

156

Other assets

111

Total assets

3,946

3,840

3,762

Current liabilities

Accounts payable

162

249

348

Accrued and other liabilities

308

363

326

Current portion of capital lease obligations

Liabilities, current, total

470

612

675

Long-term debt and obligations under capital leases

126

127

128

Other liabilities

456

391

381

Total liabilities

1,052

1,130

1,184

Shareholders' equity

Common stock and paid-in capital: 133,134,411; 132,616,087 and 174,250,091 shares outstanding, respectively

916

900

1,147

Retained earnings

2,403

2,254

3,426

Accumulated other comprehensive loss

(284)

(363)

(343)

Less: Treasury stock at cost: 2,034,408; 1,120,466 and 41,174,061 shares, respectively

(141)

(81)

(1,652)

Total shareholders’ equity

2,894

2,710

2,578

Liabilities and equity, total

$ 3,946

$ 3,840

$ 3,762

[1]

The balance sheet at January 28, 2017 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 Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended January 28, 2017.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Jul. 29, 2017	Jan. 28, 2017	Jul. 30, 2016
CONSOLIDATED BALANCE SHEETS [Abstract]
Common Stock, Shares Outstanding, Issued, Total	133,134,411	132,616,087	174,250,091
Treasury Stock, Shares	2,034,408	1,120,466	41,174,061

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

3 Months Ended

6 Months Ended

Jul. 29, 2017

Jul. 30, 2016

Jul. 29, 2017

Jul. 30, 2016

CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]

Selling, general and administrative expenses

$ 1,701

$ 1,780

$ 3,702

$ 3,767

Cost of sales

1,198

1,193

2,519

2,484

339

350

710

711

Depreciation and amortization

^[1]

Income from operations

122

198

390

494

Litigation charge

^[2]

Interest (income) / expense, net

(1)

Other income

^[3]

(1)

(3)

Income before income taxes

198

342

496

Income tax expense

111

178

Net income

$ 51

$ 127

$ 231

$ 318

^[1]

Basic earnings per share

$ 0.39

$ 0.94

$ 1.76

$ 2.35

Weighted-average shares outstanding

131.3

134.4

131.3

135.4

Diluted earnings per share

$ 0.39

$ 0.94

$ 1.74

$ 2.33

Weighted-average shares outstanding, assuming dilution

132.0

135.5

132.3

136.6

[1]	Amounts for the twenty-six weeks ended July 30, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the Recently Adopted Accounting Pronouncements note.
[2]	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings
[3]	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries, and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions

3 Months Ended

6 Months Ended

Jul. 29, 2017

Jul. 30, 2016

Jul. 29, 2017

Jul. 30, 2016

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]

Net income

$ 51

$ 127

$ 231

$ 318

^[1]

Foreign currency translation adjustment:

Translation adjustment arising during the period, net of income tax

(27)

Cash flow hedges:

Change in fair value of derivatives, net of income tax

Available for sale securities:

Unrealized gain on available-for-sale securities

Pension and postretirement adjustments:

Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $1, $1, $2 and $2 million, respectively, and foreign currency fluctuations

Comprehensive income

$ 124

$ 107

$ 310

$ 341

[1]	Amounts for the twenty-six weeks ended July 30, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the Recently Adopted Accounting Pronouncements note.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 29, 2017	Jul. 30, 2016	Jul. 29, 2017	Jul. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense and foreign currency fluctuations	$ 1	$ 1	$ 2	$ 2

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

6 Months Ended

Jul. 29, 2017

Jul. 30, 2016

From Operating Activities

Net income

$ 231

$ 318

^[1]

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

Depreciation and amortization

^[1]

Share-based compensation expense

^[1]

Qualified pension plan contributions

(25)

^[1]

Change in assets and liabilities:

Merchandise inventories

(50)

^[1]

Accounts payable

(93)

^[1]

Accrued and other liabilities

(38)

(13)

^[1]

Pension litigation accrual

^[2]

Other, net

(6)

(1)

^[1]

Net cash provided by operating activities

251

385

^[1]

From Investing Activities

Capital expenditures

(150)

(131)

^[1]

Net cash used in investing activities

(150)

(131)

^[1]

From Financing Activities

Purchase of treasury shares

(59)

(276)

^[1]

Dividends paid on common stock

(82)

(74)

^[1]

Proceeds from exercise of stock options

^[1]

Treasury stock reissued under employee stock plan

^[1]

Shares of common stock repurchased to satisfy tax withholding obligations

(9)

(6)

^[1]

Payment of revolving credit agreement costs

^[1]

(2)

Net cash used in financing activities

(135)

(340)

^[1]

Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash

^[1]

Net change in cash, cash equivalents, and restricted cash

^[1]

(76)

Cash, cash equivalents, and restricted cash at beginning of period

1,073

1,048

^[1]

Cash, cash equivalents, and restricted cash at end of period

1,073

972

^[1]

Cash Paid During the Period:

Interest

^[1]

Income taxes

$ 155

$ 216

^[1]

[1]	Amounts for the twenty-six weeks ended July 30, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the Recently Adopted Accounting Pronouncements note.
[2]	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jul. 29, 2017
Summary of Significant 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 management, the condensed consolidated financial statements include all normal, recurring adjustments necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 3, 2018 and of the fiscal year ended January 28, 2017. 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 Foot Locker, Inc.’s (the “Company”) Form 10-K for the year ended January 28, 2017, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. 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, as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. These ASUs can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company does not expect to adopt these ASUs until required, and has not yet selected the transition method. Based on an evaluation of the standard as a whole, the Company has identified gift card breakage, direct-response advertising, and principal versus agent considerations as areas which will most likely be affected by the new revenue recognition guidance. We are in the process of finalizing the analysis of our revenue streams and quantifying the effects on the areas discussed above, and we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize a lease liability and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods therein, and requires a modified retrospective adoption, with earlier adoption permitted. The Company does not expect to adopt this ASU until required and is evaluating the effect of this guidance. The Company has historically presented a non-GAAP measure to adjust its balance sheet to present operating leases as if they were capital leases. Based upon that analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of $3 billion to $4 billion of assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted. The Company does not expect to adopt this ASU until required. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but would recognize under the new guidance. While we could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions and the foreign exchange rates as of July 29, 2017, we expect the adoption will result in an increase in deferred income tax assets of approximately $40 million to $45 million. 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. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the twenty-six weeks ended July 29, 2017, the Company recorded excess tax benefits related to share-based compensation awards of $7 million to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Excess tax benefits recorded for the thirteen weeks ended July 29, 2017 were not significant. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefits. This ASU also requires that we present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $10 million which were previously classified as cash flows from financing activities to operating activities for the twenty-six weeks ended July 30, 2016. Additionally, the presentation of employee taxes paid to taxing authorities for share-based transactions of $6 million, previously classified as cash flows from operating activities, were reclassified to financing activities for the twenty-six weeks ended July 30, 2016. The Company has made a policy election of recording forfeitures as they occur instead of estimating forfeitures using a modified retrospective approach. The cumulative effect of this change was not significant. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU is effective for annual reporting periods beginning after December 15, 2017 including interim periods therein, with early adoption permitted. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $27 million as of July 30, 2016, January 30, 2016, and January 28, 2017. Please see Note 3, Restricted Cash, for a reconciliation of cash and cash equivalents as presented on our condensed consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our condensed consolidated statements of cash flows.

Segment Information

6 Months Ended

Jul. 29, 2017

Segment Information [Abstract]

Segment Information

2. Segment Information

The Company has determined that its reportable segments are those that are based on its method of internal reporting. 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 results. Division profit reflects income before income taxes, pension litigation charge, corporate expense, non-operating income, and net interest (income) / expense.



	Thirteen weeks ended				Twenty-six weeks ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
Sales	($ in millions)
Athletic Stores	$	1,485	$	1,576	$	3,207	$	3,311
Direct-to-Customers		216		204		495		456
Total sales	$	1,701	$	1,780	$	3,702	$	3,767
Operating Results
Athletic Stores	$	109	$	193	$	350	$	470
Direct-to-Customers		20		22		62		60
Division profit		129		215		412		530
Less: Pension litigation charge (1)		50		—		50		—
Less: Corporate expense		7		17		22		36
Operating profit		72		198		340		494
Interest (income) / expense, net		(1)		1		(1)		1
Other income (2)		—		1		1		3
Income before income taxes	$	73	$	198	$	342	$	496


(1)	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings.
(2)	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries, and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

Restricted Cash

6 Months Ended

Jul. 29, 2017

Restricted Cash [Abstract]

Restricted Cash

3. Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows.


	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Cash and cash equivalents	$	1,043	$	945	$	1,046
Restricted cash included in other current assets		1		—		—
Restricted cash included in other non-current assets		29		27		27
Cash, cash equivalents, and restricted cash	$	1,073	$	972	$	1,073

Amounts included in restricted cash primarily relate to amounts held in escrow in connection with various leasing arrangements in Europe. In addition, restricted cash reflects deposits held in insurance trusts in order to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims.

Goodwill

6 Months Ended

Jul. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Goodwill and Other Intangible Assets, Net [Abstract]

4. Goodwill

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 and intangible assets with indefinite lives performed during the first quarter of 2017 did not result in the recognition of impairment. The following table provides a summary of goodwill by reportable segment. The change in the balance represents foreign currency exchange fluctuations.



	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Athletic Stores	$	18	$	17	$	16
Direct-to-Customers		140		139		139
Total goodwill	$	158	$	156	$	155

Other Intangible Assets, Net

6 Months Ended

Jul. 29, 2017

Other Intangible Assets, Net

5. Other Intangible Assets, net

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



		July 29, 2017						July 30, 2016						January 28, 2017
		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	$	128	$	(115)	$	13	$	120	$	(108)	$	12	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		20		(13)		7		20		(13)		7
	Favorable leases		7		(6)		1		7		(5)		2		7		(5)		2
		$	155	$	(134)	$	21	$	147	$	(126)	$	21	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	24					$	23					$	22
Other intangible assets, net						$	45					$	44					$	42


(1)	The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar.

During the twenty-six week period ended July 29, 2017, the Company recorded $1 million of lease acquisition additions, primarily related to our European businesses. These additions are being amortized over a weighted-average life of 10 years. Amortization expense recorded is as follows:



	Thirteen weeks ended				Twenty-six weeks ended
($ in millions)		July 29, 2017		July 30, 2016	July 29, 2017		July 30, 2016
Amortization expense	$	1	$	1	$	2	$	2

Estimated future amortization expense for finite life intangible assets is as follows:


		($ in millions)
Remainder of 2017	$	2
2018		4
2019		4
2020		3
2021		2
2022		2

Accumulated Other Comprehensive Loss

6 Months Ended

Jul. 29, 2017

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

6. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss (“AOCL”), net of tax, is comprised of the following:



	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Foreign currency translation adjustments	$	(53)	$	(102)	$	(127)
Cash flow hedges		2		5		1
Unrecognized pension cost and postretirement benefit		(233)		(246)		(236)
Unrealized loss on available-for-sale security		—		—		(1)
	$	(284)	$	(343)	$	(363)

The changes in AOCL for the twenty-six weeks ended July 29, 2017 were as follows:



					Items Related
	Foreign Currency				to Pension and		Unrealized Loss on
	Translation		Cash Flow		Postretirement		Available-For-
($ in millions)	Adjustments		Hedges		Benefits		Sale Security		Total
Balance as of January 28, 2017	$	(127)	$	1	$	(236)	$	(1)	$	(363)
OCI before reclassification		74		1		(1)		1		75
Reclassified from AOCL		—		—		4		—		4
Other comprehensive income		74		1		3		1		79
Balance as of July 29, 2017	$	(53)	$	2	$	(233)	$	—	$	(284)

Reclassifications from AOCL for the twenty-six weeks ended July 29, 2017 were as follows:



		($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits- amortization of actuarial loss	$	7
Postretirement benefits- amortization of actuarial gain		(1)
Net periodic benefit cost (see Note 10)		6
Income tax benefit		(2)
Net of tax	$	4

Financial Instruments

6 Months Ended

Jul. 29, 2017

Financial Instruments [Abstract]

Financial Instruments

7. 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 8, 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. The amount of such gains or losses that were recognized in earnings during the twenty-six weeks ended July 29, 2017 was not significant and there were no such gains or losses in the corresponding prior-year period. 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 the most part, merchandise inventories are purchased by each geographic area in their respective local currency. The most significant exception to this is the United Kingdom, whose merchandise inventory purchases are denominated in euros. 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 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 quarter-end, substantially all of the Company’s hedged forecasted transactions were less than twelve months into the future, and the Company expects the derivative-related amounts reported in AOCL to be reclassified to earnings within twelve months.

The net change in the fair value of the foreign exchange derivative financial instruments designated as cash flow hedges was a $2 million gain for the thirteen weeks ended July 29, 2017 and a $1 million gain for the twenty-six weeks ended July 29, 2017. At July 29, 2017, a $2 million gain remained in AOCL. For both the thirteen and twenty-six weeks ended July 30, 2016, the net change in fair value was a $3 million gain. The notional value of the foreign exchange contracts designed as hedges outstanding at July 29, 2017 was $125 million, and these contracts mature at various dates through August 2018.

Derivative Holdings Not Designated as Hedges

The Company enters into certain derivative contracts that are not designated as hedges, such as foreign exchange forward contracts and currency option contracts. These derivative contracts are used to manage certain costs of foreign currency-denominated merchandise purchases, intercompany transactions, and the effect of fluctuating foreign exchange rates on the reporting of foreign currency-denominated earnings. Changes in the fair value of derivative holdings not designated as hedges, as well as realized gains and premiums paid, are recorded in earnings immediately within selling, general and administrative expenses or other income, depending on the type of transaction. The net change in fair value was not significant for the thirteen and twenty-six weeks ended July 29, 2017. The net change in fair value was not significant for the thirteen weeks ended July 30, 2016 and resulted in expense of $1 million for the twenty-six weeks ended July 30, 2016. The notional value of the foreign exchange contracts not designed as hedges outstanding at July 29, 2017 was $2 million, and these contracts mature in August 2017.

From time to time, 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 not designated as hedges, are recorded in earnings immediately within other income. The realized gains, premiums paid, and changes in the fair market value recorded were not significant for any of the periods presented. No such contracts were outstanding at July 29, 2017.

Fair Value of Derivative Contracts

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



	Balance Sheet	July 29,		July 30,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	3	$	6	$	3
Foreign exchange forward contracts	Current liabilities	$	1	$	—	$	3

Fair Value Measurements

6 Months Ended

Jul. 29, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements

8. 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:



	As of July 29, 2017						As of July 30, 2016						As of January 28, 2017
	($ in millions)
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Available-for-sale securities	$	—	$	7	$	—	$	—	$	7	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		3		—		—		6		—		—		3		—
Total Assets	$	—	$	10	$	—	$	—	$	13	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		1		—		—		—		—		—		3		—
Total Liabilities	$	—	$	1	$	—	$	—	$	—	$	—	$	—	$	3	$	—

Securities classified as available-for-sale are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized gains or losses are determined to be other than temporary. 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 and therefore are classified as Level 2 instruments.

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:


	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Carrying value	$	126	$	129	$	127
Fair value	$	146	$	151	$	148

The fair value of long-term debt is determined by using model-derived valuations in which all significant inputs or significant value drivers are observable in active markets and therefore are classified as Level 2. The carrying values of cash and cash equivalents, and other current receivables and payables approximate their fair value.

- Definition

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.

+ References + Details

Earnings Per Share

6 Months Ended

Jul. 29, 2017

Earnings Per Share [Abstract]

Earnings Per Share

9. 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 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					Twenty-six weeks ended
		July 29,		July 30,		July 29,		July 30,
		2017		2016		2017		2016
		(in millions, except per share data)
Net Income		$	51	$	127	$	231	$	318

Weighted-average common shares outstanding			131.3		134.4		131.3		135.4
Dilutive effect of potential common shares			0.7		1.1		1.0		1.2
Weighted-average common shares outstanding assuming dilution			132.0		135.5		132.3		136.6

Earnings per share - basic		$	0.39	$	0.94	$	1.76	$	2.35
Earnings per share - diluted		$	0.39	$	0.94	$	1.74	$	2.33

Anti-dilutive share-based awards excluded from diluted calculation			1.7		1.1		0.8		1.0

The Company adopted ASU 2016-09 during the first quarter of 2017. As a result, excess tax benefits and tax deficiencies are no longer included as assumed proceeds in the calculation of diluted shares outstanding. This change was adopted prospectively.

Contingently issuable shares of 0.4 million and 0.3 million have not been included as the vesting conditions have not been satisfied as of July 29, 2017 and July 30, 2016, respectively. These shares relate to restricted stock units issued in connection with the Company’s long-term incentive program.

Pension and Postretirement Plans

6 Months Ended

Jul. 29, 2017

Pension and Postretirement Plans [Abstract]

Pension and Postretirement Plans

10. 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. The Company also has a defined benefit pension plan covering certain employees of the Runners Point Group.

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 are recognized as part of SG&A expense:



	Pension Benefits								Postretirement Benefits
	Thirteen weeks ended				Twenty-six weeks ended				Thirteen weeks ended				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,		July 29,		July 30,		July 29,		July 30,
($ in millions)	2017		2016		2017		2016		2017		2016		2017		2016
Service cost	$	4	$	4	$	8	$	8	$	—	$	—	$	—	$	—
Interest cost		7		7		13		13		—		—		—		—
Expected return on plan assets		(10)		(9)		(19)		(18)		—		—		—		—
Amortization of net loss (gain)		4		3		7		7		(1)		—		(1)		(1)
Net benefit expense (income)	$	5	$	5	$	9	$	10	$	(1)	$	—	$	(1)	$	(1)

During the first quarter of 2017, the Company made a contribution of $25 million to the U.S. qualified plan. The Company continually evaluates the amount and timing of any future contributions. The Company currently does not expect to make any further pension plan contributions during this year. Actual contributions are dependent on several factors, including the outcome of the ongoing U.S. pension litigation. See Note 12, Legal Proceedings, for further information.

Share-Based Compensation

6 Months Ended

Jul. 29, 2017

Share-Based Compensation [Abstract]

Share-Based Compensation

11. Share-Based Compensation

Total compensation expense included in SG&A, and the associated tax benefits recognized related to the Company’s share-based compensation plans, were as follows:



	Thirteen weeks ended				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,
	2017		2016		2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	3	$	2	$	5	$	5
Restricted stock and restricted stock units		—		4		3		6
Total share-based compensation expense	$	3	$	6	$	8	$	11

Tax benefit recognized	$	1	$	2	$	2	$	3

Valuation Model and Assumptions

The Company uses the 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.

During the first quarter of 2017, in connection with the adoption of ASU 2016-09, we have made the accounting policy election to discontinue estimating forfeitures and will account for forfeitures as they occur.

The following table shows the Company’s assumptions used to compute share-based compensation expense for awards granted during the twenty-six weeks ended July 29, 2017 and July 30, 2016:



		Stock Option Plans						Stock Purchase Plan
		July 29,			July 30,			July 29,			July 30,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.8	%		0.4	%
Expected volatility		25	%		30	%		29	%		26	%
Weighted-average expected award life (in years)		5.3			5.7			1.0			1.0
Dividend yield		1.7	%		1.7	%		2.0	%		1.7	%
Weighted-average fair value	$	15.56		$	15.68		$	10.61		$	15.19

The information in the following table covers option activity under the Company’s stock option plans for the twenty-six weeks ended July 29, 2017:



		Weighted-		Weighted-
	Number	Average		Average
	of	Remaining		Exercise
	Shares	Contractual Life		Price
	(in thousands)	(in years)		(per share)
Options outstanding at the beginning of the year	2,806			$	42.61
Granted	497				72.75
Exercised	(334)				28.14
Expired or cancelled	(12)				59.55
Options outstanding at July 29, 2017	2,957		6.4	$	49.24
Options exercisable at July 29, 2017	1,926		5.1	$	39.40
Options available for future grant at July 29, 2017	10,997

The total fair value of options vested as of July 29, 2017 and July 30, 2016 was $7 million and $8 million, respectively. The cash received from option exercises for the thirteen and twenty-six weeks ended July 29, 2017 was $1 million and $10 million, respectively. The cash received from option exercises for the thirteen and twenty-six weeks ended July 30, 2016 was $7 million and $14 million, respectively.

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				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,
	2017		2016		2017		2016
	($ in millions)
Exercised	$	—	$	12	$	15	$	26

The total tax benefit realized from option exercises was not significant for the thirteen weeks ended July 29, 2017, and was $6 million for the twenty-six weeks ended July 29, 2017. The total tax benefit realized from option exercises was $5 million and $10 million for the corresponding prior-year periods.

The aggregate intrinsic value for stock options outstanding, outstanding and exercisable, and vested and expected to vest (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:



	Twenty-six weeks ended
	July 29,		July 30,
	2017		2016
	($ in millions)
Outstanding	$	23	$	76
Outstanding and exercisable	$	23	$	74
Vested and expected to vest	$	23	$	76

As of July 29, 2017 there was $9 million of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a remaining weighted-average period of 1.6 years. The following table summarizes information about stock options outstanding and exercisable at July 29, 2017:



	Options Outstanding				Options Exercisable
		Weighted-
		Average		Weighted-			Weighted-
		Remaining		Average			Average
Range of Exercise	Number	Contractual		Exercise	Number		Exercise
Prices	Outstanding	Life		Price	Exercisable		Price
	(in thousands, except prices per share and contractual life)
$9.85 to $24.75	546	2.2	$	14.33	546	$	14.33
$30.92 to $45.75	748	5.6		38.52	746		38.50
$55.02 to $62.11	697	7.1		61.25	476		61.36
$63.79 to $73.21	966	9.1		68.59	158		64.02
	2,957	6.4	$	49.24	1,926	$	39.40

Restricted Stock and Restricted Stock Units

Restricted shares of the Company’s common stock and restricted stock units (“RSU”) may be awarded to certain officers and key employees of the Company. Additionally, RSU awards are made to employees in connection with the Company’s long-term incentive program, and to nonemployee directors. Each RSU represents the right to receive one share of the Company’s common stock provided that the performance and vesting conditions are satisfied. There were 668,120 and 671,690 RSU awards outstanding as of July 29, 2017 and July 30, 2016, respectively.

Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company’s performance-based long-term incentive program are earned after the attainment of certain performance metrics and vest after 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. With regard to performance-based restricted stock, dividends will be accumulated and paid after the performance criteria are met. No dividends are paid or accumulated on RSU awards. Compensation expense is recognized using the market value at the date of grant and is amortized over the vesting period, provided the recipient continues to be employed by the Company.

Restricted stock and RSU activity for the twenty-six weeks ended July 29, 2017 is summarized as follows:


			Weighted-
			Average	Weighted-
		Number	Remaining	Average
		of	Contractual	Grant Date
		Shares	Life	Fair Value
		(in thousands)	(in years)		(per share)
Nonvested at beginning of year		798		$	56.91
Granted		248			72.71
Vested		(279)			48.96
Expired or cancelled		(60)			43.62
Nonvested at July 29, 2017		707	1.7	$	66.63
Aggregate value ($ in millions)	$	47

The total value of awards for which restrictions lapsed during the twenty-six weeks ended July 29, 2017 and July 30, 2016 was $14 million and $8 million, respectively. As of July 29, 2017, there was $12 million of total unrecognized compensation cost related to nonvested restricted awards.

Legal Proceedings	6 Months Ended
Legal Proceedings	Jul. 29, 2017
Legal Proceedings [Abstract]
Legal Proceedings	12. Legal Proceedings Legal proceedings pending against the Company or its consolidated subsidiaries consist of ordinary, routine litigation, including administrative proceedings, incidental to the business of the Company or businesses that have been sold or disposed of by the Company in past years. These legal proceedings include commercial, intellectual property, customer, environmental, and employment-related claims. The Company and the Company’s U.S. retirement plan are defendants in a class action (Osberg v. Foot Locker Inc. et ano., 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 failed to properly advise plan participants of the “wear-away” effect of the conversion. Plaintiff’s claims were for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended, and violation of the statutory provisions governing the content of the Summary Plan Description. During the third quarter of 2015, the trial court ruled that the retirement plan be reformed. As result of this development, the Company recorded a charge of $100 million pre-tax ($61 million after-tax). The Company appealed the trial court’s decision, and the judgment was stayed pending the outcome of the appeal process. During the second quarter of 2017, the Second Circuit Court of Appeals affirmed the trial court’s decision. In light of this development, the Company reassessed its estimate of the liability. The Company’s updated reasonable estimate of this liability is a range between $150 million and $260 million. The high end of the range reflects the estimated cost to reform the retirement plan in accordance with the court ruling; however, it excludes any legal fees that may be awarded to plaintiff’s counsel. No amount within that range is more probable than any other amount and therefore, in accordance with U.S. GAAP, the Company recorded a charge of $50 million pre-tax ($30 million after-tax) during the second quarter of 2017, bringing the cumulative amount accrued for this matter to $150 million. The accrual has been classified as a long-term liability. The Company will continue to vigorously defend itself in this case. In light of the uncertainties involved in this matter, there is no assurance that the ultimate resolution will not differ from the amount currently accrued by the Company. Management does not believe that the outcome of any such legal proceedings pending against the Company or its consolidated subsidiaries, as described above, would have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations, taken as a whole, based upon current knowledge and taking into consideration current accruals. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered into that could adversely affect the Company’s operating results or cash flows in a particular period.

Summary of Significant Accounting Policies (Policy)	6 Months Ended
Summary of Significant Accounting Policies (Policy)	Jul. 29, 2017
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements contained in this report are unaudited. In the opinion of management, the condensed consolidated financial statements include all normal, recurring adjustments necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 3, 2018 and of the fiscal year ended January 28, 2017. 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 Foot Locker, Inc.’s (the “Company”) Form 10-K for the year ended January 28, 2017, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. 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, as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. These ASUs can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company does not expect to adopt these ASUs until required, and has not yet selected the transition method. Based on an evaluation of the standard as a whole, the Company has identified gift card breakage, direct-response advertising, and principal versus agent considerations as areas which will most likely be affected by the new revenue recognition guidance. We are in the process of finalizing the analysis of our revenue streams and quantifying the effects on the areas discussed above, and we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize a lease liability and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods therein, and requires a modified retrospective adoption, with earlier adoption permitted. The Company does not expect to adopt this ASU until required and is evaluating the effect of this guidance. The Company has historically presented a non-GAAP measure to adjust its balance sheet to present operating leases as if they were capital leases. Based upon that analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of $3 billion to $4 billion of assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted. The Company does not expect to adopt this ASU until required. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but would recognize under the new guidance. While we could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions and the foreign exchange rates as of July 29, 2017, we expect the adoption will result in an increase in deferred income tax assets of approximately $40 million to $45 million. 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. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the twenty-six weeks ended July 29, 2017, the Company recorded excess tax benefits related to share-based compensation awards of $7 million to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Excess tax benefits recorded for the thirteen weeks ended July 29, 2017 were not significant. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefits. This ASU also requires that we present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $10 million which were previously classified as cash flows from financing activities to operating activities for the twenty-six weeks ended July 30, 2016. Additionally, the presentation of employee taxes paid to taxing authorities for share-based transactions of $6 million, previously classified as cash flows from operating activities, were reclassified to financing activities for the twenty-six weeks ended July 30, 2016. The Company has made a policy election of recording forfeitures as they occur instead of estimating forfeitures using a modified retrospective approach. The cumulative effect of this change was not significant. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU is effective for annual reporting periods beginning after December 15, 2017 including interim periods therein, with early adoption permitted. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $27 million as of July 30, 2016, January 30, 2016, and January 28, 2017. Please see Note 3, Restricted Cash, for a reconciliation of cash and cash equivalents as presented on our condensed consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our condensed consolidated statements of cash flows

Segment Information (Tables)

6 Months Ended

Jul. 29, 2017

Segment Information [Abstract]

Sales and Division Operating Results for Reportable Segments

The Company evaluates performance based on several factors, of which the primary financial measure is division results. Division profit reflects income before income taxes, pension litigation charge, corporate expense, non-operating income, and net interest (income) / expense.



	Thirteen weeks ended				Twenty-six weeks ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
Sales	($ in millions)
Athletic Stores	$	1,485	$	1,576	$	3,207	$	3,311
Direct-to-Customers		216		204		495		456
Total sales	$	1,701	$	1,780	$	3,702	$	3,767
Operating Results
Athletic Stores	$	109	$	193	$	350	$	470
Direct-to-Customers		20		22		62		60
Division profit		129		215		412		530
Less: Pension litigation charge (1)		50		—		50		—
Less: Corporate expense		7		17		22		36
Operating profit		72		198		340		494
Interest (income) / expense, net		(1)		1		(1)		1
Other income (2)		—		1		1		3
Income before income taxes	$	73	$	198	$	342	$	496


(1)	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings.
(2)	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries, and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

Restricted Cash (Tables)

6 Months Ended

Jul. 29, 2017

Restricted Cash [Abstract]

Reconciliation of Cash and Cash Equivalents


	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Cash and cash equivalents	$	1,043	$	945	$	1,046
Restricted cash included in other current assets		1		—		—
Restricted cash included in other non-current assets		29		27		27
Cash, cash equivalents, and restricted cash	$	1,073	$	972	$	1,073

Goodwill (Tables)

6 Months Ended

Jul. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Schedule of Goodwill

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



	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Athletic Stores	$	18	$	17	$	16
Direct-to-Customers		140		139		139
Total goodwill	$	158	$	156	$	155

Other Intangible Assets, Net (Tables)

6 Months Ended

Jul. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

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:



		July 29, 2017						July 30, 2016						January 28, 2017
		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	$	128	$	(115)	$	13	$	120	$	(108)	$	12	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		20		(13)		7		20		(13)		7
	Favorable leases		7		(6)		1		7		(5)		2		7		(5)		2
		$	155	$	(134)	$	21	$	147	$	(126)	$	21	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	24					$	23					$	22
Other intangible assets, net						$	45					$	44					$	42


(1)	The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar.

Amortization Expense



	Thirteen weeks ended				Twenty-six weeks ended
($ in millions)		July 29, 2017		July 30, 2016	July 29, 2017		July 30, 2016
Amortization expense	$	1	$	1	$	2	$	2

Estimated Future Expected Amortization Expense for Finite Life Intangible Assets

Estimated future amortization expense for finite life intangible assets is as follows:


		($ in millions)
Remainder of 2017	$	2
2018		4
2019		4
2020		3
2021		2
2022		2

Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jul. 29, 2017

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss (“AOCL”), net of tax, is comprised of the following:



	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Foreign currency translation adjustments	$	(53)	$	(102)	$	(127)
Cash flow hedges		2		5		1
Unrecognized pension cost and postretirement benefit		(233)		(246)		(236)
Unrealized loss on available-for-sale security		—		—		(1)
	$	(284)	$	(343)	$	(363)

Changes in Accumulated Other Comprehensive Loss

The changes in AOCL for the twenty-six weeks ended July 29, 2017 were as follows:



					Items Related
	Foreign Currency				to Pension and		Unrealized Loss on
	Translation		Cash Flow		Postretirement		Available-For-
($ in millions)	Adjustments		Hedges		Benefits		Sale Security		Total
Balance as of January 28, 2017	$	(127)	$	1	$	(236)	$	(1)	$	(363)
OCI before reclassification		74		1		(1)		1		75
Reclassified from AOCL		—		—		4		—		4
Other comprehensive income		74		1		3		1		79
Balance as of July 29, 2017	$	(53)	$	2	$	(233)	$	—	$	(284)

Reclassification from Accumulated Other Comprehensive Loss

Reclassifications from AOCL for the twenty-six weeks ended July 29, 2017 were as follows:



		($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits- amortization of actuarial loss	$	7
Postretirement benefits- amortization of actuarial gain		(1)
Net periodic benefit cost (see Note 10)		6
Income tax benefit		(2)
Net of tax	$	4

Financial Instruments (Tables)

6 Months Ended

Jul. 29, 2017

Financial Instruments [Abstract]

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

The following is presented on a gross basis, by type of contract:



	Balance Sheet	July 29,		July 30,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	3	$	6	$	3
Foreign exchange forward contracts	Current liabilities	$	1	$	—	$	3

Fair Value Measurements (Tables)

6 Months Ended

Jul. 29, 2017

Fair Value Measurements [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:



	As of July 29, 2017						As of July 30, 2016						As of January 28, 2017
	($ in millions)
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Available-for-sale securities	$	—	$	7	$	—	$	—	$	7	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		3		—		—		6		—		—		3		—
Total Assets	$	—	$	10	$	—	$	—	$	13	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		1		—		—		—		—		—		3		—
Total Liabilities	$	—	$	1	$	—	$	—	$	—	$	—	$	—	$	3	$	—

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:


	July 29,		July 30,		January 28,
	2017		2016		2017
	($ in millions)
Carrying value	$	126	$	129	$	127
Fair value	$	146	$	151	$	148

Earnings Per Share (Tables)

6 Months Ended

Jul. 29, 2017

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					Twenty-six weeks ended
		July 29,		July 30,		July 29,		July 30,
		2017		2016		2017		2016
		(in millions, except per share data)
Net Income		$	51	$	127	$	231	$	318

Weighted-average common shares outstanding			131.3		134.4		131.3		135.4
Dilutive effect of potential common shares			0.7		1.1		1.0		1.2
Weighted-average common shares outstanding assuming dilution			132.0		135.5		132.3		136.6

Earnings per share - basic		$	0.39	$	0.94	$	1.76	$	2.35
Earnings per share - diluted		$	0.39	$	0.94	$	1.74	$	2.33

Anti-dilutive share-based awards excluded from diluted calculation			1.7		1.1		0.8		1.0

Pension and Postretirement Plans (Tables)

6 Months Ended

Jul. 29, 2017

Pension and Postretirement Plans [Abstract]

Net Benefit Expense (Income)

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



	Pension Benefits								Postretirement Benefits
	Thirteen weeks ended				Twenty-six weeks ended				Thirteen weeks ended				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,		July 29,		July 30,		July 29,		July 30,
($ in millions)	2017		2016		2017		2016		2017		2016		2017		2016
Service cost	$	4	$	4	$	8	$	8	$	—	$	—	$	—	$	—
Interest cost		7		7		13		13		—		—		—		—
Expected return on plan assets		(10)		(9)		(19)		(18)		—		—		—		—
Amortization of net loss (gain)		4		3		7		7		(1)		—		(1)		(1)
Net benefit expense (income)	$	5	$	5	$	9	$	10	$	(1)	$	—	$	(1)	$	(1)

Share-Based Compensation (Tables)

6 Months Ended

Jul. 29, 2017

Share-Based Compensation [Abstract]

Total Compensation Expense and the Related Tax Benefits Recognized



	Thirteen weeks ended				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,
	2017		2016		2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	3	$	2	$	5	$	5
Restricted stock and restricted stock units		—		4		3		6
Total share-based compensation expense	$	3	$	6	$	8	$	11

Tax benefit recognized	$	1	$	2	$	2	$	3

Assumptions used to Compute Share-Based Compensation Expense



		Stock Option Plans						Stock Purchase Plan
		July 29,			July 30,			July 29,			July 30,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.8	%		0.4	%
Expected volatility		25	%		30	%		29	%		26	%
Weighted-average expected award life (in years)		5.3			5.7			1.0			1.0
Dividend yield		1.7	%		1.7	%		2.0	%		1.7	%
Weighted-average fair value	$	15.56		$	15.68		$	10.61		$	15.19

Options Granted under Stock Option Plans



		Weighted-		Weighted-
	Number	Average		Average
	of	Remaining		Exercise
	Shares	Contractual Life		Price
	(in thousands)	(in years)		(per share)
Options outstanding at the beginning of the year	2,806			$	42.61
Granted	497				72.75
Exercised	(334)				28.14
Expired or cancelled	(12)				59.55
Options outstanding at July 29, 2017	2,957		6.4	$	49.24
Options exercisable at July 29, 2017	1,926		5.1	$	39.40
Options available for future grant at July 29, 2017	10,997

Total Intrinsic Value of Options Exercised



	Thirteen weeks ended				Twenty-six weeks ended
	July 29,		July 30,		July 29,		July 30,
	2017		2016		2017		2016
	($ in millions)
Exercised	$	—	$	12	$	15	$	26

Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable



	Twenty-six weeks ended
	July 29,		July 30,
	2017		2016
	($ in millions)
Outstanding	$	23	$	76
Outstanding and exercisable	$	23	$	74
Vested and expected to vest	$	23	$	76

Information about Stock Options Outstanding and Exercisable



	Options Outstanding				Options Exercisable
		Weighted-
		Average		Weighted-			Weighted-
		Remaining		Average			Average
Range of Exercise	Number	Contractual		Exercise	Number		Exercise
Prices	Outstanding	Life		Price	Exercisable		Price
	(in thousands, except prices per share and contractual life)
$9.85 to $24.75	546	2.2	$	14.33	546	$	14.33
$30.92 to $45.75	748	5.6		38.52	746		38.50
$55.02 to $62.11	697	7.1		61.25	476		61.36
$63.79 to $73.21	966	9.1		68.59	158		64.02
	2,957	6.4	$	49.24	1,926	$	39.40

Restricted Share and Unit Activity


			Weighted-
			Average	Weighted-
		Number	Remaining	Average
		of	Contractual	Grant Date
		Shares	Life	Fair Value
		(in thousands)	(in years)		(per share)
Nonvested at beginning of year		798		$	56.91
Granted		248			72.71
Vested		(279)			48.96
Expired or cancelled		(60)			43.62
Nonvested at July 29, 2017		707	1.7	$	66.63
Aggregate value ($ in millions)	$	47

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($)
$ in Millions

6 Months Ended

Jul. 29, 2017

Jul. 30, 2016

Jan. 28, 2017

Jan. 30, 2016

Shares of common stock repurchased to satisfy tax withholding obligations

$ 9

$ 6

^[1]

Accounting Standards Update 2016-09 [Member]

Excess tax benefits on share-based compensation, operating activities

Shares of common stock repurchased to satisfy tax withholding obligations

Accounting Standards Update 2016-18 [Member]

Maximum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 02 [Member]

Restricted cash

$ 27

Addition to assets and liabilities from accounting standards update

4,000

Maximum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 16 [Member]

Increase in deferred tax assets

Minimum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 02 [Member]

Addition to assets and liabilities from accounting standards update

3,000

Minimum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 16 [Member]

Increase in deferred tax assets

$ 40

[1]	Amounts for the twenty-six weeks ended July 30, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the Recently Adopted Accounting Pronouncements note.

Segment Information (Narrative) (Details)
$ in Millions

3 Months Ended

6 Months Ended

Jul. 29, 2017

USD ($)

Jul. 29, 2017

USD ($)

segment

Segment Information [Abstract]

Number of reportable segments | segment

Pension litigation charge | $

^[1]

$ 50

[1]	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings

Segment Information (Sales and Division Operating Results for Reportable Segments) (Details) - USD ($)
$ in Millions

3 Months Ended

6 Months Ended

Jul. 29, 2017

Jul. 30, 2016

Jul. 29, 2017

Jul. 30, 2016

Less: Pension litigation charge

$ 1,701

$ 1,780

$ 3,702

$ 3,767

Division profit

129

215

412

530

^[1]

Less: Corporate expense

Income from operations

122

198

390

494

Interest (income) / expense, net

(1)

Other income

^[2]

Income before income taxes

198

342

496

Athletic Stores [Member]

Operating results before restructuring income

1,485

1,576

3,207

3,311

109

193

350

470

Direct-to-Customers [Member]

Operating results before restructuring income

216

204

495

456

Operating Segments [Member]

Cash and cash equivalents

Income from operations

$ 72

$ 198

$ 340

$ 494

[1]	Included in the thirteen and twenty-six weeks ended July 29, 2017 is a pre-tax litigation charge of $50 million relating to a pension litigation matter described further in Note 12, Legal Proceedings
[2]	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries, and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

Restricted Cash (Reconciliation of Cash and Cash Equivalents) (Details) - USD ($)
$ in Millions

Jul. 29, 2017

Jan. 28, 2017

Jul. 30, 2016

Jan. 30, 2016

^[2]

Restricted Cash [Abstract]

$ 1,043

$ 1,046

^[1]

$ 945

Restricted cash included in other current assets

Restricted cash included in other non-current assets

Cash, cash equivalents, and restricted cash

$ 1,073

$ 972

^[2]

$ 1,048

[1]

[2]

Amounts for the twenty-six weeks ended July 30, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the Recently Adopted Accounting Pronouncements note.

Goodwill (Schedule of Goodwill) (Details) - USD ($)
$ in Millions

Jul. 29, 2017

Jan. 28, 2017

Jul. 30, 2016

Goodwill [Line Items]

$ 158

$ 155

^[1]

$ 156

Athletic Stores [Member]

Goodwill [Line Items]

Direct-to-Customers [Member]

Goodwill [Line Items]

$ 140

$ 139

[1]

Other Intangible Assets, Net (Narrative) (Details) $ in Millions	6 Months Ended
	Jul. 29, 2017 USD ($)
Goodwill and Other Intangible Assets, Net [Abstract]
Additions of intangible assets of new leases	$ 1
Weighted-average amortization period	10 years

Other Intangible Assets, Net (Schedule of Other Intangible Assets) (Details) - USD ($)
$ in Millions

Jul. 29, 2017

Jan. 28, 2017

Jul. 30, 2016

^[1]

$ 155

$ 143

$ 147

^[1]

(134)

(123)

(126)

Other intangible assets, net

^[1]

^[2]

Lease Acquisition Costs [Member]

^[1]

128

116

120

^[1]

(115)

(105)

(108)

Trademarks and Trade Names [Member]

^[1]

^[1]

^[1]

(13)

Favorable Leases [Member]

^[1]

^[1]

^[1]

(6)

(5)

Runners Point Group [Member]

^[1]

Indefinite life intangible assets, Net Value

^[1]

$ 24

$ 22

$ 23

[1]

The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar

[2]

Other Intangible Assets, Net (Amortization Expense) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 29, 2017	Jul. 30, 2016	Jul. 29, 2017	Jul. 30, 2016
Goodwill and Other Intangible Assets, Net [Abstract]
Amortization expense	$ 1	$ 1	$ 2	$ 2

Other Intangible Assets, Net (Estimated Future Amortization Expense for Finite Lived Intangibles) (Details) $ in Millions	Jul. 29, 2017 USD ($)
Goodwill and Other Intangible Assets, Net [Abstract]
Remainder of 2017	$ 2
2018	4
2019	4
2020	3
2021	2
2022	$ 2

Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($)
$ in Millions

Jul. 29, 2017

Jan. 28, 2017

Jul. 30, 2016

Accumulated Other Comprehensive Loss [Abstract]

Foreign currency translation adjustments

$ (53)

$ (127)

$ (102)

Cash flow hedges

Unrecognized pension cost and postretirement benefit

(233)

(236)

(246)

Unrealized loss on available-for-sale security

(1)

Accumulated other comprehensive income (loss), net of tax, total

$ (284)

$ (363)

^[1]

$ (343)

[1]

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

6 Months Ended

Jul. 29, 2017

USD ($)

Accumulated Other Comprehensive Income (Loss) [Line Items]

$ (363)

^[1]

Foreign Currency Translation Adjustments [Member]

(284)

Accumulated Other Comprehensive Income (Loss) [Line Items]

(127)

Cash Flow Hedges [Member]

(53)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Accumulated Other Comprehensive Income (Loss) [Line Items]

(236)

(1)

Unrealized Loss on Available-For-Sale Security [Member]

(233)

Accumulated Other Comprehensive Income (Loss) [Line Items]

(1)