(Address of ~~Principal Executive Offices)~~principal executive offices, Zip Code)

~~Indicate by check mark whether the registrant~~

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes~~ o No þ

~~The number of shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding as of November 28, 2014 was 142,086,468~~

Number of shares of Common Stock outstanding as of November 27, 2015: 137,261,732

FOOT LOCKER, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions, except shares)

	November 1,			November 2,			February 1,			October 31,			November 1,			January 31,
	2014			2013			2014			2015			2014			2015
	(Unaudited)			(Unaudited)			*			(Unaudited)			(Unaudited)			*
ASSETS

Current assets
Cash and cash equivalents	$	916		$	764		$	858		$	878		$	916		$	967
Short-term investments		—			32			9
Merchandise inventories		1,324			1,316			1,220			1,336			1,324			1,250
Other current assets		244			208			263			277			244			239
		2,484			2,320			2,350			2,491			2,484			2,456
Property and equipment, net		613			589			590			664			613			620
Deferred taxes		237			257			241			256			237			221
Goodwill		160			163			163			156			160			157
Other intangible assets, net		56			70			67			46			56			49
Other assets		68			78			76			82			68			74
	$	3,618		$	3,477		$	3,487		$	3,695		$	3,618		$	3,577
LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	287		$	310		$	263		$	258		$	287		$	301
Accrued and other liabilities		358			330			360			401			358			393
Current portion of capital lease obligations		3			3			3			1			3			2
		648			643			626			660			648			696
Long-term debt and obligations under capital leases		132			137			136			130			132			132
Other liabilities		236			231			229			358			236			253
Total liabilities		1,016			1,011			991			1,148			1,016			1,081
Shareholders’ equity
Common stock and paid-in capital: 170,469,434; 168,675,093; and 169,039,095 shares, respectively		971			905			921
Common stock and paid-in capital: 173,333,777; 170,469,434 and 170,529,401 shares, respectively											1,099			971			979
Retained earnings		2,665			2,295			2,387			3,058			2,665			2,780
Accumulated other comprehensive loss		(221	)		(170	)		(186	)		(343	)		(221	)		(319	)
Less: Treasury stock at cost: 27,323,176; 22,035,758; and 23,612,273 shares, respectively		(813	)		(564	)		(626	)
Less: Treasury stock at cost: 34,772,045; 27,323,176 and 29,665,213 shares, respectively											(1,267	)		(813	)		(944	)
Total shareholders’ equity		2,602			2,466			2,496			2,547			2,602			2,496
	$	3,618		$	3,477		$	3,487		$	3,695		$	3,618		$	3,577

See Accompanying Notes to Condensed Consolidated Financial Statements.

~~See Accompanying Notes to Condensed Consolidated Financial Statements.~~

* The balance sheet at ~~February 1, 2014~~January 31, 2015 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~~Foot Locker, Inc.’s Annual Report on Form ~~10-K.~~10-K for the year ended January 31, 2015.

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

($ in millions, except per share amounts)

Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
2014 2013 2014 2013
Sales $ 1,731 $ 1,622 $ 5,240 $ 4,714

Cost of sales 1,157 1,085 3,495 3,163
Selling, general and administrative expenses 353 340 1,051 969
Depreciation and amortization 34 35 106 97
Impairment and other charges — — 3 2
Interest expense, net 1 2 3 4
Other income (1 ) — (3 ) (3 )
1,544 1,462 4,655 4,232

Income before income taxes 187 160 585 482
Income tax expense 67 56 211 174
Net income $ 120 $ 104 $ 374 $ 308

Basic earnings per share $ 0.84 $ 0.70 $ 2.59 $ 2.06

Weighted-average common shares outstanding 143.6 147.7 144.5 149.2

Diluted earnings per share $ 0.82 $ 0.70 $ 2.55 $ 2.04
Weighted-average common shares assuming dilution 145.7 149.5 146.6 151.2
~~See Accompanying Notes to Condensed Consolidated Financial Statements.~~
~~FOOT LOCKER, INC.~~
~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~
~~(Unaudited)~~
~~(in millions)~~
Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
2014 2013 2014 2013
Net income $ 120 $ 104 $ 374 $ 308

Other comprehensive income (loss), net of income tax

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

Comprehensive income $ 81 $ 127 $ 339 $ 308
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
Sales $ 1,794 $ 1,731 $ 5,405 $ 5,240

Cost of sales 1,187 1,157 3,575 3,495
Selling, general and administrative expenses 352 353 1,028 1,051
Depreciation and amortization 38 34 109 106
Litigation and impairment charges 100 — 100 3
Interest expense, net 1 1 3 3
Other income, net (1 ) (1 ) (2 ) (3 )
1,677 1,544 4,813 4,655

Income before income taxes 117 187 592 585
Income tax expense 37 67 209 211
Net income $ 80 $ 120 $ 383 $ 374

Basic earnings per share:
Net income $ 0.57 $ 0.84 $ 2.74 2.59
Weighted-average common shares outstanding 139.3 143.6 139.6 144.5

Diluted earnings per share:
Net income $ 0.57 $ 0.82 $ 2.71 $ 2.55
Weighted-average common shares assuming dilution 140.9 145.7 141.4 146.6

See Accompanying Notes to Condensed Consolidated Financial Statements.
2
FOOT LOCKER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMPREHENSIVE INCOME
(Unaudited)
($ in millions)

Thirty-nine weeks ended
November 1, November 2,
2014 2013
From Operating Activities:
Net income $ 374 $ 308
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impairment charges 3 —
Depreciation and amortization 106 97
Share-based compensation expense 18 19
Qualified pension plan contributions (2 ) (2 )
Excess tax benefits on share-based compensation (11 ) (7 )
Change in assets and liabilities:
Merchandise inventories (124 ) (108 )
Accounts payable 28 (3 )
Accrued and other liabilities (7 ) (44 )
Other, net 54 67
Net cash provided by operating activities 439 327

From Investing Activities:
Lease termination gains — 2
Sales and maturities of short-term investments 9 38
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 17 19
Treasury stock issued under employee stock purchase plan 5 3
Excess tax benefits on share-based compensation 11 8
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 ) 4
Net change in Cash and Cash Equivalents 58 (116 )
Cash and Cash Equivalents at beginning of year 858 880
Cash and Cash Equivalents at end of interim period $ 916 $ 764

Cash paid during the period:
Interest $ 5 $ 5
Income taxes $ 200 $ 123
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
Net income $ 80 $ 120 $ 383 $ 374

Other comprehensive income (loss), net of income tax

Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax (10 ) (42 ) (32 ) (42 )

Cash flow hedges:
Change in fair value of derivatives, net of income tax 2 1 1 1

Pension and postretirement adjustments:
Amortization of net actuarial gain/loss included in net periodic benefit costs, net of income tax expense of $1, $2, $3, and $4 million, respectively 3 2 7 6
Comprehensive income $ 75 $ 81 $ 359 $ 339

See Accompanying Notes to Condensed Consolidated Financial Statements.

FOOT LOCKER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in millions)
Thirty-nine weeks ended
October 31, November 1,
2015 2014
From Operating Activities:
Net income $ 383 $ 374
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impairment charge — 3
Depreciation and amortization 109 106
Share-based compensation expense 17 18
Qualified pension plan contributions (4 ) (2 )
Excess tax benefits on share-based compensation (33 ) (11 )
Change in assets and liabilities:
Merchandise inventories (96 ) (124 )
Accounts payable (39 ) 28
Accrued and other liabilities (12 ) (7 )
Other, net 89 54
Net cash provided by operating activities 414 439

From Investing Activities:
Capital expenditures (173 ) (138 )
Acquisition, net of cash acquired (1 ) —
Sales and maturities of short-term investments — 9
Net cash used in investing activities (174 ) (129 )

From Financing Activities:
Purchase of treasury shares (316 ) (174 )
Dividends paid on common stock (105 ) (96 )
Issuance of common stock 63 17
Treasury stock issued under employee stock purchase plan 5 5
Excess tax benefits on share-based compensation
33 11
Repayments of obligations under capital leases (2 ) (3 )
Net cash used in financing activities (322 ) (240 )

Effect of exchange rate fluctuations on Cash and Cash Equivalents (7 ) (12 )
Net change in Cash and Cash Equivalents (89 ) 58
Cash and Cash Equivalents at beginning of year 967 858
Cash and Cash Equivalents at end of interim period $ 878 $ 916

Cash paid during the period:
Interest $ 5 $ 5
Income taxes $ 240 $ 200
See Accompanying Notes to Condensed Consolidated Financial Statements.

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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~~30, 2016 and of the fiscal year ended ~~February 1, 2014.~~January 31, 2015. 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~~Foot Locker, Inc.’s (the “Company”) Form 10-K for the year ended ~~February 1, 2014,~~January 31, 2015, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March ~~31, 2014.~~30, 2015.

Recent Accounting Pronouncements

In ~~April 2014,~~November 2015, the Financial Accounting Standards Board ~~(“FASB”)~~ issued Accounting Standards Update (“ASU”) ~~2014-08,~~2015-17,~~Reporting Discontinued Operations~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.This amendment changes how deferred taxes are recognized by eliminating the requirement of presenting deferred tax liabilities and ~~Disclosures of Disposals of Components of an Entity. The amendments in this update change~~assets as current and noncurrent on 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 requiredbalance sheet. Instead, the requirement will be 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~~classify all deferred tax liabilities and ~~financial results and when the component or group of components meets the criteria to be classified~~assets as ~~held for sale, is disposed by sale or is disposed of by other than by sale.~~noncurrent. 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 2014-092015-17 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~~2015-17 can be adopted either prospectively or retrospectively to ~~each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.~~all periods presented. The Company plans on early adopting ASU 2015-17 prospectively during fiscal year 2016. The adoption of this guidance is not expected to have ~~a significant~~an effect on our ~~consolidated financial position,~~ results of operations or cash ~~flows.~~flows, as this represents only a change in balance sheet classification.

~~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.
~~FOOT LOCKER, INC.~~
2. Acquisitions

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
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,~~On August 3, 2015, 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,completed an ~~impairment charge~~insignificant asset acquisition from Futura Sport AG for total consideration of $2 million, of which $1 million was ~~recorded to write down the value of the CCS tradename. The liquidation was substantially completed~~paid during the third quarter ~~ended November 1, 2014. This closure does not meet~~of 2015. The Company expects to make the ~~definition~~remaining payment of ~~a discontinued operation~~$1 million during the fourth quarter for the remainder of the purchase price. The assets acquired include store fixtures, lease agreements, and inventory for 10 Runners Point and Sidestep franchise stores in Switzerland. The purchase price allocation has been completed as ~~it is not considered a strategic shift that will have a major effect on operations.~~of October 31, 2015.

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~~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.~~results. Division profit reflects income before income taxes, pension litigation charge, 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
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Sales
Athletic Stores $ 1,571 $ 1,521 $ 4,755 $ 4,646
Direct-to-Customers 223 210 650 594
Total sales $ 1,794 $ 1,731 $ 5,405 $ 5,240

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Segment Information – (continued)
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Operating Results
Athletic Stores⁽¹⁾ $ 206 $ 181 $ 649 $ 577
Direct-to-Customers⁽²⁾ 31 25 98 67
Division profit 237 206 747 644
Less:   Litigation charge⁽³⁾ 100 — 100 —
Corporate expense, net 20 19 54 59
Operating profit 117 187 593 585
Other income ⁽⁴⁾ 1 1 2 3
Interest expense, net 1 1 3 3
Income before income taxes $ 117 $ 187 $ 592 $ 585
⁽¹⁾ Included in ~~the Athletic Stores segment for~~ the thirty-nine weeks ended November 1, 2014 is a non-cash impairment charge of $1 million to fully write down the remaining value of the tradename ~~impairment charge~~ related to the Company’s stores in the Republic of Ireland.
⁽²⁾
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 non-cash impairment charge related to the CCS tradename.
⁽³⁾ Included in the thirteen and thirty-nine weeks ended October 31, 2015 is a pre-tax litigation charge of $100 million relating to a pension litigation matter described further in Note 12,Legal Proceedings.
⁽⁴⁾ 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.
8
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
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 and intangible assets with indefinite lives performed during the first quarter of ~~2014~~2015 did not result in ~~impairment charges as~~ the ~~fair value~~recognition 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.impairment.

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

Goodwill November 1, November 2, February 1,
(in millions) 2014 2013 2014
October 31, November 1, January 31,
2015 2014 2015
($ in millions)
Athletic Stores $ 19 $ 21 $ 21 $ 17 $ 19 $ 17
Direct-to-Customers 141 142 142 139 141 140
$ 160 $ 163 $ 163 $ 156 $ 160 $ 157
5. Other Intangible Assets, net

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

October 31, 2015 November 1, 2014 January 31, 2015
($ in millions)
Gross
value

Accum.
amort.

Net
Value

Gross
value

Accum.
amort.

Net
Value

Gross
value

Accum.
amort.

Net
Value

Amortized intangible assets:^{(1), (2)}
Lease acquisition costs $ 119 $ (109 ) $ 10 $ 143 $ (129 ) $ 14 $ 128 $ (116 ) $ 12
Trademarks 21 (12 ) 9 21 (11 ) 10 21 (12 ) 9
Favorable leases 7 (4 ) 3 7 (4 ) 3 7 (4 ) 3
$ 147 $ (125 ) $ 22 $ 171 $ (144 ) $ 27 $ 156 $ (132 ) $ 24
6
FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5. Other Intangible Assets, net – (continued)
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
October 31, 2015 November 1, 2014 January 31, 2015
($ in millions)
Gross
value

Accum.
amort.

Net
Value

Gross
value

Accum.
amort.

Net
Value

Gross
value

Accum.
amort.

Net
Value

Indefinite life intangible assets:⁽¹⁾
Runners Point Group trademarks 24 28 25
Other trademarks — 1 —
$ 24 $ 29 $ 25
Other intangible assets, net $ 46 $ 56 $ 49

(1) ~~Includes~~ The change in the ending balances also reflects the effect of foreign currency ~~translation related~~fluctuations due 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~~ During 2014, the Company exited the CCS e-commerce business; as such, the fully amortized customer relationship intangible of $21 million ~~of impairment charges recorded during~~was removed from the ~~thirty-nine weeks ended November 1, 2014.~~amounts presented above for all periods.

~~The $11 million change in goodwill and other intangible assets for~~For the thirty-nine week period ended ~~November 1, 2014,~~October 31, 2015, activity included ~~$5 million~~amortization of ~~amortization expense,~~ $3 million ~~related to the impairment charges noted above,~~ and a $4$1 million decrease related to foreign currency exchange fluctuations. This was partially offset by $1 million of lease acquisition additions primarily related to ~~Foot Locker Europe,~~our European businesses, which are being amortized over a weighted-average life of 98 years.
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
($ in millions) 2015 2014 2015 2014
Amortization expense $ 1 $ 2 $ 3 $ 5
Estimated future amortization expense for finite life intangible assets is as follows:
($ in millions)
Remainder of 2015 $ 1
2016 4
2017 3
2018 3
2019 3
2020 3
6. Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss (“AOCL”), net of tax, is comprised the following:
October 31, November 1, January 31,
2015 2014 2015
($ in millions)
Foreign currency translation adjustments $ (107 ) $ 15 $ (75 )
Cash flow hedges (2 ) (1 ) (3 )
Unrecognized pension cost and postretirement benefit (233 ) (234 ) (240 )
Unrealized loss on available-for-sale security (1 ) (1 ) (1 )
$ (343 ) $ (221 ) $ (319 )

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.~~Goodwill and Other Intangible Assets – (continued)~~
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
5.6. Accumulated Other Comprehensive Loss – (continued)
~~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~~AOCL for the thirty-nine weeks ended ~~November 1, 2014~~October 31, 2015 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 )
10
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
5.~~Accumulated Other Comprehensive Loss – (continued)~~
($ 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 January 31, 2015 $ (75 ) (3 ) (240 ) (1 ) $ (319 )
OCI before reclassification (32 ) 1 1 — (30 )
Reclassified from AOCL — — 6 — 6
Other comprehensive income/(loss) (32 ) 1 7 — (24 )
Balance as of October 31, 2015 $ (107 ) (2 ) (233 ) (1 ) $ (343 )

Reclassifications from ~~accumulated other comprehensive loss~~AOCL for the thirty-nine weeks ended ~~November 1, 2014~~October 31, 2015 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 (seeNote 9) 10
Income tax expense (4 )
Net of tax $ 6
($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits -  amortization of actuarial loss $ 10
Postretirement benefits -  amortization of actuarial gain (1 )
Net periodic benefit cost (seeNote 10) 9
Income tax benefit (3 )
Net of tax $ 6

6.7. 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 7,8,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. 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 the most part, merchandise inventories are purchased by each geographic area in their respective local currency. The 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 ~~Accumulated Other Comprehensive Loss (“AOCL”)~~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.

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. Financial Instruments – (continued)
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.
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
6.~~Financial Instruments – (continued)~~

The net change in the fair value of the foreign exchange derivative financial instruments designated as cash flow hedges of the purchase of inventory was a gain of $2 million and $1 million for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, and therefore decreased AOCL. At October 31, 2015, there was a $2 million loss ~~for~~included in AOCL. For both the thirteen and thirty-nine weeks ended November 1, ~~2014. The~~2014, the net change resulted in ~~fair value was not significant for the prior-year periods.~~
a loss of $1 million. The notional value of the foreign exchange contracts designed as hedges outstanding at ~~November 1, 2014~~October 31, 2015 was ~~$77~~$93 million, and these contracts ~~extend~~mature at various dates through January ~~2016.~~2017.
Derivative Holdings Not Designated as ~~Non-Hedges~~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~~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 resulted in expense of $3 million and $1 million for the thirteen and thirty-nine weeks ended October 31, 2015, respectively. 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 foreign exchange contracts not designed as hedges outstanding at ~~November 1, 2014~~October 31, 2015 was ~~$18~~$15 million, and these contracts ~~extend~~mature at various dates through December ~~2014.~~2015.

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 ~~non-hedges,~~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~~not significant for the thirteen and thirty-nine weeks ended October 31, 2015. The realized gain was $1 million for the thirteen weeks and thirty-nine weeks ended November 1, ~~2014~~2014. No such contracts were outstanding at October 31, 2015.
Additionally, the Company enters into diesel fuel forward and ~~were~~option contracts to mitigate a portion of the Company’s freight expense due to the variability caused by fuel surcharges imposed by our third-party freight carriers. Changes in the fair value of these contracts are recorded in earnings immediately. The effect was not significant for any of the ~~prior-year periods.~~periods presented. The notional value of the ~~contract~~diesel fuel forward contracts outstanding at ~~November 1, 2014~~October 31, 2015 was ~~$31~~$1 million and ~~this contract extends~~these contracts mature at various dates through ~~January 2015.~~May 2016.

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, represents the fair value of the Company’s derivative contracts:~~contract:

Balance Sheet November 1, November 2, February 1, Balance Sheet October 31, November 1, January 31,
(in millions) Caption 2014 2013 2014
($ in millions) Caption 2015 2014 2015
Hedging Instruments:
Foreign exchange forward contracts Current assets $ — $ 1 $ — Current liabilities $ 3 $ 2 $ 4
Non-Hedging Instruments:
Foreign exchange forward contracts Current liabilities $ 2 $ — $ 2 Current assets $ 2 $ — $ —
Foreign exchange forward contracts Current liabilities $ 3 $ — $ 1

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7.8. 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.
12
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
7.~~Fair Value Measurements – (continued)~~

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 At October 31, 2015 At November 1, 2014 At January 31, 2015
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
($ 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 — — 6 — — 6 — — 6 —
Foreign exchange forward contracts — — — — 1 — — — —
Total Assets $ — $ 6 $ — $ — $ 39 $ — $ — $ 15 $ — $ — $ 6 $ — $ — $ 6 $ — $ — $ 6 $ —

Liabilities
Foreign exchange forward contracts — $ 2 — — — — — 2 — — 4 — — 2 — — 5 —
Total Liabilities $ — $ 2 $ — $ — $ — $ — $ — $ 2 $ — $ — $ 4 $ — $ — $ 2 $ — $ — $ 5 $ —

~~Available-for-sale securities~~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 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.~~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:

November 1, November 2, February 1, October 31, November 1, January 31,
(in millions) 2014 2013 2014
2015 2014 2015
($ in millions)
Carrying value $ 135 $ 140 $ 139 $ 131 $ 135 $ 134
Fair value $ 161 $ 157 $ 159 $ 157 $ 161 $ 163

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~~value drivers are observable in active markets and, therefore, isare 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.
13

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8.9. 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 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 Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2, October 31, November 1, October 31, November 1,
(in millions) 2014 2013 2014 2013
2015 2014 2015 2014
($ in millions)
Weighted-average common shares outstanding 143.6 147.7 144.5 149.2 139.3 143.6 139.6 144.5
Effect of Dilution:
Stock options and awards 2.1 1.8 2.1 2.0 1.6 2.1 1.8 2.1
Weighted-average common shares assuming dilution 145.7 149.5 146.6 151.2 140.9 145.7 141.4 146.6

The number of options excluded from the computation was not significant for the thirteen weeks ended October 31, 2015, and was 0.6 million for the thirty-nine weeks ended October 31, 2015. 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 0.3 million and 0.4 million have not been included as the vesting conditions have not been satisfied as of ~~both~~October 31, 2015 and November 1, 2014, ~~and November 2, 2013.~~respectively.

9.10. 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. In addition, the Company has a defined benefit pension plan covering certain individuals 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 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 )

Pension Benefits Postretirement Benefits
Thirteen weeks Thirty-nine weeks Thirteen weeks Thirty-nine weeks
ended ended ended ended
October 31, November 1, October 31, November 1, October 31, November 1, October 31, November 1,
($ in millions) 2015 2014 2015 2014 2015 2014 2015 2014
Service cost $ 5 $ 3 $ 13 $ 11 $ — $ — $ — $ —
Interest cost 6 7 18 21 — — 1 —
Expected return on plan assets (10 ) (9 ) (29 ) (28 ) — — — —
Amortization of net loss (gain) 3 5 10 12 — (1 ) (1 ) (2 )
Net benefit expense (income) $ 4 $ 6 $ 12 $ 16 $ — $ (1 ) $ — $ (2 )
~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
9.~~Pension and Postretirement Plans – (continued)~~
~~During the first quarters of both 2014 and 2013,~~On August 14, 2015, the Company made ~~contributions~~a contribution of $2$4 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.~~plan. The Company continually evaluates the amount and timing of any future contributions. ~~Additional~~The Company currently does not expect any further pension plan contributions ~~will depend~~during the current year. Actual contributions are dependent on several factors, including the ~~plan asset performance and other factors.~~outcome of the ongoing pension litigation. See Note 12,Legal Proceedings, for further information.

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~10.~~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 iswere 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 $8 million for the thirty-nine weeks ended November 2, 2013 and are classified as a financing activity within the Condensed Consolidated Statements of Cash Flows.
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October  31, November 1,
2015 2014 2015 2014
($ in millions)
Options and shares purchased under the employee stock purchase plan $ 3 $ 3 $ 9 $ 9
Restricted stock and restricted stock units 3 3 8 9
Total share-based compensation expense $ 6 $ 6 $ 17 $ 18

Tax benefit recognized $ 3 $ 1 $ 6 $ 5
Excess income tax benefit from settled equity-classified share-based awards reported as a cash flow from financing activities $ 33 $ 11

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.
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~10.Share-Based Compensation – (continued)~~
Stock Option Plans Stock Purchase Plan
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
Weighted-average risk free rate of interest 1.52 % 2.12 % 0.22 % 0.14 %
Expected volatility 30 % 39 % 24 % 24 %
Weighted-average expected award life 6.0 years 6.1 years 1.0 year 1.0 year
Dividend yield 1.61 % 2.0 % 1.7 % 2.0 %
Weighted-average fair value $ 16.07 $ 14.91 $ 10.20 $ 7.11

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.~~October 31, 2015:

(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
Shares Weighted-
Average Term
Weighted-Average
Exercise
Price

(in thousands, except price per share and
weighted-average term)

Options outstanding at the beginning of the year 5,569 $ 25.89
Granted 694 62.29
Exercised (2,447 ) 25.64
Expired or cancelled (55 ) 48.68
Options outstanding at October 31, 2015 3,761 6.3 $ 32.44
Options exercisable at October 31, 2015 2,531 5.1 $ 22.13
Options vested and expected to vest at October 31, 2015 3,720 6.3 $ 32.17
Options available for future grant at October 31, 2015 13,037

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~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.~~11. Share-Based Compensation – (continued)

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
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014

($ in millions)

Exercised $ 31 $ 6 $ 96 $ 21

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
Thirty-nine weeks ended October 31, November 1,
November 1, November 2, 2015 2014
2014 2013 ($ in millions)
Outstanding $ 170 $ 74 $ 133 $ 170
Outstanding and exercisable $ 138 $ 64 $ 116 $ 138
Vested and expected to vest $ 169 $ 74 $ 133 $ 169

As of October 31, 2015 there was $9 million of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a weighted-average period of 1.5 years.
The cash received from option exercises for the thirteen and thirty-nine weeks ended October 31, 2015 was $25 million and $63 million, respectively. 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~~total tax benefit realized from option exercises was $12 million and $37 million for the thirteen and thirty-nine weeks ended ~~November 2, 2013 was $4 million~~October 31, 2015, respectively, 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.
~~FOOT LOCKER, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~10.Share-Based Compensation – (continued)~~

The following table summarizes information about stock options outstanding and exercisable at ~~November 1, 2014:~~October 31, 2015:

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
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 $18.80 870 3.9 $ 13.28 870 $ 13.28
$18.84 to  $24.75 899 4.8 $ 19.81 899 $ 19.81
$30.92  to  $36.59 790 6.7 $ 32.84 616 $ 32.44
$45.08 to  $73.21 1,202 8.9 $ 55.47 146 $ 45.70
3,761 6.3 $ 32.44 2,531 $ 22.13
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. ~~Awards~~RSU awards generally are made to executives outside of the United States and to nonemployee ~~directors~~directors. Additionally, RSU awards are made in connection with the ~~form of restricted stock units.~~Company’s long-term incentive program. Each ~~restricted stock unit~~RSU represents the right to receive one share of the Company’s common stock provided that the vesting conditions are satisfied. There were 588,308 and 734,295 ~~and 997,542 restricted stock units~~RSU awards outstanding as of October 31, 2015 and November 1, 2014, ~~and November 2, 2013,~~ respectively.

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
11. Share-Based Compensation – (continued)

Generally, awards fully vest after the passage of time, typically three years. However, ~~restricted stock unit grants~~RSU awards made in connection with the Company’s long-term incentive program vest after the attainment of both 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~~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 ~~restricted stock units.~~RSU awards.

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~~
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~~RSU activity for the thirty-nine weeks ended October 31, 2015 is summarized as follows:
Number of Shares Weighted-Average
Grant Date Fair
Value per Share
(in thousands, except price per share)
Nonvested at the beginning of the year 1,038 $ 37.96
Granted 154 63.72
Vested (312 ) 32.33
Expired or cancelled (68 ) 37.97
Nonvested at October 31, 2015 812 $ 45.02
Aggregate value ($ in millions) $ 37
Weighted-average remaining contractual life (in years)                1.1 years
The weighted grant-date fair value per share was $63.72 and $45.24 for the thirty-nine weeks ended October 31, 2015 and November 1, 2014, respectively . The total value of awards for which restrictions lapsed for the thirty-nine weeks ended October 31, 2015 and November ~~2, 2013,~~1, 2014 was $10 million and $14 million, respectively. As of ~~November 1, 2014,~~October 31, 2015, there was ~~$14~~$12 million of total unrecognized compensation cost net of forfeitures related to nonvested restricted awards.

~~Restricted shares~~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 ~~units activity~~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 ~~thirty-nine weeks ended November 1, 2014 are summarized~~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 ~~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
amended, and violation of the statutory provisions governing the content of the Summary Plan Description. The trial was held in July 2015 and the court issued a decision in September 2015 in favor of the class on the foregoing claims. The court ordered that the Plan be reformed. The Company is appealing the court’s decision, and the judgment has been stayed pending the outcome of the appeal. As a result of this development, the Company has determined that it is probable a liability exists. The Company’s reasonable estimate of this liability is a range between $100 million and $200 million, with no amount within that range more probable than any other amount. Therefore, in accordance with U.S. GAAP, the Company recorded a charge of $100 million pre-tax ($61 million after-tax) in the third quarter of 2015. This amount 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.
17

FOOT LOCKER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~10.Share-Based Compensation~~12. Legal Proceedings – (continued)

~~The weighted-average grant-date fair value per share was $45.24~~Certain of the Company’s subsidiaries were defendants in a number of lawsuits filed in state and ~~$34.59~~federal courts containing various class action allegations under federal or state wage and hour laws, including allegations concerning unpaid overtime, meal and rest breaks, and uniforms. InPereira v. Foot Locker, filed in the U.S. District Court for the ~~thirty-nine weeks ended November 1, 2014~~Eastern District of Pennsylvania, the plaintiff alleged that the Company permitted unpaid off-the-clock hours in violation of the Fair Labor Standards Act and ~~November 2, 2013, respectively.~~state labor laws and sought compensatory and punitive damages, injunctive relief, and attorneys’ fees and costs. Additional purported wage and hour class actions were filed against the Company that asserted claims similar to those asserted inPereira and sought similar remedies. With the exception ofHillv. Foot Locker filed in state court in Illinois,Kissinger v. Foot Locker filed in state court in California, andCortes v. Foot Locker filed in federal court in New York, all of these actions were consolidated by the United States Judicial Panel on Multidistrict Litigation withPereira under the captionIn re Foot Locker, Inc.Fair Labor Standards Act and Wage and Hour Litigation. The ~~total value of awards for which restrictions lapsed~~Company and plaintiffs entered into a settlement agreement resolvingHill and the consolidated cases that was approved by the court during the ~~thirty-nine weeks ended November 1, 2014~~second quarter of 2015. Additionally, during the third quarter of 2015, the Company and ~~November 2, 2013 was $14 million~~plaintiffs inCortesand Kissinger entered into settlement agreements that have also been approved by the respective courts.
Management does not believe that the outcome of any such legal proceedings pending against the Company or its consolidated subsidiaries, includingOsberg, 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 ~~$9 million, respectively.~~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.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~BUSINESS OVERVIEW~~Business Overview

Foot Locker, Inc. ~~(the “Company”)~~, through its subsidiaries, operates in two reportable segments – Athletic Stores and Direct-to-Customers.

The Athletic Stores segment is one of the largest athletic footwear and apparel retailers in the world, with ~~divisions~~formats that include Foot Locker, Lady Foot Locker, SIX:02, Kids Foot Locker, Champs Sports, Footaction, ~~and SIX:02, as well as the retail stores of~~ Runners Point, ~~Group, including Runners Point, Sidestep,~~ and ~~Run~~²~~, which was acquired during the second quarter of 2013.~~Sidestep.

The Direct-to-Customers segment is multi-branded and multi-channeled. This segment sells, through its affiliates, directly to customers through its Internet ~~websites,~~and mobile sites and catalogs. Eastbay, one of the affiliates, is among the largest direct marketers in the United States. The Direct-to-Customers segment operates the websites for eastbay.com, final-score.com, eastbayteamsales.com, as well as websites aligned with the brand names of its store banners (footlocker.com, footlocker.ca, footlocker.eu, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, runnerspoint.com, and ~~six02.com)~~sidestep-shoes.com). Additionally, this segment includes ~~the direct-to-customer subsidiary of Runners Point Group, which operates the websites~~sp24.com, a clearance website for ~~runnerspoint.com, sidestep-shoes.com, and sp24.com.~~our European e-commerce business.

~~STORE COUNT~~Store Count

At ~~November 1, 2014,~~October 31, 2015, the Company operated ~~3,474~~3,432 stores as compared with ~~3,473~~3,423 and ~~3,510~~3,474 stores at ~~February 1, 2014~~January 31, 2015 and ~~November 2, 2013, respectively. During the thirty-nine weeks ended~~ November 1, 2014, ~~the Company opened 76 stores, remodeled or relocated 229 stores and closed 75 stores.~~respectively.

A total of 7364 franchised stores were operating at October 31, 2015, as compared with 78 and 73 stores at January 31, 2015 and November 1, 2014, ~~as compared with 73~~respectively. During the third quarter of 2015, the Company completed an acquisition from Futura Sport AG of 10 Runners Point and 72Sidestep stores, ~~at February 1, 2014 and November 2, 2013, respectively.~~ which were previously franchise stores.
Revenue from the franchised stores was not significant for any of the periods presented. These stores are not included in the Company’s operating store count above.

15
~~SALES AND OPERATING RESULTS~~Sales

All references to comparable-store sales for a given period relate to sales of stores that were open at the period-end and ~~have~~had been open for more than one year. The computation of comparable-store sales also includes the sales of the Direct-to-Customers segment. Stores opened or closed during the period are not included in the comparable-store base; however, stores closed temporarily for relocation or remodeling are included. Computations exclude the effect of foreign currency fluctuations.

Sales from acquired businesses that include inventory are included in the computation of comparable-store sales after 15 months of operations. Accordingly, sales of Runners Point Group were included in the computation of comparable-store sales beginning October 2014.
~~The following table summarizes results by segment:~~
(in millions) Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
Sales 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
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.
~~Sales~~ increased by ~~$109~~$63 million, or ~~6.7~~3.6 percent, to $1,794 million for the thirteen weeks ended October 31, 2015, from $1,731 million for the thirteen weeks ended November 1, ~~2014, from $1,622 million for the thirteen weeks ended November 2, 2013.~~2014. For the thirty-nine weeks ended ~~November 1, 2014,~~October 31, 2015, sales of $5,405 million increased 3.1 percent from sales of $5,240 million ~~increased 11.2 percent from sales of $4,714 million~~ for the ~~thirty-nine week period ended November 2, 2013. Excluding Runners Point Group, which was acquired during the second quarter of 2013, total sales for the year-to-date period increased 7.8 percent.~~
corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for both the thirteen and thirty-nine week periods increased ~~7.7~~8.9 percent ~~and 10.9 percent, respectively,~~ as compared with the corresponding prior-year periods. Comparable-store sales increased by ~~6.9~~8.7 percent for both the thirteen and ~~7.1 percent~~thirty-nine weeks ended October 31, 2015.
Gross Margin
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
Gross margin rate 33.8 % 33.2 % 33.9 % 33.3 %
Basis point increase in the gross margin rate 60 60
Components of the increase-
Merchandise margin rate improvement 50 30
Lower occupancy and buyers’ compensation expense rate 10 30
The gross margin rate improved by 60 basis points for both the thirteen and thirty-nine weeks ended October 31, 2015. Excluding the effect of foreign currency fluctuations, the gross margin rate improved by 80 and 70 basis points for the thirteen and thirty-nine weeks ended October 31, 2015, respectively. The improvement in the gross margin rate for both the thirteen and thirty-nine weeks ended October 31, 2015 was primarily the result of a higher merchandise margin rate, which primarily reflected a lower markdown rate. In addition, the prior year merchandise margin rate was negatively affected by the liquidation of CCS merchandise. Further, the occupancy and buyers compensation expense rate decreased 10 and 30 basis points for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, which was the result of leveraging the fixed rent and salary elements within our cost of sales.
Selling, General and Administrative Expenses (SG&A)
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014

($ in millions)

SG&A $ 352 $ 353 $ 1,028 $ 1,051
$ Change $ (1 ) $ (23 )
% Change (0.3 )% (2.2 )%
SG&A as a percentage of sales 19.6 % 20.4 % 19.0 % 20.1 %
SG&A decreased by $1 million and $23 million for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, as compared with the corresponding prior-year periods. Excluding the effect of foreign currency fluctuations, SG&A expense increased by $18 million and $43 million and represented an improvement of 70 and 90 basis points, as a percentage of sales, for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, as compared with the corresponding prior-year periods. The SG&A rate improvements reflected continued disciplined expense management.

Depreciation and Amortization
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Depreciation and Amortization $ 38 $ 34 $ 109 $ 106
$ Change $ 4 $ 3
% Change 11.8 % 2.8 %
Depreciation and amortization increased by $4 million and $3 million for the thirteen weeks and thirty-nine weeks ended ~~November 1, 2014, respectively.~~
~~GROSS MARGIN~~
Gross margin, as a percentage of sales, increased to 33.2 percent for the thirteen weeks ended November 1, 2014 as compared with 33.1 percent in the corresponding prior-year period driven by the occupancy and buyers compensation expense rate, which decreased by 50 basis points reflecting improved leverage of primarily fixed costs. This was partially offset by a 40 basis point increase in the cost of merchandise rate, which reflected the result of the liquidation of CCS merchandise. The liquidation of CCS merchandise negatively affected the gross margin rate by 20 basis points. Further, the merchandise margin rate continued to be negatively affected by lower initial markups driven by vendor and category mix, and lower shipping and handling margin, offset by lower markdowns.
For the thirty-nine weeks ended November 1, 2014, gross margin, as a percentage of sales, increased to 33.3 percent as compared with 32.9 percent in the corresponding prior-year period. The occupancy and buyers compensation expense rate decreased by 70 basis points and was partially offset by a 30 basis point increase in the cost of merchandise rate. The increase in the cost of merchandise rate primarily reflects the continued effect of the factors noted in the paragraph above.
~~SELLING, GENERAL AND ADMINISTRATIVE EXPENSES~~
Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
(in millions) 2014 2013 2014 2013
SG&A $ 353 $ 340 $ 1,051 $ 969
SG&A, as a percentage of sales 20.4 % 21.0 % 20.1 % 20.6 %
~~Selling, general and administrative expenses (“SG&A”) increased by $13 million, or 3.8 percent, for the thirteen weeks ended November 1, 2014~~October 31, 2015, respectively, as compared with the corresponding prior-year period. For the thirty-nine weeks ended November 1, 2014, SG&A increased by $82 million, or 8.5 percent, as compared with the corresponding prior-year period. The SG&A increase for the thirty-nine weeks ended November 1, 2014 is primarily reflective of a full nine months of Runners Point Group expenses as compared with only four months in the prior year.
Excluding the effect of foreign currency fluctuations, ~~SG&A~~depreciation and amortization increased by ~~$17~~$6 million and $10 million for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, as compared with the corresponding prior-year periods. On a constant currency basis, the increase in depreciation and amortization reflected increased capital spending.
Pension Litigation Charge
During the third quarter of 2015, the Company recorded a $100 million pension litigation charge ($61 million after-tax or ~~5.0~~$0.43 per diluted share). This charge relates to a class action in which the plaintiffs alleged that the Company failed to properly disclose the effects of the 1996 conversion of the retirement plan to a defined benefit plan with a cash balance formula. In September 2015, the court ruled in favor of the plaintiffs and issued a decision ordering that the pension plan be reformed. The Company is appealing the court’s decision, and the judgment has been stayed pending the outcome of the appeal. The Company’s reasonable estimate of this liability is a range between $100 million and $200 million, with no amount within that range more probable than any other amount. Therefore, in accordance with U.S. GAAP, the Company recorded a charge of $100 million pre-tax. Please see Item 1. “Financial Statements,” Note 12,Legal Proceedings for further information.
Interest Expense, Net
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Interest expense $ 3 $ 3 $ 8 $ 8
Interest income (2 ) (2 ) (5 ) (5 )
Interest expense, net $ 1 $ 1 $ 3 $ 3
Interest expense and interest income were unchanged as compared with the prior year.
Income Taxes
The Company recorded income tax provisions of $37 million and $209 million, which represented effective tax rates of 31.7 percent and ~~$79 million, or 8.2~~35.3 percent for the thirteen and thirty-nine weeks ended October 31, 2015, respectively. For the thirteen and thirty-nine weeks ended November 1, 2014, ~~respectively, as compared with~~ the ~~corresponding prior-year periods.~~
~~The SG&A rate improvements reflected continued effective expense management, including store wages, which benefited from the utilization of hiring and scheduling tools, as well as associate training.~~
~~DEPRECIATION AND AMORTIZATION~~
Depreciation and amortization expenses decreased by $1 million for the thirteen weeks ended November 1, 2014 to $34 million, as compared with the corresponding prior-year period of $35 million. The decrease was primarily the result of capital accrual adjustments made during the third quarter of 2014, which reduced depreciation and amortization expense. For the thirty-nine weeks ended November 1, 2014, depreciation and amortization increased by $9 million to $106 million as compared with $97 million for the thirty-nine weeks ended November 2, 2013. The increase in depreciation for the thirty-nine weeks ended November 1, 2014 reflects increased capital spending for store improvements and technology, as well as the addition of Runners Point Group for a full period in the current year as compared with a partial period in the prior year.
~~INTEREST EXPENSE~~
Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
(in millions) 2014 2013 2014 2013
Interest expense $ 3 $ 3 $ 8 $ 8
Interest income (2 ) (1 ) (5 ) (4 )
Interest expense, net $ 1 $ 2 $ 3 $ 4
~~Interest income increased by $1 million for both the thirteen and thirty-nine weeks ended November 1, 2014 reflecting income earned on higher cash and cash equivalent balances.~~
~~INCOME TAXES~~
~~The~~ Company recorded income tax provisions of $67 million and $211 million, which ~~represent~~represented effective tax rates of 35.8 percent and 36.1 percent, for the thirteen weeks and thirty-nine weeks ended November 1, 2014, respectively. For the thirteen weeks and thirty-nine weeks ended November 2, 2013, the Company recorded income tax provisions of $56 million and $174 million, which represented effective tax rates of 35.0 percent and 36.1 percent, respectively. The Company’s interim provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items that occur within the periods presented.
The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company may adjust the reserves for unrecognized tax benefits considering new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation.
Included in ~~the effective tax rate for~~both the thirteen weeks ended October 31, 2015 and November 1, 2014 ~~is a~~are tax ~~reserve release~~benefits of ~~approximately~~ $1 million from reserve releases due to ~~the~~ expiration of ~~a foreign statute~~statutes of limitation. Included in both the ~~thirteen weeks ended November 2, 2013 were tax reserve releases of $3 million due to foreign tax audit settlements.~~
~~The~~ thirty-nine weeks ended October 31, 2015 and November 1, 2014 ~~includes~~are tax benefits of $2 million from reserve releases due to settlements of ~~federal, state, and foreign~~ tax examinations and ~~lapses~~lapse of ~~foreign~~ statutes of ~~limitation, as compared~~limitation.

During the third quarter of 2015, the Company recorded a pension-related litigation charge of $100 million with a related tax benefit of $39 million. This litigation charge reduced the ~~reserve releases~~overall effective rate because it reduced the proportion of ~~$5 million offset by state tax expense of $1 million as a result of an audit recognized~~the Company’s worldwide income taxed in the ~~corresponding prior-year period.~~United States, where the tax rates are the highest. Additionally, ~~for~~ the thirty-nine weeks ended ~~November 2, 2013, in connection with the purchase of Runners Point Group, the Company recorded a discrete item of~~October 31, 2015 includes tax benefits totaling $1 million ~~representing non-deductible acquisition costs.~~related to an adjustment to deductible compensation costs due to executive changes and a Canadian provincial tax rate change.

~~The effective tax rate, excluding~~Excluding the impact of the litigation charge, reserve releases, and other discrete items, the effective tax rate for the thirteen ~~weeks~~ and thirty-nine weeks ended ~~November 1, 2014 decreased~~October 31, 2015 was essentially unchanged as compared with the corresponding prior-year ~~periods, due primarily to the effect of full implementation of international tax planning strategies.~~periods.

The Company currently expects its fourth quarter and ~~full year~~full-year tax rate to approximate ~~36.5~~36 percent, excluding the effect of any additional nonrecurring items that may occur. The actual tax rates will depend primarily ~~depend~~ on the level and mix of income earned in the United States as compared with its international operations.

~~NET INCOME~~Net Income

For the thirteen weeks ended ~~November 1, 2014,~~October 31, 2015, net income ~~increased~~decreased by ~~$16~~$40 million ~~or 15.4 percent,~~ to ~~$120~~$80 million as compared with the corresponding prior-year period. For the thirty-nine weeks ended ~~November 1, 2014,~~October 31, 2015, net income increased by ~~$66~~$9 million ~~or 21.4 percent,~~ to ~~$374~~$383 million as compared with the corresponding prior-year period. ~~The improved performance represents a 24.8~~These changes include the pension litigation charge. Excluding the pension litigation charge and other non-GAAP adjustments, net income increased by $20 million or 16.5 percent and ~~19.6~~$66 million or 17.5 percent ~~flow-through of increased sales to pre-tax income,~~ for the thirteen and thirty-nine ~~week periods~~weeks ended ~~November 1, 2014,~~October 31, 2015, respectively, ~~reflecting leveraging of fixed costs, and controlling operating expenses.~~as compared with the corresponding prior-year periods.

~~RECONCILIATION OF NON-GAAP MEASURES~~Reconciliation of Non-GAAP Measures

The following tables present certain Non-GAAP measures. The Company ~~provides~~believes this non-GAAP information is a useful measure to ~~assist~~ investors ~~with the~~because it provides for a more direct comparison of the ~~Company’s results period over period.~~results. The non-GAAP financial ~~measure~~information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP. ~~Presented below are GAAP and non-GAAP results for the thirteen and thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively.~~
~~The Company has excluded the following charges and costs to arrive at its non-GAAP results:~~
Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
(in millions) 2014 2013 2014 2013
Net income, as reported $ 120 $ 104 $ 374 $ 308
After-tax adjustments to arrive at non-GAAP:
Runners Point Group acquisition and integration costs 1 1 2 4
Impairment of intangibles — — 2 —
Foreign tax audit settlements (3 ) (3 )
CCS store closure costs — — — 1
Net income, non-GAAP $ 121 $ 102 $ 378 $ 310
Thirteen weeks ended Thirty-nine weeks ended
November 1, November 2, November 1, November 2,
2014 2013 2014 2013

Diluted EPS, as reported $ 0.82 $ 0.70 $ 2.55 $ 2.04
Adjustments to arrive at non-GAAP:
Runners Point Group acquisition and integration costs 0.01 — 0.01 0.02
Impairment of intangibles — — 0.02 —
Foreign tax audit settlement — (0.02 ) — (0.02 )
CCS store closure costs — — — 0.01
Diluted EPS, non-GAAP $ 0.83 $ 0.68 $ 2.58 $ 2.05

The Company estimates the tax effect of the non-GAAP adjustments by applying its marginal ~~tax~~ rate to each of the respective items. Presented below are GAAP and non-GAAP results for the thirteen and thirty-nine weeks ended October 31, 2015 and November 1, 2014, respectively.
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Net income, as reported $ 80 $ 120 $ 383 $ 374
After-tax adjustments to arrive at non-GAAP:
Pension litigation charge 61 — 61 —
Runners Point Group integration costs — 1 — 2
Impairment of intangibles — — — 2
Net income, non-GAAP $ 141 $ 121 $ 444 $ 378
Diluted EPS, as reported $ 0.57 $ 0.82 $ 2.71 $ 2.55
After-tax adjustments to arrive at non-GAAP:
Pension litigation charge 0.43 — 0.43 —
Runners Point Group integration costs — 0.01 — 0.01
Impairment of intangibles — — — 0.02
Diluted EPS, non-GAAP $ 1.00 $ 0.83 $ 3.14 $ 2.58

As discussed more fully above and in the notes to the financial statements, during the third quarter of 2015 the Company recorded a charge of $100 million, $61 million after-tax or $0.43 per share, related to pension litigation.

The non-GAAP items in the prior year include integration costs and impairment charges. For the thirteen and thirty-nine weeks ended November 1, 2014, the Company recorded after-tax expenses of $1 million and $2 million, respectively, for costs associated with the ~~acquisition~~integration of Runners Point Group.
In During the first quarter of 2014, the Company recorded an after-tax impairment charge of $1 million, or $0.01 per diluted share, to fully write down the remaining value of the tradename related to the Company’s stores in the Republic of Ireland. Additionally, during the second quarter of 2014, the Company recorded an after-tax charge of $1 million, or $0.01 per diluted share, related to the impairment of the CCS tradename, resulting from the transition of its skate business from CCS to its Eastbay brand. ~~During the first quarter of 2014,~~
Accordingly, the Company ~~recorded an after-tax~~excluded the above items to arrive at its non-GAAP results.
Segment Information
The Company has determined that its reportable segments are those that are based on its method of internal reporting. The Company has two reportable segments, Athletic Stores and Direct-to-Customers. The Company evaluates performance based on several factors, of which the primary financial measure is division results. Division profit reflects income before income taxes, pension litigation charge, corporate expense, non-operating income, and net interest expense. The following table summarizes results by segment:
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1, October 31, November 1,
2015 2014 2015 2014
($ in millions)
Sales
Athletic Stores $ 1,571 $ 1,521 $ 4,755 $ 4,646
Direct-to-Customers 223 210 650 594
$ 1,794 $ 1,731 $ 5,405 $ 5,240
Operating Results
Athletic Stores⁽¹⁾ $ 206 $ 181 $ 649 $ 577
Direct-to-Customers⁽²⁾ 31 25 98 67
Division profit 237 206 747 644
Less:   Litigation charge⁽³⁾ 100 — 100 —
Corporate expense, net 20 19 54 59
Operating profit 117 187 593 585
Other income ⁽⁴⁾ 1 1 2 3
Earnings before interest expense and income 118 188 595 588
Interest expense, net 1 1 3 3
Income before income taxes $ 117 $ 187 $ 592 $ 585
(1)
Included in the thirty-nine weeks ended November 1, 2014 is 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.
(2)
Included in the thirty-nine weeks ended November 1, 2014 is a $2 million non-cash impairment charge related to the CCS tradename.
(3)
Included in the thirteen and thirty-nine weeks ended October 31, 2015 is a pre-tax litigation charge of $100 million relating to the pension litigation matter. Please see Item 1. “Financial Statements,” Note 12,Legal Proceedings for further information.
(4)
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.
19
Athletic Stores
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1,
October 31,

November 1,

2015 2014 2015 2014

($ in millions)

Sales $ 1,571 $ 1,521 $ 4,755 $ 4,646
$ Change $ 50 $ 109
% Change 3.3 % 2.3 %
Division profit $ 206 $ 181 $ 649 $ 577
Division profit margin 13.1 % 11.9 % 13.6 % 12.4 %
Excluding the effect of foreign currency fluctuations, Athletic Stores segment sales increased by 9.1 percent and 8.6 percent for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, as compared with the corresponding prior-year periods. Comparable-store sales increased by 8.0 percent and 7.7 percent for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, which was led by our international divisions and was largely driven by the performance of Foot Locker Europe. Foot Locker Europe posted double-digit comparable-store gains in all major categories and in almost all countries. Lifestyle running, basketball, and classic court styles continued to be the main drivers of the increase in footwear sales, while both branded and private-label apparel performed well.
Runners Point and Sidestep comparable-store sales declined for both the quarter and year-to-date periods, due to the continued segmentation process and the overreliance on a few key running styles. Our segmentation process includes better defining product offerings for each of these banners and executing upon our multi-banner strategy in the European market. We are broadening the assortment in the Runners Point stores beyond performance running to include more lifestyle running products, while the Sidestep stores are being shifted to lifestyle and casual footwear. Management believes that this segmentation process, along with initiatives to provide more diversified product assortments, will position these banners for future growth. Management will monitor the results of this business during the fourth quarter and will assess, if necessary, the impact of various initiatives on the projected performance of this division, which may include an impairment review.
Domestically, all formats generated comparable-store sales gains for the quarter and year-to-date periods, with the exception of Footaction, which generated a slightly negative result for the quarter. Foot Locker and Kids Foot Locker led the overall domestic comparable-store sales increases. Lifestyle running and basketball (led by Jordan and key marquee player styles) continue to be the strongest drivers of footwear sales for both the quarter and year-to-date periods. Sales also benefited from the continued expansion of various shop-in-shop partnerships with our key vendors. Court classics and boots also contributed to the comparable-store sales increase during the third quarter. Footaction’s comparable-store sales experienced a slight decline for the quarter and a modest increase for the year-to-date period. Footaction is in the early stages of remodeling its store fleet, which has resulted in comparable-store sales being negatively affected during the quarter as a few large stores were closed during this time for remodels. Lady Foot Locker/SIX:02 produced a positive comparable-store sales gain for the sixth consecutive quarter, with a comparable-store gain for both the quarter and year-to-date periods. Champs Sports also generated a comparable-store sales gain for the quarter and year-to-date periods, with increased footwear sales partially offset by declines in apparel and accessories. The decline in Champs Sports’ apparel sales primarily reflects the continuation of the customer’s shift away from licensed apparel.
Athletic Stores division profit increased by 13.8 percent and 12.5 percent for the thirteen and thirty-nine weeks ended October 31, 2015, respectively, as compared with the corresponding prior-year periods. Division profit, as a percentage of sales, was 13.1 percent and 13.6 percent for the thirteen and thirty-nine weeks ended October 31, 2015, respectively. This represents a 120 basis point improvement for both the thirteen and thirty-nine week periods ended October 31, 2015, as compared with the corresponding prior-year periods. These increases primarily reflect improved sales, an improved gross margin rate driven by improved merchandise margin, and continued diligent expense management. Included in the results for the thirty-nine weeks ended November 1, 2014 is a $1 million impairment charge to fully write down the remaining value of the tradename related to the Company’s stores in the Republic of Ireland.

For the thirteen and thirty-nine weeks ended November 2, 2013, the Company recorded $1 million, after-tax, and $4 million, after-tax, for costs associated with the acquisition of Runners Point Group, respectively. The Company also recorded $1 million, after-tax, or $0.01 per diluted share of costs related to the CCS store closures for the thirty-nine weeks ended November 2, 2013.
During the thirteen weeks ended November 2, 2013, the Company recorded benefits of $3 million or $0.02 per diluted share, to reflect the settlement of a foreign tax audit, which resulted in a reduction in tax reserves established in prior periods.
~~SEGMENT ANALYSIS~~Direct-to-Customers
~~Athletic Stores~~
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1,
October 31,

November 1,

2015 2014 2015 2014

($ in millions)

Sales $ 223 $ 210 $ 650 $ 594
$ Change $ 13 $ 56
% Change 6.2 % 9.4 %
Division profit $ 31 $ 25 $ 98 $ 67
Division profit margin 13.9 % 11.9 % 15.1 % 11.3 %
~~Athletic Stores segment sales increased by 5.3 percent to $1,521 million for the thirteen weeks ended November 1, 2014, as compared with the corresponding prior-year period.~~ Excluding the effect of foreign currency fluctuations, Athletic Stores segment sales increased 6.4 percent for the thirteen weeks ended November 1, 2014, as compared with the corresponding prior-year period. Comparable-store sales increased by 5.8 percent.
~~For the thirty nine-weeks ended November 1, 2014, Athletic Stores~~Direct-to-Customers segment sales increased by ~~9.9 percent to $4,646 million as compared with the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, Athletic Stores segment sales increased 9.7~~7.6 percent and ~~comparable-store sales increased by 6.1 percent. The results~~11.0 percent for the year-to-date period of 2014 include incremental sales of $141 million related to the Runners Point Group stores, which were acquired in the second quarter of the prior year. As of October 2014, the sales attributable to Runners Point Group are included in the computation of comparable-store sales.
Excluding Runners Point Group which was included in comparable sales for the month of October only, all divisions within this segment experienced comparable-store sales gains for both the quarter and year-to-date periods, led by domestic Foot Locker, Kids Foot Locker, and Footaction. Champs Sports experienced a slight increase in comparable-store sales for both the quarter and year-to-date periods. This division’s results continued to be negatively affected by a decline in apparel sales and a high number of stores being closed for remodels.
Basketball, lifestyle running, and children’s footwear were strong drivers of sales increases. Sales of basketball footwear were driven by Jordan and key marquee player styles, while lifestyle running shoes from Nike and Adidas had strong results. Additionally, children’s footwear continued to perform well across multiple divisions. Apparel sales were challenging primarily in Foot Locker Europe and Champs Sports, as customers have shifted away from certain lifestyle and licensed apparel programs, which had previously driven strong results.
~~Lady Foot Locker experienced a comparable-store sales increase for both~~ the thirteen and thirty-nine weeks ended November 1, 2014. The shift into more performance-oriented assortments has been resonating with customers, as both footwear and apparel grew on a comparable-sales basis. Overall sales for Lady Foot Locker for both the quarter and year-to-date periods declined, as compared with the corresponding prior-year periods, primarily reflecting a net decline of 44 stores. The Company continues to test and evaluate merchandise assortments and store layouts focused on athletically active women.
In addition, the Athletic Stores segment continues to benefit from strong banner differentiation, which has created unique store designs and product assortments which have resonated with the customer and enhanced the shopping experience.
Athletic Stores division profit for the thirteen weeks ended November 1, 2014 increased to $181 million, or 11.9 percent, as a percentage of sales, as compared with division profit of $159 million, or 11.0 percent, as a percentage of sales, for the thirteen weeks ended November 2, 2013. For the thirty-nine weeks ended November 1, 2014 division profit increased to $577 million, or 12.4 percent, as a percentage of sales, as compared with division profit of $486 million, or 11.5 percent, as a percentage of sales, for the corresponding prior-year period.
Included in the results of the Athletic Stores segment for the thirty-nine weeks ended November 1, 2014 was a $1 million impairment charge related to the tradename for our stores operating in the Republic of Ireland, reflecting historical and projected underperformance. Included in the corresponding prior-year period of 2013 was a charge of $2 million recorded in connection with the closure of all CCS stores.
~~Overall, the improvement for both the quarter and year-to-date periods primarily reflected higher sales and effective control over variable expenses, such as store wages.~~
~~Direct-to-Customers~~
~~Direct-to-Customers sales increased by 18.0 percent to $210 million for the thirteen weeks ended November 1, 2014,~~October 31, 2015, respectively, as compared with the corresponding prior-year period. Comparable sales increased by ~~15.5 percent. Sales at each of~~13.4 percent and 16.8 percent for the ~~U.S. store-banner websites increased significantly, increasing collectively approximately 40 percent.~~
~~For the~~thirteen and thirty-nine weeks ended November 1, 2014, sales increased by 22.2 percent to $594 million as compared with the corresponding prior-year period. Comparable sales were 15.9 percent. Direct-to-Customers sales included $19 million of incremental sales related to the e-commerce division of Runners Point Group, as the prior-year period included only a partial year. Excluding these sales,October 31, 2015, respectively.
These increases were primarily the result of continued strong sales performance of the Company’s domestic store-banner websites, coupled with growth from the international e-commerce businesses, particularly in Europe. Our U.S. store-banner ~~websites.~~
~~Sales~~website sales increased significantly, with collective gains of nearly 30 percent and 40 percent for ~~both~~ the quarter and year-to-date periods, respectively, reflecting the continued success and expansion of the ~~current year were~~connectivity of store banners to the e-commerce sites. Footwear continues to be our strongest category and was led by basketball, casual, and training styles, which all posted strong comparable sales gains during the quarter and year-to-date periods. These increases were partially offset by the 2014 closure of ~~basketball and lifestyle running footwear.~~the CCS direct business.

Direct-to-Customers division profit for the thirteen and thirty-nine weeks ended ~~November 1, 2014~~October 31, 2015 increased by ~~$5 million to $25~~$6 million and ~~increased by $14 million to $67~~$31 million, respectively, as compared with the corresponding prior-year periods. Division profit, as a percentage of sales, was ~~11.9~~13.9 percent and ~~11.3~~15.1 percent for the thirteen and thirty-nine weeks ended ~~November 1, 2014,~~October 31, 2015, respectively, as compared with ~~11.2~~11.9 percent and ~~10.9~~11.3 percent for the corresponding prior-year periods. The increase primarily reflected strong flow-through of sales to profit, resulting from improved gross margins due to more full-price selling and diligent expense management. Included in the prior-year results ~~of the Direct-to-Customers segment for the thirty-nine weeks ended November 1, 2014~~ was a $2 million tradename impairment charge related to the CCS ~~tradename,~~e-commerce business, which was triggered by the Company’s decision to transition the skate business to the Eastbay banner.
~~Gross margin for~~ Division profit in the ~~Direct-to-Customers segment for both the quarter and year-to-date~~prior-year periods was also negatively affected by the ~~liquidation of~~ CCS merchandise and the effects of providing additional free shipping offers. Notwithstanding this, the increase in division profit was the result of strong flow-through of sales to profits. In addition, catalog expenses were lower due to a shift in the timing of certain catalogs to the fourth quarter as compared with the prior year.business results.

Corporate Expense
Thirteen weeks ended Thirty-nine weeks ended
October 31, November 1,
October 31,
November 1,
2015 2014
2015
2014

($ in millions)

Corporate expense $ 20 $ 19 $ 54 $ 59
$ Change $ 1 $ (5 )

Corporate expense consists of unallocated ~~selling, general and administrative expenses,~~SG&A, as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items.
Depreciation and amortization included in corporate expense was $3 million for both the thirteen weeks ended October 31, 2015 and November 1, 2014, and was $8 million and $9 million for the thirty-nine weeks ended October 31, 2015 and November 1, 2014, respectively. The allocation of corporate expense to the operating divisions is adjusted annually based upon an internal study; accordingly, the allocation increased by $1 million and $3 million for the thirteen and thirty-nine weeks ended ~~November 1, 2014,~~October 31, 2015, respectively, thus reducing corporate expense. Excluding ~~this~~the corporate allocation change as ~~compared with the corresponding prior year periods,~~well as depreciation and amortization, corporate expense, ~~increased by $3 million and $6 million for the thirteen and thirty-nine weeks ended November 1, 2014, respectively.~~
~~Acquisition and integration costs related to Runners Point Group were $1 million and $2 million for the thirteen and thirty-nine weeks ended November 1, 2014, respectively. This is~~as compared with the corresponding prior-year periods, ~~of $1 million and $4~~increased by $2 million for the thirteen weeks ended October 31, 2015 and decreased by $1 million for the thirty-nine weeks ended ~~November 2, 2013, respectively.~~October 31, 2015.
21

~~Excluding~~The $2 million increase in corporate expense for the ~~allocation change and~~thirteen weeks ended October 31, 2015 was primarily related to an increase in legal accruals coupled with costs ~~associated~~incurred in connection with the spring 2016 relocation of our corporate headquarters within New York City. The $1 million decrease in corporate expense for the thirty-nine weeks ended October 31, 2015 was primarily related to prior-year costs incurred for the integration of Runners Point Group ~~corporate expense increased primarily related to increased incentive compensation and legal costs. During the first quarter~~ of ~~2014, the Company increased its legal reserves by~~ $2 million. This was partially offset by $1 million of current year costs relating to the corporate headquarters relocation.

~~LIQUIDITY AND CAPITAL RESOURCES~~Liquidity and Capital Resources
Liquidity
The Company’s primary source of liquidity has been cash flow from ~~operations,~~earnings, while the principal uses of cash have been to: fund inventory and other working capital requirements; finance capital expenditures related to store openings, store remodelings, Internet and mobile sites, information systems, and other support facilities; make retirement plan contributions, quarterly dividend payments, ~~share repurchases,~~ and interest payments; and fund other cash requirements to support the development of its short-term and long-term operating strategies. The Company generally finances real estate with operating leases. Management believes its cash, cash equivalents, and future cash flow from operations will be adequate to fund these requirements.

~~From~~The Company may also from time to time ~~the Company may also~~repurchase its common stock or seek to retire or purchase outstanding debt through open market purchases, privately negotiated transactions, or otherwise. Share repurchases and retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. As of ~~November 1, 2014,~~October 31, 2015, approximately ~~$196~~$740 million remained onavailable under the Company’s ~~$600 million~~current $1 billion share repurchase program.
As discussed further in theLegal Proceedingsnote under “Item 1. Financial Statements,” the Company recorded a pre-tax charge of $100 million ($61 million after-tax) in the third quarter of 2015. 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. The $100 million charge has been classified as a long-term liability due to the uncertainty involved with the resolution of this litigation as the appeals process can be lengthy. Additionally, the timing and the amount of any future contributions to the pension plan is dependent on the funded status of the plan and various other factors, such as interest rates and the performance of the plan’s assets. The pension plan is sufficiently funded to absorb a $100 million liability and, accordingly, we do not anticipate the need to make any pension contributions in the near term.

Any material adverse change in customer demand, fashion trends, competitive market forces, or customer acceptance of the Company’s merchandise mix and retail locations, uncertainties related to the effect of competitive products and pricing, the Company’s reliance on a few key vendors for a significant portion of its merchandise purchases and risks associated with global product sourcing, economic conditions worldwide, the effects of currency fluctuations, as well as other factors listed under the heading “Disclosure Regarding Forward-Looking Statements,” could affect the ability of the Company to continue to fund its needs from business operations.

Operating Activities

Thirty-nine weeks ended
October 31, November 1,
2015 2014
($ in millions)
Net cash provided by operating activities $ 414 $ 439
$ Change $ (25 )
~~Net cash~~
The amount provided by operating activities ~~was $439 million and $327 million for the thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively. These amounts reflect~~reflects net income adjusted for non-cash items ~~non-cash impairment charges,~~ and working capital changes. Adjustments to net income for non-cash items include non-cash impairment charges, depreciation and amortization, share-based compensation expense, and share-based related tax benefits. The ~~improvement~~decrease from the prior year reflects ~~the Company’s earnings strength and~~ working capital ~~improvements, partially offset by a $77 million~~changes and an increase in cash paid for income taxes during the thirty-nine weeks ended ~~November 1, 2014.~~
October 31, 2015. The increase of cash paid for taxes of $41 million reflected higher amounts paid due to the Company’s earnings growth.
24
22
Investing Activities
Thirty-nine weeks ended

October 31,
November 1,
2015 2014
($ in millions)
Net cash used in investing activities $ 174 $ 129
$ Change $ 45

~~Net cash used in investing activities was $129~~Capital expenditures represented a $35 million ~~and $221 million for~~increase from the ~~thirty-nine weeks ended November 1, 2014 and November 2, 2013, respectively. The current~~prior year, ~~reflects $138 million in capital expenditures partially offset by $9 million for the maturities~~which reflected a higher number of ~~short-term investments. Capital expenditures~~store projects in the current year, ~~were $19 million lower~~ as ~~compared with the corresponding prior-year period, representing a shift in the timing of~~well as increased spending on corporate technology projects. The Company’s full year forecast for capital expenditures is ~~$207~~$228 million, which includes ~~$172~~$174 million related to the remodeling or relocation of existing stores and approximately 88110 new store openings, as well as ~~$35~~$54 million for the development of information systems, websites, infrastructure, and ~~infrastructure.~~our corporate headquarters relocation within New York City. During the third quarter of 2015, the Company completed an asset acquisition for $2 million involving 10 Runners Point and Sidestep stores in Switzerland, of which $1 million will be paid during the fourth quarter. The prior year included ~~$81~~$9 million ~~for~~from the ~~purchase~~sales and maturities of ~~Runners Point Group, net of cash acquired.~~short-term investments.
Financing Activities
Thirty-nine weeks ended

October 31,
November 1,

2015
2014
($ in millions)
Net cash used in financing activities $ 322 $ 240
$ Change $ 82

~~Net cash used in financing was $240 million and $226 million for~~During the thirty-nine weeks ended ~~November 1, 2014 and November 2, 2013, respectively. The~~October 31, 2015, the Company repurchased ~~3,547,553~~5,050,000 shares of its common stock for ~~$174 million during the thirty-nine weeks ended November 1, 2014, this represents an increase of $7~~$316 million, as compared towith 3,547,553 shares repurchased for $174 million in the corresponding prior-year period. ~~During~~The Company declared and paid dividends during the first three quarters of 2015 and 2014 of $105 million and ~~2013, the Company declared and paid dividends of~~ $96 million, ~~and $89 million,~~ respectively. ~~These represent~~This represents quarterly rates of ~~$0.22~~$0.25 and ~~$0.20~~$0.22 per share for ~~2014~~2015 and ~~2013,~~2014, respectively. Additionally, the Company received proceeds ~~of $22 million~~ from the issuance of common stock in connection with employee stock programs of $68 million and $22 million for ~~both~~ the thirty-nine weeks ended October 31, 2015 and November 1, 2014, ~~and November 2, 2013.~~respectively. In connection with stock option exercises and share-based compensation programs, the Company recorded excess tax benefits of ~~$11~~$33 million and $8$11 million as a financing activity for the thirty-nine weeks ended October 31, 2015 and November 1, 2014, ~~and November 2, 2013,~~ respectively.
~~CONTRACTUAL OBLIGATIONS AND COMMITMENTS~~
~~For~~ The increased excess tax benefit primarily reflected a ~~description~~higher number of ~~our contractual obligations and other commercial commitments~~stock option exercises during the first three quarters of 2015 as ~~of February 1, 2014, see our 2013 Annual Report on Form 10-K. During~~compared with the corresponding prior-year period. The activity for the thirty-nine weeks ended October 31, 2015 and November 1, 2014 ~~there were no material changes outside the ordinary course~~also reflects payments made on capital lease obligations of ~~business.~~$2 million and $3 million, respectively.

~~CRITICAL ACCOUNTING POLICIES AND ESTIMATES~~Critical Accounting Policies and Estimates

There have been no significant changes to the Company’s critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the ~~2013~~ Annual Report on Form ~~10-K.~~10-K for the fiscal year ended January 31, 2015.

~~RECENT ACCOUNTING PRONOUNCEMENTS~~Recent Accounting Pronouncements

Descriptions of the recently issued accounting principles ~~if any, and the accounting principles adopted by the Company during the thirty-nine weeks ended November 1, 2014~~ are included Item 1. “Financial Statements” in Note 1,Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements.

~~DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS~~Disclosure Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues, and earnings, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors which are detailed in the Company’s filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company’s merchandise mix and retail locations, the Company’s reliance on a few key ~~vendors~~suppliers for a majority of its merchandise purchases (including a significant portion from one key ~~vendor)~~supplier), pandemics and similar major health concerns, unseasonable weather, deterioration of global financial markets, economic conditions worldwide, deterioration of business and economic conditions, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business and strategic plans effectively with regard to each of its business units, and risks associated with global product sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution.
For additional discussion on risks and uncertainties that may affect forward-looking statements, see “Risk Factors” disclosed in the ~~2013~~2014 Annual Report on Form 10-K. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.

Item 4. Controls and Procedures

The Company’s management performed an evaluation under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), and completed an evaluation as of ~~November 1, 2014~~October 31, 2015 of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective to ensure that information relating to the Company that is required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms, and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended ~~November 1, 2014,~~October 31, 2015, there were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) of the Exchange Act) that materially affected or are reasonably likely to affect the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~Legal proceedings pending against~~Information regarding 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. TheseCompany’s legal proceedings ~~include commercial, intellectual property, customer, environmental, and employment-related claims.~~is contained in theLegal Proceedings note under Item 1. “Financial Statements.”

Certain of the Company’s subsidiaries are defendants in a number of lawsuits filed in state and federal courts containing various class action allegations under federal or state wage and hour laws, including allegations concerning unpaid overtime, meal and rest breaks, and uniforms.
The Company is a defendant in one such case in which plaintiff alleges that the Company permitted unpaid off-the-clock hours in violation of the Fair Labor Standards Act and state labor laws. The case,~~Pereira v. Foot Locker~~Item 1A. Risk Factors, was filed in the U.S. District Court for the Eastern District of Pennsylvania in 2007. In his complaint, in addition to unpaid wage and overtime allegations, plaintiff seeks compensatory and punitive damages, injunctive relief, and attorneys’ fees and costs. In 2009, the Court conditionally certified a nationwide collective action. During the course of 2010, notices were sent to approximately 81,888 current and former employees of the Company offering them the opportunity to participate in the class action, and approximately 5,027 have opted in.
~~The Company is a defendant in additional purported wage and hour class actions that assert claims similar to those asserted in~~~~Pereira~~ ~~and seek similar remedies. With the exception of~~~~Hill v. Foot Locker~~ ~~filed in state court in Illinois,~~~~Kissinger v. Foot Locker~~ ~~filed in state court of California,~~~~Cortes v. Foot Locker~~ ~~filed in federal court in New York, and~~~~McGlothin v. Foot Locker~~ ~~filed in state court in California, all of these actions were consolidated by the United States Judicial Panel on Multidistrict Litigation with~~~~Pereira~~~~under the caption~~~~In re Foot Locker, Inc. Fair Labor Standards Act and Wage and Hour Litigation.~~In~~Hill v. Foot Locker,~~ in May 2011, the court granted plaintiffs’ motion for certification of an opt-out class covering certain Illinois employees only. The Company and plaintiffs have entered into a proposed settlement agreement to resolve the consolidated cases, ~~Hill~~ ~~and~~~~Cortes,~~~~that is subject to court approval.~~
~~The Company and the Company’s U.S. retirement plan are defendants in a purported class action (~~~~Osberg v. Foot Locker~~, filed in the U.S. District Court for the Southern District of New York) in which the plaintiff alleges that, in connection with the 1996 conversion of the retirement plan to a defined benefit plan with a cash balance formula, the Company and the retirement plan failed to properly advise plan participants of the “wear-away” effect of the conversion. Plaintiff asserted claims for: (a) breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA); (b) violation of the statutory provisions governing the content of the Summary Plan Description; (c) violation of the notice provision of Section 204(h) of ERISA; and (d) violation of ERISA’s age discrimination provisions. In September 2009, the court granted the Company's motion to dismiss the Section 204(h) claim and the age discrimination claim. In December 2012, the court granted the Company’s motion for summary judgment on the remaining two claims, dismissing the action. Plaintiff appealed to the U.S. Court of Appeals for the Second Circuit, which issued a Summary Order on February 13, 2014 that affirmed the judgment of the District Court in part, and vacated and remanded in part. In September 2014, the District Court certified the class and reinstated the claim alleging violation. Additionally, the District Court certified a class with respect to Plaintiff’s breach of fiduciary duty claim and also reinstated the claim alleging violation of the statutory provisions governing the content of the Summary Plan Description. The district court thereafter issued a second ruling certifying a class for the Summary Plan Description Claim. The Company is seeking leave to appeal both class certification rulings to the U.S. Court of Appeals for the Second Circuit.
~~Management does not believe that the outcome of any such legal proceedings pending against the Company or its consolidated subsidiaries, including~~~~In re Foot Locker, Inc. Fair Labor Standards Act and Wage and Hour Litigation~~,~~Hill, Cortes, Kissinger, McGlothin,~~~~and~~ ~~Osberg~~,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. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered that could adversely affect the Company’s operating results or cash flows in a particular period.

~~Item 1A. Risk Factors~~
There were no material changes to the risk factors disclosed in the ~~2013~~2014 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to shares of the Company’s common stock that the Company repurchased during the thirteen weeks ended ~~November 1, 2014.~~October 31, 2015:

Date Purchased Total
Number of
Shares
Purchased⁽¹⁾ Average
Price Paid
per Share⁽¹⁾ Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program⁽²⁾ Approximate Dollar
Value of Shares that
may yet be Purchased
Under the Program⁽²⁾
August 3, 2014 through August 30, 2014 3,000 $ 47.99 3,000 $ 234,266,856
August 31, 2014 through October 4, 2014 480,000 $ 56.79 480,000 $ 207,008,354
October 5, 2014 through November 1, 2014 200,000 $ 54.51 200,000 $ 196,107,226
683,000 $ 56.08 683,000
Date Purchased Total
Number of
Shares
Purchased⁽¹⁾ Average
Price Paid
per Share⁽¹⁾ Total Number of
Shares Purchased
as Part of Publicly
Announced
Program⁽²⁾ Approximate Dollar
Value of Shares that
may yet be
Purchased Under the
Program⁽²⁾
August 2, 2015 through August 29, 2015 100,340 $ 70.04 100,340 $ 843,894,883
August 30, 2015 through October 3, 2015 698,910 $ 72.21 698,910 $ 793,426,324
October 4, 2015 through October 31, 2015 760,750 $ 69.85 760,750 $ 740,284,926
1,560,000 $ 70.92 1,560,000

⁽¹⁾ These columns reflect shares ~~repurchased pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934.~~acquired in open market purchases. The calculation of the average price paid per share includes all fees, commissions, and other costs associated with the repurchase of such shares.
⁽²⁾ On February ~~20, 2013,~~17, 2015, the ~~Company’s~~ Board of Directors approved a new 3-year, ~~$600 million~~$1 billion share repurchase program extending through January ~~2016.~~  2018.

Item 6. Exhibits

(a) Exhibits
The exhibits that are in this report immediately follow the index.

27
25

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: December 9, 2015 FOOT LOCKER, INC.
~~Date: December 10, 2014~~ ~~(Company)~~

/s/ Lauren B. Peters
LAUREN B. PETERS
Executive Vice President and Chief Financial Officer

28

FOOT LOCKER, INC.
INDEX OF EXHIBITS ~~REQUIRED BY ITEM 6(a) OF FORM 10-Q~~
~~AND FURNISHED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K~~

~~Exhibit No.~~
~~Item 601~~Number Description

~~†10.1~~ Amendment, dated November 6, 2014, to Employment Agreement, dated June 25, 2009, by and between Ken C. Hicks and the Company (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated November 3, 2014, filed by the Registrant with the SEC on November 7, 2014).
~~†10.2~~ Employment Agreement, dated November 6, 2014, by and between Richard A. Johnson and the Company (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated November 3, 2014, filed by the Registrant with the SEC on November 7, 2014).
1212* Computation of Ratio of Earnings to Fixed Charges.

1515* Accountants’ Acknowledgement.

~~31.1~~31.1* Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2~~31.2* Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1~~32** Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

9999* Report of Independent Registered Public Accounting Firm.

~~101.INS~~101.INS*
XBRL Instance Document.
~~101.SCH~~
101.SCH*
XBRL Taxonomy Extension Schema.
~~101.CAL~~
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase.
~~101.DEF~~
101.DEF*
XBRL Taxonomy Extension Definition Linkbase.
~~101.LAB~~
101.LAB*
XBRL Taxonomy Extension Label Linkbase.
~~101.PRE~~
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase.
† ~~Management contract or compensatory plan or arrangement.~~
* Filed herewith.
** Furnished herewith.

29

New York	13-3513936
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

					Page
PART I.	FINANCIAL INFORMATION
	Item 1.			Financial Statements	3
				Condensed Consolidated Balance Sheets	31
				Condensed Consolidated Statements of Operations	42
				Condensed Consolidated Statements of Comprehensive Income	53
				Condensed Consolidated Statements of Cash Flows	64
				Notes to Condensed Consolidated Financial Statements	75
	Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	1815
	Item 4.			Controls and Procedures	2624
PART II.	OTHER INFORMATION
	Item 1. 1.			Legal Proceedings	2624
	Item 1A.			Risk Factors	2724
	Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	25
	Item 6.			Exhibits	25
SIGNATURE					26

INDEX OF EXHIBITS					27
	~~Item 6.~~	~~Exhibits~~	27
	~~SIGNATURE~~	28
	~~INDEX OF EXHIBITS~~		29

	Thirteen weeks ended					Thirty-nine weeks ended
	November 1,			November 2,		November 1,			November 2,
	2014			2013		2014			2013
Sales	$	1,731		$	1,622	$	5,240		$	4,714

Cost of sales		1,157			1,085		3,495			3,163
Selling, general and administrative expenses		353			340		1,051			969
Depreciation and amortization		34			35		106			97
Impairment and other charges		—			—		3			2
Interest expense, net		1			2		3			4
Other income		(1	)		—		(3	)		(3	)
		1,544			1,462		4,655			4,232

Income before income taxes		187			160		585			482
Income tax expense		67			56		211			174
Net income	$	120		$	104	$	374		$	308

Basic earnings per share	$	0.84		$	0.70	$	2.59		$	2.06

Weighted-average common shares outstanding		143.6			147.7		144.5			149.2

Diluted earnings per share	$	0.82		$	0.70	$	2.55		$	2.04
Weighted-average common shares assuming dilution		145.7			149.5		146.6			151.2

	⁽¹⁾	Included in ~~the Athletic Stores segment for~~ the thirty-nine weeks ended November 1, 2014 is a non-cash impairment charge of $1 million to fully write down the remaining value of the tradename ~~impairment charge~~ related to the Company’s stores in the Republic of Ireland.

⁽²⁾	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 thirteen and thirty-nine weeks ended October 31, 2015 is a pre-tax litigation charge of $100 million relating to a pension litigation matter described further in Note 12,Legal Proceedings.

⁽⁴⁾	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.

	October 31, 2015							November 1, 2014							January 31, 2015
($ in millions)	Gross value		Accum. amort.			Net Value		Gross value		Accum. amort.			Net Value		Gross value		Accum. amort.			Net Value
Amortized intangible assets:^{(1), (2)}
Lease acquisition costs	$	119	$	(109	)	$	10	$	143	$	(129	)	$	14	$	128	$	(116	)	$	12
Trademarks		21		(12	)		9		21		(11	)		10		21		(12	)		9
Favorable leases		7		(4	)		3		7		(4	)		3		7		(4	)		3
	$	147	$	(125	)	$	22	$	171	$	(144	)	$	27	$	156	$	(132	)	$	24

	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

(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	)

(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 (seeNote 9)		10
Income tax expense		(4	)
Net of tax	$	6

	Balance Sheet	November 1,		November 2,		February 1,		Balance Sheet	October 31,		November 1,		January 31,
(in millions)	Caption	2014		2013		2014
($ in millions)								Caption	2015		2014		2015
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	—	$	1	$	—	Current liabilities	$	3	$	2	$	4
Non-Hedging Instruments:
Foreign exchange forward contracts	Current liabilities	$	2	$	—	$	2	Current assets	$	2	$	—	$	—
Foreign exchange forward contracts								Current liabilities	$	3	$	—	$	1


	Level 3 –	Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

	At November 1, 2014						At November 2, 2013						At February 1, 2014						At October 31, 2015						At November 1, 2014						At January 31, 2015
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
																			($ 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		—		—		6		—		—		6		—		—		6		—
Foreign exchange forward contracts		—		—		—		—		1		—		—		—		—
Total Assets	$	—	$	6	$	—	$	—	$	39	$	—	$	—	$	15	$	—	$	—	$	6	$	—	$	—	$	6	$	—	$	—	$	6	$	—

Liabilities
Foreign exchange forward contracts		—	$	2		—		—		—		—		—		2		—		—		4		—		—		2		—		—		5		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	—	$	4	$	—	$	—	$	2	$	—	$	—	$	5	$	—

	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	)

	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

	Stock Option Plans						Stock Purchase Plan
	October 31,			November 1,			October 31,			November 1,
	2015			2014			2015			2014
Weighted-average risk free rate of interest		1.52	%		2.12	%		0.22	%		0.14	%
Expected volatility		30	%		39	%		24	%		24	%
Weighted-average expected award life		6.0 years			6.1 years			1.0 year			1.0 year
Dividend yield		1.61	%		2.0	%		1.7	%		2.0	%
Weighted-average fair value	$	16.07		$	14.91		$	10.20		$	7.11

(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

	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

	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 $18.80		870		3.9	$	13.28		870	$	13.28
$18.84 to $24.75		899		4.8	$	19.81		899	$	19.81
$30.92 to $36.59		790		6.7	$	32.84		616	$	32.44
$45.08 to $73.21		1,202		8.9	$	55.47		146	$	45.70
		3,761		6.3	$	32.44		2,531	$	22.13

	Number of Shares			Weighted-Average Grant Date Fair Value per Share
	(in thousands, except price per share)
Nonvested at the beginning of the year		1,038		$	37.96
Granted		154			63.72
Vested		(312	)		32.33
Expired or cancelled		(68	)		37.97
Nonvested at October 31, 2015		812		$	45.02
Aggregate value ($ in millions)	$	37
Weighted-average remaining contractual life (in years)		1.1 years

(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

(1)	Included in the thirty-nine weeks ended November 1, 2014 is 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.

(2)	Included in the thirty-nine weeks ended November 1, 2014 is a $2 million non-cash impairment charge related to the CCS tradename.

(3)	Included in the thirteen and thirty-nine weeks ended October 31, 2015 is a pre-tax litigation charge of $100 million relating to the pension litigation matter. Please see Item 1. “Financial Statements,” Note 12,Legal Proceedings for further information.

(4)	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.

Date Purchased	Total Number of Shares Purchased⁽¹⁾		Average Price Paid per Share⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Program⁽²⁾		Approximate Dollar Value of Shares that may yet be Purchased Under the Program⁽²⁾
August 3, 2014 through August 30, 2014		3,000	$	47.99		3,000	$	234,266,856
August 31, 2014 through October 4, 2014		480,000	$	56.79		480,000	$	207,008,354
October 5, 2014 through November 1, 2014		200,000	$	54.51		200,000	$	196,107,226
		683,000	$	56.08		683,000

⁽¹⁾	These columns reflect shares ~~repurchased pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934.~~acquired in open market purchases. The calculation of the average price paid per share includes all fees, commissions, and other costs associated with the repurchase of such shares.
⁽²⁾	On February ~~20, 2013,~~17, 2015, the ~~Company’s~~ Board of Directors approved a new 3-year, ~~$600 million~~$1 billion share repurchase program extending through January ~~2016.~~ 2018.

*Item 6. Exhibits*

(a)	Exhibits
	The exhibits that are in this report immediately follow the index.

Date: December 9, 2015	FOOT LOCKER, INC.
~~Date: December 10, 2014~~	~~(Company)~~


	/s/ Lauren B. Peters
	LAUREN B. PETERS
	Executive Vice President and Chief Financial Officer

~~Exhibit No.~~
~~Item 601~~Number		Description

~~†10.1~~		Amendment, dated November 6, 2014, to Employment Agreement, dated June 25, 2009, by and between Ken C. Hicks and the Company (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated November 3, 2014, filed by the Registrant with the SEC on November 7, 2014).

~~†10.2~~		Employment Agreement, dated November 6, 2014, by and between Richard A. Johnson and the Company (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated November 3, 2014, filed by the Registrant with the SEC on November 7, 2014).

1212*		Computation of Ratio of Earnings to Fixed Charges.

1515*		Accountants’ Acknowledgement.

~~31.1~~31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2~~31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1~~32**		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

9999*		Report of Independent Registered Public Accounting Firm.

~~101.INS~~101.INS*		XBRL Instance Document.
~~101.SCH~~
101.SCH*		XBRL Taxonomy Extension Schema.
~~101.CAL~~
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase.
~~101.DEF~~
101.DEF*		XBRL Taxonomy Extension Definition Linkbase.
~~101.LAB~~
101.LAB*		XBRL Taxonomy Extension Label Linkbase.
~~101.PRE~~
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase.
†		~~Management contract or compensatory plan or arrangement.~~
*		Filed herewith.
**		Furnished herewith.