Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Feb. 03, 2018 | Mar. 26, 2018 | Jul. 29, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 3, 2018 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FL | ||
Entity Common Stock, Shares Outstanding | 118,115,818 | ||
Entity Registrant Name | FOOT LOCKER, INC. | ||
Entity Central Index Key | 850,209 | ||
Current Fiscal Year End Date | --02-03 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,504,950,585 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||||
Sales | $ 7,782 | $ 7,766 | $ 7,412 | |||
Cost of sales | 5,326 | 5,130 | 4,907 | |||
Selling, general and administrative expenses | 1,501 | 1,472 | 1,415 | |||
Depreciation and amortization | 173 | 158 | [1] | 148 | [1] | |
Litigation and Other Charges | 211 | 6 | 105 | |||
Income from operations | 571 | [2] | 1,000 | [2] | 837 | |
Interest (income) / expense, net | (2) | 2 | 4 | |||
Other income | (5) | (6) | (4) | |||
Income before income taxes | 578 | 1,004 | 837 | |||
Income tax expense | 294 | 340 | 296 | |||
Net income | $ 284 | $ 664 | [1] | $ 541 | [1] | |
Basic earnings per share | $ 2.23 | [3] | $ 4.95 | [3] | $ 3.89 | |
Weighted-average shares outstanding | 127.2 | 134 | 139.1 | |||
Diluted earnings per share | $ 2.22 | [3] | $ 4.91 | [3] | $ 3.84 | |
Weighted-average shares outstanding, assuming dilution | 127.9 | 135.1 | 140.8 | |||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | |||||
[2] | Operating profit represents income before income taxes, interest (income)/expense, net, and non-operating income | |||||
[3] | Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year. Additionally, stock options and other potentially dilutive common shares were excluded from the computation of diluted earnings per common share for the quarter ended February 3, 2018 as the Company reported a net loss |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
Net Income | $ 284 | $ 664 | [1] | $ 541 | [1] |
Foreign currency translation adjustment: | |||||
Translation adjustment arising during the period, net of income tax expense (benefit) of $18, $1 and $(2) million, respectively | 114 | (8) | (44) | ||
Cash flow hedges: | |||||
Change in fair value of derivatives, net of income tax | (1) | (1) | 5 | ||
Available for sale securities: | |||||
Unrealized gain on available-for-sale securities | 1 | ||||
Pension and postretirement adjustments: | |||||
Net actuarial gain (loss) and foreign currency fluctuations arising during the year, net of income tax expense (benefit) of $2, $4 and $(10) million, respectively | 4 | 4 | (16) | ||
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $4, $4, and $5 million, respectively | 7 | 8 | 8 | ||
Reclassification due to the adoption of ASU 2018-02 | (41) | ||||
Comprehensive income | 368 | $ 667 | $ 494 | ||
Foreign Currency Translation Adjustments [Member] | |||||
Pension and postretirement adjustments: | |||||
Reclassification due to the adoption of ASU 2018-02 | 4 | ||||
Items Related to Pension and Postretirement Benefits [Member] | |||||
Pension and postretirement adjustments: | |||||
Reclassification due to the adoption of ASU 2018-02 | $ (45) | ||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income tax expense (benefit) on translation adjustment | $ 18 | $ 1 | $ (2) |
Net actuarial gain (loss) and foreign currency fluctuations arising during the year, income tax expense (benefit) | 2 | 4 | (10) |
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, income tax expense | $ 4 | $ 4 | $ 5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | |
Current assets | |||
Cash and cash equivalents | [1] | $ 849 | $ 1,046 |
Merchandise inventories | 1,278 | 1,307 | |
Other current assets | 424 | 280 | |
Assets, Current, Total | 2,551 | 2,633 | |
Property and equipment, net | 866 | 765 | |
Deferred taxes | 48 | 161 | |
Goodwill | 160 | 155 | |
Other intangible assets, net | [2] | 46 | 42 |
Other assets | 290 | 84 | |
Total Assets | 3,961 | 3,840 | |
Current liabilities | |||
Accounts payable | 258 | 249 | |
Accrued and other liabilities | 358 | 363 | |
Liabilities, Current, Total | 616 | 612 | |
Long-term debt | 125 | 127 | |
Other liabilities | 701 | 391 | |
Total liabilities | 1,442 | 1,130 | |
Shareholders’ equity | 2,519 | 2,710 | |
Liabilities and Equity, Total | $ 3,961 | $ 3,840 | |
[1] | Includes cash equivalents of $780 million, $1,000 million, and $983 million for the year ended February 3, 2018, January 28, 2017, and January 30, 2016, respectively | ||
[2] | The change in the ending balances also reflect the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions | Additional Paid-In Capital & Common Stock | Treasury Stock [Member] | Retained Earnings | Accumulated Other Comprehensive Loss [Member] | Total | |
Beginning Balance at Jan. 31, 2015 | $ 979 | $ (944) | $ 2,780 | $ (319) | $ 2,496 | |
Beginning Balance (in shares) at Jan. 31, 2015 | 170,529 | |||||
Beginning Balance (in treasury shares) at Jan. 31, 2015 | (29,665) | |||||
Restricted stock issued (in shares) | 299 | |||||
Issued under director and stock plans | $ 70 | 70 | ||||
Issued under director and stock plans (in shares) | 2,570 | |||||
Share-based compensation expense | $ 22 | 22 | ||||
Excess tax benefits from equity awards | 35 | 35 | ||||
Forfeitures of restricted stock | 2 | $ (2) | ||||
Forfeitures of restricted stock (in shares) | (45) | |||||
Shares of common stock used to satisfy tax withholding obligations | $ (9) | (9) | ||||
Shares of common stock used to satisfy tax withholding obligations (in shares) | (142) | |||||
Share repurchases | $ (419) | (419) | ||||
Share repurchases (in shares) | (6,693) | |||||
Reissued - employee stock purchase plan | $ 3 | 3 | ||||
Reissued - employee stock purchase plan (in shares) | 124 | |||||
Net income/(loss) | 541 | 541 | [1] | |||
Cash dividends declared on common stock ($1.24, $1.10, $1.00 per share in 2017, 2016 and 2015 respectively) | (139) | (139) | ||||
Translation adjustment, net of tax | (44) | (44) | ||||
Change in cash flow hedges, net of tax | 5 | 5 | ||||
Pension and postretirement adjustments, net of tax | (8) | (8) | ||||
Ending Balance at Jan. 30, 2016 | $ 1,108 | $ (1,371) | 3,182 | (366) | 2,553 | |
Ending Balance (in shares) at Jan. 30, 2016 | 173,398 | |||||
Ending Balance (in treasury shares) at Jan. 30, 2016 | (36,421) | |||||
Restricted stock issued (in shares) | 203 | |||||
Issued under director and stock plans | $ 32 | 32 | ||||
Issued under director and stock plans (in shares) | 1,342 | |||||
Share-based compensation expense | $ 22 | 22 | ||||
Excess tax benefits from equity awards | 20 | 20 | ||||
Forfeitures of restricted stock | 1 | $ (1) | ||||
Forfeitures of restricted stock (in shares) | (20) | |||||
Shares of common stock used to satisfy tax withholding obligations | $ (7) | (7) | ||||
Shares of common stock used to satisfy tax withholding obligations (in shares) | (102) | |||||
Share repurchases | $ (432) | (432) | ||||
Share repurchases (in shares) | (6,985) | |||||
Reissued - employee stock purchase plan | $ 2 | $ 2 | ||||
Reissued - employee stock purchase plan (in shares) | 81 | |||||
Retirement of treasury stock | $ (283) | $ 1,728 | (1,445) | |||
Retirement of treasury stock (in shares) | (42,327) | 42,327 | 42,000 | |||
Net income/(loss) | 664 | $ 664 | [1] | |||
Cash dividends declared on common stock ($1.24, $1.10, $1.00 per share in 2017, 2016 and 2015 respectively) | (147) | (147) | ||||
Translation adjustment, net of tax | (8) | (8) | ||||
Change in cash flow hedges, net of tax | (1) | (1) | ||||
Pension and postretirement adjustments, net of tax | 12 | 12 | ||||
Ending Balance at Jan. 28, 2017 | $ 900 | $ (81) | 2,254 | (363) | 2,710 | |
Ending Balance (in shares) at Jan. 28, 2017 | 132,616 | |||||
Ending Balance (in treasury shares) at Jan. 28, 2017 | (1,120) | |||||
Restricted stock issued (in shares) | 169 | |||||
Issued under director and stock plans | $ 11 | 11 | ||||
Issued under director and stock plans (in shares) | 608 | |||||
Share-based compensation expense | $ 15 | 15 | ||||
Shares of common stock used to satisfy tax withholding obligations | $ (10) | (10) | ||||
Shares of common stock used to satisfy tax withholding obligations (in shares) | (140) | |||||
Share repurchases | $ (467) | (467) | ||||
Share repurchases (in shares) | (12,414) | |||||
Reissued - employee stock purchase plan | $ 8 | $ 8 | ||||
Reissued - employee stock purchase plan (in shares) | 110 | |||||
Retirement of treasury stock | $ (84) | $ 487 | (403) | |||
Retirement of treasury stock (in shares) | (12,131) | 12,131 | 12,000 | |||
Net income/(loss) | 284 | $ 284 | ||||
Cash dividends declared on common stock ($1.24, $1.10, $1.00 per share in 2017, 2016 and 2015 respectively) | (157) | (157) | ||||
Translation adjustment, net of tax | 114 | 114 | ||||
Change in cash flow hedges, net of tax | (1) | (1) | ||||
Pension and postretirement adjustments, net of tax | 11 | 11 | ||||
Unrealized gain on available-for-securities | 1 | 1 | ||||
Reclassification due to the adoption of ASU 2018-02 | 41 | (41) | (41) | |||
Ending Balance at Feb. 03, 2018 | $ 842 | $ (63) | $ 2,019 | $ (279) | $ 2,519 | |
Ending Balance (in shares) at Feb. 03, 2018 | 121,262 | |||||
Ending Balance (in treasury shares) at Feb. 03, 2018 | (1,433) | |||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | |||
Cash dividends declared on common stock, per share | $ 1.24 | $ 1.10 | $ 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||
From Operating Activities | ||||||
Net income/(loss) | $ 284 | $ 664 | [1] | $ 541 | [1] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Non-cash impairment charges | 20 | 6 | [1] | 5 | [1] | |
Depreciation and amortization | 173 | 158 | [1] | 148 | [1] | |
Deferred income taxes | 105 | (1) | [1] | (6) | [1] | |
Share-based compensation expense | 15 | 22 | [1] | 22 | [1] | |
Qualified pension plan contributions | (25) | (36) | [1] | (4) | [1] | |
Change in assets and liabilities: | ||||||
Merchandise inventories | 69 | (25) | [1] | (49) | [1] | |
Accounts payable | [1] | (31) | (17) | |||
Accrued and other liabilities | (30) | 27 | [1] | |||
Pension litigation accrual | 178 | 100 | [1] | |||
Other, net | 24 | 60 | [1] | 51 | [1] | |
Net cash provided by operating activities | 813 | 844 | [1] | 791 | [1] | |
From Investing Activities | ||||||
Capital expenditures | [2] | (274) | (266) | [1] | (228) | [1] |
Cash paid for a cost method investment | (15) | |||||
Purchase of business, net of cash acquired | [1] | (2) | ||||
Net cash used in investing activities | (289) | (266) | [1] | (230) | [1] | |
From Financing Activities | ||||||
Purchase of treasury shares | (467) | (432) | [1] | (419) | [1] | |
Dividends paid on common stock | (157) | (147) | [1] | (139) | [1] | |
Proceeds from exercise of stock options | 13 | 29 | [1] | 64 | [1] | |
Treasury stock reissued under employee stock plan | 5 | 4 | [1] | 5 | [1] | |
Shares of common stock repurchased to satisfy tax withholding | (10) | (7) | [1] | (9) | [1] | |
Payment of revolving credit agreement costs | [1] | (2) | ||||
Reduction in obligations under capital leases | [1] | (1) | (2) | |||
Net cash used in financing activities | (616) | (556) | [1] | (500) | [1] | |
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash | 50 | 3 | [1] | (6) | [1] | |
Net change in cash, cash equivalents, and restricted cash | (42) | 25 | [1] | 55 | [1] | |
Cash, cash equivalents, restricted cash at beginning of year | [1] | 1,073 | 1,048 | 993 | ||
Cash, cash equivalents, restricted cash at end of year | 1,031 | 1,073 | [1] | 1,048 | [1] | |
Cash Paid During the Year: | ||||||
Interest | 11 | 11 | [1] | 11 | [1] | |
Income taxes | $ 237 | $ 341 | [1] | $ 283 | [1] | |
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | |||||
[2] | (1) Reflects cash capital expenditures for all years presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 03, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Foot Locker, Inc. and its domestic and international subsidiaries (the “Company”), all of which are wholly owned. All significant intercompany amounts have been eliminated. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Reporting Year The fiscal year end for the Company is the Saturday closest to the last day in January. Fiscal year 2017 represents the 53 weeks ended February 3, 2018. Fiscal years 2016 and 2015 represented the 52 weeks ended January 28, 2017 and January 30, 2016 , respectively. References to years in this annual report relate to fiscal years rather than calendar years. Revenue Recognition Revenue from retail stores is recognized at the point of sale when the product is delivered to customers. Internet and catalog sales revenue is recognized upon estimated product receipt by the customer. Sales include shipping and handling fees for all periods presented. Sales include merchandise, net of returns, and exclude taxes. The Company provides for estimated returns based on return history and sales levels. Revenue from layaway sales is recognized when the customer receives the product, rather than when the initial deposit is paid. Please see the Recent Accounting Pronouncements section later in this note regarding the accounting changes relating to the 2018 adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers . Gift Cards The Company sells gift cards to its customers, which do not have expiration dates. Revenue from gift card sales is recorded when the gift cards are redeemed or when the likelihood of the gift card being redeemed by the customer is remote and there is no legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions, referred to as breakage. The Company has determined its gift card breakage rate based upon historical redemption patterns. Historical experience indicates that after 12 months, the likelihood of redemption is deemed to be remote. Gift card breakage income is included in selling, general and administrative expenses and unredeemed gift cards are recorded as a current liability. Gift card breakage was $6 million for both 2017 and 2016, and was $5 million for 2015. Please see the Recent Accounting Pronouncements section later in this note regarding the accounting changes relating to the 2018 adoption of ASU 2014-09, Revenue from Contracts with Customers . Store Pre-Opening and Closing Costs Store pre-opening costs are charged to expense as incurred. In the event a store is closed before its lease has expired, the estimated post-closing lease exit costs, less any sublease rental income, is provided for once the store ceases to be used. Advertising Costs and Sales Promotion Advertising and sales promotion costs are expensed at the time the advertising or promotion takes place, net of reimbursements for cooperative advertising. Advertising expenses also include advertising costs as required by some of the Company’s mall-based leases. Cooperative advertising reimbursements earned for the launch and promotion of certain products agreed upon with vendors are recorded in the same period as the associated expenses are incurred. Digital advertising costs are expensed as incurred, net of reimbursements for cooperative advertising. Digital advertising includes search engine marketing, such as display ads and keyword search terms, and other various forms of digital advertising. Reimbursement received in excess of expenses incurred related to specific, incremental, and identifiable advertising costs is accounted for as a reduction to the cost of merchandise and is reflected in cost of sales as the merchandise is sold. Advertising costs, including digital advertising, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Advertising expenses $ 108 $ 118 $ 119 Digital advertising expenses 96 84 65 Cooperative advertising reimbursements (20) (20) (19) Net advertising expense $ 184 $ 182 $ 165 Catalog Costs Catalog costs, which are primarily comprised of paper, printing, and postage, are capitalized and amortized over the expected customer response period related to each catalog, which is generally 90 days. Cooperative reimbursements earned for the promotion of certain products are agreed upon with vendors and are recorded in the same period as the associated catalog expenses are amortized. Prepaid catalog costs were $1 million at both February 3, 2018 and January 28, 2017 . Catalog costs, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Catalog costs $ 19 $ 26 $ 28 Cooperative reimbursements (2) (6) (7) Net catalog expense $ 17 $ 20 $ 21 Earnings Per Share The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding at the end of the period. Restricted stock awards, which contain non-forfeitable rights to dividends, are considered participating securities and are included in the calculation of basic earnings per share. Diluted earnings per share reflects the weighted-average number of common shares outstanding during the period used in the basic earnings per share computation plus dilutive common stock equivalents. The computation of basic and diluted earnings per share is as follows: 2017 2016 2015 (in millions, except per share data) Net Income $ 284 $ 664 $ 541 Weighted-average common shares outstanding 127.2 134.0 139.1 Dilutive effect of potential common shares 0.7 1.1 1.7 Weighted-average common shares outstanding assuming dilution 127.9 135.1 140.8 Earnings per share - basic $ 2.23 $ 4.95 $ 3.89 Earnings per share - diluted $ 2.22 $ 4.91 $ 3.84 Anti-dilutive share-based awards excluded from diluted calculation 1.6 0.4 0.6 The Company adopted ASU 2016-09 during the first quarter of 2017. As a result, excess tax benefits and tax deficiencies are no longer included as assumed proceeds in the calculation of diluted shares outstanding. This change was adopted prospectively. Contingently issuable shares of 0.2 million, for all periods presented, have not been included as the vesting conditions have not been satisfied. These shares relate to restricted stock unit awards issued in connection with the Company’s long-term incentive program. Share-Based Compensation The Company recognizes compensation expense for share-based awards based on the grant date fair value of those awards. Additionally, stock-based compensation expense is recognized on a straight-line basis over the requisite service period for each vesting tranche of the award. See Note 21, Share-Based Compensation, for information on the assumptions used to calculate the fair value of share-based compensation. Upon exercise of stock options, issuance of restricted stock or units, or issuance of shares under the employees stock purchase plan, the Company will issue authorized but unissued common stock or use common stock held in treasury. Cash, Cash Equivalents and Restricted Cash Cash consists of funds held on hand and in bank accounts. Cash equivalents include amounts on demand with banks and all highly liquid investments with original maturities of three months or less, including money market funds. Additionally, amounts due from third-party credit card processors for the settlement of debit and credit card transactions are included as cash equivalents as they are generally collected within three business days. R estricted cash represents cash that is restricted as to withdrawal or use under the terms of various agreements. Restricted cash includes amounts held in a qualified settlement fund in connection with the pension litigation, amounts held in escrow in connection with various leasing arrangements in Europe, and deposits held in insurance trusts in order to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims. The following table provides the reconciliation of cash, cash equivalents, and restricted cash, as reported on our consolidated statements of cash flows. 2017 2016 2015 ($ in millions) Cash and cash equivalents (1) $ 849 $ 1,046 $ 1,021 Restricted cash included in other current assets 1 — 1 Restricted cash included in other non-current assets (2) 181 27 26 Cash, cash equivalents, and restricted cash $ 1,031 $ 1,073 $ 1,048 (1) Includes cash equivalents of $780 million, $1,000 million, and $983 million for the year ended February 3, 2018, January 28, 2017, and January 30, 2016, respectively . (2) Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information . Investments Changes in the fair value of available-for-sale securities are reported as a component of accumulated other comprehensive loss in the Consolidated Statements of Shareholders’ Equity and are not reflected in the Consolidated Statements of Operations until a sale transaction occurs or when declines in fair value are deemed to be other-than-temporary. Available-for-sale securities are routinely reviewed for other-than-temporary declines in fair value below the cost basis, and when events or changes in circumstances indicate the carrying value of a security may not be recoverable, the security is written down to fair value. As of February 3, 2018 , the Company held one available-for-sale security, which was the Company’s $7 million auction rate security. See Note 19 , Fair Value Measurements , for further discussion. Additionally, the Company’s investment in a privately-held company is accounted for using the cost method and had a carrying value of $15 million as of February 3, 2018. This investment is included within other assets. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss. Merchandise Inventories and Cost of Sales Merchandise inventories for the Company’s Athletic Stores are valued at the lower of cost or market using the retail inventory method. Cost for retail stores is determined on the last-in, first-out (“LIFO”) basis for domestic inventories and on the first-in, first-out (“FIFO”) basis for international inventories. Merchandise inventories of the Direct-to-Customers business are valued at the lower of cost or market using weighted-average cost, which approximates FIFO. The retail inventory method is commonly used by retail companies to value inventories at cost and calculate gross margins due to its practicality. Under the retail inventory method, cost is determined by applying a cost-to-retail percentage across groupings of similar items, known as departments. The cost-to-retail percentage is applied to ending inventory at its current owned retail valuation to determine the cost of ending inventory on a department basis. The Company provides reserves based on current selling prices when the inventory has not been marked down to market. Transportation, distribution center, and sourcing costs are capitalized in merchandise inventories. The Company expenses the freight associated with transfers between its store locations in the period incurred. The Company maintains an accrual for shrinkage based on historical rates. Cost of sales is comprised of the cost of merchandise, as well as occupancy, buyers’ compensation, and shipping and handling costs. The cost of merchandise is recorded net of amounts received from suppliers for damaged product returns, markdown allowances, and volume rebates, as well as cooperative advertising reimbursements received in excess of specific, incremental advertising expenses. Occupancy costs include the amortization of amounts received from landlords for tenant improvements. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Significant additions and improvements to property and equipment are capitalized. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Buildings Maximum of 50 years Store leasehold improvements Shorter of the asset useful life or expected term of the lease Furniture, fixtures, and equipment 3 -10 years Software 2 -7 years Maintenance and repairs are charged to current operations as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Internal-Use Software Development Costs The Company capitalizes certain external and internal computer software and software development costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing, and installation activities. Capitalized costs include only external direct cost of materials and services consumed in developing or obtaining internal-use software, and payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software, net of accumulated amortization, is included as a component of property and equipment and was $67 million and $59 million at February 3, 2018 and January 28, 2017 , respectively. Recoverability of Long-Lived Tangible Assets The Company performs an impairment review when circumstances indicate that the carrying value of long-lived tangible assets may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria at the division level, as well as qualitative measures. The Company considers historical performance and future estimated results, which are predominately identified from the Company’s long-range strategic plans, in its evaluation of potential store-level impairment and then compares the carrying amount of the asset with the estimated future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset with its estimated fair value. The estimation of fair value is measured by discounting expected future cash flows at the Company’s weighted-average cost of capital. The Company estimates fair value based on the best information available using estimates, judgments, and projections as considered necessary. Goodwill and Other Intangible Assets Goodwill and intangible assets with indefinite lives are reviewed for impairment annually during the first quarter of each fiscal year or more frequently if impairment indicators arise. The review of goodwill impairment consists of either using a qualitative approach to determine whether it is more likely than not that the fair value of the assets is less than their respective carrying values or a two-step impairment test, if necessary. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the intangible asset is greater than its carrying value, the two-step test is performed to identify potential impairment. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, it is unnecessary to perform the two-step impairment test. Based on certain circumstances, we may elect to bypass the qualitative assessment and proceed directly to performing the first step of the two-step impairment test. The first step of the two-step goodwill impairment test compares the fair value of the reporting unit to its carrying amount, including goodwill. The second step includes hypothetically valuing all the tangible and intangible assets of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying value of the asset exceeds its fair value, an impairment loss is recognized in the amount of the excess. The fair value of each reporting unit is determined using a discounted cash flow approach. Intangible assets that are determined to have finite lives are amortized over their useful lives and are measured for impairment only when events or changes in circumstances indicate that the carrying value may be impaired. Intangible assets with indefinite lives are tested for impairment if impairment indicators arise and, at a minimum, annually. The impairment review for intangible assets with indefinite lives consists of either performing a qualitative or a quantitative assessment. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of the indefinite-lived intangible is less than its carrying amount, or if we elect to proceed directly to a quantitative assessment, we calculate the fair value using a discounted cash flow method, based on the relief from royalty concept, and compare the fair value to the carrying value to determine if the asset is impaired. Derivative Financial Instruments All derivative financial instruments are recorded in the Company’s Consolidated Balance Sheets at their fair values. For derivatives designated as a hedge, and effective as part of a hedge transaction, the effective portion of the gain or loss on the hedging derivative instrument is reported as a component of other comprehensive income/loss or as a basis adjustment to the underlying hedged item and reclassified to earnings in the period in which the hedged item affects earnings. The effective portion of the gain or loss on hedges of foreign net investments is generally not reclassified to earnings unless the net investment is disposed of. To the extent derivatives do not qualify or are not designated as hedges, or are ineffective, their changes in fair value are recorded in earnings immediately, which may subject the Company to increased earnings volatility. Fair Value The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. 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. Income Taxes The Company accounts for its income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and the tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized for tax credits and net operating loss carryforwards, reduced by a valuation allowance, which is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. A taxing authority may challenge positions that the Company adopted in its income tax filings. Accordingly, the Company may apply different tax treatments for transactions in filing its income tax returns than for income tax financial reporting. The Company regularly assesses its tax positions for such transactions and records reserves for those differences when considered necessary. Tax positions are recognized only when it is more likely than not, based on technical merits, that the positions will be sustained upon examination. Tax positions that meet the more-likely-than-not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon settlement. Whether the more-likely-than-not recognition threshold is met for a tax position is a matter of judgment based on the individual facts and circumstances of that position evaluated in light of all available evidence. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying Consolidated Statement of Operations. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet. Provision for U.S. income taxes on undistributed earnings of foreign subsidiaries is made only on those amounts in excess of the funds considered to be permanently reinvested. Our income tax provision for 2017 includes the estimated effects of U.S. tax reform (“Tax Act”) enacted on December 22, 2017. The Tax Act significantly revises U.S. corporate income taxation, among other changes, lowering corporate income tax rates, implementing a modified territorial tax regime, and imposing a one-time transition tax through a deemed repatriation of accumulated untaxed earnings and profits of foreign subsidiaries. The Company has made estimates of the effects and recorded provisional amounts in its 2017 financial statements as permitted under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act , which provides guidance on accounting for the Tax Act’s effects. The ultimate effect of the Tax Act may differ from the provisional amount, possibly materially, due to, among other things, further refinement of our calculations, changes in interpretations and assumptions we have made, regulatory and administrative guidance that may be issued, and actions we may take as a result of the Tax Act. See also Note 17, Income Taxes for more information. Pension and Postretirement Obligations The discount rate for the U.S. plans is determined by reference to the Bond:Link interest rate model based upon a portfolio of highly-rated U.S. corporate bonds with individual bonds that are theoretically purchased to settle the plan’s anticipated cash outflows. The cash flows are discounted to their present value and an overall discount rate is determined. The discount rate selected to measure the present value of the Company’s Canadian benefit obligations was developed by using that plan’s bond portfolio indices, which match the benefit obligations. The Company measures its plan assets and benefit obligations using the month-end date that is closest to our fiscal year end. Insurance Liabilities The Company is primarily self-insured for health care, workers’ compensation, and general liability costs. Accordingly, provisions are made for the Company’s actuarially determined estimates of discounted future claim costs for such risks, for the aggregate of claims reported, and claims incurred but not yet reported. Self-insured liabilities totaled $10 million and $12 million at February 3, 2018 and January 28, 2017 , respectively. The Company discounts its workers’ compensation and general liability reserves using a risk-free interest rate. Imputed interest expense related to these liabilities was not significant for any of the periods presented. Accounting for Leases The Company recognizes rent expense for operating leases as of the possession date for store leases or the commencement of the agreement for a non-store lease. Rental expense, inclusive of rent holidays, concessions, and tenant allowances are recognized over the lease term on a straight-line basis. Contingent payments based upon sales and future increases determined by inflation related indices cannot be estimated at the inception of the lease and, accordingly, are charged to operations as incurred. Treasury Stock Retirement The Company periodically retires treasury shares that it acquires through share repurchases and returns those shares to the status of authorized but unissued. The Company accounts for treasury stock transactions under the cost method. For each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired to both retained earnings and additional paid-in capital. The portion allocated to additional paid-in capital is determined by applying a percentage, which is determined by dividing the number of shares to be retired by the number of shares issued, to the balance of additional paid-in capital as of the retirement date. During 2017 and 2016, the Company retired 12 million and 42 million shares, respectively, of its common stock held in treasury. The shares were returned to the status of authorized but unissued. As a result, treasury stock decreased by $487 million and $1,728 million as of February 3, 2018 and January 28, 2017, respectively. Foreign Currency Translation The functional currency of the Company’s international operations is the applicable local currency. The translation of the applicable foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted-average rates of exchange prevailing during the year. The unearned gains and losses resulting from such translation are included as a separate component of accumulated other comprehensive loss within shareholders’ equity. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ ASU”) 2014-09, Revenue from Contracts with Customers . The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. This ASU can be adopted either retrospectively to each prior reporting period presented or on a modified retrospective basis with the cumulative-effect recognized as an adjustment to retained earnings as of the date of adoption . The Company has identified a change for the following items: · Timing change relating to the recognition of gift card breakage as well as recognition of gift card breakage as part of sales instead of recognition of breakage as part of SG&A expense. · Timing change relating to the recognition of revenue for our e-commerce sales to be recognized at the shipping point rather than upon receipt by the customer. · Timing change relating to the recognition of expenses for direct-response advertising costs. · Balance sheet reclassification from inventory to other current assets relating to our right to recover products for expected returns. · Change to the accounting for our unredeemed rewards for our loyalty program as a reduction to sales instead of recording the charge to cost of goods sold. We have substantially completed our evaluation of the effect of ASU 2014-09, and will adopt the guidance beginning with our first quarter ending May 5, 2018, using the modified retrospective transition method. The adjustment to retained earnings will primarily represent the change in timing relating to gift card breakage and the change in timing related to the recognition of e-commerce sales, and is not expected to be significant. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU requires lessees to recognize a lease liability and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods therein, and requires a modified retrospective adoption, with earlier adoption permitted. The Company does not expect to adopt this ASU until required and is evaluating the effect of this guidance. The Company has historically presented a non-GAAP measure to adjust its balance sheet to present operating leases as if they were capital leases. Based upon that analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of $3 to $4 billion of assets and liabilities on our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . ASU 2016-16 requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective and will be adopted by the Company for annual reporting periods beginning after December 15, 2017, including interim periods therein. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not re |
Segment Information
Segment Information | 12 Months Ended |
Feb. 03, 2018 | |
Segment Information [Abstract] | |
Segment Information | 2. Segment Information The Company has determined that its reportable segments are those that are based on its method of internal reporting. As of February 3, 2018 , the Company had two reportable segments, Athletic Stores and Direct-to-Customers. The accounting policies of both segments are the same as those described in Note 1, Summary of Significant Accounting Policies . 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 and reorganization charges, corporate expense, non-operating income, and net interest (income) / expense. Effective as of the beginning of fisca l year 2018, the Company will report one reportable segment based upon the change in our method of internal reporting . 2017 2016 2015 Sales ($ in millions) Athletic Stores $ 6,673 $ 6,744 $ 6,468 Direct-to-Customers 1,109 1,022 944 Total sales $ 7,782 $ 7,766 $ 7,412 Operating Results Athletic Stores (1) $ 675 $ 927 $ 872 Direct-to-Customers (2) 135 143 142 Division profit 810 1,070 1,014 Less: Pension litigation and reorganization charges (3), (4) 191 — 100 Less: Corporate expense (5) 48 70 77 Operating profit 571 1,000 837 Interest (income) / expense, net (2) 2 4 Other income 5 6 4 Income before income taxes $ 578 $ 1,004 $ 837 (1) Included in the results for 2017, 2016, and 2015 are non-cash impairment charges of $20 million, $ 6 million, and $ 4 million, respectively. The 2017 amount includes a charge of $16 million to write down long-lived store assets of SIX:02, and a charge of $4 million to write down primarily long-lived store assets of Runners Point and Sidestep. The 2016 and 2015 amounts reflect charges to write down long-lived store assets of Runners Point and Sidestep. See Note 3, Litigation and Other Charges for additional information . (2) Included in the results for 2015 is a $1 million non-cash impairment charge relating to an e-commerce trade name. See Note 3, Litigation and Other Charges for additional information . (3) Included in the 2017 and 2015 amounts is a pre-tax charge of $178 million and $100 million, respectively, relating to a pension litigation matter described further in Note 22, Legal Proceedings . (4) Included in the 2017 amount is $13 million in pre-tax reorganization costs related to the reduction and reorganization of division and corporate staff that occurred in the third quarter of 2017, described more fully in Note 3, Litigation and Other Charges . (5) Corporate expense for all years presented reflects the reallocation of expense between corporate and the operating divisions. Based upon annual internal studies of corporate expense, the allocation of such expenses to the operating divisions was increased by $4 million for 2017, $9 million for 2016, and $5 million for 2015, thereby reducing corporate expense . Depreciation and Amortization Capital Expenditures (1) Total Assets 2017 2016 2015 2017 2016 2015 2017 2016 2015 ($ in millions) Athletic Stores $ 153 $ 140 $ 130 $ 202 $ 193 $ 181 $ 2,775 $ 2,802 $ 2,612 Direct-to-Customers 4 4 7 3 4 7 357 338 330 157 144 137 205 197 188 3,132 3,140 2,942 Corporate 16 14 11 69 69 40 829 700 833 Total Company $ 173 $ 158 $ 148 $ 274 $ 266 $ 228 $ 3,961 $ 3,840 $ 3,775 (1) Reflects cash capital expenditures for all years presented . Sales and long-lived asset information by geographic area as of and for the fiscal years ended February 3, 2018 , January 28, 2017 , and January 30, 2016 are presented in the following tables. Sales are attributed to the country in which the sales transaction is fulfilled. Long-lived assets reflect property and equipment. 2017 2016 2015 Sales ($ in millions) United States $ 5,532 $ 5,562 $ 5,305 International 2,250 2,204 2,107 Total sales $ 7,782 $ 7,766 $ 7,412 2017 2016 2015 Long-Lived Assets ($ in millions) United States $ 607 $ 575 $ 486 International 259 190 175 Total long-lived assets $ 866 $ 765 $ 661 For the year ended February 3, 2018 , the countries that comprised the majority of the sales and long-lived assets for the international category were Canada, Italy, Germany, and France. No other individual country included in the international category was significant. |
Litigation and Other Charges
Litigation and Other Charges | 12 Months Ended |
Feb. 03, 2018 | |
Litigation and Other Charges [Abstract] | |
Litigation and Other Charges | 3. Litigation and Other Charges 2017 2016 2015 ($ in millions) Pension litigation charge $ 178 $ — $ 100 Reorganization costs 13 — — Impairment of long-lived assets 20 6 4 Other intangible asset impairments — — 1 Total litigation and other charges $ 211 $ 6 $ 105 During the third quarter of 2017, the Company reorganized its organizational structure by adjusting certain responsibilities between our various businesses. As a result of this, as well as certain corporate staff reductions taken to improve corporate efficiency, the Company recorded a charge of $13 million. The charge consisted primarily of severance payments and benefit continuation costs for approximately 190 associates. The following is a reconciliation of the accrual as of February 3, 2018: Severance and Other Related Benefit Costs Charges Total ($ in millions) Balance at January 28, 2017 $ — $ — $ — Amounts charged to expense 11 2 13 Cash payments (6) — (6) Balance at February 3, 2018 $ 5 $ 2 $ 7 During 2017, due to the underperformance of our SIX:02 stores, and the continued underperformance of our Runners Point and Sidestep stores, management determined that a triggering event had occurred and, therefore, an impairment review was conducted. T he Company evaluated the long-lived assets of our SIX:02 stores for impairment and recorded a non-cash charge of $16 million to write down store fixtures and leasehold improvements for 30 stores. The Company also evaluated the long-lived assets of our Runners Point and Sidestep stores for impairment and re corded a non-cash charge of $4 million to write down store fixtures and leasehold improvements for 123 stores. As of February 3, 2018, the remaining net book value of long-lived assets totaled $2 million for SIX:02 , and totaled $12 million for Runners Point and Sidestep . The Company also performed an impairment review of other intangible assets for Runners Point and Sidestep, and the resulting non-cash impairment charge was not significant. In 2016 and 2015, the Company also recorded non-cash impairment charges for Runners Point and Sidestep stores to write down long-lived assets of $6 million for 116 stores and $4 million for 61 stores, respectively. As a result of the impairment review related to long-lived assets, the Company performed a review of other intangible assets in 2016 and 2015. No impairment charges of these assets was required as a result of the 2016 review; however, in 2015 a non-cash impairment charge of $1 million was recorded to fully write down the value of an e-commerce trade name resulting from a decline in sales, as the Company shifted away from the use of this website. The Company recorded $178 million and $100 million in pension litigation charges during 2017 and 2015, respectively. Please see Note 22, Legal Proceedings for further information. |
Other Income
Other Income | 12 Months Ended |
Feb. 03, 2018 | |
Other Income [Abstract] | |
Other Income | 4 . Other Income Other income includes non-operating items, such as: gains from insurance recoveries; discounts/premiums paid on the repurchase and retirement of bonds; royalty income; changes in fair value, premiums paid, and realized gains associated with foreign currency option contracts ; and property sales. Other income was $5 million in 2017 , $6 million in 2016 , and $4 million in 2015 . For 2017 , other income includes $4 million of royalty income and $1 million of lease termination gains related to the sales of leasehold interests. Other income in 2016 included a gain of $2 million on a forward foreign currency contract associated with an intercompany transaction that did not qualify for hedge accounting; $2 million of royalty income; $1 million related to an insurance recovery; and $1 million of lease termination gains related to the sales of leasehold interests. Included in 2015 is a $2 million insurance recovery related to a business interruption claim and $2 million of royalty income. |
Merchandise Inventories
Merchandise Inventories | 12 Months Ended |
Feb. 03, 2018 | |
Merchandise Inventories [Abstract] | |
Merchandise Inventories | 5 . Merchandise Inventories 2017 2016 ($ in millions) LIFO inventories $ 809 $ 861 FIFO inventories 469 446 Total merchandise inventories $ 1,278 $ 1,307 The value of the Company’s LIFO inventories, as calculated on a LIFO basis, approximates their value as calculated on a FIFO basis. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Feb. 03, 2018 | |
Other Current Assets [Abstract] | |
Other Current Assets | 6 . Other Current Assets 2017 2016 ($ in millions) Prepaid income taxes $ 174 $ 48 Net receivables 106 101 Prepaid rent 96 86 Other prepaid expenses 31 27 Deferred tax costs 13 13 Other 4 5 $ 424 $ 280 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Feb. 03, 2018 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | 7 . Property and Equipment, Net 2017 2016 ($ in millions) Land $ 4 $ 4 Buildings: Owned 44 43 Furniture, fixtures, equipment and software development costs: Owned 1,145 1,029 Assets under capital leases — 2 1,193 1,078 Less: accumulated depreciation (753) (674) 440 404 Alterations to leased and owned buildings: Cost 965 849 Less: accumulated amortization (539) (488) 426 361 $ 866 $ 765 |
Goodwill
Goodwill | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Goodwill | 8 . Goodwill The Athletic Stores segment’s goodwill is net of accumulated impairment charges of $167 million for all periods presented. The 2017 and 2016 annual goodwill impairment tests did not result in an impairment charge. Direct-to- Athletic Stores Customers Total ($ in millions) Goodwill at January 30, 2016 $ 17 $ 139 $ 156 Foreign currency translation adjustment (1) — (1) Goodwill at January 28, 2017 $ 16 $ 139 $ 155 Foreign currency translation adjustment 3 2 5 Goodwill at February 3, 2018 $ 19 $ 141 $ 160 |
Other Intangible Assets, net
Other Intangible Assets, net | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Other Intangible Assets, net | 9 . Other Intangible Assets, net February 3, 2018 January 28, 2017 Wtd. Avg. Gross Accum. Net Life in Gross Accum. Net ($ in millions) value amort. value Years (2) value amort. value Amortized intangible assets: (1) Lease acquisition costs $ 135 $ (122) $ 13 10.0 $ 116 $ (105) $ 11 Trademarks / trade names 20 (14) 6 20.0 20 (13) 7 Favorable leases 7 (6) 1 8.6 7 (5) 2 $ 162 $ (142) $ 20 13.8 $ 143 $ (123) $ 20 Indefinite life intangible assets: (1) Runners Point Group trademarks / trade names 26 22 Other intangible assets, net $ 46 $ 42 (1) The change in the ending balances also reflect the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar . (2) The weighted-average useful life is as of February 3, 2018 and excludes those assets that are fully amortized . Amortizing intangible assets primarily represent lease acquisition costs, which are amounts that are required to secure prime lease locations and other lease rights, primarily in Europe. During 2017, the Company recorded $2 million of lease acquisition additions, primarily related to our European businesses. These additions are being amortized over a weighted-average life of 10 years. Amortization expense recorded is as follows: ($ in millions) 2017 2016 2015 Amortization expense $ 4 $ 4 $ 4 Estimated future amortization expense for finite lived intangibles for the next five years is as follows: ($ in millions) 2018 $ 4 2019 4 2020 3 2021 3 2022 2 |
Other Assets
Other Assets | 12 Months Ended |
Feb. 03, 2018 | |
Other Assets [Abstract] | |
Other Assets | 1 0 . Other Assets 2017 2016 ($ in millions) Restricted cash (1) $ 181 $ 27 Pension asset 36 10 Deferred tax costs 11 10 Auction rate security 7 6 Cost method investment 15 — Other 40 31 $ 290 $ 84 (1) Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information. |
Accrued and Other Liabilities
Accrued and Other Liabilities | 12 Months Ended |
Feb. 03, 2018 | |
Accrued and Other Liabilities [Abstract] | |
Accrued and Other Liabilities | 1 1 . Accrued and Other Liabilities 2017 2016 ($ in millions) Other payroll and payroll related costs, excluding taxes $ 67 $ 57 Taxes other than income taxes 63 66 Property and equipment (1) 58 38 Customer deposits (2) 49 49 Advertising 22 35 Income taxes payable 11 5 Incentive bonuses 6 32 Other 82 81 $ 358 $ 363 (1) Accruals for property and equipment are excluded from the statements of cash flows for all years presented . (2) Customer deposits include unredeemed gift cards, merchandise credits, and deferred revenue related to undelivered merchandise, including layaway sales. |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Feb. 03, 2018 | |
Revolving Credit Facility [Abstract] | |
Revolving Credit Facility | 1 2 . Revolving Credit Facility On May 19, 2016 , the Company entered into a credit agreement with its banks (“2016 Credit Agreement”) . The 2016 Credit Agreement provides for a $400 million asset-based revolving credit facility maturing on May 19, 2021 . During the term of the 2016 Credit Agreement, the Company may also increase the commitments by up to $200 million, subject to customary conditions. Interest is determined, at the Company’s option, by the federal funds rate plus a margin of 0.125 percent to 0.375 percent, or a Eurodollar rate, determined by reference to LIBOR, plus a margin of 1.125 percent to 1.375 percent depending on availability under the 2016 Credit Agreement. In addition, the Company is pay ing a commitment fee of 0.20 percent per annum on the unused portion of the commitments. The 2016 Credit Agreement provides for a security interest in certain of the Company’s domestic store assets, including inventory assets, accounts receivable, cash deposits, and certain insurance proceeds. The Company is not required to comply with any financial covenants unless certain events of default have occurred and are continuing, or if availability under the 2016 Credit Agreement does not exceed the greater of $40 million and 10 percent of the Loan Cap (as defined in the 2016 Credit Agreement). There are no restrictions relating to the payment of dividends and share repurchases as long as no default or event of default has occurred and the aggregate principal amount of unused commitments under the 2016 Credit Agreement is not less than 15 percent of the lesser of the aggregate amount of the commitments and the Borrowing Base, determined as of the preceding fiscal month and on a proforma basis for the following six fiscal months. The Company uses the 2016 Credit Agreement to support standby letters of credit in connection with insurance programs. The letters of credit outstanding as of February 3, 2018 were not significant. During 2016, t he Company paid approximately $2 million in fees relating to th e 2016 Credit Agreement . Deferred financing fees are amortized over the life of the facility on a straight-line basis, which is comparable to the interest method. The unamortized balance at February 3, 2018 is $1 million. The quarterly facility fees paid on the unused portion was 0.20 percent in 2017. Interest expense, including facility fees, related to the revolving credit facility was $1 million for all years presented. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Feb. 03, 2018 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 1 3 . Long-Term Debt 2017 2016 ($ in millions) 8.5% debentures payable January 2022 $ 118 $ 118 Unamortized gain related to interest rate swaps (1) 7 9 $ 125 $ 127 (1) In 2009, the Company terminated an interest rate swap at a gain. This gain is being amortized as part of interest expense over the remaining term of the debt using the effective-yield method . Interest expense related to long-term debt and the amortization of the associated debt issuance costs was $ 9 million and $8 million as of February 3, 2018 and January 28, 2017 , respectively. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Feb. 03, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | 1 4 . Other Liabilities 2017 2016 ($ in millions) Pension litigation liability $ 278 $ 100 Straight-line rent liability (1) 245 205 Income taxes 114 23 Pension benefits 19 26 Deferred taxes 15 3 Postretirement benefits 14 14 Workers’ compensation and general liability reserves 7 8 Other 9 12 $ 701 $ 391 (1) Includes unamortized tenant allowances of $64 million and $ 59 million for the year ended February 3, 2018 and January 28, 2017, respectively. |
Leases
Leases | 12 Months Ended |
Feb. 03, 2018 | |
Leases [Abstract] | |
Leases | 1 5 . Leases The Company is obligated under operating leases for almost all of its store properties. Some of the store leases contain renewal options with varying terms and conditions. Management expects that in the normal course of business, expiring leases will generally be renewed or, upon making a decision to relocate, replaced by leases on other premises. Operating lease periods generally range from 5 to 10 years. Certain leases provide for additional rent payments based on a percentage of store sales. Also, most of the Company’s leases require the payment of certain executory costs such as insurance, maintenance, and other costs in addition to the future minimum lease payments. These costs, including the amortization of lease rights, totaled $146 million in 2017 , $1 41 million in 2016 , and $13 7 million in 2015 . Included in the amounts below are non-store expenses that totaled $24 million in both 201 7 and 2016 , and $18 million in 2015 . 2017 2016 2015 ($ in millions) Minimum rent $ 714 $ 667 $ 618 Contingent rent based on sales 26 29 27 Sublease income (5) (6) (5) $ 735 $ 690 $ 640 Future minimum lease payments under non-cancellable operating leases, net of future non-cancellable operating sublease payments, are: ($ in millions) 2018 $ 678 2019 637 2020 594 2021 554 2022 496 Thereafter 1,721 Total operating lease commitments $ 4,680 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Feb. 03, 2018 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | 1 6 . Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax, is comprised of the following: 2017 2016 2015 ($ in millions) Foreign currency translation adjustments $ (9) $ (127) $ (119) Cash flow hedges — 1 2 Unrecognized pension cost and postretirement benefit (270) (236) (248) Unrealized loss on available-for-sale security — (1) (1) $ (279) $ (363) $ (366) The changes in accumulated other comprehensive loss for the period ended February 3, 2018 were as follows: Unrealized Foreign Items Related (Loss)/Gain Currency to Pension and on Translation Cash Flow Postretirement Available-For- ($ in millions) Adjustments Hedges Benefits Sale Security Total Balance as of January 28, 2017 $ (127) $ 1 $ (236) $ (1) $ (363) OCI before reclassification 114 (1) 4 1 118 Reclassified from AOCI — — 7 — 7 Reclassification of tax effects due to the adoption of ASU 2018-02 4 — (45) — (41) Other comprehensive income/ (loss) 118 (1) (34) 1 84 Balance as of February 3, 2018 $ (9) $ — $ (270) $ — $ (279) Reclassifications to income from accumulated other comprehensive loss for the period ended February 3, 2018 were as follows: ($ in millions) Amortization of actuarial (gain) loss: Pension benefits- amortization of actuarial loss $ 13 Postretirement benefits- amortization of actuarial gain (2) Net periodic benefit cost (see Note 20) 11 Income tax benefit 4 Net of tax $ 7 |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 03, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 1 7 . Income Taxes The domestic and international components of pre-tax income are as follows: 2017 2016 2015 ($ in millions) Domestic $ 432 $ 779 $ 668 International 146 225 169 Total pre-tax income $ 578 $ 1,004 $ 837 Domestic pre-tax income includes the results of non-U . S . businesses that are operated in branches owned directly by the U . S . which , therefore, are subject to U . S . income tax. The income tax provision consists of the following: 2017 2016 2015 Current: ($ in millions) Federal $ 129 $ 249 $ 212 State and local 18 44 37 International 42 48 53 Total current tax provision 189 341 302 Deferred: Federal 98 (6) (8) State and local 5 1 (1) International 2 4 3 Total deferred tax provision 105 (1) (6) Total income tax provision $ 294 $ 340 $ 296 The Company previously considered the earnings in its non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. Given the Tax Act’s significant changes and potential opportunities to repatriate cash without significant incremental U.S. federal tax, the Company is in the process of evaluating its current permanent reinvestment assertions. This evaluation includes the possible repatriation of historical earnings (2017 and prior) that have now been taxed under the Tax Act. The Company had aggregate undistributed earnings and profits (“E&P”) from foreign subsidiaries of approximately $1,407 million at February 3, 2018, which is now classified as previously taxed income (“PTI”) subsequent to the Tax Act. The Company recorded a provisional $86 million “transition tax” in connection with this E&P. Additionally, the Company has recorded a provisional $13 million deferred tax liability as of the date of the change in the Company’s permanent reinvestment assertion primarily for state income taxes and foreign withholding taxes on the future repatriation of PTI. The Company currently considers the remaining financial statement carrying amounts over the tax basis of investments in its foreign subsidiaries to be indefinitely reinvested, and has not recorded a provisional deferred tax liability. The determination of any unrecorded provisional deferred tax liability on this amount is not practicable due to the uncertainty of how these investments would be recovered. A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pre-tax income is as follows: 2017 2016 2015 Federal statutory income tax rate (1) 33.7 % 35.0 % 35.0 % Deemed repatriation tax 17.1 — — Increase in valuation allowance 1.6 — — State and local income taxes, net of federal tax benefit 2.0 3.1 2.8 International income taxed at varying rates (2.3) (3.7) (2.1) Foreign tax credits (2.6) (1.9) (2.8) Domestic/foreign tax settlements (0.2) (0.1) (0.1) Federal tax credits (0.2) (0.2) (0.2) Other, net 1.7 1.7 2.8 Effective income tax rate 50.8 % 33.9 % 35.4 % (1) On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions, including but not limited to a reduction in the U.S. corporate income tax rate from 35 percent to 21 percent as well as provisions that limit or eliminate various deductions or credits. In accordance with Section 15 of the Internal Revenue Code, the tax rate for 2017 represented a blended rate of 33.7 percent, calculated by applying a prorated percentage of the number of days prior to and subsequent to the January 1, 2018 effective date . Deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes. Items that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows: 2017 2016 Deferred tax assets: ($ in millions) Tax loss/credit carryforwards and capital loss $ 23 $ 12 Employee benefits 16 76 Property and equipment 54 110 Straight-line rent 44 51 Other 27 47 Total deferred tax assets $ 164 $ 296 Valuation allowance (17) (7) Total deferred tax assets, net $ 147 $ 289 Deferred tax liabilities: Merchandise inventories $ 79 $ 104 Goodwill and other intangible assets 20 21 Other 15 6 Total deferred tax liabilities $ 114 $ 131 Net deferred tax asset $ 33 $ 158 Balance Sheet caption reported in: Deferred taxes $ 48 $ 161 Other liabilities (15) (3) $ 33 $ 158 As a result of the Tax Act’s corporate income tax rate reduction to 21 percent, the Company remeasured its deferred tax assets and liabilities, and the adjustment was not significant. Based upon the level of historical taxable income and projections for future taxable income, which are based upon the Company’s long-range strategic plans, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the valuation allowances at February 3, 2018 , over the periods in which the temporary differences are anticipated to reverse. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of taxable income are revised. As of February 3, 2018 , the Company has a valuation allowance of $17 million to reduce its deferred tax assets to an amount that is more likely than not to be realized. A valuation allowance of $15 million was recorded against tax loss carryforwards of certain foreign entities. Based on the history of losses and the absence of prudent and feasible business plans for generating future taxable income in these entities, the Company believes it is more likely than not that the benefit of these loss carryforwards will not be realized. An additional valuation allowance of $2 million relates to the deferred tax assets arising from a capital loss associated with an impairment of the Northern Group note receivable in 2008. The Company does not anticipate realizing capital gains to utilize the capital loss associated with the note receivable impairment. At February 3, 2018 , the Company has U.S. state operating loss carryforwards with a potential tax benefit of $1 million that expire between 2021 and 2037 . The Company will have, when realized, a capital loss with a potential benefit of $2 million arising from a note receivable. This loss will carryforward for 5 years after realization. The Company has international minimum tax credit carryforwards with a potential tax benefit of $4 million and operating loss carryforwards with a potential tax benefit of $16 million, a portion of which will expire between 2018 and 2026 and a portion of which will never expire. The state and international operating loss carryforwards do not include unrecognized tax benefits. The Company operates in multiple taxing jurisdictions and is subject to audit. Audits can involve complex issues that may require an extended period of time to resolve. A taxing authority may challenge positions that the Company has adopted in its income tax filings. Accordingly, the Company may apply different tax treatments for transactions in filing its income tax returns than for income tax financial reporting. The Company regularly assesses its tax positions for such transactions and records reserves for those differences. The Company’s U.S. Federal income tax filings have been examined by the Internal Revenue Service through 2016. The Company is participating in the IRS’s Compliance Assurance Process (“CAP”) for 2017, which is expected to conclude during 2018. The Company has started the CAP for 2018. Due to the recent utilization of net operating loss carryforwards, the Company is subject to state and local tax examinations effectively including years from 2000 to the present. To date, no adjustments have been proposed in any audits that will have a material effect on the Company’s financial position or results of operations. At February 3, 2018 and January 28, 2017 , the Company had $44 million and $38 million, respectively, of gross unrecognized tax benefits, and $44 million and $38 million, respectively, of net unrecognized tax benefits that would, if recognized, affect the Company’s annual effective tax rate. The Company has classified certain income tax liabilities as current or noncurrent based on management’s estimate of when these liabilities will be settled. Interest expense and penalties related to unrecognized tax benefits are classified as income tax expense. Interest income was not significant in 2017 , was $1 million in 2016 , and was not significant for 2015. Accrued interest and penalties was not significant for 2017 , $1 million in 2016 , and $2 million in 2015. The following table summarizes the activity related to unrecognized tax benefits: 2017 2016 2015 ($ in millions) Unrecognized tax benefits at beginning of year $ 38 $ 38 $ 40 Foreign currency translation adjustments 4 1 (2) Increases related to current year tax positions 3 8 4 Increases related to prior period tax positions 1 1 2 Decreases related to prior period tax positions — (2) — Settlements (1) (7) (1) Lapse of statute of limitations (1) (1) (5) Unrecognized tax benefits at end of year $ 44 $ 38 $ 38 It is reasonably possible that the liability associated with the Company’s unrecognized tax benefits will increase or decrease within the next twelve months. These changes may be the result of foreign currency fluctuations, ongoing audits, or the expiration of statutes of limitations. Settlements could increase earnings up to $5 million based on current estimates. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although management believes that adequate provision has been made for such issues, the ultimate resolution could have an adverse effect on the earnings of the Company. Conversely, if these issues are resolved favorably in the future, the related provision would be reduced, generating a positive effect on earnings. Due to the uncertainty of amounts and in accordance with its accounting policies, the Company has not recorded any potential consequences of these settlements . |
Financial Instruments and Risk
Financial Instruments and Risk Management | 12 Months Ended |
Feb. 03, 2018 | |
Financial Instruments and Risk Management [Abstract] | |
Financial Instruments and Risk Management | 18. Financial Instruments and Risk Management 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 19, 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. G ains or losses recognized in earnings for any of the periods presented were not significant . Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period, which management evaluates periodically. The primary currencies to which the Company is exposed are the euro, British pound, Canadian dollar, and Australian dollar. For the most part, merchandise inventories are purchased by each geographic area in their respective local currency. The most significant exception to this is the United Kingdom, whose merchandise inventory purchases are denominated in euros. For option and foreign exchange forward contracts designated as cash flow hedges of the purchase of inventory, the effective portion of gains and losses is deferred as a component of Accumulated Other Comprehensive Loss (“AOCL”) and is recognized as a component of cost of sales when the related inventory is sold. The amount reclassified to cost of sales related to such contracts was not significant for any of the periods presented. The effective portion of gains or losses associated with other forward contracts is deferred as a component of AOCL until the underlying transaction is reported in earnings. The ineffective portion of gains and losses related to cash flow hedges recorded to earnings was 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. As of February 3, 2018 , all of the Company’s hedged forecasted transactions extend less than twelve months into the future, and the Company expects all derivative-related amounts reported in AOCL to be reclassified to earnings within twelve months. T he balance in AOCL was a gain of $1 million as of January 28, 2017. During 2017 , 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 more than offset by amounts recognized in cost of sales, therefore AOCL was reduced to zero . The notional value of the contracts outstanding at February 3, 2018 was $118 million, and these contracts mature at various dates through January 201 9 . Derivative Holdings Not Designated as Hedges The Company enters into certain derivative contracts that are not designated as hedges, such as foreign exchange forward contracts and currency option contracts. These derivative contracts are used to manage certain costs of foreign currency-denominated merchandise purchases, intercompany transactions, and the effect of fluctuating foreign exchange rates on the reporting of foreign currency-denominated earnings. Changes in the fair value of derivative holdings not designated as hedges, as well as realized gains and premiums paid, are recorded in earnings immediately within selling, general and administrative expenses or other income, depending on the type of transaction. The aggregate amount recognized for these contracts was not significant as of February 3, 2018 and represented income of $1 million as of January 28, 2017. The notional value of foreign exchange forward contracts outstanding at February 3, 2018 was $2 million, and these contracts mature during September 2018 . From time to time, the Company mitigates the effect of fluctuating foreign exchange rates on the reporting of foreign-currency denominated earnings by entering into currency option contracts. Changes in the fair value of these foreign currency option contracts, which are not designated as hedges, are recorded in earnings immediately within other income. The realized gains, premiums paid, and changes in the fair market value recorded were not significant for any of the periods presented. There were no currency option contracts outstanding at February 3, 2018 . Fair Value of Derivative Contracts The following represents the fair value of the Company’s derivative contracts. Many of the Company’s agreements allow for a netting arrangement. The following is presented on a gross basis, by type of contract: Balance Sheet ($ in millions) Caption 2017 2016 Hedging Instruments: Foreign exchange forward contracts Current assets $ 1 $ 3 Foreign exchange forward contracts Current liabilities $ 1 $ 3 Notional Values and Foreign Currency Exchange Rates The table below presents the notional amounts for all outstanding derivatives and the weighted-average exchange rates of foreign exchange forward contracts at February 3, 2018 : Contract Value Weighted-Average ($ in millions) Exchange Rate Inventory Buy €/Sell British £ $ 111 0.8749 Intercompany Buy US $/Sell € $ 7 1.2118 Buy US $/Sell CAD $ $ 2 1.2568 Business Risk The retailing business is highly competitive. Price, quality, selection of merchandise, reputation, store location, advertising, and customer experience are important competitive factors in the Company’s business. The Company operates in 24 countries and purchased approximately 93 percent of its merchandise in 2017 from its top 5 suppliers. In 2017 , the Company purchased approximately 67 percent of its athletic merchandise from one major supplier, Nike, Inc. (“Nike”). Each of our operating divisions is highly dependent on Nike; they individually purchased 44 to 73 percent of their merchandise from Nike. Included in the Company’s Consolidated Balance Sheet at February 3, 2018 , are the net assets of the Company’s European operations, which total $1,058 million and are located in 20 countries, 11 of which have adopted the euro as their functional currency. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 03, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 19 . Fair Value Measurements The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: As of February 3, 2018 As of January 28, 2017 ($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Available-for-sale security $ — $ 7 $ — $ — $ 6 $ — Foreign exchange forward contracts — 1 — — 3 — Total Assets $ — $ 8 $ — $ — $ 9 $ — Liabilities Foreign exchange forward contracts — 1 — — 3 — Total Liabilities $ — $ 1 $ — $ — $ 3 $ — Securities classified as available-for-sale are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless the unrealized gains or losses are determined to be other than temporary. The fair value of the auction rate security is determined by using quoted prices for similar instruments in active markets and accordingly is classified as a Level 2 instrument. The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility and therefore are classified as Level 2 instruments . There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented. In 2017 and 2016, the Company performed impairment reviews of long-lived and intangible assets for Runners Point and Sidestep. Additionally, during 2017, the Company performed an impairment review of long-lived assets for SIX:02. The fair value of all of the assets reviewed for both periods were measured using Level 3 inputs. Please see Note 3, Litigation and Other Charges for further information. The carrying value and estimated fair value of long-term debt were as follows: 2017 2016 ($ in millions) Carrying value $ 125 $ 127 Fair value $ 144 $ 148 The fair value of long-term debt is determined by using model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets and therefore are classified as Level 2. The carrying values of cash and cash equivalents, restricted cash, and other current receivables and payables approximate their fair value. |
Retirement Plans and Other Bene
Retirement Plans and Other Benefits | 12 Months Ended |
Feb. 03, 2018 | |
Retirement Plans and Other Benefits [Abstract] | |
Retirement Plans and Other Benefits | 2 0 . Retirement Plans and Other Benefits The Company and the Company’s U.S. retirement plan are defendants in a class action lawsuit. Please see Note 22, Legal Proceedings for further information. The amounts presented in this note do not include the expected plan reformation. Pension and Other 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 plan for certain individuals of Runners Point Group. The Company also sponsors postretirement medical and life insurance plans, which are available to most of its retired U.S. employees. These plans are contributory and are not funded. The measurement date of the assets and liabilities is the month-end date that is closest to our fiscal year end . The following tables set forth the plans’ changes in benefit obligations and plan assets, funded status, and amounts recognized in the Consolidated Balance Sheets, as of February 3, 2018 and January 28, 2017 : Pension Benefits Postretirement Benefits 2017 2016 2017 2016 ($ in millions) Change in benefit obligation Benefit obligation at beginning of year $ 666 $ 667 $ 15 $ 14 Service cost 17 16 — — Interest cost 25 26 1 1 Plan participants’ contributions — — 1 1 Actuarial loss 25 7 — 1 Foreign currency translation adjustments 3 4 — — Benefits paid (53) (54) (2) (2) Benefit obligation at end of year $ 683 $ 666 $ 15 $ 15 Change in plan assets Fair value of plan assets at beginning of year $ 647 $ 602 Actual return on plan assets 70 55 Employer contributions 29 40 Foreign currency translation adjustments 4 4 Benefits paid (53) (54) Fair value of plan assets at end of year $ 697 $ 647 Funded status $ 14 $ (19) $ (15) $ (15) Amounts recognized on the balance sheet: Other assets $ 36 $ 10 $ — $ — Accrued and other liabilities (3) (3) (1) (1) Other liabilities (19) (26) (14) (14) $ 14 $ (19) $ (15) $ (15) Amounts recognized in accumulated other comprehensive loss, pre-tax: Net loss (gain) $ 368 $ 387 $ (5) $ (7) Prior service cost 1 1 — — $ 369 $ 388 $ (5) $ (7) As of February 3, 2018 , the assets of both the Canadian and U.S. qualified pension plans exceeded their accumulated benefit obligation s . As of January 28, 2017 , the Canadian qualified pension plan’s assets exceeded its accumulated benefit obligation. The Company’s non-qualified pension plans have an accumulated benefit obligation in excess of plan assets , as these plans are unfunded. Accordingly, the table below reflects the non-qualified plans for 2017, whereas the amounts presented for 2016 included both the U.S. qualified plan and the non-qualified plans. 2017 2016 ($ in millions) Projected benefit obligation $ 22 $ 617 Accumulated benefit obligation 22 617 Fair value of plan assets — 589 The following tables set forth the changes in accumulated other comprehensive loss (pre-tax) at February 3, 2018 : Pension Postretirement Benefits Benefits ($ in millions) Net actuarial loss (gain) at beginning of year $ 387 $ (7) Amortization of net (loss) gain (13) 2 Gain arising during the year (8) — Foreign currency fluctuations 2 — Net actuarial loss (gain) at end of year (1) $ 368 $ (5) Net prior service cost at end of year (2) 1 — Total amount recognized $ 369 $ (5) (1) The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year are approximately $13 million and $(1) million related to the pension and postretirement plans, respectively . (2) The net prior service cost did not change during the year and is not expected to change significantly during the next year . The following weighted-average assumptions were used to determine the benefit obligations under the plans: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Discount rate 3.7 % 4.0 % 3.7 % 4.0 % Rate of compensation increase 3.6 % 3.7 % Pension expense is actuarially calculated annually based on data available at the beginning of each year. The expected return on plan assets is determined by multiplying the expected long-term rate of return on assets by the market-related value of plan assets for the U.S. qualified pension plan and market value for the Canadian qualified pension plan. The market-related value of plan assets is a calculated value that recognizes investment gains and losses in fair value related to equities over three or five years, depending on which computation results in a market-related value closer to market value. Market-related value for the U.S. qualified plan was $585 million and $550 million for 2017 and 2016 , respectively. Assumptions used in the calculation of net benefit cost include the discount rate selected and disclosed at the end of the previous year, as well as other assumptions detailed in the table below: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 4.0 % 4.1 % 3.4 % 4.0 % 4.1 % 3.4 % Rate of compensation increase 3.6 % 3.7 % 3.7 % Expected long-term rate of return on assets 5.8 % 6.1 % 6.1 % The expected long-term rate of return on invested plan assets is based on the plans’ weighted-average target asset allocation, as well as historical and future expected performance of those assets. The target asset allocation is selected to obtain an investment return that is sufficient to cover the expected benefit payments and to reduce the variability of future contributions by the Company. The components of net benefit expense (income) are: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 ($ in millions) Service cost $ 17 $ 16 $ 17 $ — $ — $ — Interest cost 25 26 24 1 1 1 Expected return on plan assets (37) (37) (39) — — — Amortization of net loss (gain) 13 14 14 (2) (2) (1) Net benefit expense (income) $ 18 $ 19 $ 16 $ (1) $ (1) $ — Beginning in 2001, new retirees were charged the expected full cost of the medical plan, and then-existing retirees will incur 100 percent of the expected future increases in medical plan costs. Any changes in the health care cost trend rates assumed would not affect the accumulated benefit obligation or net benefit income, since retirees will incur 100 percent of such expected future increases. The Company maintains a Supplemental Executive Retirement Plan (“SERP”), which is an unfunded plan that includes provisions for the continuation of medical and dental insurance benefits to certain executive officers and other key employees of the Company (“SERP Medical Plan”). The SERP Medical Plan’s accumulated projected benefit obligation at February 3, 2018 was $12 million. The following initial and ultimate cost trend rate assumptions were used to determine the benefit obligations under the SERP Medical Plan: Medical Trend Rate Dental Trend Rate 2017 2016 2015 2017 2016 2015 Initial cost trend rate 7.0 % 7.0 % 7.0 % 5.0 % 5.0 % 5.0 % Ultimate cost trend rate 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % Year that the ultimate cost trend rate is reached 2025 2021 2021 2018 2017 2016 The following initial and ultimate cost trend rate assumptions were used to determine the net periodic cost under the SERP Medical Plan: Medical Trend Rate Dental Trend Rate 2017 2016 2015 2017 2016 2015 Initial cost trend rate 7.0 % 7.0 % 7.0 % 5.0 % 5.0 % 5.0 % Ultimate cost trend rate 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % Year that the ultimate cost trend rate is reached 2021 2021 2019 2017 2016 2015 A one percentage-point change in the assumed health care cost trend rates would have the following effects on the SERP Medical Plan: 1% Increase 1% (Decrease) ($ in millions) Effect on total service and interest cost components $ — $ — Effect on accumulated postretirement benefit obligation 3 (2) In 2017, the mortality assumption used to value the Company’s U.S. pension obligations was updated to the modified RP-2017 mortality table with generational projection using modified MP-2017 for both males and females and terminated vested participants. The mortality assumption was updated during the current year as the Company’s actual experience more closely matched the RP-2017 table than the previous table. In 2016, the Company used the RP-2000 mortality table with generational projection using scale AA for both males and females to value its pension obligations. This table was also used to value the Canadian pension obligations for 2017. For the SERP Medical Plan, the mortality assumption used to value the 2017 obligation was updated to the RPH-2017 table with generational projection using MP-2017, while in the prior year the obligation was valued using the RPH-2016 table with generational projection using MP-2016. Plan Assets The target composition of the Company’s Canadian qualified pension plan assets is 95 percent fixed-income securities and 5 percent equities. The Company believes plan assets are invested in a prudent manner with the same overall objective and investment strategy as noted below for the U.S. pension plan. The bond portfolio is comprised of government and corporate bonds chosen to match the duration of the pension plan’s benefit payment obligations. This current asset allocation will limit future volatility with regard to the funded status of the plan. The target composition of the Company’s U.S. qualified pension plan assets is 60 percent fixed-income securities, 36.5 percent equities, and 3.5 percent real estate. The Company may alter the asset allocation targets from time to time depending on market conditions and the funding requirements of the pension plan. This current asset allocation has and is expected to limit volatility with regard to the funded status of the plan, but may result in higher pension expense due to the lower long-term rate of return associated with fixed-income securities. Due to market conditions and other factors, actual asset allocations may var y from the target allocation outlined above. The Company believes plan assets are invested in a prudent manner with an objective of providing a total return that, over the long term, provides sufficient assets to fund benefit obligations, taking into account the Company’s expected contributions and the level of funding risk deemed appropriate. The Company’s investment strategy seeks to diversify assets among classes of investments with differing rates of return, volatility, and correlation in order to reduce funding risk. Diversification within asset classes is also utilized to ensure that there are no significant concentrations of risk in plan assets and to reduce the effect that the return on any single investment may have on the entire portfolio. Valuation of Investments Significant portions of plan assets are invested in commingled trust funds. These funds are valued at the net asset value of units held by the plan at year end. Stocks traded on U.S. and Canadian security exchanges are valued at closing market prices on the measurement date. The fair values of the Company’s Canadian pension plan assets at February 3, 2018 and January 28, 2017 were as follows: Level 1 Level 2 Level 3 2017 Total 2016 Total* ($ in millions) Cash and cash equivalents $ — $ 1 $ — $ 1 $ 1 Equity securities: Canadian and international (1) 4 — — 4 3 Fixed-income securities: Cash matched bonds (2) — 53 — 53 54 Total assets at fair value $ 4 $ 54 $ — $ 58 $ 58 *Each category of plan assets is classified within the same level of the fair value hierarchy for 2017 and 2016. (1) This category comprises one mutual fund that invests primarily in a diverse portfolio of Canadian securities . (2) This category consists of fixed-income securities, including strips and coupons, issued or guaranteed by the Government of Canada, provinces or municipalities of Canada including their agencies and crown corporations, as well as other governmental bonds and corporate bonds . No Level 3 assets were held by the Canadian pension plan during 2017 and 2016 . The fair values of the Company’s U.S. pension plan assets at February 3, 2018 and January 28, 2017 were as follows: Level 1 Level 2 Level 3 2017 Total 2016 Total* ($ in millions) Cash and cash equivalents $ — $ 4 $ — $ 4 $ 4 Equity securities: U.S. large-cap (1) — 115 — 115 103 U.S. mid-cap (1) — 34 — 34 31 International (2) — 78 — 78 70 Corporate stock (3) 19 — — 19 27 Fixed-income securities: Long duration corporate and government bonds (4) — 254 — 254 231 Intermediate duration corporate and government bonds (5) — 113 — 113 103 Other types of investments: Real estate securities (6) — 21 — 21 19 Insurance contracts — 1 — 1 1 Total assets at fair value $ 19 $ 620 — $ — $ 639 $ 589 * Each category of plan assets is classified within the same level of t he fair value hierarchy for 2017 and 2016 . (1) These categories consist of various managed funds that invest primarily in common stocks, as well as other equity securities and a combination of other funds . (2) This category comprises three managed funds that invest primarily in international common stocks, as well as other equity securities and a combination of other funds . (3) This category consists of the Company’s common stock . (4) This category consists of various fixed-income funds that invest primarily in long-term bonds, as well as a combination of other funds, that together are designed to exceed the performance of related long-term market indices . (5) This category consists of two fixed-income funds that invest primarily in intermediate duration bonds, as well as a combination of other funds, that together are designed to exceed the performance of related indices . (6) This category consists of one fund that invests in global real estate securities . No Level 3 assets were held by the U.S. pension plan during 2017 and 2016 . T he Company made a contribution of $25 million to its U.S. qualified pension plan during 2017. During 2017 , the Company also paid $4 million in pension benefits related to its non-qualified pension plans. The Company continually evaluates the amount and timing of any potential contributions. Actual contributions are dependent on several factors; however the Company anticipates making a $128 million contribution during 2018 in connection with the expected U.S. pension plan reformation . See Note 2 2 , Legal Proceedings , for further information. Estimated future benefit payments (excluding any amounts related to the expected U.S. pension plan reformation) for each of the next five years and the five years thereafter are as follows: Pension Postretirement Benefits Benefits ($ in millions) 2018 $ 66 $ 1 2019 54 1 2020 53 1 2021 52 1 2022 51 1 2023–2027 236 2 Savings Plans The Company has two qualified savings plans, a 401(k) plan that is available to employees whose primary place of employment is the U.S., and another plan that is available to employees whose primary place of employment is in Puerto Rico. Prior to January 1, 2018 , b oth plans limit ed participation to employees who ha d attained at least the age of twenty-one and have completed one year of service consisting of at least 1,000 hours. Effective January 1, 2018, eligible associates may contribute to the plans following 28 days of employment and are eligible for Company matching contributions upon completion of one year of service consisting of at least 1,000 hours. As of January 1, 201 8 , the savings plans allow eligible employees to contribute up to 40 percent of their compensation on a pre-tax basis, subject to a maximum of $18, 500 for the U.S. plan and $15, 000 for the Puerto Rico plan. The Company matches 25 percent of employees’ pre-tax contributions on up to the first 4 percent of the employees’ compensation (subject to certain limitations). Matching contributions made before January 1, 2016 were made with Company stock , subsequent to this date matching c ontributions were made in cash. Such matching contributions are vested incrementally over the first 5 years of participation for both plans. The charge to operations for the Company’s matching contribution was $3 million for each of the years presented. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Feb. 03, 2018 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 2 1 . Share-Based Compensation Stock Awards Under the Company’s 2007 Stock Incentive Plan (the “2007 Stock Plan”), stock options, restricted stock, restricted stock units, stock appreciation rights, or other stock-based awards may be granted to officers and other employees of the Company, including its subsidiaries and operating divisions worldwide. Nonemployee directors are also eligible to receive stock options under this plan, although none are outstanding as of February 3, 2018 . Options for employees become exercisable in substantially equal annual installments over a three-year period, beginning with the first anniversary of the date of grant of the option, unless a shorter or longer duration is established at the time of the option grant. The options terminate up to ten years from the date of grant. On May 21, 2014, the 2007 Stock Plan was amended to increase the number of shares of the Company’s common stock reserved for all awards to 14 million shares. As of February 3, 2018 , there were 10,760,270 shares available for issuance under this plan. Employees Stock Purchase Plan Under the Company’s 2013 Foot Locker Employees Stock Purchase Plan (“ESPP”), participating employees are able to contribute up to 10 percent of their annual compensation, not to exceed $25,000 in any plan year, through payroll deductions to acquire shares of the Company’s common stock at 85 percent of the lower market price on one of two specified dates in each plan year. Of the 3,000,000 shares of common stock authorized under this plan, there were 2,523,865 shares available for purchase as of February 3, 2018 . During 2017 and 2016 , participating employees purchased 109,790 shares and 80,992 shares, respectively. Share-Based Compensation Expense Total compensation expense included in SG&A and the associated tax benefits recognized related to the Company’s share-based compensation plans were as follows: 2017 2016 2015 ($ in millions) Options and shares purchased under the ESPP $ 9 $ 10 $ 11 Restricted stock and restricted stock units 6 12 11 Total share-based compensation expense $ 15 $ 22 $ 22 Tax benefit recognized $ 4 $ 6 $ 8 Valuation Model and Assumptions The Black-Scholes option-pricing model is used 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 Company estimates the expected term of share-based awards using the Company’s historical exercise and post-vesting employment termination patterns, which it believes are representative of future behavior. The expected term for the employee stock purchase plan valuation is based on the length of each purchase period as measured at the beginning of the offering period, which is one year. The Company estimates the expected volatility of its common stock at the grant date using a weighted-average of the Company’s historical volatility and implied volatility from traded options on the Company’s common stock. The Company believes that th is combination of historical volatility and implied volatility provides a better estimate of future stock price volatility. The risk-free interest rate assumption is determined using the Federal Reserve nominal rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The expected dividend yield is derived from the Company’s historical experience. As of Q1 2017, i n connection with the adoption of ASU 2016-09 , we have made the accounting policy election to discontinue estimating forfeitures and will account for forfeitures as they occur. Prior to 2017, the Company recorded share-based compensation expense only for those awards expected to vest using an estimated forfeiture rate based on its historical pre-vesting forfeiture data. The following table shows the Company’s assumptions used to compute the share-based compensation expense: Stock Option Plans Stock Purchase Plan 2017 2016 2015 2017 2016 2015 Weighted-average risk free rate of interest 2.1 % 1.4 % 1.5 % 1.0 % 0.5 % 0.2 % Expected volatility 25 % 30 % 30 % 30 % 27 % 25 % Weighted-average expected award life (in years) 5.4 5.7 6.0 1.0 1.0 1.0 Dividend yield 1.9 % 1.7 % 1.6 % 2.0 % 1.8 % 1.6 % Weighted-average fair value $ 14.74 $ 15.71 $ 16.07 $ 10.96 $ 13.33 $ 10.47 The information set forth in the following table covers options granted under the Company’s stock option plans: Weighted- Weighted- Number Average Average of Remaining Exercise Shares Contractual Life Price (in thousands) (in years) (per share) Options outstanding at January 28, 2017 2,806 $ 42.61 Granted 547 69.58 Exercised (593) 21.35 Expired or cancelled (21) 61.50 Options outstanding at February 3, 2018 2,739 6.5 $ 52.45 Options exercisable at February 3, 2018 1,699 5.2 $ 43.85 The total fair value of options vested during 2017 , 2016 , and 2015 was $8 million, $9 million, and $15 million, respectively. During the year ended February 3, 2018, t he Company received $13 million in cash from option exercises and recognized a related tax benefit of $8 million . The total intrinsic value of options exercised (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the optionee to exercise the option) is presented below: 2017 2016 2015 ($ in millions) Exercised $ 22 $ 56 $ 99 The aggregate intrinsic value for stock options outstanding, and those outstanding and 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: 2017 ($ in millions) Outstanding $ 17 Outstanding and exercisable $ 17 As of February 3, 2018 , there was $5 million of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a remaining weighted-average period of 1.5 years. The following table summarizes information about stock options outstanding and exercisable at February 3, 2018 : Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Remaining Average Average Range of Exercise Number Contractual Exercise Number Exercise Prices Outstanding Life Price Exercisable Price (in thousands, except prices per share and contractual life) $9.85 to $24.75 312 2.6 $ 17.40 312 $ 17.40 $30.92 to $45.75 762 5.2 38.46 722 38.64 $48.55 to $62.11 703 6.6 61.04 499 61.08 $63.79 to $73.21 962 8.6 68.60 166 64.35 2,739 6.5 $ 52.45 1,699 $ 43.85 Restricted Stock and Restricted Stock Units Restricted shares of the Company’s common stock and restricted stock units (“RSU”) may be awarded to certain officers and key employees of the Company. Additionally, RSU awards are made to employees in connection with the Company’ long-term incentive program and to nonemployee directors. Each RSU represents the right to receive one share of the Company’s common stock provided that the performance and vesting conditions are satisfied. In 2017 , 2016 , and 2015 there were 360,782 , 648,558 , and 588,308 RSU awards outstanding, respectively. Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company’s long-term incentive program are earned after the attainment of certain performance metrics and vest after the passage of time. Restricted stock is considered outstanding at the time of grant and the holders have voting rights. Dividends are paid to holders of restricted stock that vest with the passage of time. With regard to performance-based restricted stock, dividends will be accumulated and paid after the performance criteria are met. No dividends are paid or accumulated on RSU awards. Compensation expense is recognized using the fair market value on the date of grant and is amortized over the vesting period, provided the recipient continues to be employed by the Company. Restricted stock and RSU activity is summarized as follows: Weighted-Average Number Remaining Weighted-Average of Contractual Grant Date Shares Life Fair Value (in thousands) (in years) (per share) Nonvested at January 28, 2017 798 $ 56.91 Granted 329 63.68 Vested (305) 49.97 Expired or cancelled (448) 64.75 Nonvested at February 3, 2018 374 1.3 $ 59.15 Aggregate value ($ in millions) $ 22 The total fair value of awards for which restrictions lapsed was $15 million, $9 million, and $10 million for 2017 , 2016 , and 2015 , respectively. At February 3, 2018 , there was $8 million of total unrecognized compensation cost related to nonvested restricted stock and RSU awards. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Feb. 03, 2018 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 22. Legal Proceedings Legal proceedings pending against the Company or its consolidated subsidiaries consist of ordinary, routine litigation, including administrative proceedings, incidental to the business of the Company or businesses that have been sold or disposed of by the Company in past years. These legal proceedings include commercial, intellectual property, customer, environmental, and employment-related claims. Additionally, the Company is a defendant in a purported Fair Credit Reporting Act class action in California and a purported meal break class action in California . The Company and certain officers of the Company are defendants in purported securities law class action s in New York. The Company and the Company’s U.S. retirement plan are defendants in a class action ( Osberg v. Foot Locker Inc. et ano., filed in the U.S. District Court for the Southern District of New York) in which the plaintiff alleges that, in connection with the 1996 conversion of the retirement plan to a defined benefit plan with a cash balance formula, the Company and the retirement plan failed to properly advise plan participants of the “wear-away” effect of the conversion. Plaintiff’s claims were for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended, and violation of the statutory provisions governing the content of the Summary Plan Description. In February 2018, the Company’s Petition for Writ of Certiorari with the U.S. Supreme Court was denied. Accordingly, the Company must reform the pension plan consistent with the trial court’s judgment, and will be working with plaintiffs’ counsel and the court on the specific steps needed to implement the judgment . The Company has estimated that the cost of plan reformation is $278 million as of February 3, 2018 and this amount will continue to increase with interest until paid, as required by the provisions of the required plan reformation . The previous amount accrued was $150 million. Accordingly, during the fourth quarter of 2017, the Company recorded an additional charge of $128 million, bringing the cumulative amount accrued for this matter to $278 million. The Company is currently formulating the actions and steps necessary to reform the plan and has determined that it will make a $128 million contribution during 2018 to the pension trust to fund a portion of this obligation. Also during the fourth quarter of 2017, the Company established a qualified settlement fund in the amount of $150 million, which will also be used to fund future pension contributions that may be required as a result of the plan reformation and plaintiffs’ legal fees . Management does not believe that the outcome of any such legal proceedings pending against the Company or its consolidated subsidiaries, as described above, would have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations, taken as a whole, based upon current knowledge and taking into consideration current accruals. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered into that could adversely affect the Company’s operating results or cash flows in a particular period. |
Quarterly Results
Quarterly Results | 12 Months Ended |
Feb. 03, 2018 | |
Quarterly Results [Abstract] | |
Quarterly Results (Unaudited) | 23. Quarterly Results (Unaudited) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter (1) Fiscal Year Sales 2017 2,001 1,701 1,870 2,210 $ 7,782 2016 1,987 1,780 1,886 2,113 $ 7,766 Gross margin (2) 2017 680 503 580 693 $ 2,456 2016 696 587 640 713 $ 2,636 Operating profit (3) 2017 268 72 155 76 $ 571 2016 296 198 228 278 $ 1,000 Net income/(loss) (4), (5), (6), (7) 2017 180 51 102 (49) $ 284 2016 191 127 157 189 $ 664 Basic earnings per share (8) 2017 1.37 0.39 0.81 (0.40) $ 2.23 2016 1.40 0.94 1.18 1.43 $ 4.95 Diluted earnings per share (8) 2017 1.36 0.39 0.81 (0.40) $ 2.22 2016 1.39 0.94 1.17 1.42 $ 4.91 (1) The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 . (2) Gross margin represents sales less cost of sales. Cost of sales includes: the cost of merchandise, freight, distribution costs including related depreciation expense, shipping and handling, occupancy and buyers’ compensation. Occupancy costs include rent, common area maintenance charges, real estate taxes, general maintenance, and utilities . (3) Operating profit represents income before income taxes, interest (income)/expense, net, and non-operating income . (4) During the second and fourth quarters of 2017, the Company recorded pre-tax charges of $50 million and $128 million, respectively, related to its U.S. retirement plan litigation. See Note 22, Legal Proceedings for further information . (5) During the third quarter of 2017, the Company recorded a pre-tax charge of $13 million associated with the reorganization and the reduction in staff taken to improve efficiency. See Note 3, Litigation and Other Charges for further information . (6) During the fourth quarter of 2017 and the third quarter of 2016, the Company recorded pre-tax non-cash impairment charges totaling $20 million and $6 million, respectively. See Note 3, Litigation and Other Charges for further information . (7) During the fourth quarter of 2017, the Company recorded a provisional $99 million tax liability for the mandatory deemed repatriation of foreign sourced net earnings and a corresponding change in our permanent reinvestment assertion under ASC 740-30. See Note 17, Income Taxes for further information . (8) Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year. Additionally, stock options and other potentially dilutive common shares were excluded from the computation of diluted earnings per common share for the quarter ended February 3, 2018 as the Company reported a net loss . |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Feb. 03, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Foot Locker, Inc. and its domestic and international subsidiaries (the “Company”), all of which are wholly owned. All significant intercompany amounts have been eliminated. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. |
Reporting Year | Reporting Year The fiscal year end for the Company is the Saturday closest to the last day in January. Fiscal year 2017 represents the 53 weeks ended February 3, 2018. Fiscal years 2016 and 2015 represented the 52 weeks ended January 28, 2017 and January 30, 2016 , respectively. References to years in this annual report relate to fiscal years rather than calendar years. |
Revenue Recognition | Revenue Recognition Revenue from retail stores is recognized at the point of sale when the product is delivered to customers. Internet and catalog sales revenue is recognized upon estimated product receipt by the customer. Sales include shipping and handling fees for all periods presented. Sales include merchandise, net of returns, and exclude taxes. The Company provides for estimated returns based on return history and sales levels. Revenue from layaway sales is recognized when the customer receives the product, rather than when the initial deposit is paid. Please see the Recent Accounting Pronouncements section later in this note regarding the accounting changes relating to the 2018 adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers . |
Gift Cards | Gift Cards The Company sells gift cards to its customers, which do not have expiration dates. Revenue from gift card sales is recorded when the gift cards are redeemed or when the likelihood of the gift card being redeemed by the customer is remote and there is no legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions, referred to as breakage. The Company has determined its gift card breakage rate based upon historical redemption patterns. Historical experience indicates that after 12 months, the likelihood of redemption is deemed to be remote. Gift card breakage income is included in selling, general and administrative expenses and unredeemed gift cards are recorded as a current liability. Gift card breakage was $6 million for both 2017 and 2016, and was $5 million for 2015. Please see the Recent Accounting Pronouncements section later in this note regarding the accounting changes relating to the 2018 adoption of ASU 2014-09, Revenue from Contracts with Customers . |
Store Pre-Opening and Closing Costs | Store Pre-Opening and Closing Costs Store pre-opening costs are charged to expense as incurred. In the event a store is closed before its lease has expired, the estimated post-closing lease exit costs, less any sublease rental income, is provided for once the store ceases to be used. |
Advertising Costs and Sales Promotion | Advertising Costs and Sales Promotion Advertising and sales promotion costs are expensed at the time the advertising or promotion takes place, net of reimbursements for cooperative advertising. Advertising expenses also include advertising costs as required by some of the Company’s mall-based leases. Cooperative advertising reimbursements earned for the launch and promotion of certain products agreed upon with vendors are recorded in the same period as the associated expenses are incurred. Digital advertising costs are expensed as incurred, net of reimbursements for cooperative advertising. Digital advertising includes search engine marketing, such as display ads and keyword search terms, and other various forms of digital advertising. Reimbursement received in excess of expenses incurred related to specific, incremental, and identifiable advertising costs is accounted for as a reduction to the cost of merchandise and is reflected in cost of sales as the merchandise is sold. Advertising costs, including digital advertising, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Advertising expenses $ 108 $ 118 $ 119 Digital advertising expenses 96 84 65 Cooperative advertising reimbursements (20) (20) (19) Net advertising expense $ 184 $ 182 $ 165 |
Catalog Costs | Catalog Costs Catalog costs, which are primarily comprised of paper, printing, and postage, are capitalized and amortized over the expected customer response period related to each catalog, which is generally 90 days. Cooperative reimbursements earned for the promotion of certain products are agreed upon with vendors and are recorded in the same period as the associated catalog expenses are amortized. Prepaid catalog costs were $1 million at both February 3, 2018 and January 28, 2017 . Catalog costs, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Catalog costs $ 19 $ 26 $ 28 Cooperative reimbursements (2) (6) (7) Net catalog expense $ 17 $ 20 $ 21 |
Earnings Per Share | Earnings Per Share The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding at the end of the period. Restricted stock awards, which contain non-forfeitable rights to dividends, are considered participating securities and are included in the calculation of basic earnings per share. Diluted earnings per share reflects the weighted-average number of common shares outstanding during the period used in the basic earnings per share computation plus dilutive common stock equivalents. The computation of basic and diluted earnings per share is as follows: 2017 2016 2015 (in millions, except per share data) Net Income $ 284 $ 664 $ 541 Weighted-average common shares outstanding 127.2 134.0 139.1 Dilutive effect of potential common shares 0.7 1.1 1.7 Weighted-average common shares outstanding assuming dilution 127.9 135.1 140.8 Earnings per share - basic $ 2.23 $ 4.95 $ 3.89 Earnings per share - diluted $ 2.22 $ 4.91 $ 3.84 Anti-dilutive share-based awards excluded from diluted calculation 1.6 0.4 0.6 The Company adopted ASU 2016-09 during the first quarter of 2017. As a result, excess tax benefits and tax deficiencies are no longer included as assumed proceeds in the calculation of diluted shares outstanding. This change was adopted prospectively. Contingently issuable shares of 0.2 million, for all periods presented, have not been included as the vesting conditions have not been satisfied. These shares relate to restricted stock unit awards issued in connection with the Company’s long-term incentive program. |
Share-Based Compensation | Share-Based Compensation The Company recognizes compensation expense for share-based awards based on the grant date fair value of those awards. Additionally, stock-based compensation expense is recognized on a straight-line basis over the requisite service period for each vesting tranche of the award. See Note 21, Share-Based Compensation, for information on the assumptions used to calculate the fair value of share-based compensation. Upon exercise of stock options, issuance of restricted stock or units, or issuance of shares under the employees stock purchase plan, the Company will issue authorized but unissued common stock or use common stock held in treasury. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash consists of funds held on hand and in bank accounts. Cash equivalents include amounts on demand with banks and all highly liquid investments with original maturities of three months or less, including money market funds. Additionally, amounts due from third-party credit card processors for the settlement of debit and credit card transactions are included as cash equivalents as they are generally collected within three business days. R estricted cash represents cash that is restricted as to withdrawal or use under the terms of various agreements. Restricted cash includes amounts held in a qualified settlement fund in connection with the pension litigation, amounts held in escrow in connection with various leasing arrangements in Europe, and deposits held in insurance trusts in order to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims. The following table provides the reconciliation of cash, cash equivalents, and restricted cash, as reported on our consolidated statements of cash flows. 2017 2016 2015 ($ in millions) Cash and cash equivalents (1) $ 849 $ 1,046 $ 1,021 Restricted cash included in other current assets 1 — 1 Restricted cash included in other non-current assets (2) 181 27 26 Cash, cash equivalents, and restricted cash $ 1,031 $ 1,073 $ 1,048 (1) Includes cash equivalents of $780 million, $1,000 million, and $983 million for the year ended February 3, 2018, January 28, 2017, and January 30, 2016, respectively . (2) Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information . |
Investments | Investments Changes in the fair value of available-for-sale securities are reported as a component of accumulated other comprehensive loss in the Consolidated Statements of Shareholders’ Equity and are not reflected in the Consolidated Statements of Operations until a sale transaction occurs or when declines in fair value are deemed to be other-than-temporary. Available-for-sale securities are routinely reviewed for other-than-temporary declines in fair value below the cost basis, and when events or changes in circumstances indicate the carrying value of a security may not be recoverable, the security is written down to fair value. As of February 3, 2018 , the Company held one available-for-sale security, which was the Company’s $7 million auction rate security. See Note 19 , Fair Value Measurements , for further discussion. Additionally, the Company’s investment in a privately-held company is accounted for using the cost method and had a carrying value of $15 million as of February 3, 2018. This investment is included within other assets. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss. |
Merchandise Inventories and Cost of Sales | Merchandise Inventories and Cost of Sales Merchandise inventories for the Company’s Athletic Stores are valued at the lower of cost or market using the retail inventory method. Cost for retail stores is determined on the last-in, first-out (“LIFO”) basis for domestic inventories and on the first-in, first-out (“FIFO”) basis for international inventories. Merchandise inventories of the Direct-to-Customers business are valued at the lower of cost or market using weighted-average cost, which approximates FIFO. The retail inventory method is commonly used by retail companies to value inventories at cost and calculate gross margins due to its practicality. Under the retail inventory method, cost is determined by applying a cost-to-retail percentage across groupings of similar items, known as departments. The cost-to-retail percentage is applied to ending inventory at its current owned retail valuation to determine the cost of ending inventory on a department basis. The Company provides reserves based on current selling prices when the inventory has not been marked down to market. Transportation, distribution center, and sourcing costs are capitalized in merchandise inventories. The Company expenses the freight associated with transfers between its store locations in the period incurred. The Company maintains an accrual for shrinkage based on historical rates. Cost of sales is comprised of the cost of merchandise, as well as occupancy, buyers’ compensation, and shipping and handling costs. The cost of merchandise is recorded net of amounts received from suppliers for damaged product returns, markdown allowances, and volume rebates, as well as cooperative advertising reimbursements received in excess of specific, incremental advertising expenses. Occupancy costs include the amortization of amounts received from landlords for tenant improvements. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Significant additions and improvements to property and equipment are capitalized. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Buildings Maximum of 50 years Store leasehold improvements Shorter of the asset useful life or expected term of the lease Furniture, fixtures, and equipment 3 -10 years Software 2 -7 years Maintenance and repairs are charged to current operations as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. |
Internal-Use Software Development Costs | Internal-Use Software Development Costs The Company capitalizes certain external and internal computer software and software development costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing, and installation activities. Capitalized costs include only external direct cost of materials and services consumed in developing or obtaining internal-use software, and payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software, net of accumulated amortization, is included as a component of property and equipment and was $67 million and $59 million at February 3, 2018 and January 28, 2017 , respectively. |
Recoverability of Long-Lived Assets | Recoverability of Long-Lived Tangible Assets The Company performs an impairment review when circumstances indicate that the carrying value of long-lived tangible assets may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria at the division level, as well as qualitative measures. The Company considers historical performance and future estimated results, which are predominately identified from the Company’s long-range strategic plans, in its evaluation of potential store-level impairment and then compares the carrying amount of the asset with the estimated future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset with its estimated fair value. The estimation of fair value is measured by discounting expected future cash flows at the Company’s weighted-average cost of capital. The Company estimates fair value based on the best information available using estimates, judgments, and projections as considered necessary. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and intangible assets with indefinite lives are reviewed for impairment annually during the first quarter of each fiscal year or more frequently if impairment indicators arise. The review of goodwill impairment consists of either using a qualitative approach to determine whether it is more likely than not that the fair value of the assets is less than their respective carrying values or a two-step impairment test, if necessary. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the intangible asset is greater than its carrying value, the two-step test is performed to identify potential impairment. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, it is unnecessary to perform the two-step impairment test. Based on certain circumstances, we may elect to bypass the qualitative assessment and proceed directly to performing the first step of the two-step impairment test. The first step of the two-step goodwill impairment test compares the fair value of the reporting unit to its carrying amount, including goodwill. The second step includes hypothetically valuing all the tangible and intangible assets of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying value of the asset exceeds its fair value, an impairment loss is recognized in the amount of the excess. The fair value of each reporting unit is determined using a discounted cash flow approach. Intangible assets that are determined to have finite lives are amortized over their useful lives and are measured for impairment only when events or changes in circumstances indicate that the carrying value may be impaired. Intangible assets with indefinite lives are tested for impairment if impairment indicators arise and, at a minimum, annually. The impairment review for intangible assets with indefinite lives consists of either performing a qualitative or a quantitative assessment. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of the indefinite-lived intangible is less than its carrying amount, or if we elect to proceed directly to a quantitative assessment, we calculate the fair value using a discounted cash flow method, based on the relief from royalty concept, and compare the fair value to the carrying value to determine if the asset is impaired. |
Derivative Financial Instruments | Derivative Financial Instruments All derivative financial instruments are recorded in the Company’s Consolidated Balance Sheets at their fair values. For derivatives designated as a hedge, and effective as part of a hedge transaction, the effective portion of the gain or loss on the hedging derivative instrument is reported as a component of other comprehensive income/loss or as a basis adjustment to the underlying hedged item and reclassified to earnings in the period in which the hedged item affects earnings. The effective portion of the gain or loss on hedges of foreign net investments is generally not reclassified to earnings unless the net investment is disposed of. To the extent derivatives do not qualify or are not designated as hedges, or are ineffective, their changes in fair value are recorded in earnings immediately, which may subject the Company to increased earnings volatility. |
Fair Value | Fair Value The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. 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. |
Income Taxes | Income Taxes The Company accounts for its income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and the tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized for tax credits and net operating loss carryforwards, reduced by a valuation allowance, which is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. A taxing authority may challenge positions that the Company adopted in its income tax filings. Accordingly, the Company may apply different tax treatments for transactions in filing its income tax returns than for income tax financial reporting. The Company regularly assesses its tax positions for such transactions and records reserves for those differences when considered necessary. Tax positions are recognized only when it is more likely than not, based on technical merits, that the positions will be sustained upon examination. Tax positions that meet the more-likely-than-not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon settlement. Whether the more-likely-than-not recognition threshold is met for a tax position is a matter of judgment based on the individual facts and circumstances of that position evaluated in light of all available evidence. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying Consolidated Statement of Operations. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet. Provision for U.S. income taxes on undistributed earnings of foreign subsidiaries is made only on those amounts in excess of the funds considered to be permanently reinvested. Our income tax provision for 2017 includes the estimated effects of U.S. tax reform (“Tax Act”) enacted on December 22, 2017. The Tax Act significantly revises U.S. corporate income taxation, among other changes, lowering corporate income tax rates, implementing a modified territorial tax regime, and imposing a one-time transition tax through a deemed repatriation of accumulated untaxed earnings and profits of foreign subsidiaries. The Company has made estimates of the effects and recorded provisional amounts in its 2017 financial statements as permitted under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act , which provides guidance on accounting for the Tax Act’s effects. The ultimate effect of the Tax Act may differ from the provisional amount, possibly materially, due to, among other things, further refinement of our calculations, changes in interpretations and assumptions we have made, regulatory and administrative guidance that may be issued, and actions we may take as a result of the Tax Act. See also Note 17, Income Taxes for more information. |
Pension and Postretirement Obligations | Pension and Postretirement Obligations The discount rate for the U.S. plans is determined by reference to the Bond:Link interest rate model based upon a portfolio of highly-rated U.S. corporate bonds with individual bonds that are theoretically purchased to settle the plan’s anticipated cash outflows. The cash flows are discounted to their present value and an overall discount rate is determined. The discount rate selected to measure the present value of the Company’s Canadian benefit obligations was developed by using that plan’s bond portfolio indices, which match the benefit obligations. The Company measures its plan assets and benefit obligations using the month-end date that is closest to our fiscal year end. |
Insurance Liabilities | Insurance Liabilities The Company is primarily self-insured for health care, workers’ compensation, and general liability costs. Accordingly, provisions are made for the Company’s actuarially determined estimates of discounted future claim costs for such risks, for the aggregate of claims reported, and claims incurred but not yet reported. Self-insured liabilities totaled $10 million and $12 million at February 3, 2018 and January 28, 2017 , respectively. The Company discounts its workers’ compensation and general liability reserves using a risk-free interest rate. Imputed interest expense related to these liabilities was not significant for any of the periods presented. |
Accounting for Leases | Accounting for Leases The Company recognizes rent expense for operating leases as of the possession date for store leases or the commencement of the agreement for a non-store lease. Rental expense, inclusive of rent holidays, concessions, and tenant allowances are recognized over the lease term on a straight-line basis. Contingent payments based upon sales and future increases determined by inflation related indices cannot be estimated at the inception of the lease and, accordingly, are charged to operations as incurred. |
Treasury Stock Retirement | Treasury Stock Retirement The Company periodically retires treasury shares that it acquires through share repurchases and returns those shares to the status of authorized but unissued. The Company accounts for treasury stock transactions under the cost method. For each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired to both retained earnings and additional paid-in capital. The portion allocated to additional paid-in capital is determined by applying a percentage, which is determined by dividing the number of shares to be retired by the number of shares issued, to the balance of additional paid-in capital as of the retirement date. During 2017 and 2016, the Company retired 12 million and 42 million shares, respectively, of its common stock held in treasury. The shares were returned to the status of authorized but unissued. As a result, treasury stock decreased by $487 million and $1,728 million as of February 3, 2018 and January 28, 2017, respectively. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company’s international operations is the applicable local currency. The translation of the applicable foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted-average rates of exchange prevailing during the year. The unearned gains and losses resulting from such translation are included as a separate component of accumulated other comprehensive loss within shareholders’ equity. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ ASU”) 2014-09, Revenue from Contracts with Customers . The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. This ASU can be adopted either retrospectively to each prior reporting period presented or on a modified retrospective basis with the cumulative-effect recognized as an adjustment to retained earnings as of the date of adoption . The Company has identified a change for the following items: · Timing change relating to the recognition of gift card breakage as well as recognition of gift card breakage as part of sales instead of recognition of breakage as part of SG&A expense. · Timing change relating to the recognition of revenue for our e-commerce sales to be recognized at the shipping point rather than upon receipt by the customer. · Timing change relating to the recognition of expenses for direct-response advertising costs. · Balance sheet reclassification from inventory to other current assets relating to our right to recover products for expected returns. · Change to the accounting for our unredeemed rewards for our loyalty program as a reduction to sales instead of recording the charge to cost of goods sold. We have substantially completed our evaluation of the effect of ASU 2014-09, and will adopt the guidance beginning with our first quarter ending May 5, 2018, using the modified retrospective transition method. The adjustment to retained earnings will primarily represent the change in timing relating to gift card breakage and the change in timing related to the recognition of e-commerce sales, and is not expected to be significant. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU requires lessees to recognize a lease liability and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods therein, and requires a modified retrospective adoption, with earlier adoption permitted. The Company does not expect to adopt this ASU until required and is evaluating the effect of this guidance. The Company has historically presented a non-GAAP measure to adjust its balance sheet to present operating leases as if they were capital leases. Based upon that analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of $3 to $4 billion of assets and liabilities on our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . ASU 2016-16 requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective and will be adopted by the Company for annual reporting periods beginning after December 15, 2017, including interim periods therein. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but would recognize under the new guidance. Based on deferred tax amounts related to applicable past intercompany transactions and the foreign exchange rates as of February 3, 2018, we expect the adoption will result in an increase in deferred income tax assets of $37 million. Other recently issued accounting pronouncements did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the year ended February 3, 2018, the Company recorded $9 million of excess tax benefits related to share-based compensation awards to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefits. This ASU also requires that we present excess tax benefits or deficiencies as operating activities in our consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $20 million and $35 million, which were previously classified as cash flows from financing activities, to operating activities for the years ended January 28, 2017 and January 30, 2016, respectively. Additionally, the presentation of employee taxes paid to taxing authorities for share-based transactions of $7 million and $9 million, previously classified as cash flows from operating activities, were reclassified to financing activities for the years ended January 28, 2017 and January 30, 2016, respectively. The Company has made a policy election of recording forfeitures as they occur instead of estimating forfeitures using a modified retrospective approach. The cumulative effect of this change was not significant. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU is effective for annual reporting periods beginning after December 15, 2017 including interim periods therein. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, we restated our cash and cash equivalents balances in the consolidated statements of cash flows to include restricted cash of $27 million as of January 28, 2017 and January 30, 2016. Please see the Cash, Cash Equivalents, and Restricted Cash section earlier in this note for a reconciliation of cash and cash equivalents as presented on our consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our consolidated statements of cash flows. In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted corporate tax rates. As permitted by the ASU, the Company has elected to adopt this ASU early as of the year ended February 3, 2018, resulting in a reclassification of $41 million from accumulated other comprehensive loss to retained earnings. The amount of the reclassification is calculated on the basis of the difference between the historical and newly enacted tax rates on deferred taxes related primarily to our pension and postretirement benefit plans. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Significant Accounting Policies [Line Items] | |
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share is as follows: 2017 2016 2015 (in millions, except per share data) Net Income $ 284 $ 664 $ 541 Weighted-average common shares outstanding 127.2 134.0 139.1 Dilutive effect of potential common shares 0.7 1.1 1.7 Weighted-average common shares outstanding assuming dilution 127.9 135.1 140.8 Earnings per share - basic $ 2.23 $ 4.95 $ 3.89 Earnings per share - diluted $ 2.22 $ 4.91 $ 3.84 Anti-dilutive share-based awards excluded from diluted calculation 1.6 0.4 0.6 |
Schedule of Restricted Cash and Cash Equivalents [Table Text Block] | The following table provides the reconciliation of cash, cash equivalents, and restricted cash, as reported on our consolidated statements of cash flows. 2017 2016 2015 ($ in millions) Cash and cash equivalents (1) $ 849 $ 1,046 $ 1,021 Restricted cash included in other current assets 1 — 1 Restricted cash included in other non-current assets (2) 181 27 26 Cash, cash equivalents, and restricted cash $ 1,031 $ 1,073 $ 1,048 (1) Includes cash equivalents of $780 million, $1,000 million, and $983 million for the year ended February 3, 2018, January 28, 2017, and January 30, 2016, respectively . (2) Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information . |
Estimated Useful Lives | Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Buildings Maximum of 50 years Store leasehold improvements Shorter of the asset useful life or expected term of the lease Furniture, fixtures, and equipment 3 -10 years Software 2 -7 years |
Advertising Expense [Member] | |
Significant Accounting Policies [Line Items] | |
Costs Included as Component of Selling, General and Administrative Expenses | Advertising costs, including digital advertising, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Advertising expenses $ 108 $ 118 $ 119 Digital advertising expenses 96 84 65 Cooperative advertising reimbursements (20) (20) (19) Net advertising expense $ 184 $ 182 $ 165 |
Catalog Expense [Member] | |
Significant Accounting Policies [Line Items] | |
Costs Included as Component of Selling, General and Administrative Expenses | Catalog costs, which are included as a component of selling, general and administrative expenses, were as follows: 2017 2016 2015 ($ in millions) Catalog costs $ 19 $ 26 $ 28 Cooperative reimbursements (2) (6) (7) Net catalog expense $ 17 $ 20 $ 21 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Segment Information [Abstract] | |
Sales and Division Operating Results for Reportable Segments | The Company evaluates performance based on several factors, of which the primary financial measure is division results. Division profit reflects income before income taxes, pension litigation and reorganization charges, corporate expense, non-operating income, and net interest (income) / expense. Effective as of the beginning of fisca l year 2018, the Company will report one reportable segment based upon the change in our method of internal reporting . 2017 2016 2015 Sales ($ in millions) Athletic Stores $ 6,673 $ 6,744 $ 6,468 Direct-to-Customers 1,109 1,022 944 Total sales $ 7,782 $ 7,766 $ 7,412 Operating Results Athletic Stores (1) $ 675 $ 927 $ 872 Direct-to-Customers (2) 135 143 142 Division profit 810 1,070 1,014 Less: Pension litigation and reorganization charges (3), (4) 191 — 100 Less: Corporate expense (5) 48 70 77 Operating profit 571 1,000 837 Interest (income) / expense, net (2) 2 4 Other income 5 6 4 Income before income taxes $ 578 $ 1,004 $ 837 (1) Included in the results for 2017, 2016, and 2015 are non-cash impairment charges of $20 million, $ 6 million, and $ 4 million, respectively. The 2017 amount includes a charge of $16 million to write down long-lived store assets of SIX:02, and a charge of $4 million to write down primarily long-lived store assets of Runners Point and Sidestep. The 2016 and 2015 amounts reflect charges to write down long-lived store assets of Runners Point and Sidestep. See Note 3, Litigation and Other Charges for additional information . (2) Included in the results for 2015 is a $1 million non-cash impairment charge relating to an e-commerce trade name. See Note 3, Litigation and Other Charges for additional information . (3) Included in the 2017 and 2015 amounts is a pre-tax charge of $178 million and $100 million, respectively, relating to a pension litigation matter described further in Note 22, Legal Proceedings . (4) Included in the 2017 amount is $13 million in pre-tax reorganization costs related to the reduction and reorganization of division and corporate staff that occurred in the third quarter of 2017, described more fully in Note 3, Litigation and Other Charges . (5) Corporate expense for all years presented reflects the reallocation of expense between corporate and the operating divisions. Based upon annual internal studies of corporate expense, the allocation of such expenses to the operating divisions was increased by $4 million for 2017, $9 million for 2016, and $5 million for 2015, thereby reducing corporate expense . |
Segment Information | Depreciation and Amortization Capital Expenditures (1) Total Assets 2017 2016 2015 2017 2016 2015 2017 2016 2015 ($ in millions) Athletic Stores $ 153 $ 140 $ 130 $ 202 $ 193 $ 181 $ 2,775 $ 2,802 $ 2,612 Direct-to-Customers 4 4 7 3 4 7 357 338 330 157 144 137 205 197 188 3,132 3,140 2,942 Corporate 16 14 11 69 69 40 829 700 833 Total Company $ 173 $ 158 $ 148 $ 274 $ 266 $ 228 $ 3,961 $ 3,840 $ 3,775 (1) Reflects cash capital expenditures for all years presented . |
Sales and Long-Lived Asset Information by Geographic Area | Sales and long-lived asset information by geographic area as of and for the fiscal years ended February 3, 2018 , January 28, 2017 , and January 30, 2016 are presented in the following tables. Sales are attributed to the country in which the sales transaction is fulfilled. Long-lived assets reflect property and equipment. 2017 2016 2015 Sales ($ in millions) United States $ 5,532 $ 5,562 $ 5,305 International 2,250 2,204 2,107 Total sales $ 7,782 $ 7,766 $ 7,412 2017 2016 2015 Long-Lived Assets ($ in millions) United States $ 607 $ 575 $ 486 International 259 190 175 Total long-lived assets $ 866 $ 765 $ 661 |
Litigation and Other Charges (T
Litigation and Other Charges (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Litigation and Other Charges [Abstract] | |
Schedule of Litigation and Other Charges | 2017 2016 2015 ($ in millions) Pension litigation charge $ 178 $ — $ 100 Reorganization costs 13 — — Impairment of long-lived assets 20 6 4 Other intangible asset impairments — — 1 Total litigation and other charges $ 211 $ 6 $ 105 |
Schedule of Reorganization Accrual | The following is a reconciliation of the accrual as of February 3, 2018: Severance and Other Related Benefit Costs Charges Total ($ in millions) Balance at January 28, 2017 $ — $ — $ — Amounts charged to expense 11 2 13 Cash payments (6) — (6) Balance at February 3, 2018 $ 5 $ 2 $ 7 |
Merchandise Inventories (Tables
Merchandise Inventories (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Merchandise Inventories [Abstract] | |
Schedule of Merchandise Inventories | 2017 2016 ($ in millions) LIFO inventories $ 809 $ 861 FIFO inventories 469 446 Total merchandise inventories $ 1,278 $ 1,307 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Other Current Assets [Abstract] | |
Schedule of Other Current Assets | 2017 2016 ($ in millions) Prepaid income taxes $ 174 $ 48 Net receivables 106 101 Prepaid rent 96 86 Other prepaid expenses 31 27 Deferred tax costs 13 13 Other 4 5 $ 424 $ 280 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Property and Equipment, Net [Abstract] | |
Schedule of Property and Equipment | 2017 2016 ($ in millions) Land $ 4 $ 4 Buildings: Owned 44 43 Furniture, fixtures, equipment and software development costs: Owned 1,145 1,029 Assets under capital leases — 2 1,193 1,078 Less: accumulated depreciation (753) (674) 440 404 Alterations to leased and owned buildings: Cost 965 849 Less: accumulated amortization (539) (488) 426 361 $ 866 $ 765 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Schedule of Goodwill | Direct-to- Athletic Stores Customers Total ($ in millions) Goodwill at January 30, 2016 $ 17 $ 139 $ 156 Foreign currency translation adjustment (1) — (1) Goodwill at January 28, 2017 $ 16 $ 139 $ 155 Foreign currency translation adjustment 3 2 5 Goodwill at February 3, 2018 $ 19 $ 141 $ 160 |
Other Intangible Assets, net (T
Other Intangible Assets, net (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Components of Finite-Lived Intangible Assets and Intangible Assets Not Subject to Amortization | February 3, 2018 January 28, 2017 Wtd. Avg. Gross Accum. Net Life in Gross Accum. Net ($ in millions) value amort. value Years (2) value amort. value Amortized intangible assets: (1) Lease acquisition costs $ 135 $ (122) $ 13 10.0 $ 116 $ (105) $ 11 Trademarks / trade names 20 (14) 6 20.0 20 (13) 7 Favorable leases 7 (6) 1 8.6 7 (5) 2 $ 162 $ (142) $ 20 13.8 $ 143 $ (123) $ 20 Indefinite life intangible assets: (1) Runners Point Group trademarks / trade names 26 22 Other intangible assets, net $ 46 $ 42 (1) The change in the ending balances also reflect the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar . (2) The weighted-average useful life is as of February 3, 2018 and excludes those assets that are fully amortized . |
Amortization Expense | Amortization expense recorded is as follows: ($ in millions) 2017 2016 2015 Amortization expense $ 4 $ 4 $ 4 |
Estimated Future Expected Amortization Expense for Finite Life Intangible Assets | Estimated future amortization expense for finite lived intangibles for the next five years is as follows: ($ in millions) 2018 $ 4 2019 4 2020 3 2021 3 2022 2 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Other Assets [Abstract] | |
Schedule of Other Assets | 2017 2016 ($ in millions) Restricted cash (1) $ 181 $ 27 Pension asset 36 10 Deferred tax costs 11 10 Auction rate security 7 6 Cost method investment 15 — Other 40 31 $ 290 $ 84 (1) Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information. |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Accrued and Other Liabilities [Abstract] | |
Schedule of Accrued and Other Liabilities | 2017 2016 ($ in millions) Other payroll and payroll related costs, excluding taxes $ 67 $ 57 Taxes other than income taxes 63 66 Property and equipment (1) 58 38 Customer deposits (2) 49 49 Advertising 22 35 Income taxes payable 11 5 Incentive bonuses 6 32 Other 82 81 $ 358 $ 363 (1) Accruals for property and equipment are excluded from the statements of cash flows for all years presented . (2) Customer deposits include unredeemed gift cards, merchandise credits, and deferred revenue related to undelivered merchandise, including layaway sales. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Long-Term Debt [Abstract] | |
Long Term Debt | 2017 2016 ($ in millions) 8.5% debentures payable January 2022 $ 118 $ 118 Unamortized gain related to interest rate swaps (1) 7 9 $ 125 $ 127 (1) In 2009, the Company terminated an interest rate swap at a gain. This gain is being amortized as part of interest expense over the remaining term of the debt using the effective-yield method . |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | 2017 2016 ($ in millions) Pension litigation liability $ 278 $ 100 Straight-line rent liability (1) 245 205 Income taxes 114 23 Pension benefits 19 26 Deferred taxes 15 3 Postretirement benefits 14 14 Workers’ compensation and general liability reserves 7 8 Other 9 12 $ 701 $ 391 (1) Includes unamortized tenant allowances of $64 million and $ 59 million for the year ended February 3, 2018 and January 28, 2017, respectively. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Leases [Abstract] | |
Leases | Included in the amounts below are non-store expenses that totaled $24 million in both 201 7 and 2016 , and $18 million in 2015 . 2017 2016 2015 ($ in millions) Minimum rent $ 714 $ 667 $ 618 Contingent rent based on sales 26 29 27 Sublease income (5) (6) (5) $ 735 $ 690 $ 640 |
Future Minimum Lease Payments Under Non-Cancelable Operating Leases, Net of Future Non-Cancelable Operating Sublease Payments | Future minimum lease payments under non-cancellable operating leases, net of future non-cancellable operating sublease payments, are: ($ in millions) 2018 $ 678 2019 637 2020 594 2021 554 2022 496 Thereafter 1,721 Total operating lease commitments $ 4,680 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss, net of tax, is comprised of the following: 2017 2016 2015 ($ in millions) Foreign currency translation adjustments $ (9) $ (127) $ (119) Cash flow hedges — 1 2 Unrecognized pension cost and postretirement benefit (270) (236) (248) Unrealized loss on available-for-sale security — (1) (1) $ (279) $ (363) $ (366) |
Changes in Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss for the period ended February 3, 2018 were as follows: Unrealized Foreign Items Related (Loss)/Gain Currency to Pension and on Translation Cash Flow Postretirement Available-For- ($ in millions) Adjustments Hedges Benefits Sale Security Total Balance as of January 28, 2017 $ (127) $ 1 $ (236) $ (1) $ (363) OCI before reclassification 114 (1) 4 1 118 Reclassified from AOCI — — 7 — 7 Reclassification of tax effects due to the adoption of ASU 2018-02 4 — (45) — (41) Other comprehensive income/ (loss) 118 (1) (34) 1 84 Balance as of February 3, 2018 $ (9) $ — $ (270) $ — $ (279) |
Reclassification from Accumulated Other Comprehensive Loss | Reclassifications to income from accumulated other comprehensive loss for the period ended February 3, 2018 were as follows: ($ in millions) Amortization of actuarial (gain) loss: Pension benefits- amortization of actuarial loss $ 13 Postretirement benefits- amortization of actuarial gain (2) Net periodic benefit cost (see Note 20) 11 Income tax benefit 4 Net of tax $ 7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Income Taxes [Abstract] | |
Domestic and International Pre-Tax Income | The domestic and international components of pre-tax income are as follows: 2017 2016 2015 ($ in millions) Domestic $ 432 $ 779 $ 668 International 146 225 169 Total pre-tax income $ 578 $ 1,004 $ 837 |
Income Tax Provision | The income tax provision consists of the following: 2017 2016 2015 Current: ($ in millions) Federal $ 129 $ 249 $ 212 State and local 18 44 37 International 42 48 53 Total current tax provision 189 341 302 Deferred: Federal 98 (6) (8) State and local 5 1 (1) International 2 4 3 Total deferred tax provision 105 (1) (6) Total income tax provision $ 294 $ 340 $ 296 |
Reconciliation of Significant Differences between Federal Statutory Income Tax Rate and Effective Income Tax Rate on Pre-Tax Income from Continuing Operations | A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pre-tax income is as follows: 2017 2016 2015 Federal statutory income tax rate (1) 33.7 % 35.0 % 35.0 % Deemed repatriation tax 17.1 — — Increase in valuation allowance 1.6 — — State and local income taxes, net of federal tax benefit 2.0 3.1 2.8 International income taxed at varying rates (2.3) (3.7) (2.1) Foreign tax credits (2.6) (1.9) (2.8) Domestic/foreign tax settlements (0.2) (0.1) (0.1) Federal tax credits (0.2) (0.2) (0.2) Other, net 1.7 1.7 2.8 Effective income tax rate 50.8 % 33.9 % 35.4 % (1) On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions, including but not limited to a reduction in the U.S. corporate income tax rate from 35 percent to 21 percent as well as provisions that limit or eliminate various deductions or credits. In accordance with Section 15 of the Internal Revenue Code, the tax rate for 2017 represented a blended rate of 33.7 percent, calculated by applying a prorated percentage of the number of days prior to and subsequent to the January 1, 2018 effective date . |
Significant Portions of Deferred Tax Accounts | Items that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows: 2017 2016 Deferred tax assets: ($ in millions) Tax loss/credit carryforwards and capital loss $ 23 $ 12 Employee benefits 16 76 Property and equipment 54 110 Straight-line rent 44 51 Other 27 47 Total deferred tax assets $ 164 $ 296 Valuation allowance (17) (7) Total deferred tax assets, net $ 147 $ 289 Deferred tax liabilities: Merchandise inventories $ 79 $ 104 Goodwill and other intangible assets 20 21 Other 15 6 Total deferred tax liabilities $ 114 $ 131 Net deferred tax asset $ 33 $ 158 Balance Sheet caption reported in: Deferred taxes $ 48 $ 161 Other liabilities (15) (3) $ 33 $ 158 |
Unrecognized Tax Benefits Activity | The following table summarizes the activity related to unrecognized tax benefits: 2017 2016 2015 ($ in millions) Unrecognized tax benefits at beginning of year $ 38 $ 38 $ 40 Foreign currency translation adjustments 4 1 (2) Increases related to current year tax positions 3 8 4 Increases related to prior period tax positions 1 1 2 Decreases related to prior period tax positions — (2) — Settlements (1) (7) (1) Lapse of statute of limitations (1) (1) (5) Unrecognized tax benefits at end of year $ 44 $ 38 $ 38 |
Financial Instruments and Ris48
Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Financial Instruments and Risk Management [Abstract] | |
Fair Value of Derivative Contracts on Gross Basis, by Type of Contract | The following is presented on a gross basis, by type of contract: Balance Sheet ($ in millions) Caption 2017 2016 Hedging Instruments: Foreign exchange forward contracts Current assets $ 1 $ 3 Foreign exchange forward contracts Current liabilities $ 1 $ 3 |
Notional Amounts for Outstanding Derivatives and Weighted-Average Exchange Rates of Foreign Exchange Forward Contracts | The table below presents the notional amounts for all outstanding derivatives and the weighted-average exchange rates of foreign exchange forward contracts at February 3, 2018 : Contract Value Weighted-Average ($ in millions) Exchange Rate Inventory Buy €/Sell British £ $ 111 0.8749 Intercompany Buy US $/Sell € $ 7 1.2118 Buy US $/Sell CAD $ $ 2 1.2568 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Fair Value Measurements [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: As of February 3, 2018 As of January 28, 2017 ($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Available-for-sale security $ — $ 7 $ — $ — $ 6 $ — Foreign exchange forward contracts — 1 — — 3 — Total Assets $ — $ 8 $ — $ — $ 9 $ — Liabilities Foreign exchange forward contracts — 1 — — 3 — Total Liabilities $ — $ 1 $ — $ — $ 3 $ — |
Carrying Value and Estimated Fair Value of Long-Term Debt | The carrying value and estimated fair value of long-term debt were as follows: 2017 2016 ($ in millions) Carrying value $ 125 $ 127 Fair value $ 144 $ 148 |
Retirement Plans and Other Be50
Retirement Plans and Other Benefits (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Changes in Benefit Obligations and Plan Assets, Funded Status, and Amounts Recognized in Consolidated Balance Sheets | The following tables set forth the plans’ changes in benefit obligations and plan assets, funded status, and amounts recognized in the Consolidated Balance Sheets, as of February 3, 2018 and January 28, 2017 : Pension Benefits Postretirement Benefits 2017 2016 2017 2016 ($ in millions) Change in benefit obligation Benefit obligation at beginning of year $ 666 $ 667 $ 15 $ 14 Service cost 17 16 — — Interest cost 25 26 1 1 Plan participants’ contributions — — 1 1 Actuarial loss 25 7 — 1 Foreign currency translation adjustments 3 4 — — Benefits paid (53) (54) (2) (2) Benefit obligation at end of year $ 683 $ 666 $ 15 $ 15 Change in plan assets Fair value of plan assets at beginning of year $ 647 $ 602 Actual return on plan assets 70 55 Employer contributions 29 40 Foreign currency translation adjustments 4 4 Benefits paid (53) (54) Fair value of plan assets at end of year $ 697 $ 647 Funded status $ 14 $ (19) $ (15) $ (15) Amounts recognized on the balance sheet: Other assets $ 36 $ 10 $ — $ — Accrued and other liabilities (3) (3) (1) (1) Other liabilities (19) (26) (14) (14) $ 14 $ (19) $ (15) $ (15) Amounts recognized in accumulated other comprehensive loss, pre-tax: Net loss (gain) $ 368 $ 387 $ (5) $ (7) Prior service cost 1 1 — — $ 369 $ 388 $ (5) $ (7) |
Information for Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | As of February 3, 2018 , the assets of both the Canadian and U.S. qualified pension plans exceeded their accumulated benefit obligation s . As of January 28, 2017 , the Canadian qualified pension plan’s assets exceeded its accumulated benefit obligation. The Company’s non-qualified pension plans have an accumulated benefit obligation in excess of plan assets , as these plans are unfunded. Accordingly, the table below reflects the non-qualified plans for 2017, whereas the amounts presented for 2016 included both the U.S. qualified plan and the non-qualified plans. 2017 2016 ($ in millions) Projected benefit obligation $ 22 $ 617 Accumulated benefit obligation 22 617 Fair value of plan assets — 589 |
Changes in Accumulated Other Comprehensive Loss (Pre-Tax) | The following tables set forth the changes in accumulated other comprehensive loss (pre-tax) at February 3, 2018 : Pension Postretirement Benefits Benefits ($ in millions) Net actuarial loss (gain) at beginning of year $ 387 $ (7) Amortization of net (loss) gain (13) 2 Gain arising during the year (8) — Foreign currency fluctuations 2 — Net actuarial loss (gain) at end of year (1) $ 368 $ (5) Net prior service cost at end of year (2) 1 — Total amount recognized $ 369 $ (5) (1) The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year are approximately $13 million and $(1) million related to the pension and postretirement plans, respectively . (2) The net prior service cost did not change during the year and is not expected to change significantly during the next year . |
Assumptions Used in the Calculation of Net Benefit Cost | Assumptions used in the calculation of net benefit cost include the discount rate selected and disclosed at the end of the previous year, as well as other assumptions detailed in the table below: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 4.0 % 4.1 % 3.4 % 4.0 % 4.1 % 3.4 % Rate of compensation increase 3.6 % 3.7 % 3.7 % Expected long-term rate of return on assets 5.8 % 6.1 % 6.1 % |
Net Benefit Expense (Income) | The components of net benefit expense (income) are: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 ($ in millions) Service cost $ 17 $ 16 $ 17 $ — $ — $ — Interest cost 25 26 24 1 1 1 Expected return on plan assets (37) (37) (39) — — — Amortization of net loss (gain) 13 14 14 (2) (2) (1) Net benefit expense (income) $ 18 $ 19 $ 16 $ (1) $ (1) $ — |
Assumed Health Care Cost Trend Rates Related to Measurement of SERP Medical Plan | The following initial and ultimate cost trend rate assumptions were used to determine the benefit obligations under the SERP Medical Plan: Medical Trend Rate Dental Trend Rate 2017 2016 2015 2017 2016 2015 Initial cost trend rate 7.0 % 7.0 % 7.0 % 5.0 % 5.0 % 5.0 % Ultimate cost trend rate 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % Year that the ultimate cost trend rate is reached 2025 2021 2021 2018 2017 2016 The following initial and ultimate cost trend rate assumptions were used to determine the net periodic cost under the SERP Medical Plan: Medical Trend Rate Dental Trend Rate 2017 2016 2015 2017 2016 2015 Initial cost trend rate 7.0 % 7.0 % 7.0 % 5.0 % 5.0 % 5.0 % Ultimate cost trend rate 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % Year that the ultimate cost trend rate is reached 2021 2021 2019 2017 2016 2015 |
Effect of One Percentage-Point Change in Assumed Health Care Cost Trend Rates | A one percentage-point change in the assumed health care cost trend rates would have the following effects on the SERP Medical Plan: 1% Increase 1% (Decrease) ($ in millions) Effect on total service and interest cost components $ — $ — Effect on accumulated postretirement benefit obligation 3 (2) |
Estimated Future Benefit Payments | Estimated future benefit payments (excluding any amounts related to the expected U.S. pension plan reformation) for each of the next five years and the five years thereafter are as follows: Pension Postretirement Benefits Benefits ($ in millions) 2018 $ 66 $ 1 2019 54 1 2020 53 1 2021 52 1 2022 51 1 2023–2027 236 2 |
U.S. Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair Value of Pension Plan Assets | The fair values of the Company’s U.S. pension plan assets at February 3, 2018 and January 28, 2017 were as follows: Level 1 Level 2 Level 3 2017 Total 2016 Total* ($ in millions) Cash and cash equivalents $ — $ 4 $ — $ 4 $ 4 Equity securities: U.S. large-cap (1) — 115 — 115 103 U.S. mid-cap (1) — 34 — 34 31 International (2) — 78 — 78 70 Corporate stock (3) 19 — — 19 27 Fixed-income securities: Long duration corporate and government bonds (4) — 254 — 254 231 Intermediate duration corporate and government bonds (5) — 113 — 113 103 Other types of investments: Real estate securities (6) — 21 — 21 19 Insurance contracts — 1 — 1 1 Total assets at fair value $ 19 $ 620 — $ — $ 639 $ 589 * Each category of plan assets is classified within the same level of t he fair value hierarchy for 2017 and 2016 . (1) These categories consist of various managed funds that invest primarily in common stocks, as well as other equity securities and a combination of other funds . (2) This category comprises three managed funds that invest primarily in international common stocks, as well as other equity securities and a combination of other funds . (3) This category consists of the Company’s common stock . (4) This category consists of various fixed-income funds that invest primarily in long-term bonds, as well as a combination of other funds, that together are designed to exceed the performance of related long-term market indices . (5) This category consists of two fixed-income funds that invest primarily in intermediate duration bonds, as well as a combination of other funds, that together are designed to exceed the performance of related indices . (6) This category consists of one fund that invests in global real estate securities . |
Canadian Qualified Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair Value of Pension Plan Assets | The fair values of the Company’s Canadian pension plan assets at February 3, 2018 and January 28, 2017 were as follows: Level 1 Level 2 Level 3 2017 Total 2016 Total* ($ in millions) Cash and cash equivalents $ — $ 1 $ — $ 1 $ 1 Equity securities: Canadian and international (1) 4 — — 4 3 Fixed-income securities: Cash matched bonds (2) — 53 — 53 54 Total assets at fair value $ 4 $ 54 $ — $ 58 $ 58 *Each category of plan assets is classified within the same level of the fair value hierarchy for 2017 and 2016. (1) This category comprises one mutual fund that invests primarily in a diverse portfolio of Canadian securities . (2) This category consists of fixed-income securities, including strips and coupons, issued or guaranteed by the Government of Canada, provinces or municipalities of Canada including their agencies and crown corporations, as well as other governmental bonds and corporate bonds . |
Benefit Obligations [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Assumptions Used in the Calculation of Net Benefit Cost | The following weighted-average assumptions were used to determine the benefit obligations under the plans: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Discount rate 3.7 % 4.0 % 3.7 % 4.0 % Rate of compensation increase 3.6 % 3.7 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Share-Based Compensation [Abstract] | |
Total Compensation Expense and the Related Tax Benefits Recognized | Total compensation expense included in SG&A and the associated tax benefits recognized related to the Company’s share-based compensation plans were as follows: 2017 2016 2015 ($ in millions) Options and shares purchased under the ESPP $ 9 $ 10 $ 11 Restricted stock and restricted stock units 6 12 11 Total share-based compensation expense $ 15 $ 22 $ 22 Tax benefit recognized $ 4 $ 6 $ 8 |
Assumptions used to Compute Share-Based Compensation Expense | The following table shows the Company’s assumptions used to compute the share-based compensation expense: Stock Option Plans Stock Purchase Plan 2017 2016 2015 2017 2016 2015 Weighted-average risk free rate of interest 2.1 % 1.4 % 1.5 % 1.0 % 0.5 % 0.2 % Expected volatility 25 % 30 % 30 % 30 % 27 % 25 % Weighted-average expected award life (in years) 5.4 5.7 6.0 1.0 1.0 1.0 Dividend yield 1.9 % 1.7 % 1.6 % 2.0 % 1.8 % 1.6 % Weighted-average fair value $ 14.74 $ 15.71 $ 16.07 $ 10.96 $ 13.33 $ 10.47 |
Options Granted under Stock Option Plans | The information set forth in the following table covers options granted under the Company’s stock option plans: Weighted- Weighted- Number Average Average of Remaining Exercise Shares Contractual Life Price (in thousands) (in years) (per share) Options outstanding at January 28, 2017 2,806 $ 42.61 Granted 547 69.58 Exercised (593) 21.35 Expired or cancelled (21) 61.50 Options outstanding at February 3, 2018 2,739 6.5 $ 52.45 Options exercisable at February 3, 2018 1,699 5.2 $ 43.85 |
Total Intrinsic Value of Options Exercised | 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: 2017 2016 2015 ($ in millions) Exercised $ 22 $ 56 $ 99 |
Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable | The aggregate intrinsic value for stock options outstanding, and those outstanding and 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: 2017 ($ in millions) Outstanding $ 17 Outstanding and exercisable $ 17 |
Information about Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at February 3, 2018 : Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Remaining Average Average Range of Exercise Number Contractual Exercise Number Exercise Prices Outstanding Life Price Exercisable Price (in thousands, except prices per share and contractual life) $9.85 to $24.75 312 2.6 $ 17.40 312 $ 17.40 $30.92 to $45.75 762 5.2 38.46 722 38.64 $48.55 to $62.11 703 6.6 61.04 499 61.08 $63.79 to $73.21 962 8.6 68.60 166 64.35 2,739 6.5 $ 52.45 1,699 $ 43.85 |
Restricted Share and Unit Activity | Restricted stock and RSU activity is summarized as follows: Weighted-Average Number Remaining Weighted-Average of Contractual Grant Date Shares Life Fair Value (in thousands) (in years) (per share) Nonvested at January 28, 2017 798 $ 56.91 Granted 329 63.68 Vested (305) 49.97 Expired or cancelled (448) 64.75 Nonvested at February 3, 2018 374 1.3 $ 59.15 Aggregate value ($ in millions) $ 22 |
Quarterly Results (Tables)
Quarterly Results (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Quarterly Results [Abstract] | |
Quarterly Results (Unaudited) | 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter (1) Fiscal Year Sales 2017 2,001 1,701 1,870 2,210 $ 7,782 2016 1,987 1,780 1,886 2,113 $ 7,766 Gross margin (2) 2017 680 503 580 693 $ 2,456 2016 696 587 640 713 $ 2,636 Operating profit (3) 2017 268 72 155 76 $ 571 2016 296 198 228 278 $ 1,000 Net income/(loss) (4), (5), (6), (7) 2017 180 51 102 (49) $ 284 2016 191 127 157 189 $ 664 Basic earnings per share (8) 2017 1.37 0.39 0.81 (0.40) $ 2.23 2016 1.40 0.94 1.18 1.43 $ 4.95 Diluted earnings per share (8) 2017 1.36 0.39 0.81 (0.40) $ 2.22 2016 1.39 0.94 1.17 1.42 $ 4.91 (1) The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 . (2) Gross margin represents sales less cost of sales. Cost of sales includes: the cost of merchandise, freight, distribution costs including related depreciation expense, shipping and handling, occupancy and buyers’ compensation. Occupancy costs include rent, common area maintenance charges, real estate taxes, general maintenance, and utilities . (3) Operating profit represents income before income taxes, interest (income)/expense, net, and non-operating income . (4) During the second and fourth quarters of 2017, the Company recorded pre-tax charges of $50 million and $128 million, respectively, related to its U.S. retirement plan litigation. See Note 22, Legal Proceedings for further information . (5) During the third quarter of 2017, the Company recorded a pre-tax charge of $13 million associated with the reorganization and the reduction in staff taken to improve efficiency. See Note 3, Litigation and Other Charges for further information . (6) During the fourth quarter of 2017 and the third quarter of 2016, the Company recorded pre-tax non-cash impairment charges totaling $20 million and $6 million, respectively. See Note 3, Litigation and Other Charges for further information . (7) During the fourth quarter of 2017, the Company recorded a provisional $99 million tax liability for the mandatory deemed repatriation of foreign sourced net earnings and a corresponding change in our permanent reinvestment assertion under ASC 740-30. See Note 17, Income Taxes for further information . (8) Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year. Additionally, stock options and other potentially dilutive common shares were excluded from the computation of diluted earnings per common share for the quarter ended February 3, 2018 as the Company reported a net loss . |
Summary of Significant Accoun53
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
Significant Accounting Policies [Line Items] | |||||
Gift card breakage income | $ 6 | $ 6 | $ 5 | ||
Shares of common stock repurchased to satisfy tax withholding obligations | $ 10 | 7 | [1] | $ 9 | [1] |
Catalog Costs, amortization period | P90D | ||||
Prepaid catalog cost | $ 1 | $ 1 | |||
Contingently Issuable Shares Excluded From Diluted Earnings Per Share | 200 | 200 | 200 | ||
Cash equivalents | $ 780 | $ 1,000 | $ 983 | ||
Qualified Settlement Fund | 150 | ||||
Available-for-sale securities | 7 | ||||
Cost Method Investment | 15 | ||||
Capitalized software, net of accumulated amortization | 67 | 59 | |||
Self-insured liabilities total | $ 10 | $ 12 | |||
Retirement of treasury stock (in shares) | 12,000 | 42,000 | |||
Reclassification of tax effects due to the adoption of ASU 2018-02 | $ (41) | ||||
Accounting Standards Update 2016-09 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Excess tax benefits on share-based compensation, operating activities | 9 | $ 20 | 35 | ||
Shares of common stock repurchased to satisfy tax withholding obligations | 7 | 9 | |||
Accounting Standards Update 2016-18 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Restricted cash | $ 27 | $ 27 | |||
Accounting Standards Update 2018-02 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Reclassification of tax effects due to the adoption of ASU 2018-02 | 41 | ||||
Scenario, Plan [Member] | Accounting Standards Update 2016 16 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Increase in deferred tax assets | $ 37 | ||||
Treasury Stock [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Retirement of treasury stock (in shares) | 12,131 | 42,327 | |||
Retirement of treasury stock | $ 487 | $ 1,728 | |||
Maximum [Member] | Scenario, Plan [Member] | Accounting Standards Update 2016 02 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Addition to Assets and Liabilities from Accounting Standards Update | 4,000 | ||||
Minimum [Member] | Scenario, Plan [Member] | Accounting Standards Update 2016 02 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Addition to Assets and Liabilities from Accounting Standards Update | $ 3,000 | ||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Costs Included as Net Advertising Expenses) (Details) - Advertising Expense [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Component Of Operating Other Cost And Expense [Line Items] | |||
Advertising expenses | $ 108 | $ 118 | $ 119 |
Digital advertising expense | 96 | 84 | 65 |
Cooperative advertising reimbursements | (20) | (20) | (19) |
Net advertising expense | $ 184 | $ 182 | $ 165 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies (Costs Included as Component of Selling, General and Administrative Expenses) (Details) - Catalog Expense [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Component Of Operating Other Cost And Expense [Line Items] | |||
Catalog costs | $ 19 | $ 26 | $ 28 |
Cooperative reimbursements | (2) | (6) | (7) |
Net catalog expense | $ 17 | $ 20 | $ 21 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Feb. 03, 2018 | [4] | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | [4] | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||||||||
Net Income | $ (49) | [1],[2],[3] | $ 102 | [5] | $ 51 | [3] | $ 180 | $ 189 | $ 157 | [1] | $ 127 | $ 191 | $ 284 | $ 664 | [6] | $ 541 | [6] | |||||
Weighted-average common shares outstanding | 127.2 | 134 | 139.1 | |||||||||||||||||||
Dilutive effect of potential common shares | 0.7 | 1.1 | 1.7 | |||||||||||||||||||
Weighted-average common shares outstanding assuming dilution | 127.9 | 135.1 | 140.8 | |||||||||||||||||||
Basic earnings per share (in dollars per shares) | $ (0.40) | [7] | $ 0.81 | [7] | $ 0.39 | [7] | $ 1.37 | [7] | $ 1.43 | [7] | $ 1.18 | [7] | $ 0.94 | [7] | $ 1.40 | [7] | $ 2.23 | [7] | $ 4.95 | [7] | $ 3.89 | |
Diluted earnings per share (in dollars per share) | $ (0.40) | [7] | $ 0.81 | [7] | $ 0.39 | [7] | $ 1.36 | [7] | $ 1.42 | [7] | $ 1.17 | [7] | $ 0.94 | [7] | $ 1.39 | [7] | $ 2.22 | [7] | $ 4.91 | [7] | $ 3.84 | |
Stock Option Plans [Member] | ||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||||||||
Anti-dilutive share-based awards excluded from diluted calculation | 1.6 | 0.4 | 0.6 | |||||||||||||||||||
[1] | During the fourth quarter of 2017 and the third quarter of 2016, the Company recorded pre-tax non-cash impairment charges totaling $20 million and $6 million, respectively. See Note 3, Litigation and Other Charges for further information | |||||||||||||||||||||
[2] | During the fourth quarter of 2017, the Company recorded a provisional $99 million tax liability for the mandatory deemed repatriation of foreign sourced net earnings and a corresponding change in our permanent reinvestment assertion under ASC 740-30. See Note 17, Income Taxes for further information | |||||||||||||||||||||
[3] | During the second and fourth quarters of 2017, the Company recorded pre-tax charges of $50 million and $128 million, respectively, related to its U.S. retirement plan litigation. See Note 22, Legal Proceedings for further information | |||||||||||||||||||||
[4] | The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 | |||||||||||||||||||||
[5] | During the third quarter of 2017, the Company recorded a pre-tax charge of $13 million associated with the reorganization and the reduction in staff taken to improve efficiency. See Note 3, Litigation and Other Charges for further information | |||||||||||||||||||||
[6] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | |||||||||||||||||||||
[7] | Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year. Additionally, stock options and other potentially dilutive common shares were excluded from the computation of diluted earnings per common share for the quarter ended February 3, 2018 as the Company reported a net loss |
Summary of Significant Accoun57
Summary of Significant Accounting Policies (Restricted Cash (Reconciliation of Cash and Cash Equivalents)) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | Jan. 31, 2015 | [3] | |||
Restricted Cash [Abstract] | ||||||||
Cash and cash equivalents | [1] | $ 849 | $ 1,046 | $ 1,021 | ||||
Restricted cash included in other current assets | 1 | 1 | ||||||
Restricted cash included in other non-current assets | [2] | 181 | 27 | 26 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 1,031 | $ 1,073 | [3] | $ 1,048 | [3] | $ 993 | ||
[1] | Includes cash equivalents of $780 million, $1,000 million, and $983 million for the year ended February 3, 2018, January 28, 2017, and January 30, 2016, respectively | |||||||
[2] | Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information | |||||||
[3] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Summary of Significant Accoun58
Summary of Significant Accounting Policies (Estimated Useful Lives) (Details) | 12 Months Ended |
Feb. 03, 2018 | |
Buildings | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 50 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Store leasehold improvement useful life policy | Shorter of the asset useful life or expected term of the lease |
Furniture, Fixtures and Equipment | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 10 years |
Furniture, Fixtures and Equipment | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 3 years |
Software | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 7 years |
Software | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Segment Information (Narrative)
Segment Information (Narrative) (Details) - segment | 12 Months Ended | |
Feb. 02, 2019 | Feb. 03, 2018 | |
Number of reportable segments | 2 | |
Scenario, Forecast [Member] | ||
Number of reportable segments | 1 |
Segment Information (Sales and
Segment Information (Sales and Division Operating Results for Reportable Segments) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Feb. 03, 2018USD ($) | Oct. 28, 2017USD ($) | Jul. 29, 2017USD ($) | Apr. 29, 2017USD ($) | Jan. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Jul. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Feb. 03, 2018USD ($)segment | Jan. 28, 2017USD ($) | Jan. 30, 2016USD ($) | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Sales | $ 2,210 | [1] | $ 1,870 | $ 1,701 | $ 2,001 | $ 2,113 | [1] | $ 1,886 | $ 1,780 | $ 1,987 | $ 7,782 | $ 7,766 | $ 7,412 | ||||||||||
Less: Pension litigation charge | 50 | 178 | 100 | [2] | |||||||||||||||||||
Income from operations | 76 | [1],[3] | 155 | [3] | $ 72 | [3] | $ 268 | [3] | 278 | [1],[3] | $ 228 | [3] | $ 198 | [3] | $ 296 | [3] | 571 | [3] | 1,000 | [3] | 837 | ||
Interest (income) / expense, net | (2) | 2 | 4 | ||||||||||||||||||||
Other income | 5 | 6 | 4 | ||||||||||||||||||||
Income before income taxes | $ 578 | 1,004 | 837 | ||||||||||||||||||||
Number of reportable segments | segment | 2 | ||||||||||||||||||||||
Other intangible assets impairments | 1 | ||||||||||||||||||||||
Impairment of long-lived assets | $ 20 | 6 | 4 | ||||||||||||||||||||
Pension litigation charge | 128 | 178 | |||||||||||||||||||||
Reorganization costs | $ 13 | 13 | |||||||||||||||||||||
Athletic Stores [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Sales | 6,673 | 6,744 | 6,468 | ||||||||||||||||||||
Direct-to-Customers [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Sales | 1,109 | 1,022 | 944 | ||||||||||||||||||||
Operating Segments [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Division profit | 810 | 1,070 | 1,014 | ||||||||||||||||||||
Operating Segments [Member] | Athletic Stores [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Operating results before restructuring income | [4] | 675 | 927 | 872 | |||||||||||||||||||
Impairment of long-lived assets | 20 | 6 | 4 | ||||||||||||||||||||
Operating Segments [Member] | Direct-to-Customers [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Operating results before restructuring income | [5] | 135 | 143 | 142 | |||||||||||||||||||
Operating Segments [Member] | Six02 [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Impairment of long-lived assets | 16 | ||||||||||||||||||||||
Operating Segments [Member] | Runners Point Group [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Impairment of long-lived assets | 4 | ||||||||||||||||||||||
Operating Segments [Member] | Trade Names [Member] | Direct-to-Customers [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Other intangible assets impairments | 1 | ||||||||||||||||||||||
Segment Reconciling Items [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Less: Pension litigation and reorganization charges | [6],[7] | 191 | 100 | ||||||||||||||||||||
Corporate, Non-Segment [Member] | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Less: Pension litigation charge | 100 | ||||||||||||||||||||||
Less: Corporate expense | [8] | 48 | 70 | 77 | |||||||||||||||||||
Pension litigation charge | 178 | ||||||||||||||||||||||
Reorganization costs | 13 | ||||||||||||||||||||||
Corporate expense due to allocation changes | $ 4 | $ 9 | $ 4 | $ 9 | $ 5 | ||||||||||||||||||
[1] | The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 | ||||||||||||||||||||||
[2] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | ||||||||||||||||||||||
[3] | Operating profit represents income before income taxes, interest (income)/expense, net, and non-operating income | ||||||||||||||||||||||
[4] | Included in the results for 2017, 2016, and 2015 are non-cash impairment charges of $20 million, $6 million, and $4 million, respectively. The 2017 amount includes a charge of $16 million to write down long-lived store assets of SIX:02, and a charge of $4 million to write down primarily long-lived store assets of Runners Point and Sidestep. The 2016 and 2015 amounts reflect charges to write down long-lived store assets of Runners Point and Sidestep. See Note 3, Litigation and Other Charges for additional information | ||||||||||||||||||||||
[5] | Included in the results for 2015 is a $1 million non-cash impairment charge relating to an e-commerce trade name. See Note 3, Litigation and Other Charges for additional information | ||||||||||||||||||||||
[6] | Included in the 2017 amount is $13 million in pre-tax reorganization costs related to the reduction and reorganization of division and corporate staff that occurred in the third quarter of 2017, described more fully in Note 3, Litigation and Other Charges | ||||||||||||||||||||||
[7] | Included in the 2017 and 2015 amounts is a pre-tax charge of $178 million and $100 million, respectively, relating to a pension litigation matter described further in Note 22, Legal Proceedings | ||||||||||||||||||||||
[8] | Corporate expense for all years presented reflects the reallocation of expense between corporate and the operating divisions. Based upon annual internal studies of corporate expense, the allocation of such expenses to the operating divisions was increased by $4 million for 2017, $9 million for 2016, and $5 million for 2015, thereby reducing corporate expense |
Segment Information (Schedule o
Segment Information (Schedule of Segment Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and Amortization | $ 173 | $ 158 | [1] | $ 148 | [1] | |
Capital Expenditures | [2] | 274 | 266 | [1] | 228 | [1] |
Total Assets | 3,961 | 3,840 | 3,775 | |||
Athletic Stores [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and Amortization | 153 | 140 | 130 | |||
Capital Expenditures | [2] | 202 | 193 | 181 | ||
Total Assets | 2,775 | 2,802 | 2,612 | |||
Direct-to-Customers [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and Amortization | 4 | 4 | 7 | |||
Capital Expenditures | [2] | 3 | 4 | 7 | ||
Total Assets | 357 | 338 | 330 | |||
Corporate [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and Amortization | 16 | 14 | 11 | |||
Capital Expenditures | [2] | 69 | 69 | 40 | ||
Total Assets | 829 | 700 | 833 | |||
Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and Amortization | 157 | 144 | 137 | |||
Capital Expenditures | [2] | 205 | 197 | 188 | ||
Total Assets | $ 3,132 | $ 3,140 | $ 2,942 | |||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | |||||
[2] | (1) Reflects cash capital expenditures for all years presented. |
Segment Information (Sales an62
Segment Information (Sales and Long-Lived Asset Information by Geographic Area) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
Segment Reporting Information [Line Items] | |||||||||||||
Sales | $ 2,210 | [1] | $ 1,870 | $ 1,701 | $ 2,001 | $ 2,113 | [1] | $ 1,886 | $ 1,780 | $ 1,987 | $ 7,782 | $ 7,766 | $ 7,412 |
Long-lived assets | 866 | 765 | 866 | 765 | 661 | ||||||||
United States | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Sales | 5,532 | 5,562 | 5,305 | ||||||||||
Long-lived assets | 607 | 575 | 607 | 575 | 486 | ||||||||
International | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Sales | 2,250 | 2,204 | 2,107 | ||||||||||
Long-lived assets | $ 259 | $ 190 | $ 259 | $ 190 | $ 175 | ||||||||
[1] | The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 |
Litigation and Other Charges (N
Litigation and Other Charges (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Feb. 03, 2018USD ($) | Oct. 28, 2017USD ($) | Jul. 29, 2017USD ($) | Feb. 03, 2018USD ($)employeestore | Jan. 28, 2017USD ($)store | Jan. 30, 2016USD ($)store | ||
Impairment Of Assets [Line Items] | |||||||
Reorganization costs | $ 13 | $ 13 | |||||
Associates With Severance Benefits | employee | 190 | ||||||
Pension litigation charge | $ 128 | $ 178 | |||||
Pension litigation charge | $ 50 | 178 | $ 100 | [1] | |||
Impairment of assets | 20 | $ 6 | 4 | ||||
Net book value of long-lived assets | 866 | 866 | 765 | 661 | |||
Other intangible assets impairments | 1 | ||||||
Runners Point Group [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Net book value of long-lived assets | 12 | 12 | |||||
Six02 [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Net book value of long-lived assets | 2 | 2 | |||||
Store Fixtures and Leasehold Improvements [Member] | Runners Point Group [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Impairment of assets | $ 4 | $ 6 | $ 4 | ||||
Number of stores with non-cash impairment charge | store | 123 | 116 | 61 | ||||
Store Fixtures and Leasehold Improvements [Member] | Six02 [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Impairment of assets | $ 16 | ||||||
Number of stores with non-cash impairment charge | store | 30 | ||||||
Osberg V. Foot Locker, Inc [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Pension litigation charge | $ 128 | $ 178 | |||||
Pension litigation charge | $ 100 | ||||||
Trade Names [Member] | Runners Point Group [Member] | |||||||
Impairment Of Assets [Line Items] | |||||||
Other intangible assets impairments | $ 1 | ||||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Litigation and Other Charges (S
Litigation and Other Charges (Schedule of Litigation and Other Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Litigation and Other Charges [Abstract] | |||||||
Pension litigation charge | $ 128 | $ 178 | |||||
Pension litigation charge | $ 50 | 178 | $ 100 | [1] | |||
Reorganization costs | $ 13 | 13 | |||||
Impairment of long-lived assets | 20 | $ 6 | 4 | ||||
Other intangible assets impairments | 1 | ||||||
Total litigation and other charges | $ 211 | $ 6 | $ 105 | ||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Litigation and Other Charges (R
Litigation and Other Charges (Reorganization Accrual) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Oct. 28, 2017 | Feb. 03, 2018 | |
Amounts charged to expense | $ 13 | $ 13 |
Cash payments | (6) | |
Ending balance | 7 | |
Other Related Charges [Member] | ||
Amounts charged to expense | 2 | |
Ending balance | 2 | |
Severance and Benefit Costs [Member] | ||
Amounts charged to expense | 11 | |
Cash payments | (6) | |
Ending balance | $ 5 |
Other Income (Narrative) (Detai
Other Income (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Other Income Non operating [Line Items] | |||
Other income | $ 5 | $ 6 | $ 4 |
Insurance recovery related to a business interruption claim | 2 | ||
Royalty income | 4 | 2 | $ 2 |
Insurance Recoveries | 1 | ||
Realized gain associated with foreign currency option contract | 2 | ||
Leasehold improvements | |||
Other Income Non operating [Line Items] | |||
Lease termination gains related to the sales of leasehold interests | $ 1 | $ 1 |
Merchandise Inventories (Schedu
Merchandise Inventories (Schedule of Merchandise Inventories) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Merchandise Inventories [Abstract] | ||
LIFO inventories | $ 809 | $ 861 |
FIFO inventories | 469 | 446 |
Total merchandise inventories | $ 1,278 | $ 1,307 |
Other Current Assets (Schedule
Other Current Assets (Schedule of Other Current Assets) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Other Current Assets [Abstract] | ||
Prepaid income taxes | $ 174 | $ 48 |
Net receivables | 106 | 101 |
Prepaid rent | 96 | 86 |
Other prepaid expenses | 31 | 27 |
Deferred tax costs | 13 | 13 |
Other | 4 | 5 |
Other current assets | $ 424 | $ 280 |
Property and Equipment, Net (Sc
Property and Equipment, Net (Schedule of Property and Equipment) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,193 | $ 1,078 | |
Less: accumulated depreciation | (753) | (674) | |
Property plant and equipment excluding leasehold and building improvements | 440 | 404 | |
Property and equipment, net | 866 | 765 | $ 661 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4 | 4 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 44 | 43 | |
Furniture, Fixtures, Equipment and Software Development Costs | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,145 | 1,029 | |
Assets under capital leases | 2 | ||
Leasehold and Building Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 965 | 849 | |
Less: accumulated depreciation | (539) | (488) | |
Property and equipment, net | $ 426 | $ 361 |
Goodwill (Narrative) (Details)
Goodwill (Narrative) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Athletic Stores [Member] | ||
Goodwill accumulated impairment charges | $ 167 | $ 167 |
Goodwill (Schedule of Goodwill)
Goodwill (Schedule of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2018 | Jan. 28, 2017 | |
Goodwill [Line Items] | ||
Goodwill Beginning Balance | $ 155 | $ 156 |
Foreign currency translation adjustment | 5 | (1) |
Goodwill Ending Balance | 160 | 155 |
Athletic Stores [Member] | ||
Goodwill [Line Items] | ||
Goodwill Beginning Balance | 16 | 17 |
Foreign currency translation adjustment | 3 | (1) |
Goodwill Ending Balance | 19 | 16 |
Direct-to-Customers [Member] | ||
Goodwill [Line Items] | ||
Goodwill Beginning Balance | 139 | 139 |
Foreign currency translation adjustment | 2 | |
Goodwill Ending Balance | $ 141 | $ 139 |
Other Intangible Assets, Net (N
Other Intangible Assets, Net (Narrative) (Details) $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Additions of intangible assets of new leases | $ 2 |
Weighted-average amortization period | 10 years |
Other Intangible Assets, Net (S
Other Intangible Assets, Net (Schedule of Other Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | ||
Intangible Assets by Major Class [Line Items] | |||
Amortized intangible assets, Gross value | [1] | $ 162 | $ 143 |
Amortized intangible assets, Accum. amort. | [1] | (142) | (123) |
Amortized intangible assets, Net value | [1] | $ 20 | 20 |
Amortized intangible assets, Wtd. Avg. Life in Years | [1],[2] | 13 years 9 months 18 days | |
Other intangible assets, net | [1] | $ 46 | 42 |
Lease Acquisition Costs [Member] | |||
Intangible Assets by Major Class [Line Items] | |||
Amortized intangible assets, Gross value | [1] | 135 | 116 |
Amortized intangible assets, Accum. amort. | [1] | (122) | (105) |
Amortized intangible assets, Net value | [1] | $ 13 | 11 |
Amortized intangible assets, Wtd. Avg. Life in Years | [1],[2] | 10 years | |
Trademarks and Trade Names [Member] | |||
Intangible Assets by Major Class [Line Items] | |||
Amortized intangible assets, Gross value | [1] | $ 20 | 20 |
Amortized intangible assets, Accum. amort. | [1] | (14) | (13) |
Amortized intangible assets, Net value | [1] | $ 6 | 7 |
Amortized intangible assets, Wtd. Avg. Life in Years | [1],[2] | 20 years | |
Favorable Leases [Member] | |||
Intangible Assets by Major Class [Line Items] | |||
Amortized intangible assets, Gross value | [1] | $ 7 | 7 |
Amortized intangible assets, Accum. amort. | [1] | (6) | (5) |
Amortized intangible assets, Net value | [1] | $ 1 | 2 |
Amortized intangible assets, Wtd. Avg. Life in Years | [1],[2] | 8 years 7 months 6 days | |
Runners Point Group [Member] | |||
Intangible Assets by Major Class [Line Items] | |||
Indefinite life intangible assets, Net Value | [1] | $ 26 | $ 22 |
[1] | The change in the ending balances also reflect the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar | ||
[2] | The weighted-average useful life is as of February 3, 2018 and excludes those assets that are fully amortized. |
Other Intangible Assets, Net (A
Other Intangible Assets, Net (Amortization Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Goodwill and Other Intangible Assets, Net [Abstract] | |||
Amortization expense | $ 4 | $ 4 | $ 4 |
Other Intangible Assets, Net (E
Other Intangible Assets, Net (Estimated Future Amortization Expense for Finite Lived Intangibles) (Details) $ in Millions | Feb. 03, 2018USD ($) |
Goodwill and Other Intangible Assets, Net [Abstract] | |
2,018 | $ 4 |
2,019 | 4 |
2,020 | 3 |
2,021 | 3 |
2,022 | $ 2 |
Other Assets (Schedule of Other
Other Assets (Schedule of Other Assets) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Other Assets [Abstract] | ||||
Restricted cash | [1] | $ 181 | $ 27 | $ 26 |
Pension asset | 36 | 10 | ||
Deferred tax costs | 11 | 10 | ||
Auction rate security | 7 | 6 | ||
Cost Method Investment | 15 | |||
Other | 40 | 31 | ||
Qualified Settlement Fund | 150 | |||
Other assets | $ 290 | $ 84 | ||
[1] | Restricted cash for the year ended February 3, 2018 includes $150 million deposited to a qualified settlement fund in connection with the pension litigation. Please see Note 22, Legal Proceedings for further information |
Accrued and Other Liabilities77
Accrued and Other Liabilities (Schedule of Accrued and Other Liabilities) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | |
Accrued and Other Liabilities [Abstract] | |||
Other payroll and payroll related costs, excluding taxes | $ 67 | $ 57 | |
Taxes other than income taxes | 63 | 66 | |
Property and equipment | [1] | 58 | 38 |
Customer deposits | [2] | 49 | 49 |
Advertising | 22 | 35 | |
Income taxes payable | 11 | 5 | |
Incentive bonuses | 6 | 32 | |
Other | 82 | 81 | |
Accrued and other liabilities | $ 358 | $ 363 | |
[1] | Accruals for property and equipment are excluded from the statements of cash flows for all years presented | ||
[2] | Customer deposits include unredeemed gift cards, merchandise credits, and deferred revenue related to undelivered merchandise, including layaway sales. |
Revolving Credit Facility (Narr
Revolving Credit Facility (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Line of Credit Facility [Line Items] | |||
Interest expense, net | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit agreement start date | May 19, 2016 | ||
Revolving credit facility | $ 400,000,000 | ||
Revolving credit facility maturity date | May 19, 2021 | ||
Incremental facility available for credit facility | $ 200,000,000 | ||
Credit facility, covenant description | The Company is not required to comply with any financial covenants unless certain events of default have occurred and are continuing, or if availability under the 2016 Credit Agreement does not exceed the greater of $40 million and 10 percent of the Loan Cap (as defined in the 2016 Credit Agreement). There are no restrictions relating to the payment of dividends and share repurchases as long as no default or event of default has occurred and the aggregate principal amount of unused commitments under the 2016 Credit Agreement is not less than 15 percent of the lesser of the aggregate amount of the commitments and the Borrowing Base, determined as of the preceding fiscal month and on a proforma basis for the following six fiscal months. | ||
Fees paid for the credit facility | $ 2,000,000 | ||
Deferred financing fees, unamortized balance | $ 1,000,000 | ||
Facility fees on unused portion of credit facility | 0.20% | ||
Revolving Credit Facility [Member] | 2016 Credit Agreement Member | |||
Line of Credit Facility [Line Items] | |||
Facility fees on unused portion of credit facility | 0.20% | ||
Revolving Credit Facility [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility, availability percentage as the lesser of Aggregate Commitments and Borrowing Base | 15.00% | ||
Minimum threshold of availability under the credit agreement before the company needs to comply with financial covenants | $ 40,000,000 | ||
Minimum percentage threshold of credit availability to Loan Cap before the company needs to comply with financial covenants | 10.00% | ||
Federal Funds Rate [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, basis spread on variable rate | 0.375% | ||
Federal Funds Rate [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, basis spread on variable rate | 0.125% | ||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, basis spread on variable rate | 1.375% | ||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, basis spread on variable rate | 1.125% |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2018 | Jan. 28, 2017 | |
Long-Term Debt [Abstract] | ||
Interest expense related to long-term debt | $ 9 | $ 8 |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | |
Long-Term Debt [Abstract] | |||
8.5% debentures payable 2022 | $ 118 | $ 118 | |
Unamortized gain related to interest rate swaps | [1] | 7 | 9 |
Debt, total | $ 125 | $ 127 | |
[1] | In 2009, the Company terminated an interest rate swap at a gain. This gain is being amortized as part of interest expense over the remaining term of the debt using the effective-yield method |
Other Liabilities (Schedule of
Other Liabilities (Schedule of Other Liabilities) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | |
Other Liabilities [Abstract] | |||
Pension litigation liability | $ 278 | ||
Pension litigation liability | $ 100 | ||
Straight-line rent liability | [1] | 245 | 205 |
Income taxes | 114 | 23 | |
Pension benefits | 19 | 26 | |
Deferred taxes | 15 | 3 | |
Postretirement benefits | 14 | 14 | |
Workers' compensation and general liability reserves | 7 | 8 | |
Other | 9 | 12 | |
Other liabilities | 701 | 391 | |
Unamortized tenant allowance | $ 64 | $ 59 | |
[1] | Includes unamortized tenant allowances of $64 million and $59 million for the year ended February 3, 2018 and January 28, 2017, respectively. |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Schedule of Operating Leases [Line Items] | |||
Certain executory costs related to leases | $ 146 | $ 141 | $ 137 |
Operating Leases, Rent Expense | 735 | 690 | 640 |
Non-store expenses [Member] | |||
Schedule of Operating Leases [Line Items] | |||
Operating Leases, Rent Expense | $ 24 | $ 24 | $ 18 |
Minimum [Member] | |||
Schedule of Operating Leases [Line Items] | |||
Operating lease period | 5 years | ||
Maximum [Member] | |||
Schedule of Operating Leases [Line Items] | |||
Operating lease period | 10 years |
Leases (Schedule of Leases) (De
Leases (Schedule of Leases) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Leases [Abstract] | |||
Minimum rent | $ 714 | $ 667 | $ 618 |
Contingent rent based on sales | 26 | 29 | 27 |
Sublease income | (5) | (6) | (5) |
Operating Leases, Rent Expense | $ 735 | $ 690 | $ 640 |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments Under Non-Cancelable Operating Leases Net of Future Non-Cancelable Operating Sublease Payments) (Details) $ in Millions | Feb. 03, 2018USD ($) |
Leases [Abstract] | |
2,018 | $ 678 |
2,019 | 637 |
2,020 | 594 |
2,021 | 554 |
2,022 | 496 |
Thereafter | 1,721 |
Total operating lease commitments | $ 4,680 |
Accumulated Other Comprehensi85
Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 |
Accumulated Other Comprehensive Loss [Abstract] | |||
Foreign currency translation adjustments | $ (9) | $ (127) | $ (119) |
Cash flow hedges | 1 | 2 | |
Unrecognized pension cost and postretirement benefit | (270) | (236) | (248) |
Unrealized loss on available-for-sale security | (1) | (1) | |
Accumulated other comprehensive income (loss), net of tax, total | $ (279) | $ (363) | $ (366) |
Accumulated Other Comprehensi86
Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss) (Details) $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | $ (363) |
OCI before reclassification | 118 |
Reclassified from AOCI | 7 |
Reclassification of tax effects due to the adoption of ASU 2018-02 | (41) |
Other comprehensive income/(loss) | 84 |
Ending Balance | (279) |
Foreign Currency Translation Adjustments [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | (127) |
OCI before reclassification | 114 |
Reclassification of tax effects due to the adoption of ASU 2018-02 | 4 |
Other comprehensive income/(loss) | 118 |
Ending Balance | (9) |
Cash Flow Hedges [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | 1 |
OCI before reclassification | (1) |
Other comprehensive income/(loss) | (1) |
Items Related to Pension and Postretirement Benefits [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | (236) |
OCI before reclassification | 4 |
Reclassified from AOCI | 7 |
Reclassification of tax effects due to the adoption of ASU 2018-02 | (45) |
Other comprehensive income/(loss) | (34) |
Ending Balance | (270) |
Unrealized Loss on Available-For-Sale Security [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | (1) |
OCI before reclassification | 1 |
Other comprehensive income/(loss) | $ 1 |
Accumulated Other Comprehensi87
Accumulated Other Comprehensive Loss (Reclassifications from Accumulated Other Comprehensive Loss) (Details) $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |
Net periodic benefit cost | $ 11 |
Income tax benefit | 4 |
Net of tax | 7 |
Pension Benefits [Member] | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |
Net periodic benefit cost | 13 |
Postretirement Benefits [Member] | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |
Net periodic benefit cost | $ (2) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Feb. 03, 2018 | Feb. 03, 2018 | Feb. 03, 2018 | Dec. 21, 2017 | Jan. 28, 2017 | Jan. 30, 2016 | Jan. 31, 2015 | ||||
Income Taxes [Line Items] | ||||||||||
Previously taxed income from undistributed earnings and profits from foreign subsidiaries | $ 1,407 | $ 1,407 | $ 1,407 | |||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense | 99 | |||||||||
Valuation allowance | 17 | 17 | 17 | $ 7 | ||||||
State operating loss carryforwards, potential tax benefit | 1 | 1 | 1 | |||||||
Capital loss with potential benefit from a note receivable | 2 | 2 | $ 2 | |||||||
Capital loss carryforward period | 5 years | |||||||||
Gross unrecognized tax benefits | 44 | 44 | $ 44 | 38 | $ 38 | $ 40 | ||||
Net unrecognized tax benefits that would impact effective tax rate | $ 44 | 44 | $ 44 | 38 | ||||||
Unrecognized tax benefits interest expense (income), net | (1) | |||||||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 1 | $ 2 | ||||||||
Federal statutory income tax rate | 21.00% | 33.70% | [1] | 35.00% | 35.00% | [1] | 35.00% | [1] | ||
Impairement Northern Group Note 2008 [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Valuation allowance | $ 2 | 2 | $ 2 | |||||||
Scenario, Plan [Member] | Tax Cuts and Jobs Act Member | ||||||||||
Income Taxes [Line Items] | ||||||||||
Federal statutory income tax rate | 21.00% | |||||||||
Minimum [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards state, expiration date | 2,021 | |||||||||
Maximum [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards state, expiration date | 2,037 | |||||||||
Settlements could increase earnings in an amount ranging | 5 | 5 | $ 5 | |||||||
International | ||||||||||
Income Taxes [Line Items] | ||||||||||
International minimum tax credit carryforwards | 4 | 4 | 4 | |||||||
Operating loss carryforwards Foreign | 16 | 16 | $ 16 | |||||||
International | Minimum [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards state, expiration date | 2,018 | |||||||||
International | Maximum [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards state, expiration date | 2,026 | |||||||||
Foreign Tax Authority [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Valuation allowance | $ 15 | $ 15 | $ 15 | |||||||
Previously Taxed Income [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense | 13 | |||||||||
Undistributed Earnings and Profits [Member] | ||||||||||
Income Taxes [Line Items] | ||||||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense | $ 86 | |||||||||
[1] | On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions, including but not limited to a reduction in the U.S. corporate income tax rate from 35 percent to 21 percent as well as provisions that limit or eliminate various deductions or credits. In accordance with Section 15 of the Internal Revenue Code, the tax rate for 2017 represented a blended rate of 33.7 percent, calculated by applying a prorated percentage of the number of days prior to and subsequent to the January 1, 2018 effective date |
Income Taxes (Domestic and Inte
Income Taxes (Domestic and International Components of Pre-Tax Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Income Taxes [Abstract] | |||
Domestic | $ 432 | $ 779 | $ 668 |
International | 146 | 225 | 169 |
Total pre-tax income | $ 578 | $ 1,004 | $ 837 |
Income Taxes (Income Tax Provis
Income Taxes (Income Tax Provision) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
Current: | |||||
Federal | $ 129 | $ 249 | $ 212 | ||
State and local | 18 | 44 | 37 | ||
International | 42 | 48 | 53 | ||
Total current tax provision | 189 | 341 | 302 | ||
Deferred: | |||||
Federal | 98 | (6) | (8) | ||
State and local | 5 | 1 | (1) | ||
International | 2 | 4 | 3 | ||
Total deferred tax provision | 105 | (1) | [1] | (6) | [1] |
Total income tax provision | $ 294 | $ 340 | $ 296 | ||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Significant Differences Between Federal Statutory Income Tax Rate and Effective Income Tax Rate on Pre-Tax Income) (Details) | 1 Months Ended | 12 Months Ended | ||||||
Feb. 03, 2018 | Feb. 03, 2018 | Dec. 21, 2017 | Jan. 28, 2017 | Jan. 30, 2016 | ||||
Income Taxes [Abstract] | ||||||||
Federal statutory income tax rate | 21.00% | 33.70% | [1] | 35.00% | 35.00% | [1] | 35.00% | [1] |
Deemed repatriation tax | 17.10% | |||||||
Increase in valuation allowance | 1.60% | |||||||
State and local income taxes, net of federal tax benefit | 2.00% | 3.10% | 2.80% | |||||
International income taxed at varying rates | (2.30%) | (3.70%) | (2.10%) | |||||
Foreign tax credits | (2.60%) | (1.90%) | (2.80%) | |||||
Domestic/foreign tax settlements | (0.20%) | (0.10%) | (0.10%) | |||||
Federal tax credits | (0.20%) | (0.20%) | (0.20%) | |||||
Other, net | 1.70% | 1.70% | 2.80% | |||||
Effective income tax rate | 50.80% | 33.90% | 35.40% | |||||
[1] | On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions, including but not limited to a reduction in the U.S. corporate income tax rate from 35 percent to 21 percent as well as provisions that limit or eliminate various deductions or credits. In accordance with Section 15 of the Internal Revenue Code, the tax rate for 2017 represented a blended rate of 33.7 percent, calculated by applying a prorated percentage of the number of days prior to and subsequent to the January 1, 2018 effective date |
Income Taxes (Significant Porti
Income Taxes (Significant Portions of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Deferred tax assets: | ||
Tax loss/credit carryforwards and capital loss | $ 23 | $ 12 |
Employee benefits | 16 | 76 |
Property and equipment | 54 | 110 |
Straight-line rent | 44 | 51 |
Other | 27 | 47 |
Total deferred tax assets | 164 | 296 |
Valuation allowance | (17) | (7) |
Total deferred tax assets, net | 147 | 289 |
Deferred tax liabilities: | ||
Merchandise inventories | 79 | 104 |
Goodwill and other intangible assets | 20 | 21 |
Other | 15 | 6 |
Total deferred tax liabilities | 114 | 131 |
Net deferred tax asset | 33 | 158 |
Balance Sheet caption reported in: | ||
Deferred taxes | 48 | 161 |
Other liabilities | (15) | (3) |
Net deferred tax asset | $ 33 | $ 158 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits Activity) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Income Taxes [Abstract] | |||
Unrecognized tax benefits at beginning of year | $ 38 | $ 38 | $ 40 |
Foreign currency translation adjustments | 4 | 1 | (2) |
Increases related to current year tax positions | 3 | 8 | 4 |
Increases related to prior period tax positions | 1 | 1 | 2 |
Decreases related to prior period tax positions | (2) | ||
Settlements | (1) | (7) | (1) |
Lapse of statute of limitations | (1) | (1) | (5) |
Unrecognized tax benefits at end of year | $ 44 | $ 38 | $ 38 |
Financial Instruments and Ris94
Financial Instruments and Risk Management (Narrative) (Details) $ in Millions | 12 Months Ended | |
Feb. 03, 2018USD ($)contractcountry | Jan. 28, 2017USD ($) | |
Derivative [Line Items] | ||
Number of countries of operation | country | 24 | |
Derivatives Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Notional value of contracts outstanding | $ 118 | |
Amount of hedge gain (loss) included in AOCL | 0 | $ 1 |
Derivatives Designated as Non-Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Notional value of contracts outstanding | $ 2 | |
Foreign exchange derivative NOT designated as cash flow hedges, gain (loss) | $ 1 | |
Derivatives Designated as Non-Hedging Instruments [Member] | Foreign Currency Option Contracts [Member] | ||
Derivative [Line Items] | ||
Number of contracts outstanding | contract | 0 | |
Maximum [Member] | Derivatives Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Derivative contracts maturity date | 2019-01 | |
Maximum [Member] | Derivatives Designated as Non-Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Derivative contracts maturity date | 2018-09 | |
Top Five Suppliers [Member] | Supplier Concentration Risk [Member] | ||
Derivative [Line Items] | ||
Concentration risk, percentage | 93.00% | |
Nike | Supplier Concentration Risk [Member] | ||
Derivative [Line Items] | ||
Concentration risk, percentage | 67.00% | |
Nike | Minimum [Member] | Supplier Concentration Risk [Member] | ||
Derivative [Line Items] | ||
Concentration risk, percentage | 44.00% | |
Nike | Maximum [Member] | Supplier Concentration Risk [Member] | ||
Derivative [Line Items] | ||
Concentration risk, percentage | 73.00% | |
European | Corporate [Member] | ||
Derivative [Line Items] | ||
Number of countries of operation | country | 20 | |
Net assets | $ 1,058 | |
Number of contries that uses the Euro as the functional currency | country | 11 |
Financial Instruments and Ris95
Financial Instruments and Risk Management (Fair Value Derivative Contracts on Gross Basis by Type of Contract) (Details) - Forward Foreign Exchange Contracts [Member] - Derivatives Designated as Hedging Instruments [Member] - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Current Assets [Member] | ||
Derivative [Line Items] | ||
Fair value of derivative hedging assets | $ 1 | $ 3 |
Current Liabilities [Member] | ||
Derivative [Line Items] | ||
Fair value of derivative hedging liability | $ 1 | $ 3 |
Financial Instruments and Ris96
Financial Instruments and Risk Management (Notional Amounts for All Outstanding Derivatives and Weighted-Average Exchange Rates of Foreign Exchange Forward Contracts) (Details) $ in Millions | Feb. 03, 2018USD ($) |
Inventories | Buy Euro Sell British Pound Sterling [Member] | |
Derivative [Line Items] | |
Notional value of contracts outstanding | $ 111 |
Weighted-Average Exchange Rate | 0.8749 |
Intercompany | Buy US Dollar Sell Euro [Member] | |
Derivative [Line Items] | |
Notional value of contracts outstanding | $ 7 |
Weighted-Average Exchange Rate | 1.2118 |
Intercompany | Buy US Dollar Sell Canadian Dollar [Member] | |
Derivative [Line Items] | |
Notional value of contracts outstanding | $ 2 |
Weighted-Average Exchange Rate | 1.2568 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Level 2 - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 8 | $ 9 |
Liabilities measured at fair value on recurring basis | 1 | 3 |
Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 7 | 6 |
Forward Foreign Exchange Contracts [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Liabilities measured at fair value on recurring basis | 1 | 3 |
Forward Foreign Exchange Contracts [Member] | Derivative Financial Instruments, Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 1 | $ 3 |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Value and Estimated Fair Value of Long-Term Debt) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Fair Value Measurements [Abstract] | ||
Long-term debt, Carrying value | $ 125 | $ 127 |
Long-term debt, Fair value | $ 144 | $ 148 |
Retirement Plans and Other Be99
Retirement Plans and Other Benefits (Narrative) (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |||
Feb. 03, 2018 | Dec. 31, 2017 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Accumulated projected benefit obligation | $ 22,000,000 | $ 22,000,000 | $ 617,000,000 | |||
Future increases in medical plan costs to be incurred by retirees | 100.00% | |||||
U.S. Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Employer's contribution | $ 25,000,000 | |||||
Market-related value of plan assets | $ 585,000,000 | $ 585,000,000 | 550,000,000 | |||
U.S. Plan [Member] | Scenario, Forecast [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Employer's contribution | $ 128,000,000 | |||||
U.S. Plan [Member] | Equity Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Target composition of plan assets | 36.50% | 36.50% | ||||
U.S. Plan [Member] | Fixed Income Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Target composition of plan assets | 60.00% | 60.00% | ||||
U.S. Plan [Member] | Real Estate Investment Trust | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Target composition of plan assets | 3.50% | 3.50% | ||||
SERP Medical Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Accumulated projected benefit obligation | $ 12,000,000 | $ 12,000,000 | ||||
Canadian Qualified Pension Plan [Member] | Equity Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Target composition of plan assets | 5.00% | 5.00% | ||||
Canadian Qualified Pension Plan [Member] | Fixed Income Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Target composition of plan assets | 95.00% | 95.00% | ||||
Savings Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution plan, employer matching contribution, percent of match | 25.00% | |||||
Employer's matching vesting period | 5 years | |||||
Employer's matching contribution | $ 3,000,000 | 3,000,000 | $ 3,000,000 | |||
Eligible age to qualified savings plans | 21 years | |||||
Eligible service to qualified savings plans | 28 days | 1 year | ||||
Minimum eligible service hours to qualified savings plans | 1000 hours | |||||
Defined Contribution Plan Employer Matching Contribution Period Of Service | 1 year | |||||
Defined Contribution Plan Employer Matching Contribution Minimum Number of Working Hours Required | 1000 hours | |||||
Defined Contribution Maximum Percentage of Compensation Matched By Company | 4.00% | |||||
Savings Plan | U.S. Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 18,500 | |||||
Savings Plan | Puerto Rico Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 15,000 | |||||
Non Qualified Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension benefits paid related to its non-qualified pension plans | $ 4,000,000 | |||||
Pension Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension benefits paid related to its non-qualified pension plans | 53,000,000 | 54,000,000 | ||||
Postretirement Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension benefits paid related to its non-qualified pension plans | $ 2,000,000 | $ 2,000,000 | ||||
Maximum [Member] | Savings Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 40.00% |
Retirement Plans and Other B100
Retirement Plans and Other Benefits (Changes in Benefit Obligations and Plan Assets, Funded Status, and Amounts Recognized in Consolidated Balance Sheets) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Change in benefit obligation | ||||
Benefit obligation at beginning of year | $ 617 | |||
Benefit obligation at end of year | 22 | $ 617 | ||
Change in plan assets | ||||
Fair value of plan assets at beginning of year | 589 | |||
Fair value of plan assets at end of year | 589 | |||
Amounts recognized on the balance sheet: | ||||
Other assets | 36 | 10 | ||
Pension Benefits [Member] | ||||
Change in benefit obligation | ||||
Benefit obligation at beginning of year | 666 | 667 | ||
Service cost | 17 | 16 | $ 17 | |
Interest cost | 25 | 26 | 24 | |
Actuarial (gain) loss | 25 | 7 | ||
Foreign currency translation adjustments | 3 | 4 | ||
Benefits paid | (53) | (54) | ||
Benefit obligation at end of year | 683 | 666 | 667 | |
Change in plan assets | ||||
Fair value of plan assets at beginning of year | 647 | 602 | ||
Actual (loss) return on plan assets | 70 | 55 | ||
Employer contributions | 29 | 40 | ||
Foreign currency translation adjustments | 4 | 4 | ||
Benefits paid | (53) | (54) | ||
Fair value of plan assets at end of year | 697 | 647 | 602 | |
Funded status | 14 | (19) | ||
Amounts recognized on the balance sheet: | ||||
Other assets | 36 | 10 | ||
Accrued and other liabilities | (3) | (3) | ||
Other liabilities | (19) | (26) | ||
Amounts recognized on the Balance Sheet | 14 | (19) | ||
Amounts recognized in accumulated other comprehensive loss, pre-tax: | ||||
Net loss (gain) | 368 | [1] | 387 | |
Prior service cost | 1 | [2] | 1 | |
Total amount recognized | 369 | 388 | ||
Postretirement Benefits [Member] | ||||
Change in benefit obligation | ||||
Benefit obligation at beginning of year | 15 | 14 | ||
Interest cost | 1 | 1 | 1 | |
Plan participants’ contributions | 1 | 1 | ||
Actuarial (gain) loss | 1 | |||
Benefits paid | (2) | (2) | ||
Benefit obligation at end of year | 15 | 15 | $ 14 | |
Change in plan assets | ||||
Benefits paid | (2) | (2) | ||
Funded status | (15) | (15) | ||
Amounts recognized on the balance sheet: | ||||
Accrued and other liabilities | (1) | (1) | ||
Other liabilities | (14) | (14) | ||
Amounts recognized on the Balance Sheet | (15) | (15) | ||
Amounts recognized in accumulated other comprehensive loss, pre-tax: | ||||
Net loss (gain) | (5) | [1] | (7) | |
Total amount recognized | $ (5) | $ (7) | ||
[1] | The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year are approximately $13 million and $(1) million related to the pension and postretirement plans, respectively | |||
[2] | The net prior service cost did not change during the year and is not expected to change significantly during the next year |
Retirement Plans and Other B101
Retirement Plans and Other Benefits (Information for Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Retirement Plans and Other Benefits [Abstract] | ||
Projected benefit obligation | $ 22 | $ 617 |
Accumulated benefit obligation | $ 22 | 617 |
Fair value of plan assets | $ 589 |
Retirement Plans and Other B102
Retirement Plans and Other Benefits (Weighted-Average Assumptions used to Determine Benefit Obligations and Net Benefit Cost) (Details) | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Pension Benefits [Member] | |||
Schedule of Benefit Obligations Weighted Average Assumptions [Line Items] | |||
Discount rate, net periodic benefit costs | 4.00% | 4.10% | 3.40% |
Rate of compensation increase, net periodic benefit costs | 3.60% | 3.70% | 3.70% |
Expected long-term rate of return on assets, net periodic benefit costs | 5.80% | 6.10% | 6.10% |
Discount rate, benefit obligation | 3.70% | 4.00% | |
Rate of compensation increase, benefit obligation | 3.60% | 3.70% | |
Postretirement Benefits [Member] | |||
Schedule of Benefit Obligations Weighted Average Assumptions [Line Items] | |||
Discount rate, net periodic benefit costs | 4.00% | 4.10% | 3.40% |
Discount rate, benefit obligation | 3.70% | 4.00% |
Retirement Plans and Other B103
Retirement Plans and Other Benefits (Net Benefit Expense (Income)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 17 | $ 16 | $ 17 |
Interest cost | 25 | 26 | 24 |
Expected return on plan assets | (37) | (37) | (39) |
Amortization of net loss (gain) | 13 | 14 | 14 |
Net benefit expense (income) | 18 | 19 | 16 |
Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 1 | 1 | 1 |
Amortization of net loss (gain) | (2) | (2) | $ (1) |
Net benefit expense (income) | $ (1) | $ (1) |
Retirement Plans and Other B104
Retirement Plans and Other Benefits (Changes in Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | ||
Pension Benefits [Member] | |||
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net actuarial loss (gain) at beginning of year | $ 387 | ||
Amortization of net (loss) gain | (13) | ||
Loss (gain) arising during the year | (8) | ||
Foreign currency fluctuations | 2 | ||
Net actuarial loss (gain) at end of year | [1] | 368 | |
Net prior service cost at end of year | [2] | 1 | |
Total amount recognized | 369 | $ 388 | |
Accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year | 13 | ||
Postretirement Benefits [Member] | |||
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net actuarial loss (gain) at beginning of year | (7) | ||
Amortization of net (loss) gain | 2 | ||
Net actuarial loss (gain) at end of year | [1] | (5) | |
Total amount recognized | (5) | $ (7) | |
Accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year | $ (1) | ||
[1] | The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year are approximately $13 million and $(1) million related to the pension and postretirement plans, respectively | ||
[2] | The net prior service cost did not change during the year and is not expected to change significantly during the next year |
Retirement Plans and Other B105
Retirement Plans and Other Benefits (Assumed Health Care Cost Trend Rates Related to Measurement of SERP Medical Plan Obligations) (Details) | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Medical care | Defined Benefit Obligations | |||
Health Care Cost Trend Rates Assumptions [Line Items] | |||
Initial cost trend rate | 7.00% | 7.00% | 7.00% |
Ultimate cost trend rate | 5.00% | 5.00% | 5.00% |
Year that the ultimate cost trend rate is reached | 2,025 | 2,021 | 2,021 |
Medical care | Net Periodic Benefit Costs | |||
Health Care Cost Trend Rates Assumptions [Line Items] | |||
Initial cost trend rate | 7.00% | 7.00% | 7.00% |
Ultimate cost trend rate | 5.00% | 5.00% | 5.00% |
Year that the ultimate cost trend rate is reached | 2,021 | 2,021 | 2,019 |
Dental care | Defined Benefit Obligations | |||
Health Care Cost Trend Rates Assumptions [Line Items] | |||
Initial cost trend rate | 5.00% | 5.00% | 5.00% |
Ultimate cost trend rate | 5.00% | 5.00% | 5.00% |
Year that the ultimate cost trend rate is reached | 2,018 | 2,017 | 2,016 |
Dental care | Net Periodic Benefit Costs | |||
Health Care Cost Trend Rates Assumptions [Line Items] | |||
Initial cost trend rate | 5.00% | 5.00% | 5.00% |
Ultimate cost trend rate | 5.00% | 5.00% | 5.00% |
Year that the ultimate cost trend rate is reached | 2,017 | 2,016 | 2,015 |
Retirement Plans and Other B106
Retirement Plans and Other Benefits (Effect of One Percentage-Point Change in Assumed Health Care Cost Trend Rates) (Details) - Supplemental Employee Retirement Plan [Member] $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Assumed Health Care Cost Trend Rates, Effect of One Percentage Point Change [Line Items] | |
Effect on total service and interest cost components, 1% increase | |
Effect on accumulated postretirement benefit obligation, 1% increase | 3 |
Effect on total service and interest cost components, 1% (decrease) | |
Effect on accumulated postretirement benefit obligation, 1% (decrease) | $ (2) |
Retirement Plans and Other B107
Retirement Plans and Other Benefits (Fair Values of Plan Assets) (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | $ 589 | |||
U.S. Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | $ 639 | 589 | ||
U.S. Plan [Member] | Cash and Cash Equivalents | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 4 | 4 | ||
U.S. Plan [Member] | Equity Securities | U S Large Cap [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [1] | 115 | 103 | |
U.S. Plan [Member] | Equity Securities | U S Mid Cap [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [1] | 34 | 31 | |
U.S. Plan [Member] | International Equity Securities | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [2] | 78 | 70 | |
U.S. Plan [Member] | Corporate Stock | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [3] | 19 | 27 | |
U.S. Plan [Member] | Long Duration Corporate and Government Bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [4] | 254 | 231 | |
U.S. Plan [Member] | Intermediate Duration Corporate and Government Bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [5] | 113 | 103 | |
U.S. Plan [Member] | Real Estate Securities | Other types of investments | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [6] | 21 | 19 | |
U.S. Plan [Member] | Insurance Contracts | Other types of investments | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 1 | 1 | ||
Canadian Qualified Pension Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 58 | 58 | ||
Canadian Qualified Pension Plan [Member] | Cash and Cash Equivalents | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 1 | 1 | ||
Canadian Qualified Pension Plan [Member] | Canadian and International | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [7] | 4 | 3 | |
Canadian Qualified Pension Plan [Member] | Cash matched bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [8] | 53 | 54 | |
Pension Benefits [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 697 | $ 647 | $ 602 | |
Level 1 | U.S. Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 19 | |||
Level 1 | U.S. Plan [Member] | Corporate Stock | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [3] | 19 | ||
Level 1 | Canadian Qualified Pension Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 4 | |||
Level 1 | Canadian Qualified Pension Plan [Member] | Canadian and International | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [7] | 4 | ||
Level 2 | U.S. Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 620 | |||
Level 2 | U.S. Plan [Member] | Cash and Cash Equivalents | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 4 | |||
Level 2 | U.S. Plan [Member] | Equity Securities | U S Large Cap [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [1] | 115 | ||
Level 2 | U.S. Plan [Member] | Equity Securities | U S Mid Cap [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [1] | 34 | ||
Level 2 | U.S. Plan [Member] | International Equity Securities | Equity Securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [2] | 78 | ||
Level 2 | U.S. Plan [Member] | Long Duration Corporate and Government Bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [4] | 254 | ||
Level 2 | U.S. Plan [Member] | Intermediate Duration Corporate and Government Bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [5] | 113 | ||
Level 2 | U.S. Plan [Member] | Real Estate Securities | Other types of investments | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [6] | 21 | ||
Level 2 | U.S. Plan [Member] | Insurance Contracts | Other types of investments | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 1 | |||
Level 2 | Canadian Qualified Pension Plan [Member] | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 54 | |||
Level 2 | Canadian Qualified Pension Plan [Member] | Cash and Cash Equivalents | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | 1 | |||
Level 2 | Canadian Qualified Pension Plan [Member] | Cash matched bonds | Fixed-income securities | ||||
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items] | ||||
Fair value of plan assets | [8] | $ 53 | ||
[1] | These categories consist of various managed funds that invest primarily in common stocks, as well as other equity securities and a combination of other funds | |||
[2] | This category comprises three managed funds that invest primarily in international common stocks, as well as other equity securities and a combination of other funds | |||
[3] | This category consists of the Company's common stock | |||
[4] | This category consists of various fixed-income funds that invest primarily in long-term bonds, as well as a combination of other funds, that together are designed to exceed the performance of related long-term market indices | |||
[5] | This category consists of two fixed-income funds that invest primarily in intermediate duration bonds, as well as a combination of other funds, that together are designed to exceed the performance of related indices | |||
[6] | This category consists of one fund that invests in global real estate securities | |||
[7] | This category comprises one mutual fund that invests primarily in a diverse portfolio of Canadian securities | |||
[8] | This category consists of fixed-income securities, including strips and coupons, issued or guaranteed by the Government of Canada, provinces or municipalities of Canada including their agencies and crown corporations, as well as other governmental bonds and corporate bonds |
Retirement Plans and Other B108
Retirement Plans and Other Benefits (Estimated Future Benefit Payments) (Details) $ in Millions | Feb. 03, 2018USD ($) |
Pension Benefits [Member] | |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | |
2,018 | $ 66 |
2,019 | 54 |
2,020 | 53 |
2,021 | 52 |
2,022 | 51 |
2023 - 2027 | 236 |
Postretirement Benefits [Member] | |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | |
2,018 | 1 |
2,019 | 1 |
2,020 | 1 |
2,021 | 1 |
2,022 | 1 |
2023 - 2027 | $ 2 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) | Feb. 02, 2013 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | May 21, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Proceeds from exercise of stock options | $ 13,000,000 | $ 29,000,000 | [1] | $ 64,000,000 | [1] | ||
2007 Stock Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized under plan | 14,000,000 | ||||||
Share-based compensation, expiration period | 10 years | ||||||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Available For Grant | 10,760,270 | ||||||
2013 ESPP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized under plan | 3,000,000 | ||||||
Share-based compensation, maximum percentage of employee salary | 10.00% | ||||||
Share-based compensation, maximum value permitted to purchase, per year | $ 25,000 | ||||||
Percentage of common stock fair market value on plan | 85.00% | ||||||
Total number of shares purchased | 109,790 | 80,992 | |||||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Available For Grant | 2,523,865 | ||||||
Stock Option Plans [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Proceeds from exercise of stock options | $ 13,000,000 | ||||||
Tax benefit realized from options exercised | 8,000,000 | ||||||
Fair value of options vested | $ 8,000,000 | $ 9,000,000 | 15,000,000 | ||||
Awards vesting period description | Options for employees become exercisable in substantially equal annual installments over a three-year period, beginning with the first anniversary of the date of grant of the option, unless a shorter or longer duration is established at the time of the option grant. | ||||||
Restricted Stock and Units [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | $ 8,000,000 | ||||||
Fair value of awards | $ 15,000,000 | $ 9,000,000 | $ 10,000,000 | ||||
Awards vesting period description | Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company's long-term incentive program are earned after the attainment of certain performance metrics and vest after the passage of time. | ||||||
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number | 360,782 | 648,558 | 588,308 | ||||
Nonvested Stock Options [Member] | Stock Option Plans [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | $ 5,000,000 | ||||||
Unrecognized compensation cost related to nonvested stock options, weighted-average period expected to be recognized | 1 year 6 months | ||||||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Share-Based Compensation (Total
Share-Based Compensation (Total Compensation Expense Included in SG&A and the Related Tax Benefits Recognized) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | $ 15 | $ 22 | [1] | $ 22 | [1] |
Tax benefit recognized | 4 | 6 | 8 | ||
Stock Option Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Allocated share-based compensation expense | 9 | 10 | 11 | ||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Allocated share-based compensation expense | $ 6 | $ 12 | $ 11 | ||
[1] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. |
Share-Based Compensation (Assum
Share-Based Compensation (Assumptions Used to Compute Share-Based Compensation Expense) (Details) - $ / shares | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Stock Option Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average risk free rate of interest | 2.10% | 1.40% | 1.50% |
Expected volatility | 25.00% | 30.00% | 30.00% |
Weighted-average expected award life (in years) | 5 years 4 months 24 days | 5 years 8 months 12 days | 6 years |
Dividend yield | 1.90% | 1.70% | 1.60% |
Weighted-average fair value | $ 14.74 | $ 15.71 | $ 16.07 |
2013 ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average risk free rate of interest | 1.00% | 0.50% | 0.20% |
Expected volatility | 30.00% | 27.00% | 25.00% |
Weighted-average expected award life (in years) | 1 year | 1 year | 1 year |
Dividend yield | 2.00% | 1.80% | 1.60% |
Weighted-average fair value | $ 10.96 | $ 13.33 | $ 10.47 |
Share-Based Compensation (Optio
Share-Based Compensation (Options Granted Under Stock Option Plans) (Details) shares in Thousands | 12 Months Ended |
Feb. 03, 2018$ / sharesshares | |
Number of Shares | |
Options outstanding at beginning of year | shares | 2,806 |
Granted | shares | 547 |
Exercised | shares | (593) |
Expired or cancelled | shares | (21) |
Options outstanding at end of year | shares | 2,739 |
Options exercisable at end of year | shares | 1,699 |
Weighted-Average Exercise Price | |
Options outstanding at beginning of year | $ / shares | $ 42.61 |
Granted | $ / shares | 69.58 |
Exercised | $ / shares | 21.35 |
Expired or cancelled | $ / shares | 61.50 |
Options outstanding at end of year | $ / shares | 52.45 |
Options exercisable at end of year | $ / shares | $ 43.85 |
Options Outstanding, Weighted-average Remaining Contractual Life | 6 years 6 months |
Otions exercisable at end of year, Weighted-average remaining contractual life | 5 years 2 months 12 days |
Share-Based Compensation (To113
Share-Based Compensation (Total Intrinsic Value of Options Exercised) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Intrinsic value of stock options | |||
Exercised | $ 22 | $ 56 | $ 99 |
Share-Based Compensation (Aggre
Share-Based Compensation (Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable) (Details) $ in Millions | Feb. 03, 2018USD ($) |
Share-Based Compensation [Abstract] | |
Outstanding | $ 17 |
Outstanding and exercisable | $ 17 |
Share-Based Compensation (Infor
Share-Based Compensation (Information about Stock Options Outstanding and Exercisable) (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Feb. 03, 2018 | Jan. 28, 2017 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options Outstanding, Number of Shares | 2,739 | 2,806 |
Options Outstanding, Weighted-average Remaining Contractual Life | 6 years 6 months | |
Options Outstanding, Weighted-Average Exercise Price | $ 52.45 | $ 42.61 |
Options Exercisable, Number of Shares | 1,699 | |
Options Exercisable, Weighted-Average Exercise Price | $ 43.85 | |
$9.85 to $24.75 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Limit | 9.85 | |
Range of Exercise Prices, Upper Limit | $ 24.75 | |
Options Outstanding, Number of Shares | 312 | |
Options Outstanding, Weighted-average Remaining Contractual Life | 2 years 7 months 6 days | |
Options Outstanding, Weighted-Average Exercise Price | $ 17.40 | |
Options Exercisable, Number of Shares | 312 | |
Options Exercisable, Weighted-Average Exercise Price | $ 17.40 | |
$30.92 to $45.75 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Limit | 30.92 | |
Range of Exercise Prices, Upper Limit | $ 45.75 | |
Options Outstanding, Number of Shares | 762 | |
Options Outstanding, Weighted-average Remaining Contractual Life | 5 years 2 months 12 days | |
Options Outstanding, Weighted-Average Exercise Price | $ 38.46 | |
Options Exercisable, Number of Shares | 722 | |
Options Exercisable, Weighted-Average Exercise Price | $ 38.64 | |
$48.55 to $62.11 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Limit | 48.55 | |
Range of Exercise Prices, Upper Limit | $ 62.11 | |
Options Outstanding, Number of Shares | 703 | |
Options Outstanding, Weighted-average Remaining Contractual Life | 6 years 7 months 6 days | |
Options Outstanding, Weighted-Average Exercise Price | $ 61.04 | |
Options Exercisable, Number of Shares | 499 | |
Options Exercisable, Weighted-Average Exercise Price | $ 61.08 | |
$63.79 to $73.21 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Limit | 63.79 | |
Range of Exercise Prices, Upper Limit | $ 73.21 | |
Options Outstanding, Number of Shares | 962 | |
Options Outstanding, Weighted-average Remaining Contractual Life | 8 years 7 months 6 days | |
Options Outstanding, Weighted-Average Exercise Price | $ 68.60 | |
Options Exercisable, Number of Shares | 166 | |
Options Exercisable, Weighted-Average Exercise Price | $ 64.35 |
Share-Based Compensation (Chang
Share-Based Compensation (Changes in Nonvested Options) (Details) - Restricted Stock and Units [Member] $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Nonvested, Beginning Balance | shares | 798 |
Granted | shares | 329 |
Vested | shares | (305) |
Expired or cancelled | shares | (448) |
Nonvested, Ending Balance | shares | 374 |
Aggregate value | $ | $ 22 |
Wtg. Avg. remaining contractual life (in years) | 1 year 3 months 18 days |
Weighted-Average Grant Date Fair Value per Share | |
Nonvested, Beginning Balance | $ / shares | $ 56.91 |
Granted | $ / shares | 63.68 |
Vested | $ / shares | 49.97 |
Expired or cancelled | $ / shares | 64.75 |
Nonvested, Ending Balance | $ / shares | $ 59.15 |
Legal Proceedings (Narrative) (
Legal Proceedings (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Feb. 03, 2018 | Feb. 02, 2019 | Feb. 03, 2018 | Oct. 28, 2017 | |
Pension litigation liability | $ 278 | $ 278 | ||
Pension litigation charge | 128 | 178 | ||
Qualified Settlement Fund | 150 | 150 | ||
Osberg V. Foot Locker, Inc [Member] | ||||
Estimated cost to reform the pension plan | 278 | |||
Pension litigation liability | 278 | 278 | $ 150 | |
Pension litigation charge | 128 | 178 | ||
Qualified Settlement Fund | $ 150 | $ 150 | ||
Osberg V. Foot Locker, Inc [Member] | Scenario, Forecast [Member] | ||||
Pension contribution | $ 128 |
Quarterly Results (Schedule of
Quarterly Results (Schedule of Quarterly Results) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | [1] | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||||||||||
Quarterly Results [Abstract] | |||||||||||||||||||||||
Sales | $ 2,210 | [1] | $ 1,870 | $ 1,701 | $ 2,001 | $ 2,113 | $ 1,886 | $ 1,780 | $ 1,987 | $ 7,782 | $ 7,766 | $ 7,412 | |||||||||||
Gross margin | [2] | 693 | [1] | 580 | 503 | 680 | 713 | 640 | 587 | 696 | 2,456 | 2,636 | |||||||||||
Operating profit | 76 | [1],[3] | 155 | [3] | 72 | [3] | 268 | [3] | 278 | [3] | 228 | [3] | 198 | [3] | 296 | [3] | 571 | [3] | 1,000 | [3] | 837 | ||
Net income/(loss) | $ (49) | [1],[4],[5],[6] | $ 102 | [7] | $ 51 | [6] | $ 180 | $ 189 | $ 157 | [4] | $ 127 | $ 191 | $ 284 | $ 664 | [8] | $ 541 | [8] | ||||||
Basic earnings per share: | $ (0.40) | [1],[9] | $ 0.81 | [9] | $ 0.39 | [9] | $ 1.37 | [9] | $ 1.43 | [9] | $ 1.18 | [9] | $ 0.94 | [9] | $ 1.40 | [9] | $ 2.23 | [9] | $ 4.95 | [9] | $ 3.89 | ||
Diluted earnings per share: | $ (0.40) | [1],[9] | $ 0.81 | [9] | $ 0.39 | [9] | $ 1.36 | [9] | $ 1.42 | [9] | $ 1.17 | [9] | $ 0.94 | [9] | $ 1.39 | [9] | $ 2.22 | [9] | $ 4.91 | [9] | $ 3.84 | ||
Pension litigation charge | $ 128 | $ 178 | |||||||||||||||||||||
Pension litigation charge | $ 50 | 178 | $ 100 | [8] | |||||||||||||||||||
Reorganization costs | $ 13 | 13 | |||||||||||||||||||||
Impairment charges | 20 | $ 6 | $ 20 | $ 6 | [8] | $ 5 | [8] | ||||||||||||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense | $ 99 | ||||||||||||||||||||||
[1] | The fourth quarter of 2017 represents the 14 weeks ended February 3, 2018 | ||||||||||||||||||||||
[2] | Gross margin represents sales less cost of sales. Cost of sales includes: the cost of merchandise, freight, distribution costs including related depreciation expense, shipping and handling, occupancy and buyers' compensation. Occupancy costs include rent, common area maintenance charges, real estate taxes, general maintenance, and utilities | ||||||||||||||||||||||
[3] | Operating profit represents income before income taxes, interest (income)/expense, net, and non-operating income | ||||||||||||||||||||||
[4] | During the fourth quarter of 2017 and the third quarter of 2016, the Company recorded pre-tax non-cash impairment charges totaling $20 million and $6 million, respectively. See Note 3, Litigation and Other Charges for further information | ||||||||||||||||||||||
[5] | During the fourth quarter of 2017, the Company recorded a provisional $99 million tax liability for the mandatory deemed repatriation of foreign sourced net earnings and a corresponding change in our permanent reinvestment assertion under ASC 740-30. See Note 17, Income Taxes for further information | ||||||||||||||||||||||
[6] | During the second and fourth quarters of 2017, the Company recorded pre-tax charges of $50 million and $128 million, respectively, related to its U.S. retirement plan litigation. See Note 22, Legal Proceedings for further information | ||||||||||||||||||||||
[7] | During the third quarter of 2017, the Company recorded a pre-tax charge of $13 million associated with the reorganization and the reduction in staff taken to improve efficiency. See Note 3, Litigation and Other Charges for further information | ||||||||||||||||||||||
[8] | Amounts for 2016 and 2015 have been revised from previously reported amounts to reflect the adoption of new accounting standards in 2017. For additional information, see Note 1, Summary of Significant Accounting Policies. | ||||||||||||||||||||||
[9] | Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year. Additionally, stock options and other potentially dilutive common shares were excluded from the computation of diluted earnings per common share for the quarter ended February 3, 2018 as the Company reported a net loss |