FL Foot Locker

Document And Entity Information

Document And Entity Information - shares6 Months Ended
Aug. 04, 2018Aug. 31, 2018
Document And Entity Information [Abstract]
Document Type10-Q
Amendment Flagfalse
Document Period End DateAug. 4,
2018
Document Fiscal Year Focus2018
Document Fiscal Period FocusQ2
Trading SymbolFL
Entity Common Stock, Shares Outstanding114,896,024
Entity Registrant NameFOOT LOCKER, INC.
Entity Central Index Key850209
Current Fiscal Year End Date--02-02
Entity Filer CategoryLarge Accelerated Filer

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018[1]Jul. 29, 2017
Current assets:
Cash and cash equivalents $ 950 $ 849 $ 1,043
Merchandise inventories1,254 1,278 1,290
Other current assets320 424 311
Assets, current, total2,524 2,551 2,644
Property and equipment, net842 866 821
Deferred taxes108 48 167
Goodwill158 160 158
Other intangible assets, net41 46 45
Other assets159 290 111
Total assets3,832 3,961 3,946
Current liabilities:
Accounts payable408 258 162
Accrued and other liabilities313 358 308
Liabilities, current, total721 616 470
Long-term debt124 125 126
Other liabilities505 701 456
Total liabilities1,350 1,442 1,052
Shareholders' equity:
Common stock and paid-in capital: 121,497,470; 121,262,456 and 133,134,411 shares outstanding, respectively857 842 916
Retained earnings2,232 2,019 2,403
Accumulated other comprehensive loss(340)(279)(284)
Less: Treasury stock at cost: 5,869,122; 1,433,433 and 2,034,408 shares, respectively(267)(63)(141)
Total shareholders’ equity2,482 2,519 2,894
Liabilities and equity, total $ 3,832 $ 3,961 $ 3,946
[1]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - sharesAug. 04, 2018Feb. 03, 2018Jul. 29, 2017
CONSOLIDATED BALANCE SHEETS [Abstract]
Common Stock, Shares Outstanding, Issued, Total121,497,470 121,262,456 133,134,411
Treasury Stock, Shares5,869,122 1,433,433 2,034,408

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Sales $ 1,782 $ 1,701 $ 3,807 $ 3,702
Cost of sales1,243 1,198 2,602 2,519
Selling, general and administrative expenses380 339 765 710
Depreciation and amortization44 42 89 83
Litigation and other charges3 50 15 50
Income from operations112 72 336 340
Interest income, net(1)(1)(3)(1)
Other income[1](2)(5)(1)
Income before income taxes115 73 344 342
Income tax expense27 22 91 111
Net income $ 88 $ 51 $ 253 $ 231
Basic earnings per share $ 0.76 $ 0.39 $ 2.15 $ 1.76
Weighted-average shares outstanding116.6 131.3 117.7 131.3
Diluted earnings per share $ 0.75 $ 0.39 $ 2.14 $ 1.74
Weighted-average shares outstanding, assuming dilution117.1 132 118.1 132.3
[1]Other income includes non-operating items, such as lease termination gains, royalty income, changes in fair value, premiums paid, realized gains and losses associated with foreign currency option contracts, changes in the market value of our available-for-sale security, and net benefit expense related to our pension and postretirement programs excluding the service cost component

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income $ 88 $ 51 $ 253 $ 231
Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax (benefit)/expense of $1, $5, $(7), and $5 million, respectively(20)70 (58)74
Cash flow hedges:
Change in fair value of derivatives, net of income tax 2 1 1
Available for sale securities:
Unrealized gain on available-for-sale securities 1 1
Pension and postretirement adjustments:
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $-, $1, $1 and $2 million, respectively2 4 3
Pension remeasurement and foreign currency fluctuations arising during the year, net of income tax benefit of $3, $-, $3 and $-, respectively(9) (8)
Comprehensive income $ 61 $ 124 $ 192 $ 310

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income tax benefit on translation adjustment $ 1 $ 5 $ (7) $ 5
Income tax expense on amortization of net acturial gain/loss and prior service cost $ 1 1 $ 2
Income tax benefit on pension remeasurement and foreign currency fluctuations arising during the year $ 3 $ 3

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions6 Months Ended
Aug. 04, 2018Jul. 29, 2017
From operating activities:
Net income $ 253 $ 231
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization89 83
Share-based compensation expense9 8
Qualified pension plan contributions(30)(25)
Change in assets and liabilities:
Merchandise inventories3 41
Accounts payable155 (93)
Accrued and other liabilities(38)
Pension litigation accrual15 50
Class counsel fees paid in connection with pension litigation(97)
Other, net30 (6)
Net cash provided by operating activities427 251
From investing activities:
Capital expenditures(115)(150)
Insurance proceeds related to loss on property and equipment2
Net cash used in investing activities(113)(150)
From financing activities:
Purchase of treasury shares(205)(59)
Dividends paid on common stock(81)(82)
Proceeds from exercise of stock options4 10
Treasury stock reissued under employee stock plan2 5
Shares of common stock repurchased to satisfy tax withholding obligations(1)(9)
Net cash used in financing activities(281)(135)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash(25)34
Net change in cash, cash equivalents, and restricted cash8
Cash, cash equivalents, and restricted cash at beginning of period1,031 1,073
Cash, cash equivalents, and restricted cash at end of period1,039 1,073
Cash paid during the period:
Interest5 6
Income taxes $ 129 $ 155

Summary of Significant Accounti

Summary of Significant Accounting Policies6 Months Ended
Aug. 04, 2018
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies1. Summary of Signific ant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements contained in this report are unaudited. In the opinion of management, the condensed consolidated financial statements include all normal, recurring adjustments necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 2, 2019 and of the fiscal year ended February 3, 2018 . Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in Foot Locker, Inc.’s (the “Company”) Form 10-K for the year ended February 3, 2018 , as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 29, 2018 .

Other than the changes to the Revenue Recognition policies as a result of the recently adopted accounting standards discussed below, there were no significant changes to our significant accounting policies disclosed in Note 1, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended February 3, 2018.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of Topic 606 is to 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. The Company adopted ASU 2014-09 during the first quarter of 2018 using the modified retrospective method. We recognized $5 million, or $4 million net of tax, as the cumulative effect of initially applying the new revenue standard as an increase to the opening balance of retained earnings.

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. The Company adopted this ASU during the first quarter of 2018 using the modified retrospective method, and as a result increased deferred income tax assets by $37 million. The Company recorded an adjustment to opening retained earnings to write off the income tax effects that had been deferred from past intercompany transactions involving non-inventory assets. The Company also recorded deferred tax assets with an offset to opening retained earnings for amounts that were not previously recognized under the previous guidance but are recognized under this ASU.

Other recently adopted ASUs are discussed within the applicable disclosures on the following pages.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires lessees to recognize a lease liability, on a discounted basis, and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method of applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. These new leasing standards are effective for fiscal years beginning after December 15, 2018, including interim periods therein. The Company intends to adopt Topic 842 during the first quarter of 2019 using the optional transition method provided by ASU 2018-11. 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 our current evaluation of the standard, we estimate the adoption will result in the addition of $3 billion to $4 billion of assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows.

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.
Revenue Recognition

Store revenue is recognized at the point of sale and includes merchandise, net of returns, and excludes taxes. Revenue from layaway sales is recognized when the customer receives the product, rather than when the initial deposit is paid.

In conjunction with the adoption of Topic 606 during the first quarter of 2018, we have determined that revenue for merchandise that is shipped to our customers from our distribution centers and stores will be recognized upon shipment date. Total revenue recognized includes shipping and handling fees. We have determined that control of the promised good is passed to the customer upon shipment date since the customer has legal title, the rewards of ownership, and paid for the merchandise as of the shipment date. This reflects a change in timing in how we previously recognized revenue for our direct-to-customer sales. Prior to the adoption of Topic 606, the Company recognized such revenue upon date of delivery. As a result of this change, the Company recorded $1 million, net of tax, as an increase to opening retained earnings to reflect the cumulative effect of adopting this change. We have elected to account for shipping and handling as a fulfillment activity. The Company accrues the cost and recognized revenue for these activities upon shipment date.

Gift Cards

The Company sells gift cards, which do not have expiration dates to its customers. Revenue from gift card sales is recorded when the gift cards are redeemed. Effective as of the first quarter of 2018 with the adoption of Topic 606, gift card breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer, unless there is a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions. This reflects a change in our accounting for gift card breakage from the remote method to the proportional method. As a result of adopting Topic 606, the Company recorded $4 million, or $3 million net of tax, as an increase to opening retained earnings to reflect the cumulative effect of this change based upon historical redemption patterns . Additionally, breakage income was previously recorded within selling, general and administrative expenses; however, with the adoption of this standard in the first quarter of 2018, this income is reported as part of sales. This change in classification is not considered significant .


Revenue

Revenue6 Months Ended
Aug. 04, 2018
Revenue [Abstract]
Revenue2. Revenue

Sales disaggregated based upon sales channel is presented below.



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Stores
$ 1,542
$ 1,485
$ 3,285
$ 3,207
 Direct-to-customers
240
216
522
495
 Total sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

Sales disaggregated based upon geographic area is presented in the below table. Sales are attributable to the geographic area in which the sales transaction is fulfilled.




Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 United States
$ 1,220
$ 1,146
$ 2,721
$ 2,646
 International
562
555
1,086
1,056
 Total sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

Contract Liabilities

The table below presents the activity of our gift card liability balance:


($ in millions)
 Balance at February 4, 2018
$ 38
 Redemptions
(43)
 Cumulative catch-up adjustment to retained earnings from the adoption of Topic 606
(4)
 Breakage recognized
(3)
 Activations
39
 Foreign currency fluctuations
(1)
 Balance at August 4, 2018
$ 26

Due to the fact that most gift cards are redeemed within 12 months, the Company elected not to disclose information about remaining performance obligations.

Segment Information

Segment Information6 Months Ended
Aug. 04, 2018
Segment Information [Abstract]
Segment Information3 . Segment Information

The Company has integrated all available shopping channels including stores, websites, and catalogs. Store sales are primarily fulfilled from the store’s inventory, but may also be shipped from any of our distribution centers or from a different store location if an item is not available at the original store. Direct-to-customer orders are primarily shipped to our customers through our distribution centers but may also be shipped from any store or a combination of our distribution centers and stores depending on the availability of particular items.

Our operating segments are identified according to how our business activities are managed and evaluated by our chief operating decision maker, our CEO. Prior to fiscal 2018, the Company had two reportable segments: Athletic Stores and Direct-to-Customers. Beginning in fiscal 2018, the Company has changed its organizational and internal reporting structure in order to execute our omni-channel strategy. In light of these changes, the Company has re-evaluated its operating segments, which now reflect the combination of stores and direct-to-customer by geography. The Company has determined that it has two operating segments, North America and International. Our North America operating segment includes the results of the following banners operating in the U.S. and Canada: Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, and SIX:02, including each of their related e-commerce businesses, as well as our Eastbay business that includes internet, catalog, and team services and sales. Our International operating segment includes the results of the following banners operating in Europe, Australia, and New Zealand: Foot Locker, Runners Point, Sidestep, and Kids Foot Locker, including each of their related e-commerce businesses. We have further aggregated these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics. Prior-year information has been restated to reflect this change.

The Company evaluates performance based on several factors, of which the primary financial measure is the banner’s financial results referred to as division profit. Division profit reflects income before income taxes, pension litigation charge, corporate expense, non-operating income, and net interest income. The following table summarizes our results:



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

 Operating Results
 Division profit
131
129
378
412
 Less: Pension litigation (1)
3
50
15
50
 Less: Corporate expense (2)
16
7
27
22
 Income from operations
112
72
336
340
 Interest income, net
(1)
(1)
(3)
(1)
 Other income (3)
2

5
1
 Income before income taxes
$ 115
$ 73
$ 344
$ 342





 (1)
Included in the thirteen and twenty-six weeks ended August 4, 2018 are pre-tax charges of $3 million and $15 million, respectively, relating to a pension litigation matter described further in Note 14, Legal Proceedings . Included in the thirteen and twenty-six weeks ended July 29, 2017 are pre-tax charges of $50 million in both periods relating to the same matter.
(2)
Corporate expense consists of unallocated selling, general and administrative expenses as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items .
(3)
Other income includes non-operating items, such as lease termination gains, royalty income, changes in fair value, premiums paid, realized gains and losses associated with foreign currency option contracts, changes in the market value of our available-for-sale security, and net benefit expense related to our pension and postretirement programs excluding the service cost component .


Litigation and Other Charges

Litigation and Other Charges6 Months Ended
Aug. 04, 2018
Litigation and Other Charges [Abstract]
Litigation and Other Charges4. Litigation and Other Charges

As more fully discussed in Note 14, Legal Proceedings, the Company recorded charges related to the pension litigation of $3 million and $15 million for the thirteen and twenty-six weeks ended August 4, 2018. For the thirteen and twenty-six weeks ended August 4, 2018, the Company recorded charges of $2 million and $13 million, respectively, representing adjustments to the estimated cost of reformation and interest. Additionally, professional fees in connection with the plan reformation were incurred totaling $1 million and $2 million for the thirteen and twenty-six weeks ended August 4, 2018, respectively. During the second quarter of 2017 , the Company recorded $50 million of charges related to the pension litigation.

During the third quarter of the prior year, the Company reorganized its organizational structure by adjusting certain divisional responsibilities between our various businesses. The following is a rollforward of the liability related to that event for the twenty-six weeks ended August 4, 2018:






Severance and
Other Related

Benefit Costs
Charges
Total

($ in millions)
 Balance at February 3, 2018
$ 5
$ 2
$ 7
 Cash payments
(4)
(1)
(5)
 Balance at August 4, 2018
$ 1
$ 1
$ 2


Restricted Cash

Restricted Cash6 Months Ended
Aug. 04, 2018
Restricted Cash [Abstract]
Restricted Cash
5. Restricted Cash

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


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Cash and cash equivalents
$ 950
$ 1,043
$ 849
 Restricted cash included in other current assets
1
1
1
 Restricted cash included in other non-current assets
88
29
181
 Cash, cash equivalents, and restricted cash
$ 1,039
$ 1,073
$ 1,031

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

Goodwill

Goodwill6 Months Ended
Aug. 04, 2018
Goodwill and Other Intangible Assets, Net [Abstract]
Goodwill6. Goodwill

Annually during the first quarter, or more frequently if impairment indicators arise, the Company reviews goodwill and intangible assets with indefinite lives for impairment.
As a result of the first quarter 2018 change in our organizational and internal reporting structure, we have determined that we have one reportable segment. We have reassessed our reporting units in light of this change and have deemed the collective omni-channel banners in North America and International to be the two reporting units at which goodwill is tested. Therefore, goodwill was re-allocated to these reporting units based on their relative fair values. As required, we conducted our annual impairment review both before and after this change. Neither review resulted in the recognition of impairment, as the fair value of each reporting unit exceeded its carrying value.


Other Intangible Assets, Net

Other Intangible Assets, Net6 Months Ended
Aug. 04, 2018
Goodwill and Other Intangible Assets, Net [Abstract]
Other Intangible Assets, Net7. Other Intangible Assets, net

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



August 4, 2018
July 29, 2017
February 3, 2018

Gross
Accum.
Net
Gross
Accum.
Net
Gross
Accum.
Net
 ($ in millions)
value
amort.
value
value
amort.
value
value
amort.
value
 Amortized intangible assets: (1)

Lease acquisition costs
$ 125
$ (115)
$ 10
$ 128
$ (115)
$ 13
$ 135
$ (122)
$ 13

Trademarks / trade names
20
(14)
6
20
(13)
7
20
(14)
6

Favorable leases
7
(6)
1
7
(6)
1
7
(6)
1

$ 152
$ (135)
$ 17
$ 155
$ (134)
$ 21
$ 162
$ (142)
$ 20
 Indefinite life intangible assets: (1)

Runners Point Group trademarks / trade names
$ 24
$ 24
$ 26
 Other intangible assets, net
$ 41
$ 45
$ 46



(1)
The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar .
The annual review of intangible assets with indefinite lives performed during the first quarter of 2018 did not result in the recognition of impairment. Amortization expense recorded is as follows :




Thirteen weeks ended
Twenty-six weeks ended
 ($ in millions)
August 4, 2018
July 29, 2017
August 4, 2018
July 29, 2017
 Amortization expense
$ 1
$ 1
$ 2
$ 2

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



($ in millions)
 Remainder of 2018
$ 2
 2019
4
 2020
3
 2021
2
 2022
2
 2023
2


Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss6 Months Ended
Aug. 04, 2018
Accumulated Other Comprehensive Loss [Abstract]
Accumulated Other Comprehensive Loss
8. Accumulated Other Comprehensive Loss

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


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Foreign currency translation adjustments
$ (67)
$ (53)
$ (9)
 Cash flow hedges
1
2

 Unrecognized pension cost and postretirement benefit
(274)
(233)
(270)

$ (340)
$ (284)
$ (279)


The changes in AOCL for the twenty-six weeks ended August 4, 2018 were as follows:



Items Related

Foreign Currency
to Pension and

Translation
Cash Flow
Postretirement
 ($ in millions)
Adjustments
Hedges
Benefits
Total
 Balance as of February 3, 2018
$ (9)
$

$ (270)
$ (279)
 OCI before reclassification
(58)
1
1
(56)
 Amortization of pension actuarial (gain)/loss, net of tax


4
4
 Pension remeasurement, net of tax


(9)
(9)
 Other comprehensive income
(58)
1
(4)
(61)
 Balance as of August 4, 2018
$ (67)
$ 1
$ (274)
$ (340)

Reclassifications from AOCL for the twenty-six weeks ended August 4, 2018 were as follows:



($ in millions)
 Amortization of actuarial (gain) loss:
 Pension benefits- amortization of actuarial loss
$ 6
 Postretirement benefits- amortization of actuarial gain
(1)
 Net periodic benefit cost (see Note 12)
5
 Income tax benefit
(1)
 Net of tax
$ 4


Income Taxes

Income Taxes6 Months Ended
Aug. 04, 2018
Income Taxes [Abstract]
Income Taxes9. Income Taxes

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”). This update provides guidance on income tax accounting implications under Public Law 115-97, informally known as the Tax Cuts and Jobs Act (the "Tax Act"), which was enacted on December 22, 2017. The Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35 percent to 21 percent, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. SAB 118 addressed the application of GAAP to situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.

As of the fourth quarter of 2017, the Company had not completed the determination of the accounting implications of the Tax Act on the Company’s tax accruals. However, we reasonably estimated the effects of the Tax Act and recognized a provisional net tax expense of $99 million associated with the Tax Act in the fourth quarter of 2017. During the second quarter of 2018, the Company reduced its provisional calculation by $1 million, which represented a revised estimate of foreign tax credits. Our accounting for the Tax Act is still incomplete as we have not finalized the deemed repatriation of deferred foreign income and prior-year deferred tax activity. We are continuing to gather additional information to complete our accounting for these items and expect to complete our accounting within the one-year time period provided by SAB 118. Any adjustment to these amounts during the measurement period will be recorded in income tax expense in the period in which the analysis is complete.

The Company continues to evaluate the provisions of the Tax Act, including the global intangible low-taxed income (“GILTI”) , the foreign derived intangible income (“FDII”) provisions, and the base erosion and anti-abuse tax (“BEAT”). The Company has made an accounting policy election to treat GILTI taxes as a current period expense.

The ultimate effect of the Tax Act may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, as well as any related actions the Company may take.

For the thirteen and twenty-six weeks ended August 4, 2018, the Company recorded income tax provisions of $27 million and $91 million , which represented effective tax rates of 23.6 percent and 26.4 percent , respectively. For the thirteen and twenty-six weeks ended July 29, 2017, the Company recorded income tax provisions of $22 million and $111 million, which represented effective tax rates of 30.9 percent and 32.6 percent, respectively. The Company’s interim provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items that occur within the periods presented.


Fair Value Measurements

Fair Value Measurements6 Months Ended
Aug. 04, 2018
Fair Value Measurements [Abstract]
Fair Value Measurements10. Fair Value Measurements

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


Level 1 –
Quoted prices for identical instruments in active markets.



Level 2 –
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.


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

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



As of August 4, 2018
As of July 29, 2017
As of February 3, 2018

($ in millions)

Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
 Assets
 Investment in equity securities
$

$ 15
$

$

$

$

$

$

$

 Available-for-sale security

7


7


7

 Foreign exchange forward contracts

2


3


1

 Total Assets
$

$ 24
$

$

$ 10
$

$

$ 8
$

 Liabilities
 Foreign exchange forward contracts

1


1


1

 Total Liabilities
$

$ 1
$

$

$ 1
$

$

$ 1
$


In the first quarter of 2018 the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The Company’s equity investment, under the practicability exception, is now measured at cost adjusted for changes in observable prices minus impairment. Additionally, our security classified as available-for-sale is now recorded at fair value with gains and losses reported to other income in our Statement of Operations, whereas previously it was recorded to AOCL. The adjustment recorded to retained earnings as a result of adopting ASU 2016-01 was not significant. The fair value of the Company’s investment in equity securities is determined by using quoted prices for identical or similar instruments in markets that are not active and therefore are classified as Level 2. The fair value of the auction rate security is determined by using quoted prices for similar instruments in active markets and accordingly is classified as a Level 2 instrument.

The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility and therefore are classified as Level 2 instruments.

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.
The carrying value and estimated fair value of long-term debt and obligations under capital leases were as follows:


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Carrying value
$ 124
$ 126
$ 125
 Fair value
$ 140
$ 146
$ 144

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

Earnings Per Share

Earnings Per Share6 Months Ended
Aug. 04, 2018
Earnings Per Share [Abstract]
Earnings Per Share11. Earnings Per Share
The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding at the end of the period. Restricted stock awards, which contain non-forfeitable rights to dividends, are considered participating securities and are included in the calculation of basic earnings per share. Diluted earnings per share reflects the weighted-average number of common shares outstanding during the period used in the basic earnings per share computation plus dilutive common stock equivalents.
The computation of basic and diluted earnings per share is as follows:



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

(in millions, except per share data)
 Net Income
$ 88
$ 51
$ 253
$ 231

 Weighted-average common shares outstanding
116.6
131.3
117.7
131.3
 Dilutive effect of potential common shares
0.5
0.7
0.4
1.0
 Weighted-average common shares outstanding assuming dilution
117.1
132.0
118.1
132.3

 Earnings per share - basic
$ 0.76
$ 0.39
$ 2.15
$ 1.76
 Earnings per share - diluted
$ 0.75
$ 0.39
$ 2.14
$ 1.74

 Anti-dilutive option awards excluded from diluted calculation
2.0
1.7
1.7
0.8

Additionally, shares of 1.1 million and 0.4 million as of August 4, 2018 and July 29, 2017, respectively, have been excluded from diluted weighted-average shares as the number of shares that will be issued is contingent on the Company’s performance metrics as compared to the pre-established performance goals which have not been achieved as of August 4, 2018 and July 29, 2017 . These shares relate to restricted stock units issued in connection with the Company’s long-term incentive program.

Pension and Postretirement Plan

Pension and Postretirement Plans6 Months Ended
Aug. 04, 2018
Pension and Postretirement Plans [Abstract]
Pension and Postretirement Plans12. Pension and Postretirement Plans

The Company has defined benefit pension plans covering certain of its North American employees, which are funded in accordance with the provisions of the laws where the plans are in effect. The Company also has a defined benefit pension plan covering certain employees of the Runners Point Group. In addition to providing pension benefits, the Company sponsors postretirement medical and life insurance plans, which are available to most of its retired U.S. employees. These medical and life insurance plans are contributory and are not funded.

The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income. In conjunction with the adoption of ASU 2017-07, Compensation - Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , service cost continues to be recognized as part of SG&A expense, while the remaining pension and postretirement expense components are now recognized as part of other income. Prior periods were not reclassified as required by this ASU as the amounts were not considered significant.



Pension Benefits
Postretirement Benefits

Thirteen weeks ended
Twenty-six weeks ended
Thirteen weeks ended
Twenty-six weeks ended

Aug. 4,
July 29,
Aug. 4,
July 29,
Aug. 4,
July 29,
Aug. 4,
July 29,
 ($ in millions)
2018
2017
2018
2017
2018
2017
2018
2017
 Service cost
$ 4
$ 4
$ 9
$ 8
$

$

$

$

 Interest cost
7
7
13
13




 Expected return on plan assets
(9)
(10)
(19)
(19)




 Amortization of net loss (gain)
3
4
6
7
(1)
(1)
(1)
(1)
 Net benefit expense (income)
$ 5
$ 5
$ 9
$ 9
$ (1)
$ (1)
$ (1)
$ (1)

The Company contributed $30 million in May 2018 and $98 million in early September 2018 to the U.S. qualified pension plan . The Company continually evaluates the amount and timing of any future contributions.

In connection with the pension litigation more fully disclosed in Note 14, Legal Proceedings , the Company reformed its U.S. qualified pension plan during the second quarter of 2018, which resulted in the reclassification of the accrued liability previously recorded and the remeasurement of the liability. The Company reclassified $194 million, after the payment of class counsel fees, to the U.S. qualified pension plan liability. After this reclassification, the remeasurement resulted in an increase to the benefit obligation of $12 million, with a corresponding charge to accumulated other comprehensive loss of $9 million, net of tax. The assumptions used to determine the remeasured benefit obligation did not change from the beginning of the year with the exception of the discount rate which increased from 3.7 percent to 4.0 percent.

Share-Based Compensation

Share-Based Compensation6 Months Ended
Aug. 04, 2018
Share-Based Compensation [Abstract]
Share-Based Compensation13. Share-Based Compensation

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




Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Options and shares purchased under the employee stock purchase plan
$ 1
$ 3
$ 3
$ 5
 Restricted stock and restricted stock units
3

6
3
 Total share-based compensation expense
$ 4
$ 3
$ 9
$ 8

 Tax benefit recognized
$

$ 1
$ 1
$ 2


Valuation Model and Assumptions

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


The following table shows the Company’s assumptions used to compute share-based compensation expense for awards granted during the twenty-six weeks ended August 4, 2018 and July 29, 2017 :



Stock Option Plans
Stock Purchase Plan

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017
 Weighted-average risk free rate of interest
2.7
%
2.1
%
1.6
%
0.8
%
 Expected volatility
37
%
25
%
41
%
29
%
 Weighted-average expected award life (in years)
5.5
5.3
1.0
1.0
 Dividend yield
3.1
%
1.7
%
2.3
%
2.0
%
 Weighted-average fair value
$ 12.37
$ 15.56
$ 14.89
$ 10.61

The information in the following table covers option activity under the Company’s stock option plans for the twenty-six weeks ended August 4, 2018 :




Weighted-
Weighted-

Number
Average
Average

of
Remaining
Exercise

Shares
Contractual Life
Price

(in thousands)
(in years)
(per share)
 Options outstanding at the beginning of the year
2,739
$ 52.45
 Granted
380
44.82
 Exercised
(134)
31.47
 Expired or cancelled
(48)
57.91
 Options outstanding at August 4, 2018
2,937
6.5
$ 52.33
 Options exercisable at August 4, 2018
2,054
5.4
$ 50.00
 Options available for future grant at August 4, 2018
8,323

The total fair value of options vested as of August 4, 2018 and July 29, 2017 was $8 million and $7 million, respectively. The cash received from option exercises was $4 million for both the thirteen and twenty-six weeks ended August 4, 2018. The total tax benefit realized from option exercises was $1 million for both the thirteen and twenty-six weeks ended August 4, 2018.

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



Thirteen weeks ended
Twenty-six weeks ended

August 4, 2018
July 29, 2017
August 4, 2018
July 29, 2017

($ in millions)
 Exercised
$ 3
$

$ 3
$ 15

The aggregate intrinsic value for stock options outstanding, and 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:



Twenty-six weeks ended

August 4, 2018
July 29, 2017

($ in millions)
 Outstanding
$ 15
$ 23
 Outstanding and exercisable
$ 13
$ 23

As of August 4, 2018 there was $7 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 August 4, 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 $18.84
240
2.2
$ 17.10
240
$ 17.10
 $24.75 to $34.75
395
4.5
32.16
356
31.88
 $44.78 to $45.75
663
7.7
44.92
299
45.08
 $46.64 to $62.11
699
6.0
60.98
683
61.22
 $63.79 to $73.21
940
7.9
68.57
476
67.13

2,937
6.5
$ 52.33
2,054
$ 50.00


Restricted Stock and Restricted Stock Units

Restricted shares of the Company’s common stock and restricted stock units (“RSU”) may be awarded to certain officers and key employees of the Company. Additionally, RSU awards are made to employees in connection with the Company’s long-term incentive program and to nonemployee directors. Each RSU represents the right to receive one share of the Company’s common stock provided that the vesting conditions are satisfied. There were 842,768 and 668,120 RSU awards outstanding as of August 4, 2018 and July 29, 2017 , respectively.

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

Restricted stock and RSU activity for the twenty-six weeks ended August 4, 2018 is summarized as follows:




Weighted-

Average
Weighted-

Number
Remaining
Average

of
Contractual
Grant Date

Shares
Life
Fair Value

(in thousands)
(in years)
(per share)
 Nonvested at beginning of year
374
$ 59.15
 Granted (1)
651
47.29
 Vested
(94)
63.37
 Cancelled (2)
(80)
58.92
 Nonvested at August 4, 2018
851
2.3
$ 49.63
 Aggregate value ($ in millions)
$ 42



(1)
Approximately 0.4 million performance-based RSUs were granted during the first quarter of 2018 and are included as granted in the table above. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company’s predefined financial performance targets .
(2)
In addition to forfeitures of restricted stock and RSUs, cancellations include adjustments that were made to performance-based RSUs previously granted. These adjustments reflect changes in estimates based upon the Company’s current performance against predefined financial targets .


The total value of awards for which restrictions lapsed during the twenty-six weeks ended August 4, 2018 and July 29, 2017 was $6 million and $14 million, respectively. As of August 4, 2018 , there was $29 million of total unrecognized compensation cost related to nonvested restricted awards.

Legal Proceedings

Legal Proceedings6 Months Ended
Aug. 04, 2018
Legal Proceedings [Abstract]
Legal Proceedings14. 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 discontinued 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 meal break class action in California and a purported class action in New York alleging failure to pay for all hours worked by employees. The Company and certain officers of the Company are defendants in a purported securities law class action in New York. Additionally, the directors and certain officers of the Company are defendants in a related derivative action.

For the last several years, the Company and the Company’s U.S. retirement plan have been 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 alleged 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. In early 2018, the Company exhausted all of its legal remedies and is required to r eform the pension plan consistent with the trial court’s decision and judgment. During the second quarter of 2018, the court entered its final judgment, including the ruling on the fairness of the class counsel fees. The amount accrued as of February 3, 2018 was $278 million. During the first quarter of 2018 the amount of the accrual was increased by $7 million related to a change in the estimated value of the judgment, based on additional facts as to how the reformation should be calculated . Additionally, interest was accrued as mandated by the provisions of the required plan reformation of $2 million and $6 million for the thirteen and twenty-six weeks ended August 4, 2018, respectively, bringing the total amount accrued to $291 million. In June 2018, the Company paid $97 million to class counsel representing the court-approved fees. The remaining balance of $194 million was reclassified to the pension plan obligation in connection with the reformation.

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. Judgments could be rendered or settlements made that could adversely affect the Company’s operating results or cash flows in a particular period.



Summary of Significant Accoun22

Summary of Significant Accounting Policies (Policy)6 Months Ended
Aug. 04, 2018
Summary of Significant Accounting Policies [Abstract]
Basis of PresentationBasis of Presentation

The accompanying condensed consolidated financial statements contained in this report are unaudited. In the opinion of management, the condensed consolidated financial statements include all normal, recurring adjustments necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 2, 2019 and of the fiscal year ended February 3, 2018 . Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in Foot Locker, Inc.’s (the “Company”) Form 10-K for the year ended February 3, 2018 , as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 29, 2018 .

Other than the changes to the Revenue Recognition policies as a result of the recently adopted accounting standards discussed below, there were no significant changes to our significant accounting policies disclosed in Note 1, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended February 3, 2018.
Recent Accounting PronouncementsRecently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of Topic 606 is to 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. The Company adopted ASU 2014-09 during the first quarter of 2018 using the modified retrospective method. We recognized $5 million, or $4 million net of tax, as the cumulative effect of initially applying the new revenue standard as an increase to the opening balance of retained earnings.

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. The Company adopted this ASU during the first quarter of 2018 using the modified retrospective method, and as a result increased deferred income tax assets by $37 million. The Company recorded an adjustment to opening retained earnings to write off the income tax effects that had been deferred from past intercompany transactions involving non-inventory assets. The Company also recorded deferred tax assets with an offset to opening retained earnings for amounts that were not previously recognized under the previous guidance but are recognized under this ASU.

Other recently adopted ASUs are discussed within the applicable disclosures on the following pages.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires lessees to recognize a lease liability, on a discounted basis, and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method of applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. These new leasing standards are effective for fiscal years beginning after December 15, 2018, including interim periods therein. The Company intends to adopt Topic 842 during the first quarter of 2019 using the optional transition method provided by ASU 2018-11. 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 our current evaluation of the standard, we estimate the adoption will result in the addition of $3 billion to $4 billion of assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows.

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.
Revenue RecognitionRevenue Recognition

Store revenue is recognized at the point of sale and includes merchandise, net of returns, and excludes taxes. Revenue from layaway sales is recognized when the customer receives the product, rather than when the initial deposit is paid.

In conjunction with the adoption of Topic 606 during the first quarter of 2018, we have determined that revenue for merchandise that is shipped to our customers from our distribution centers and stores will be recognized upon shipment date. Total revenue recognized includes shipping and handling fees. We have determined that control of the promised good is passed to the customer upon shipment date since the customer has legal title, the rewards of ownership, and paid for the merchandise as of the shipment date. This reflects a change in timing in how we previously recognized revenue for our direct-to-customer sales. Prior to the adoption of Topic 606, the Company recognized such revenue upon date of delivery. As a result of this change, the Company recorded $1 million, net of tax, as an increase to opening retained earnings to reflect the cumulative effect of adopting this change. We have elected to account for shipping and handling as a fulfillment activity. The Company accrues the cost and recognized revenue for these activities upon shipment date.
Gift CardsGift Cards

The Company sells gift cards, which do not have expiration dates to its customers. Revenue from gift card sales is recorded when the gift cards are redeemed. Effective as of the first quarter of 2018 with the adoption of Topic 606, gift card breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer, unless there is a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions. This reflects a change in our accounting for gift card breakage from the remote method to the proportional method. As a result of adopting Topic 606, the Company recorded $4 million, or $3 million net of tax, as an increase to opening retained earnings to reflect the cumulative effect of this change based upon historical redemption patterns . Additionally, breakage income was previously recorded within selling, general and administrative expenses; however, with the adoption of this standard in the first quarter of 2018, this income is reported as part of sales. This change in classification is not considered significant

Revenue (Tables)

Revenue (Tables)6 Months Ended
Aug. 04, 2018
Revenue [Abstract]
Disaggregation of RevenueSales disaggregated based upon sales channel is presented below.



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Stores
$ 1,542
$ 1,485
$ 3,285
$ 3,207
 Direct-to-customers
240
216
522
495
 Total sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

Revenue from External Customers by Geographic AreasSales disaggregated based upon geographic area is presented in the below table. Sales are attributable to the geographic area in which the sales transaction is fulfilled.




Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 United States
$ 1,220
$ 1,146
$ 2,721
$ 2,646
 International
562
555
1,086
1,056
 Total sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

Activity of Gift Card Liability BalanceThe table below presents the activity of our gift card liability balance:


($ in millions)
 Balance at February 4, 2018
$ 38
 Redemptions
(43)
 Cumulative catch-up adjustment to retained earnings from the adoption of Topic 606
(4)
 Breakage recognized
(3)
 Activations
39
 Foreign currency fluctuations
(1)
 Balance at August 4, 2018
$ 26


Segment Information (Tables)

Segment Information (Tables)6 Months Ended
Aug. 04, 2018
Segment Information [Abstract]
Sales and Division Operating Results for Reportable SegmentsThe Company evaluates performance based on several factors, of which the primary financial measure is the banner’s financial results referred to as division profit. Division profit reflects income before income taxes, pension litigation charge, corporate expense, non-operating income, and net interest income. The following table summarizes our results:



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Sales
$ 1,782
$ 1,701
$ 3,807
$ 3,702

 Operating Results
 Division profit
131
129
378
412
 Less: Pension litigation (1)
3
50
15
50
 Less: Corporate expense (2)
16
7
27
22
 Income from operations
112
72
336
340
 Interest income, net
(1)
(1)
(3)
(1)
 Other income (3)
2

5
1
 Income before income taxes
$ 115
$ 73
$ 344
$ 342





 (1)
Included in the thirteen and twenty-six weeks ended August 4, 2018 are pre-tax charges of $3 million and $15 million, respectively, relating to a pension litigation matter described further in Note 14, Legal Proceedings . Included in the thirteen and twenty-six weeks ended July 29, 2017 are pre-tax charges of $50 million in both periods relating to the same matter.
(2)
Corporate expense consists of unallocated selling, general and administrative expenses as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items .
(3)
Other income includes non-operating items, such as lease termination gains, royalty income, changes in fair value, premiums paid, realized gains and losses associated with foreign currency option contracts, changes in the market value of our available-for-sale security, and net benefit expense related to our pension and postretirement programs excluding the service cost component .


Litigation and Other Charges (T

Litigation and Other Charges (Tables)6 Months Ended
Aug. 04, 2018
Litigation and Other Charges [Abstract]
Schedule of Reorganization AccrualThe following is a rollforward of the liability related to that event for the twenty-six weeks ended August 4, 2018:






Severance and
Other Related

Benefit Costs
Charges
Total

($ in millions)
 Balance at February 3, 2018
$ 5
$ 2
$ 7
 Cash payments
(4)
(1)
(5)
 Balance at August 4, 2018
$ 1
$ 1
$ 2


Restricted Cash (Tables)

Restricted Cash (Tables)6 Months Ended
Aug. 04, 2018
Restricted Cash [Abstract]
Reconciliation of Cash and Cash EquivalentsThe following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows.


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Cash and cash equivalents
$ 950
$ 1,043
$ 849
 Restricted cash included in other current assets
1
1
1
 Restricted cash included in other non-current assets
88
29
181
 Cash, cash equivalents, and restricted cash
$ 1,039
$ 1,073
$ 1,031


Other Intangible Assets, Net (T

Other Intangible Assets, Net (Tables)6 Months Ended
Aug. 04, 2018
Goodwill and Other Intangible Assets, Net [Abstract]
Components of Finite-Lived Intangible Assets and Intangible Assets Not Subject to Amortization
The components of finite-lived intangible assets and intangible assets not subject to amortization are as follows:



August 4, 2018
July 29, 2017
February 3, 2018

Gross
Accum.
Net
Gross
Accum.
Net
Gross
Accum.
Net
 ($ in millions)
value
amort.
value
value
amort.
value
value
amort.
value
 Amortized intangible assets: (1)

Lease acquisition costs
$ 125
$ (115)
$ 10
$ 128
$ (115)
$ 13
$ 135
$ (122)
$ 13

Trademarks / trade names
20
(14)
6
20
(13)
7
20
(14)
6

Favorable leases
7
(6)
1
7
(6)
1
7
(6)
1

$ 152
$ (135)
$ 17
$ 155
$ (134)
$ 21
$ 162
$ (142)
$ 20
 Indefinite life intangible assets: (1)

Runners Point Group trademarks / trade names
$ 24
$ 24
$ 26
 Other intangible assets, net
$ 41
$ 45
$ 46



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

Amortization Expense


Thirteen weeks ended
Twenty-six weeks ended
 ($ in millions)
August 4, 2018
July 29, 2017
August 4, 2018
July 29, 2017
 Amortization expense
$ 1
$ 1
$ 2
$ 2

Estimated Future Expected Amortization Expense for Finite Life Intangible AssetsEstimated future amortization expense for finite-life intangible assets is as follows:



($ in millions)
 Remainder of 2018
$ 2
 2019
4
 2020
3
 2021
2
 2022
2
 2023
2


Accumulated Other Comprehensi28

Accumulated Other Comprehensive Loss (Tables)6 Months Ended
Aug. 04, 2018
Accumulated Other Comprehensive Loss [Abstract]
Accumulated Other Comprehensive Loss

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


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Foreign currency translation adjustments
$ (67)
$ (53)
$ (9)
 Cash flow hedges
1
2

 Unrecognized pension cost and postretirement benefit
(274)
(233)
(270)

$ (340)
$ (284)
$ (279)

Changes in Accumulated Other Comprehensive Loss

The changes in AOCL for the twenty-six weeks ended August 4, 2018 were as follows:



Items Related

Foreign Currency
to Pension and

Translation
Cash Flow
Postretirement
 ($ in millions)
Adjustments
Hedges
Benefits
Total
 Balance as of February 3, 2018
$ (9)
$

$ (270)
$ (279)
 OCI before reclassification
(58)
1
1
(56)
 Amortization of pension actuarial (gain)/loss, net of tax


4
4
 Pension remeasurement, net of tax


(9)
(9)
 Other comprehensive income
(58)
1
(4)
(61)
 Balance as of August 4, 2018
$ (67)
$ 1
$ (274)
$ (340)

Reclassification from Accumulated Other Comprehensive LossReclassifications from AOCL for the twenty-six weeks ended August 4, 2018 were as follows:



($ in millions)
 Amortization of actuarial (gain) loss:
 Pension benefits- amortization of actuarial loss
$ 6
 Postretirement benefits- amortization of actuarial gain
(1)
 Net periodic benefit cost (see Note 12)
5
 Income tax benefit
(1)
 Net of tax
$ 4


Fair Value Measurements (Tables

Fair Value Measurements (Tables)6 Months Ended
Aug. 04, 2018
Fair Value Measurements [Abstract]
Assets and Liabilities Measured at Fair Value on Recurring Basis
The following tables provide a summary of the Company’s recognized assets and liabilities that are measured at fair value on a recurring basis:



As of August 4, 2018
As of July 29, 2017
As of February 3, 2018

($ in millions)

Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
 Assets
 Investment in equity securities
$

$ 15
$

$

$

$

$

$

$

 Available-for-sale security

7


7


7

 Foreign exchange forward contracts

2


3


1

 Total Assets
$

$ 24
$

$

$ 10
$

$

$ 8
$

 Liabilities
 Foreign exchange forward contracts

1


1


1

 Total Liabilities
$

$ 1
$

$

$ 1
$

$

$ 1
$


Carrying Value and Estimated Fair Value of Long-Term DebtThe carrying value and estimated fair value of long-term debt and obligations under capital leases were as follows:


August 4,
July 29,
February 3,

2018
2017
2018

($ in millions)
 Carrying value
$ 124
$ 126
$ 125
 Fair value
$ 140
$ 146
$ 144


Earnings Per Share (Tables)

Earnings Per Share (Tables)6 Months Ended
Aug. 04, 2018
Earnings Per Share [Abstract]
Basic and Diluted Weighted-Average Number of Common Shares OutstandingThe computation of basic and diluted earnings per share is as follows:



Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

(in millions, except per share data)
 Net Income
$ 88
$ 51
$ 253
$ 231

 Weighted-average common shares outstanding
116.6
131.3
117.7
131.3
 Dilutive effect of potential common shares
0.5
0.7
0.4
1.0
 Weighted-average common shares outstanding assuming dilution
117.1
132.0
118.1
132.3

 Earnings per share - basic
$ 0.76
$ 0.39
$ 2.15
$ 1.76
 Earnings per share - diluted
$ 0.75
$ 0.39
$ 2.14
$ 1.74

 Anti-dilutive option awards excluded from diluted calculation
2.0
1.7
1.7
0.8


Pension and Postretirement Pl31

Pension and Postretirement Plans (Tables)6 Months Ended
Aug. 04, 2018
Pension and Postretirement Plans [Abstract]
Net Benefit Expense (Income)
The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income. In conjunction with the adoption of ASU 2017-07, Compensation - Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , service cost continues to be recognized as part of SG&A expense, while the remaining pension and postretirement expense components are now recognized as part of other income. Prior periods were not reclassified as required by this ASU as the amounts were not considered significant.



Pension Benefits
Postretirement Benefits

Thirteen weeks ended
Twenty-six weeks ended
Thirteen weeks ended
Twenty-six weeks ended

Aug. 4,
July 29,
Aug. 4,
July 29,
Aug. 4,
July 29,
Aug. 4,
July 29,
 ($ in millions)
2018
2017
2018
2017
2018
2017
2018
2017
 Service cost
$ 4
$ 4
$ 9
$ 8
$

$

$

$

 Interest cost
7
7
13
13




 Expected return on plan assets
(9)
(10)
(19)
(19)




 Amortization of net loss (gain)
3
4
6
7
(1)
(1)
(1)
(1)
 Net benefit expense (income)
$ 5
$ 5
$ 9
$ 9
$ (1)
$ (1)
$ (1)
$ (1)


Share-Based Compensation (Table

Share-Based Compensation (Tables)6 Months Ended
Aug. 04, 2018
Share-Based Compensation [Abstract]
Total Compensation Expense and the Related Tax Benefits Recognized


Thirteen weeks ended
Twenty-six weeks ended

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017

($ in millions)
 Options and shares purchased under the employee stock purchase plan
$ 1
$ 3
$ 3
$ 5
 Restricted stock and restricted stock units
3

6
3
 Total share-based compensation expense
$ 4
$ 3
$ 9
$ 8

 Tax benefit recognized
$

$ 1
$ 1
$ 2

Assumptions used to Compute Share-Based Compensation Expense


Stock Option Plans
Stock Purchase Plan

August 4,
July 29,
August 4,
July 29,

2018
2017
2018
2017
 Weighted-average risk free rate of interest
2.7
%
2.1
%
1.6
%
0.8
%
 Expected volatility
37
%
25
%
41
%
29
%
 Weighted-average expected award life (in years)
5.5
5.3
1.0
1.0
 Dividend yield
3.1
%
1.7
%
2.3
%
2.0
%
 Weighted-average fair value
$ 12.37
$ 15.56
$ 14.89
$ 10.61

Options Granted under Stock Option Plans


Weighted-
Weighted-

Number
Average
Average

of
Remaining
Exercise

Shares
Contractual Life
Price

(in thousands)
(in years)
(per share)
 Options outstanding at the beginning of the year
2,739
$ 52.45
 Granted
380
44.82
 Exercised
(134)
31.47
 Expired or cancelled
(48)
57.91
 Options outstanding at August 4, 2018
2,937
6.5
$ 52.33
 Options exercisable at August 4, 2018
2,054
5.4
$ 50.00
 Options available for future grant at August 4, 2018
8,323

Total Intrinsic Value of Options Exercised


Thirteen weeks ended
Twenty-six weeks ended

August 4, 2018
July 29, 2017
August 4, 2018
July 29, 2017

($ in millions)
 Exercised
$ 3
$

$ 3
$ 15

Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable


Twenty-six weeks ended

August 4, 2018
July 29, 2017

($ in millions)
 Outstanding
$ 15
$ 23
 Outstanding and exercisable
$ 13
$ 23

Information about Stock Options Outstanding and Exercisable


Options Outstanding
Options Exercisable

Weighted-

Average
Weighted-
Weighted-

Remaining
Average
Average
 Range of Exercise
Number
Contractual
Exercise
Number
Exercise
 Prices
Outstanding
Life
Price
Exercisable
Price

(in thousands, except prices per share and contractual life)
 $9.85 to $18.84
240
2.2
$ 17.10
240
$ 17.10
 $24.75 to $34.75
395
4.5
32.16
356
31.88
 $44.78 to $45.75
663
7.7
44.92
299
45.08
 $46.64 to $62.11
699
6.0
60.98
683
61.22
 $63.79 to $73.21
940
7.9
68.57
476
67.13

2,937
6.5
$ 52.33
2,054
$ 50.00

Restricted Share and Unit ActivityRestricted stock and RSU activity for the twenty-six weeks ended August 4, 2018 is summarized as follows:




Weighted-

Average
Weighted-

Number
Remaining
Average

of
Contractual
Grant Date

Shares
Life
Fair Value

(in thousands)
(in years)
(per share)
 Nonvested at beginning of year
374
$ 59.15
 Granted (1)
651
47.29
 Vested
(94)
63.37
 Cancelled (2)
(80)
58.92
 Nonvested at August 4, 2018
851
2.3
$ 49.63
 Aggregate value ($ in millions)
$ 42



(1)
Approximately 0.4 million performance-based RSUs were granted during the first quarter of 2018 and are included as granted in the table above. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company’s predefined financial performance targets .
(2)
In addition to forfeitures of restricted stock and RSUs, cancellations include adjustments that were made to performance-based RSUs previously granted. These adjustments reflect changes in estimates based upon the Company’s current performance against predefined financial targets .


Summary of Significant Accoun33

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in MillionsFeb. 04, 2018Aug. 04, 2018
Accounting Standards Update 2016 16 [Member]
Significant Accounting Policies [Line Items]
Increase in deferred tax assets $ 37
Accounting Standards Update 2014-09 [Member]
Significant Accounting Policies [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets5
Cumulative Effect on Retained Earnings, Net of Tax4
Accounting Standards Update 2014-09 [Member] | Revenue Recognition Timing Change [Member]
Significant Accounting Policies [Line Items]
Cumulative Effect on Retained Earnings, Net of Tax1
Accounting Standards Update 2014-09 [Member] | Gift Card Breakage [Member]
Significant Accounting Policies [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets4
Cumulative Effect on Retained Earnings, Net of Tax $ 3
Maximum [Member] | Scenario, Forecast [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, Forecast [Member] | Accounting Standards Update 2016 02 [Member]
Significant Accounting Policies [Line Items]
Addition to assets and liabilities from accounting standards update $ 3,000

Revenue (Schedule of Sales Disa

Revenue (Schedule of Sales Disaggregated by Sales Channel) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Sales $ 1,782 $ 1,701 $ 3,807 $ 3,702
Store Sales Channel [Member]
Sales1,542 1,485 3,285 3,207
Direct to Customers Sales Channel [Member]
Sales $ 240 $ 216 $ 522 $ 495

Revenue (Schedule of Sales Di35

Revenue (Schedule of Sales Disaggregated by Geographic Area) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Sales $ 1,782 $ 1,701 $ 3,807 $ 3,702
United States of America [Member]
Sales1,220 1,146 2,721 2,646
International [Member]
Sales $ 562 $ 555 $ 1,086 $ 1,056

Revenue (Activity of Gift Card

Revenue (Activity of Gift Card Liability Balance) (Details) $ in Millions6 Months Ended
Aug. 04, 2018USD ($)
Accrued gift card liability at beginning of period $ 38
Cumulative catch-up adjustment to retained earnings from the adoption of Topic 606(4)
Foreign currency fluctuations(1)
Accrued gift card liability at end of period26
Gift Card Activations [Member]
Activations39
Gift Card Redemption Revenue [Member]
Revenue recognized(43)
Gift Card Breakage Revenue [Member]
Revenue recognized $ (3)

Segment Information (Narrative)

Segment Information (Narrative) (Details) $ in Millions3 Months Ended6 Months Ended12 Months Ended
Aug. 04, 2018USD ($)Jul. 29, 2017USD ($)Aug. 04, 2018USD ($)segmentJul. 29, 2017USD ($)Feb. 03, 2018segment
Segment Information [Abstract]
Number of reportable segments | segment1 2
Pension litigation charge | $[1] $ (3) $ (50) $ (15) $ (50)
[1]Included in the thirteen and twenty-six weeks ended August 4, 2018 are pre-tax charges of $3 million and $15 million, respectively, relating to a pension litigation matter described further in Note 14, Legal Proceedings. Included in the thirteen and twenty-six weeks ended July 29, 2017 are pre-tax charges of $50 million in both periods relating to the same matter.

Segment Information (Sales and

Segment Information (Sales and Division Operating Results for Reportable Segments) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Segment Information [Abstract]
Sales $ 1,782 $ 1,701 $ 3,807 $ 3,702
Division profit131 129 378 412
Less: Pension litigation[1]3 50 15 50
Less: Corporate expense[2]16 7 27 22
Income from operations112 72 336 340
Interest income, net(1)(1)(3)(1)
Other income[3]2 5 1
Income before income taxes $ 115 $ 73 $ 344 $ 342
[1]Included in the thirteen and twenty-six weeks ended August 4, 2018 are pre-tax charges of $3 million and $15 million, respectively, relating to a pension litigation matter described further in Note 14, Legal Proceedings. Included in the thirteen and twenty-six weeks ended July 29, 2017 are pre-tax charges of $50 million in both periods relating to the same matter.
[2]Corporate expense consists of unallocated selling, general and administrative expenses as well as depreciation and amortization related to the Company's corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items
[3]Other income includes non-operating items, such as lease termination gains, royalty income, changes in fair value, premiums paid, realized gains and losses associated with foreign currency option contracts, changes in the market value of our available-for-sale security, and net benefit expense related to our pension and postretirement programs excluding the service cost component

Litigation and Other Charges (N

Litigation and Other Charges (Narrative) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Litigation and Other Charges [Abstract]
Less: Pension litigation[1] $ 3 $ 50 $ 15 $ 50
Plan reformation cost2 13
Professional Fees $ 1 $ 2
[1]Included in the thirteen and twenty-six weeks ended August 4, 2018 are pre-tax charges of $3 million and $15 million, respectively, relating to a pension litigation matter described further in Note 14, Legal Proceedings. Included in the thirteen and twenty-six weeks ended July 29, 2017 are pre-tax charges of $50 million in both periods relating to the same matter.

Litigation and Other Charges (R

Litigation and Other Charges (Reorganization Accrual) (Details) $ in Millions6 Months Ended
Aug. 04, 2018USD ($)
Beginning balance $ 7
Cash payments(5)
Ending balance2
Other Related Charges [Member]
Beginning balance2
Cash payments(1)
Ending balance1
Severance and Benefit Costs [Member]
Beginning balance5
Cash payments(4)
Ending balance $ 1

Restricted Cash (Reconciliation

Restricted Cash (Reconciliation of Cash and Cash Equivalents) (Details) - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018Jul. 29, 2017Jan. 28, 2017
Restricted Cash [Abstract]
Cash and cash equivalents $ 950 $ 849 [1] $ 1,043
Restricted cash included in other current assets1 1 1
Restricted cash included in other non-current assets88 181 29
Cash, cash equivalents, and restricted cash $ 1,039 $ 1,031 $ 1,073 $ 1,073
[1]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

Goodwill (Narrative) (Details)

Goodwill (Narrative) (Details) - segment6 Months Ended12 Months Ended
Aug. 04, 2018Feb. 03, 2018
Goodwill and Other Intangible Assets, Net [Abstract]
Number of reportable segments1 2
Number of Reporting Units2

Other Intangible Assets, Net (S

Other Intangible Assets, Net (Schedule of Other Intangible Assets) (Details) - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018Jul. 29, 2017
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value[1] $ 152 $ 162 $ 155
Amortized intangible assets, Accum. amort.[1](135)(142)(134)
Amortized intangible assets, Net value[1]17 20 21
Other intangible assets, net41 46 [2]45
Lease Acquisition Costs [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value[1]125 135 128
Amortized intangible assets, Accum. amort.[1](115)(122)(115)
Amortized intangible assets, Net value[1]10 13 13
Trademarks and Trade Names [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value[1]20 20 20
Amortized intangible assets, Accum. amort.[1](14)(14)(13)
Amortized intangible assets, Net value[1]6 6 7
Favorable Leases [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value[1]7 7 7
Amortized intangible assets, Accum. amort.[1](6)(6)(6)
Amortized intangible assets, Net value[1]1 1 1
Runners Point Group [Member]
Intangible Assets by Major Class [Line Items]
Indefinite life intangible assets, Net Value[1] $ 24 $ 26 $ 24
[1]The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar
[2]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

Other Intangible Assets, Net (A

Other Intangible Assets, Net (Amortization Expense) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Goodwill and Other Intangible Assets, Net [Abstract]
Amortization expense $ 1 $ 1 $ 2 $ 2

Other Intangible Assets, Net (E

Other Intangible Assets, Net (Estimated Future Amortization Expense for Finite Lived Intangibles) (Details) $ in MillionsAug. 04, 2018USD ($)
Goodwill and Other Intangible Assets, Net [Abstract]
Remainder of 2018 $ 2
2,019 4
2,020 3
2,021 2
2,022 2
2,023 $ 2

Accumulated Other Comprehensi46

Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018Jul. 29, 2017
Accumulated Other Comprehensive Loss [Abstract]
Foreign currency translation adjustments $ (67) $ (9) $ (53)
Cash flow hedges1 2
Unrecognized pension cost and postretirement benefit(274)(270)(233)
Accumulated other comprehensive income (loss), net of tax, total $ (340) $ (279)[1] $ (284)
[1]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

Accumulated Other Comprehensi47

Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss) (Details) $ in Millions6 Months Ended
Aug. 04, 2018USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance $ (279)[1]
OCI before reclassification(56)
Amortization of pension actuarial (gain)/loss, net of tax4
Pension remeasurement, net of tax(9)
Other comprehensive income(61)
Ending Balance(340)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance(9)
OCI before reclassification(58)
Amortization of pension actuarial (gain)/loss, net of tax
Pension remeasurement, net of tax
Other comprehensive income(58)
Ending Balance(67)
Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance
OCI before reclassification1
Amortization of pension actuarial (gain)/loss, net of tax
Pension remeasurement, net of tax
Other comprehensive income1
Ending Balance1
Items Related to Pension and Postretirement Benefits [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance(270)
OCI before reclassification1
Amortization of pension actuarial (gain)/loss, net of tax4
Pension remeasurement, net of tax(9)
Other comprehensive income(4)
Ending Balance $ (274)
[1]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

Accumulated Other Comprehensi48

Accumulated Other Comprehensive Loss (Reclassifications from Accumulated Other Comprehensive Loss) (Details) $ in Millions6 Months Ended
Aug. 04, 2018USD ($)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 12) $ 5
Income tax benefit(1)
Net of tax4
Pension Benefits [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 12)6
Postretirement Benefits [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 12) $ (1)

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($) $ in MillionsDec. 21, 2017Aug. 04, 2018Feb. 03, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Income Taxes [Abstract]
Tax Cuts and Jobs Act, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense $ (1) $ 99
Federal statutory income tax rate35.00%21.00%
Income tax expense $ 27 $ 22 $ 91 $ 111
Effective income tax rate23.60%30.90%26.40%32.60%

Fair Value Measurements (Assets

Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018Jul. 29, 2017
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Liabilities measured at fair value on recurring basis
Level 1 [Member] | Investment in Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Level 1 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis24 8 10
Liabilities measured at fair value on recurring basis1 1 1
Level 2 [Member] | Investment in Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis15
Level 2 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis7 7 7
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Liabilities measured at fair value on recurring basis
Level 3 [Member] | Investment in Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Level 3 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 1 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 1 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 2 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis1 1 1
Forward Foreign Exchange Contracts [Member] | Level 2 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis2 1 3
Forward Foreign Exchange Contracts [Member] | Level 3 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 3 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis

Fair Value Measurements (Carryi

Fair Value Measurements (Carrying Value and Estimated Fair Value of Long-Term Debt) (Details) - USD ($) $ in MillionsAug. 04, 2018Feb. 03, 2018Jul. 29, 2017
Fair Value Measurements [Abstract]
Long-term debt, Carrying value $ 124 $ 125 [1] $ 126
Long-term debt, Fair value $ 140 $ 144 $ 146
[1]The balance sheet at February 3, 2018 has been derived from the previously reported audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.'s Annual Report on Form 10-K for the year ended February 3, 2018.

Earnings Per Share (Narrative)

Earnings Per Share (Narrative) (Details) - shares shares in Millions6 Months Ended
Aug. 04, 2018Jul. 29, 2017
Earnings Per Share [Abstract]
Contingently issuable shares excluded from diluted earnings per share1.1 0.4

Earnings Per Share (Computation

Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net Income $ 88 $ 51 $ 253 $ 231
Weighted-average common shares outstanding116.6 131.3 117.7 131.3
Dilutive effect of potential common shares0.5 0.7 0.4 1
Weighted-average common shares outstanding assuming dilution117.1 132 118.1 132.3
Earnings per share - basic $ 0.76 $ 0.39 $ 2.15 $ 1.76
Earnings per share - diluted $ 0.75 $ 0.39 $ 2.14 $ 1.74
Stock Option Plans [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive option awards excluded from diluted calculation2 1.7 1.7 0.8

Pension and Postretirement Pl54

Pension and Postretirement Plans (Narrative) (Details) - USD ($) $ in MillionsSep. 04, 2018May 30, 2018Aug. 04, 2018Feb. 03, 2018
Defined Benefit Plan Disclosure [Line Items]
Pension remeasurement, net of tax $ 9
U.S. Qualified Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer's contribution $ 98 $ 30
Pension litigation liability194
Change in benefit obligation12
Pension remeasurement, net of tax $ 9
Discount rate, benefit obligation4.00%3.70%

Pension and Postretirement Pl55

Pension and Postretirement Plans (Net Benefit Expense (Income)) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost $ 4 $ 4 $ 9 $ 8
Interest cost7 7 13 13
Expected return on plan assets(9)(10)(19)(19)
Amortization of net loss (gain)3 4 6 7
Net benefit expense (income)5 5 9 9
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost
Interest cost
Expected return on plan assets
Amortization of net loss (gain)(1)(1)(1)(1)
Net benefit expense (income) $ (1) $ (1) $ (1) $ (1)

Share-Based Compensation (Narra

Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018May 05, 2018Aug. 04, 2018Jul. 29, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from exercise of stock options $ 4 $ 10
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of options vested8 $ 7
Proceeds from exercise of stock options $ 4 4
Tax benefit realized from options exercised1 1
Restricted Stock and Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost $ 29 $ 29
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number842,768 842,768 668,120
Fair value of awards $ 6 $ 14
Awards vesting period descriptionGenerally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company's performance-based long-term incentive program are earned after the attainment of certain performance metrics and vest after the passage of time.
Awards granted[1]651,000
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted400,000
Performance Shares [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award, Target Percentage of Equity Awards Earned Over Performance Period200.00%
Performance Shares [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award, Target Percentage of Equity Awards Earned Over Performance Period0.00%
Nonvested Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost $ 7 $ 7
Unrecognized compensation cost related to nonvested stock options, weighted-average period expected to be recognized1 year 6 months
[1]Approximately 0.4 million performance-based RSUs were granted during the first quarter of 2018 and are included as granted in the table above. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company's predefined financial performance targets

Share-Based Compensation (Total

Share-Based Compensation (Total Compensation Expense Included in SG&A and the Related Tax Benefits Recognized) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Jul. 29, 2017Aug. 04, 2018Jul. 29, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense $ 4 $ 3 $ 9 $ 8
Tax benefit recognized1 1 2
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense1 $ 3 3 5
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense $ 3 $ 6 $ 3

Share-Based Compensation (Assum

Share-Based Compensation (Assumptions Used to Compute Share-Based Compensation Expense) (Details) - $ / shares6 Months Ended
Aug. 04, 2018Jul. 29, 2017
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average risk free rate of interest2.70%2.10%
Expected volatility37.00%25.00%
Weighted-average expected award life (in years)5 years 6 months5 years 3 months 18 days
Dividend yield3.10%1.70%
Weighted-average fair value $ 12.37 $ 15.56
2013 ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average risk free rate of interest1.60%0.80%
Expected volatility41.00%29.00%
Weighted-average expected award life (in years)1 year1 year
Dividend yield2.30%2.00%
Weighted-average fair value $ 14.89 $ 10.61

Share-Based Compensation (Optio

Share-Based Compensation (Options Granted Under Stock Option Plans) (Details) shares in Thousands6 Months Ended
Aug. 04, 2018$ / sharesshares
Number of Shares
Options outstanding at beginning of year2,739
Granted380
Exercised(134)
Expired or cancelled(48)
Options outstanding at end of period2,937
Options exercisable at end of period2,054
Options available for future grant at end of period8,323
Weighted-Average Exercise Price
Options outstanding at beginning of year | $ / shares $ 52.45
Granted | $ / shares44.82
Exercised | $ / shares31.47
Expired or cancelled | $ / shares57.91
Options outstanding at end of period | $ / shares52.33
Options exercisable at end of period | $ / shares $ 50
Options outstanding, weighted-average remaining contractual life6 years 6 months
Options exercisable at end of period, Weighted-average remaining contractual life5 years 4 months 24 days

Share-Based Compensation (Tot60

Share-Based Compensation (Total Intrinsic Value of Options Exercised) (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Aug. 04, 2018Aug. 04, 2018Jul. 29, 2017
Intrinsic value of stock options
Exercised $ 3 $ 3 $ 15

Share-Based Compensation (Aggre

Share-Based Compensation (Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable) (Details) - USD ($) $ in MillionsAug. 04, 2018Jul. 29, 2017
Share-Based Compensation [Abstract]
Outstanding $ 15 $ 23
Outstanding and exercisable $ 13 $ 23

Share-Based Compensation (Infor

Share-Based Compensation (Information about Stock Options Outstanding and Exercisable) (Details) - $ / shares shares in Thousands6 Months Ended
Aug. 04, 2018Feb. 03, 2018
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares2,937 2,739
Options outstanding, weighted-average remaining contractual life6 years 6 months
Options Outstanding, Weighted-Average Exercise Price $ 52.33 $ 52.45
Options Exercisable, Number of Shares2,054
Options Exercisable, Weighted-Average Exercise Price $ 50
$9.85 to $18.84 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit9.85
Range of Exercise Prices, Upper Limit $ 18.84
Options Outstanding, Number of Shares240
Options outstanding, weighted-average remaining contractual life2 years 2 months 12 days
Options Outstanding, Weighted-Average Exercise Price $ 17.10
Options Exercisable, Number of Shares240
Options Exercisable, Weighted-Average Exercise Price $ 17.10
$24.75 to $34.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit24.75
Range of Exercise Prices, Upper Limit $ 34.75
Options Outstanding, Number of Shares395
Options outstanding, weighted-average remaining contractual life4 years 6 months
Options Outstanding, Weighted-Average Exercise Price $ 32.16
Options Exercisable, Number of Shares356
Options Exercisable, Weighted-Average Exercise Price $ 31.88
$44.78 to $45.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit44.78
Range of Exercise Prices, Upper Limit $ 45.75
Options Outstanding, Number of Shares663
Options outstanding, weighted-average remaining contractual life7 years 8 months 12 days
Options Outstanding, Weighted-Average Exercise Price $ 44.92
Options Exercisable, Number of Shares299
Options Exercisable, Weighted-Average Exercise Price $ 45.08
$46.64 to $62.11 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit46.64
Range of Exercise Prices, Upper Limit $ 62.11
Options Outstanding, Number of Shares699
Options outstanding, weighted-average remaining contractual life6 years
Options Outstanding, Weighted-Average Exercise Price $ 60.98
Options Exercisable, Number of Shares683
Options Exercisable, Weighted-Average Exercise Price $ 61.22
$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 Limit63.79
Range of Exercise Prices, Upper Limit $ 73.21
Options Outstanding, Number of Shares940
Options outstanding, weighted-average remaining contractual life7 years 10 months 24 days
Options Outstanding, Weighted-Average Exercise Price $ 68.57
Options Exercisable, Number of Shares476
Options Exercisable, Weighted-Average Exercise Price $ 67.13

Share-Based Compensation (Chang

Share-Based Compensation (Changes in Nonvested Options) (Details) - Restricted Stock and Units [Member] $ / shares in Units, shares in Thousands, $ in Millions6 Months Ended
Aug. 04, 2018USD ($)$ / sharesshares
Number of Shares
Nonvested, Beginning Balance | shares374
Granted | shares651 [1]
Vested | shares(94)
Cancelled | shares(80)[2]
Nonvested, Ending Balance | shares851
Aggregate value | $ $ 42
Wtg. Avg. remaining contractual life (in years)2 years 3 months 18 days
Weighted-Average Grant Date Fair Value per Share
Nonvested, Beginning Balance | $ / shares $ 59.15
Granted | $ / shares47.29[1]
Vested | $ / shares63.37
Cancelled | $ / shares58.92[2]
Nonvested, Ending Balance | $ / shares $ 49.63
[1]Approximately 0.4 million performance-based RSUs were granted during the first quarter of 2018 and are included as granted in the table above. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company's predefined financial performance targets
[2]In addition to forfeitures of restricted stock and RSUs, cancellations include adjustments that were made to performance-based RSUs previously granted. These adjustments reflect changes in estimates based upon the Company's current performance against predefined financial targets

Legal Proceedings (Narrative) (

Legal Proceedings (Narrative) (Details) - USD ($) $ in MillionsJun. 18, 2018Aug. 04, 2018May 05, 2018Aug. 04, 2018Jun. 17, 2018Feb. 03, 2018
Plan reformation cost $ 2 $ 13
Class counsel fees paid in connection with pension litigation97
Osberg Interest On Reformation [Member]
Plan reformation cost2 6
Osberg Reformance Cost [Member]
Plan reformation cost $ 7
Osberg V. Foot Locker, Inc [Member]
Pension litigation liability $ 194 $ 194 $ 291 $ 278
Class counsel fees paid in connection with pension litigation $ 97