Foot Locker (FL)

2007 compared with 2006

     Athletic Stores sales of $5,071 million decreased 5.6 percent in 2007, as compared with $5,370 million in 2006. Excluding the effect of foreign currency fluctuations, primarily related to the euro, sales from athletic store formats decreased by 7.8 percent in 2007. The decline in sales for the year ended February 2, 2008 was primarily related to the domestic operations. Sales in the U.S. were negatively affected by a continuing weakening in consumer spending, unseasonable warmer weather, and a lack of clear fashion trend in athletic footwear and apparel. Internationally, comparable-store sales declined mid-single digits. In Europe, sales of low-profile footwear styles declined, while the sales trend of higher priced technical footwear was higher than the prior year. Comparable-store sales for the Athletic Stores segment decreased by 6.6 percent in 2007.

     Athletic Stores reported a loss of $27 million in 2007 as compared with a profit of $405 million in 2006. The decrease in division profit was attributable to the U.S. operations. The decline in the U.S. operations was offset, in part, by increases in most international formats. Included in the Athletic Stores division results for 2007 are non-cash impairment charges of $117 million to write-down long-lived assets such as store fixtures and leasehold improvements for 1,395 stores at the Company’s U.S. store operations pursuant to SFAS No. 144, consistent with the Company’s recoverability of long-lived assets policy. Additionally, in 2007, the Company identified unproductive stores for closure; accordingly, the Company evaluated the recoverability of long-lived assets considering the revised estimated future cash flows. The Company recorded an additional non-cash impairment charge of $7 million as a result of this analysis. Exit costs related to 33 stores that closed during 2007, comprising primarily lease termination costs of $4 million, were recognized in accordance with SFAS No. 146.

2007 compared with 2006

     Direct-to-Customers sales decreased 4.2 percent to $364 million in 2007, as compared with $380 million in 2006. Internet sales increased by 6.3 percent to $287 million, as compared with 2006. Catalog sales decreased by 30.0 percent to $77 million in 2007 from $110 million in 2006. Management believes that the decrease in catalog sales, which was

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2007 compared with
2006

     Athletic Stores sales of $5,071 million decreased 5.6 percent in 2007, as
compared with $5,370 million in 2006. Excluding the effect of foreign currency
fluctuations, primarily related to the euro, sales from athletic store formats
decreased by 7.8 percent in 2007. The decline in sales for the year ended
February 2, 2008 was primarily related to the domestic operations. Sales in the
U.S. were negatively affected by a continuing weakening in consumer spending,
unseasonable warmer weather, and a lack of clear fashion trend in athletic
footwear and apparel. Internationally, comparable-store sales declined
mid-single digits. In Europe, sales of low-profile footwear styles declined,
while the sales trend of higher priced technical footwear was higher than the
prior year. Comparable-store sales for the Athletic Stores segment decreased by
6.6 percent in 2007.

     Athletic Stores reported a loss of $27 million in 2007 as compared with a
profit of $405 million in 2006. The decrease in division profit was attributable
to the U.S. operations. The decline in the U.S. operations was offset, in part,
by increases in most international formats. Included in the Athletic Stores
division results for 2007 are non-cash impairment charges of $117 million to
write-down long-lived assets such as store fixtures and leasehold improvements
for 1,395 stores at the Company’s U.S. store operations pursuant to SFAS No.
144, consistent with the Company’s recoverability of long-lived assets policy.
Additionally, in 2007, the Company identified unproductive stores for closure;
accordingly, the Company evaluated the recoverability of long-lived assets
considering the revised estimated future cash flows. The Company recorded an
additional non-cash impairment charge of $7 million as a result of this
analysis. Exit costs related to 33 stores that closed during 2007, comprising
primarily lease termination costs of $4 million, were recognized in accordance
with SFAS No. 146.

2007 compared with
2006

     Athletic Stores sales of $5,071 million decreased 5.6 percent in 2007, as
compared with $5,370 million in 2006. Excluding the effect of foreign currency
fluctuations, primarily related to the euro, sales from athletic store formats
decreased by 7.8 percent in 2007. The decline in sales for the year ended
February 2, 2008 was primarily related to the domestic operations. Sales in the
U.S. were negatively affected by a continuing weakening in consumer spending,
unseasonable warmer weather, and a lack of clear fashion trend in athletic
footwear and apparel. Internationally, comparable-store sales declined
mid-single digits. In Europe, sales of low-profile footwear styles declined,
while the sales trend of higher priced technical footwear was higher than the
prior year. Comparable-store sales for the Athletic Stores segment decreased by
6.6 percent in 2007.

     Athletic Stores reported a loss of $27 million in 2007 as compared with a
profit of $405 million in 2006. The decrease in division profit was attributable
to the U.S. operations. The decline in the U.S. operations was offset, in part,
by increases in most international formats. Included in the Athletic Stores
division results for 2007 are non-cash impairment charges of $117 million to
write-down long-lived assets such as store fixtures and leasehold improvements
for 1,395 stores at the Company’s U.S. store operations pursuant to SFAS No.
144, consistent with the Company’s recoverability of long-lived assets policy.
Additionally, in 2007, the Company identified unproductive stores for closure;
accordingly, the Company evaluated the recoverability of long-lived assets
considering the revised estimated future cash flows. The Company recorded an
additional non-cash impairment charge of $7 million as a result of this
analysis. Exit costs related to 33 stores that closed during 2007, comprising
primarily lease termination costs of $4 million, were recognized in accordance
with SFAS No. 146.

2007 compared with
2006

     Direct-to-Customers sales decreased 4.2 percent to $364 million in 2007,
as compared with $380 million in 2006. Internet sales increased by 6.3 percent
to $287 million, as compared with 2006. Catalog sales decreased by 30.0 percent
to $77 million in 2007 from $110 million in 2006. Management believes that the
decrease in catalog sales, which was

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