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These excerpts taken from the FL 10-K filed Mar 30, 2009. Debt Capitalization and Equity For purposes of calculating debt to total capitalization, the Company includes the present value of operating lease commitments in total net debt. Total net debt including the present value of operating leases is considered a non-GAAP financial measure. The present value of operating leases is discounted using various interest rates ranging from 4 percent to 13 percent, which represent the Company’s incremental borrowing rate at inception of the lease. Operating leases are the primary financing vehicle used to fund store expansion and, therefore, we believe that the inclusion of the present value of operating leases in total debt is useful to our investors, credit constituencies, and rating agencies. The following table sets forth the components of the Company’s capitalization, both with and without the present value of operating leases: 19
The Company reduced debt by $94 million (this reduction was offset by a $15 million increase in the fair value of the interest rate swaps), and decreased cash, cash equivalents, and short-term investments by $85 million during 2008. Additionally, the present value of the operating leases decreased by $174 million representing store closures and the effect of foreign currency fluctuations primarily related to the euro. Including the present value of operating leases, the Company’s net debt capitalization percent increased 160 basis points in 2008. The decrease in shareholders’ equity of $337 million in 2008 relates to the following: net loss of $80 million, $93 million in dividends paid, $12 million related to stock plans, and a decrease of $83 million in the foreign exchange currency translation adjustment, primarily related to the value of the euro in relation to the U.S. dollar. In addition, as required by SFAS No. 158, during 2008 the Company recognized, within accumulated other comprehensive loss, amortization of prior service costs and net actuarial gains and losses, as well as an additional charge representing the change in the funded status of the pension and postretirement plans, which totaled $91 million after-tax. Debt Capitalization and For 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Debt Capitalization and For 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The These excerpts taken from the FL 10-K filed Mar 31, 2008. Debt Capitalization and Equity For purposes of calculating debt to total capitalization, the Company includes the present value of operating lease commitments in total net debt. Total net debt including the present value of operating leases is considered a non-GAAP financial measure. The present value of operating leases is discounted using various interest rates ranging from 4 percent to 13 percent, which represent the Company’s incremental borrowing rate at inception of the lease. Operating leases are the primary financing vehicle used to fund store expansion and, therefore, we believe that the inclusion of the present value of operating lease in total debt is useful to our investors, credit constituencies, and rating agencies. The following table sets forth the components of the Company’s capitalization, both with and without the present value of operating leases:
The Company reduced debt and capital lease obligations by $13 million, and increased cash, cash equivalents, and short-term investments by $23 million during 2007. Additionally, the present value of the operating leases increased by $57 million representing the net change of lease renewals and the effect of foreign currency fluctuations primarily related to the euro. Including the present value of operating leases, the Company’s net debt capitalization percent increased 50 basis points in 2007. The decrease in shareholders’ equity of $24 million in 2007 relates to the following: net income of $51 million in 2007, $77 million in dividends paid, $21 million related to stock plans, and an increase of $60 million in the foreign exchange currency translation adjustment, primarily related to the value of the euro in relation to the U.S. dollar. Additionally, the Company repurchased 2,283,254 shares of common stock for approximately $50 million during the year. As required by SFAS No. 158, during 2007 the Company recognized, within accumulated other comprehensive loss, amortization of prior service costs and net actuarial gains and losses, as well as an additional charge representing the change in the funded status of the pension plans which totaled $29 million, after-tax. 17 Debt Capitalization and For
The 17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
This excerpt taken from the FL 10-K filed Apr 2, 2007. Debt Capitalization and Equity For purposes of calculating debt to total capitalization, the Company includes the present value of operating lease commitments. These commitments are the primary financing vehicle for the Company. The following table sets forth the components of the Company’s capitalization, both with and without the present value of operating leases: 15
Excluding the present value of operating leases, the Company’s cash, cash equivalents, and short-term investments, net of debt and capital lease obligations, decreased to $236 million at February 3, 2007 from $261 million at January 28, 2006. The Company reduced debt and capital lease obligations by $92 million, and decreased cash, cash equivalents, and short-term investments by $117 million. Additionally, the present value of the operating leases increased by $135 million representing the net change of lease renewals and the effect of foreign currency fluctuations primarily related to the euro. Including the present value of operating leases, the Company’s net debt capitalization percent decreased 80 basis points in 2006. The increase in shareholders’ equity relates to net income of $251 million in 2006, $17 million related to stock plans, an increase of $27 million in the foreign exchange currency translation adjustment, primarily related to the value of the euro in relation to the U.S. dollar and a decrease of $6 million resulting from the adoption of SAB 108. The Company recorded a reduction to shareholders’ equity as permitted by SAB 108 to correct for previous misstatements. The Company declared and paid dividends totaling $61 million during 2006. The Company repurchased 334,200 million shares for approximately $8 million during the year. During 2006, the Company adopted SFAS No. 158 which resulted in the elimination of the additional minimum liability adjustment of $181 million. SFAS No.158 requires that unamortized prior service cost and unamortized gains or losses for both the pension and postretirement plans, which totaled $133 million, be recognized as a component of other comprehensive income. The Company contributed $51 million and $17 million to the Company’s U.S. and Canadian qualified pension plans, respectively, in 2006. Excluding the present value of operating leases, the Company’s cash, cash equivalents and short-term investments, net of debt and capital lease obligations, increased to $261 million at January 28, 2006 from $127 million at January 29, 2005. The Company reduced debt and capital lease obligations by $39 million, while increasing cash, cash equivalents and short-term investments by $95 million. Additionally, the present value of the operating leases decreased by $55 million representing the net change of lease renewals, the effect of foreign currency fluctuations primarily related to the euro and the result of the closure of 25 stores due to the hurricanes. Including the present value of operating leases, the Company’s net debt capitalization percent decreased 520 basis points in 2005. The increase in shareholders’ equity relates to net income of $264 million in 2005, $26 million related to stock plans, and a decrease of $25 million in the foreign exchange currency translation adjustment, primarily related to the value of the euro in relation to the U.S. dollar. The Company declared and paid dividends totaling $49 million during 2005.The Company repurchased approximately 1.6 million shares for $35 million during the year. During 2005, the Company reduced its minimum liability for the Company’s pension plans by $15 million, primarily as a result of the plans’ asset performance. The Company contributed $19 million and $7 million to the Company’s U.S. and Canadian qualified pension plans, respectively, in 2005. 16 This excerpt taken from the FL 10-K filed Mar 29, 2005. Debt Capitalization and Equity For purposes of calculating debt to total
capitalization, the Company includes the present value of operating lease commitments. These commitments are the primary financing vehicle used to fund
store expansion. The following table sets forth the components of the Company’s capitalization, both with and without the present value of
operating leases, and excludes the effect of interest rate swaps of $4 million that increased long-term debt at January 29, 2005 and $1 million that
reduced long-term debt at January 31, 2004:
Excluding the present value of operating leases, the
Company’s cash, cash equivalents and short-term investments, net of debt and capital lease obligations increased to $131 million at January 29,
2005 from $112 million at January 31, 2004. The Company increased debt and capital lease obligations by $25 million while increasing cash, cash
equivalents and short-term investments by $44 million. This improvement was offset by an increase of $306 million in the present value of operating
leases primarily related to the Footaction acquisition and additional lease renewals entered into during 2004. Including the present value of operating
leases, the Company’s net debt capitalization percent improved 2.9 percentage points in 2004. Total capitalization increased by $742 million in
2004, which was primarily attributable to an increase in shareholders’ equity. The increase in shareholders’ equity relates to net income of
$293 million in 2004, an increase of $147 million resulting from the conversion of $150 million subordinated notes to equity, net of unamortized
deferred issuance costs, $49 million related to employee stock plans, and an increase of $19 million in the foreign exchange currency translation
adjustment, primarily related to the strength of the euro. The Company declared and paid dividends totaling $39 million during 2004.
The Company also recorded an increase of $14 million
to the minimum liability for the Company’s pension plans during 2004. This increase was primarily a result of the 40 basis point decrease in the
discount rate used to calculate present value of the obligations as of January 29, 2005, offset, in part, by an increase in the plans’ asset
performance. The Company contributed $44 million and $6 million to the Company’s U.S. and Canadian qualified pension plans, respectively, in
February 2004 and an additional $56 million to the Company’s U.S. qualified pension plan in September 2004, in advance of ERISA
requirements.
As of January 31, 2004, the Company’s cash, net
of debt and capital lease obligations, increased to $112 million. In 2003, the Company repurchased $19 million of the 8.50 percent debentures due in
2022. The Company declared and paid dividends totaling $21 million during 2003. The Company’s revolving credit facility was amended in 2003 to
increase the available line of credit by $10 million to $200 million and extended the term to July 2006. The amended agreement includes various
restrictive financial covenants with which the Company was in compliance on January 31, 2004. The Company made a $50 million contribution to its U.S.
qualified retirement plan in February 2003, in advance of ERISA requirements.
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