Foot Locker (FL)

Foreign Exchange Risk Management — Derivative Holdings Designated as Non-Hedges

     The Company mitigates the effect of fluctuating foreign exchange rates on the reporting of foreign currency denominated earnings by entering into a variety of derivative instruments including option currency contracts. Changes in the fair value of these foreign currency option contracts, which are designated as non-hedges, are recorded in earnings immediately. The premiums paid and changes in the fair market value recorded in the Consolidated Statement of Operations were not significant for the years ended February 2, 2008 and February 3, 2007, respectively.

     The Company also enters into forward foreign exchange contracts to hedge foreign-currency denominated merchandise purchases and intercompany transactions. Net changes in the fair value of foreign exchange derivative financial instruments designated as non-hedges were substantially offset by the changes in value of the underlying transactions, which were recorded in selling, general and administrative expenses. The amount recorded during 2006 was not significant.

Foreign Exchange Risk
Management — Derivative Holdings Designated as Non-Hedges

     The
Company mitigates the effect of fluctuating foreign exchange rates on the
reporting of foreign currency denominated earnings by entering into a variety of
derivative instruments including option currency contracts. Changes in the fair
value of these foreign currency option contracts, which are designated as
non-hedges, are recorded in earnings immediately. The premiums paid and changes
in the fair market value recorded in the Consolidated Statement of Operations
were not significant for the years ended February 2, 2008 and February 3, 2007,
respectively.

     The
Company also enters into forward foreign exchange contracts to hedge
foreign-currency denominated merchandise purchases and intercompany
transactions. Net changes in the fair value of foreign exchange derivative
financial instruments designated as non-hedges were substantially offset by the
changes in value of the underlying transactions, which were recorded in selling,
general and administrative expenses. The amount recorded during 2006 was not
significant.

Foreign Exchange Risk Management — Derivative Holdings Designated as Non-Hedges

     The Company mitigates the effect of fluctuating foreign exchange rates on the reporting of foreign currency denominated earnings by entering into a variety of derivative instruments including option currency contracts. These contracts are not designated as hedges and as a result, the changes in the fair value of these financial instruments are charged to the statement of operations immediately. The changes in fair values recorded in the Consolidated Statement of Operations for the year ended February 3, 2007 was not significant and was a net gain of approximately $3 million for contracts that settled in the second quarter of 2005.

     The Company also enters into certain forward foreign exchange contracts to hedge intercompany foreign-currency denominated transactions. In 2005, the Company recorded gains of approximately $3 million in selling, general and administrative expenses to reflect the fair value of these contracts. These gains were offset by the foreign exchange losses on the revaluation of the underlying assets or liabilities. The amount recorded during 2006 was not significant.

Foreign Exchange Risk Management – Derivative Holdings Designated as Non-Hedges

          The Company had foreign currency option contracts with a total notional amount of €65 million outstanding at the end of the third quarter of 2006 to mitigate the effect of fluctuating foreign exchange rates on the reporting of a portion of its expected 2006 foreign currency denominated earnings. Changes in the fair value of these foreign currency option contracts, which are designated as non-hedges, are recorded in earnings immediately. The premiums paid on option contracts were $1 million for the thirty-nine weeks ended October 28, 2006.  Changes in the fair market value of option contracts were not significant for the thirteen and thirty-nine weeks ended October 28, 2006.

          In addition, the Company has forward foreign exchange contracts to hedge foreign-currency denominated merchandise purchases and intercompany transactions. At October 28, 2006, the USD equivalent notional amount for outstanding forward foreign exchange contracts totaled $96 million. Net changes in the fair value of foreign exchange derivative financial instruments designated as non-hedges were substantially offset by the changes in value of the underlying transactions, which were recorded in selling, general and administrative expenses in the current period.

Foreign Exchange Risk Management – Derivative Holdings Designated as Non-Hedges

          The Company had foreign currency option contracts with a total notional amount of €20 million outstanding at the end of the first quarter of 2006, and purchased an additional foreign currency option contract with a total notional amount of €65 million in May 2006, to mitigate the effect of fluctuating foreign exchange rates on the reporting of a portion of its expected 2006 foreign currency denominated earnings. During the second quarter of 2006, €20 million of these contracts expired. Changes in the fair value of these foreign currency option contracts, which are designated as non-hedges, are recorded in earnings immediately. The premiums paid on option contracts were not significant for the thirteen weeks ended July 29, 2006 and were $1 million for the twenty-six weeks ended July 29, 2006.  Changes in the fair market value of option contracts were not significant for the thirteen and twenty-six weeks ended July 29, 2006.

          In addition, the Company has forward foreign exchange contracts to hedge foreign-currency denominated merchandise purchases and intercompany transactions. At July 29, 2006, the USD equivalent notional amount for outstanding forward foreign exchange contracts totaled $101 million. Net changes in the fair value of foreign exchange derivative financial instruments designated as non-hedges were substantially offset by the changes in value of the underlying transactions, which were recorded in selling, general and administrative expenses in the current period.

Foreign Exchange Risk Management – Derivative Holdings Designated as Non-Hedges

          The Company purchased foreign currency option contracts with a total notional amount of €35 million during the first quarter of 2006, and subsequently purchased an additional foreign currency option contract with a total notional amount of €65 million in May 2006, to mitigate the effect of fluctuating foreign exchange rates on the reporting of a portion of its expected 2006 foreign currency denominated earnings. During the first quarter of 2006, €15 million of these contracts expired. Changes in the fair value of these foreign currency option contracts, which are designated as non-hedges, are recorded in earnings immediately. The premiums paid and changes in the fair market value were not significant for the thirteen weeks ended April 29, 2006.

          In addition, the Company entered into forward foreign exchange contracts to hedge foreign-currency denominated merchandise purchases and intercompany transactions. At April 29, 2006, the USD equivalent notional amount for outstanding forward foreign exchange contracts totaled $133 million. Net changes in the fair value of foreign exchange derivative financial instruments designated as non-hedges were substantially offset by the changes in value of the underlying transactions, which were recorded in selling, general and administrative expenses in the current period.