UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal years ended December 31, 2002 and 2001
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
FOOT LOCKER 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FOOT LOCKER, INC.
112 WEST 34TH STREET
NEW YORK, NY 10120
FOOT LOCKER 401(k) PLAN
Financial Statements and Supplemental Schedule
Index
Page
----
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits as of
December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2002 and 2001 3
Notes to Financial Statements 4-12
Supplemental Schedule:
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
as of December 31, 2002 13
Signature 14
Index of Exhibits 15
INDEPENDENT AUDITORS' REPORT
Foot Locker 401(k) Plan Administrator:
We have audited the accompanying statements of net assets available for benefits
of the Foot Locker 401(k) Plan (the "Plan") as of December 31, 2002 and 2001,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
accompanying index is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 ("ERISA"). The supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
New York, New York
June 26, 2003
1
FOOT LOCKER 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
2002
-------------------------------------------
Participant- Nonparticipant-
Directed Directed
------------ ---------------
Foot Locker
Common Stock
Total Funds Fund Total
------------ --------------- ------------
Assets:
Investments, at fair value $ 32,241,962 $ 3,772,563 $ 36,014,525
Receivables:
Employer's contribution - 1,403,441 1,403,441
------------ --------------- ------------
Total assets 32,241,962 5,176,004 37,417,966
------------ --------------- ------------
Liabilities:
Excess contributions payable to participants 193,828 - 193,828
------------ --------------- ------------
Net assets available for benefits $ 32,048,134 $ 5,176,004 $ 37,224,138
============ =============== ============
2001
-------------------------------------------
Participant- Nonparticipant-
Directed Directed
------------ ---------------
Foot Locker
Common Stock
Total Funds Fund Total
------------ --------------- ------------
Assets:
Investments, at fair value $ 34,367,180 $ 5,014,695 $ 39,381,875
Receivables:
Employer's contribution - 1,327,496 1,327,496
------------ --------------- ------------
Total assets 34,367,180 6,342,191 40,709,371
------------ --------------- ------------
Liabilities:
Excess contributions payable to participants 191,872 - 191,872
------------ --------------- ------------
Net assets available for benefits $ 34,175,308 $ 6,342,191 $ 40,517,499
============ =============== ============
See accompanying notes to financial statements.
2
FOOT LOCKER 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2002 AND 2001
2002
-------------------------------------------
Participant- Nonparticipant-
Directed Directed
------------ ---------------
Foot Locker
Common Stock
Total Funds Fund Total
------------ --------------- ------------
Additions:
Additions (reductions) to net assets attributed to:
Investment income (loss):
Net depreciation in fair value of investments $ (7,236,240) $ (1,809,477) $ (9,045,717)
Dividends 410,318 - 410,318
Interest 62,723 - 62,723
Contributions:
Participants' 9,412,217 9,412,217
Employer's - 1,403,441 1,403,441
------------ --------------- ------------
Total additions (reductions) 2,649,018 (406,036) 2,242,982
------------ --------------- ------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants (3,190,857) (572,342) (3,763,199)
Loan administrative & maintenance fees (9,707) (2,576) (12,283)
------------ --------------- ------------
Total deductions (3,200,564) (574,918) (3,775,482)
------------ --------------- ------------
Net (decrease) increase before transfers from plan (551,546) (980,954) (1,532,500)
Transfers from plan (Note 3) (1,575,628) (185,233) (1,760,861)
------------ --------------- ------------
Net (decrease) increase (2,127,174) (1,166,187) (3,293,361)
Net assets available for benefits:
Beginning of year 34,175,308 6,342,191 40,517,499
------------ --------------- ------------
End of year $ 32,048,134 $ 5,176,004 $ 37,224,138
============ =============== ============
2001
------------ ------------------------------
Participant- Nonparticipant-
Directed Directed
------------ ----------------
Foot Locker
Common Stock
Total Funds Fund Total
-------------- ---------------- ------------
Additions:
Additions (reductions) to net assets attributed to:
Investment income (loss):
Net depreciation in fair value of investments $ (3,424,998) $ (29,201) $ (3,454,199)
Dividends 538,709 - 538,709
Interest 80,191 - 80,191
Contributions:
Participants' 9,235,163 9,235,163
Employer's - 1,327,496 1,327,496
------------ ---------------- ------------
Total additions (reductions) 6,429,065 1,298,295 7,727,360
------------ ---------------- ------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants (4,900,184) (781,624) (5,681,808)
Loan administrative & maintenance fees (107,944) (47,332) (155,276)
------------ ---------------- ------------
Total deductions (5,008,128) (828,956) (5,837,084)
------------ ---------------- ------------
Net (decrease) increase before transfers from plan 1,420,937 469,339 1,890,276
Transfers from plan (Note 3) - - --
------------ ---------------- ------------
Net (decrease) increase 1,420,937 469,339 1,890,276
Net assets available for benefits:
Beginning of year 32,754,371 5,872,852 38,627,223
------------ ---------------- ------------
End of year $ 34,175,308 $ 6,342,191 $ 40,517,499
============ ================ ============
See accompanying notes to financial statements.
3
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) DESCRIPTION OF PLAN
The following description of the Foot Locker 401(k) Plan (the "Plan")
provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
Effective January 1, 2002, the Board of Directors of the Company
appointed The Sterling Trust Company ("Sterling") as the trustee of the
Plan, replacing Scudder Trust Company ("Scudder"). Paine Webber was
selected to be the new investment advisor, BISYS was selected to be the
new recordkeeper and OppenheimerFunds was selected to provide
investment management services to the Plan. The Plan's assets, with the
exception of the Foot Locker Stock Fund and the amounts invested in the
New England Guaranteed Fund, were liquidated by Scudder and
transferred to BISYS on January 1, 2002. Investments in the Foot Locker
Stock Fund and the New England Guaranteed Fund were transferred
in-kind to OppenheimerFunds together with the remaining Plan assets.
The Plan balances invested at Scudder were transferred to new funds
with similar investment and performance strategies. The New England
Guaranteed Fund contracts were subsequently cancelled and invested in
the Oppenheimer Capital Preservation Fund. On September 1, 2002,
Matrix Capital Bank Trust Services replaced Sterling as the trustee.
On December 20, 2002, Merrill Lynch began to provide investment
management services to the Plan in place of Paine Webber.
(a) GENERAL
The Plan is a defined contribution plan generally covering all
U.S. employees of Foot Locker, Inc. (the "Company") and its
affiliates that adopt the Plan, with the exception of the
employees whose primary place of employment is in Puerto Rico.
Eligible employees are those who have attained age twenty-one
and completed one year of service consisting of at least 1,000
hours and who have enrolled in the Plan. The Plan is subject
to the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). The Plan became effective
as of January 1, 1996.
(b) CONTRIBUTIONS
The Plan provides for automatic revocable enrollment in the
Plan at a contribution rate of 2% of pre-tax annual
compensation for participants who meet the eligibility
requirements. Effective January 1, 2002, the maximum allowable
salary reduction contribution was increased to 25% from 15% of
pre-tax annual compensation, as defined in the Plan. Also
effective on January 1, 2002, participants may elect to change
their contribution rate and salary reduction agreement as
often as daily, whereas only quarterly elections were
permitted previously. In accordance with the Tax Reform Act of
1986, the maximum amount that a participant may contribute
under the Plan was $11,000 for 2002 and $10,500 for 2001.
Participants may also roll over certain amounts representing
distributions from other qualified retirement plans prior to
becoming eligible to participate in the Plan. However,
additional contributions cannot be made until the completion
of one year of service. For any participant who (i) has
completed 1,000 hours of service during the Plan year and is
actively employed by the Company on the last day of the Plan
year or (ii) during the Plan year, has died, has become
disabled or retired on or after normal retirement age, the
Company also contributes 25% of such participant's pre-tax
contributions to the Plan up to the first 4% of the
participant's compensation earned during the Plan year.
Matching contributions, at the Company's option, are made
either in shares of the Company's common stock ("Foot Locker
Shares") or in cash to be
4
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(1), CONTINUED
(b), CONTINUED
invested in Foot Locker Shares, to be held in the Foot Locker
Common Stock Fund. Matching contributions for 2002 and 2001
were made entirely in Foot Locker Shares and were recorded at
fair market value on the date of the Plan's year-end.
Additional contributions may be made at the discretion of the
Company and are subject to certain limitations. Effective on
January 1, 2002, participants who have attained the age of 50
may make catch-up contributions of up to $1,000, as defined by
the Plan. These contributions are not eligible for matching
contributions by the Company. No additional contributions were
made for 2002 and 2001. In March 2003 and 2002, the Plan
reimbursed certain participants for excess amounts contributed
to the Plan during 2002 and 2001, respectively.
(c) PARTICIPANT ACCOUNTS
Each participant's account is credited with (a) the
participant's contributions and allocations of the Company's
matching contribution and (b) Plan net earnings and reduced by
(c) Plan net losses and (d) loan initiation fees, when
applicable, and maintenance fees, which are paid by the
participants. Allocations are based on participant's salary
deferrals or account balances, respectively. The benefit to
which a participant is entitled is the benefit that can be
provided from the participant's vested account balance.
(d) VESTING
Participants are immediately vested in their contributions
plus actual earnings thereon. Vesting in the Company's regular
and discretionary matching contributions and earnings thereon
is over a one to five year period; a participant vests 20% per
year after the first year of vesting service and is 100%
vested after five years of vesting service.
(e) INVESTMENT OPTIONS
Effective January 1, 2002, participants may change their
investment options daily. Prior to this, participants were
able to change their investment options quarterly. At December
31, 2002, each participant may direct his or her contributions
to the following funds in 1% increments:
Oppenheimer Champion Income Fund - Participant's
assets are invested in a mutual fund with a portfolio
of high-yield, lower-rated fixed-income securities as
a primary goal. The fund secondarily seeks capital
growth when consistent with its primary objective.
Securities include lower-grade bonds and notes of
corporate issuers, foreign corporate and government
bonds and structured notes. The fund is designed to
seek high current income and capital growth.
Oppenheimer Quest Balanced Value Fund - Participant's
assets are invested in a mutual fund that mainly
invests in undervalued U.S. common stocks, preferred
stocks and securities convertible into common stock
issued by U.S. Corporations, corporate and government
bonds, notes and other debt securities for investment
income, which can be below investment grade. The
fund's primary objective is to seek capital growth
and investment income.
5
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(1), CONTINUED
(e), CONTINUED
Oppenheimer Quest Opportunity Value Fund - Participant's
assets are invested in a mutual fund with a diversified
portfolio of stocks, bonds and cash equivalents, although it
focuses primarily on stocks. The fund's design is similar to
the Quest Balanced Value Fund. The fund is designed to seek
growth of capital.
Oppenheimer Capital Appreciation Fund - Participant's assets
are invested in a mutual fund with a portfolio of common stock
of "growth" companies. "Growth" companies may be newer
companies or established companies of any capitalization
range, which may appreciate in value over the long-term. The
fund is designed to seek capital appreciation.
Oppenheimer Global Fund - Participant's assets are invested in
a mutual fund which invests primarily in common stocks of
U.S. and foreign countries. The fund may invest without limit
in foreign securities, in any country, including countries
with developed or emerging markets. The fund is currently
investing in developed markets such as the United States,
Western European countries and Japan, in mid-cap and large-cap
companies. The fund is designed to seek capital appreciation.
Oppenheimer Capital Preservation Fund - Participant's assets
are invested in a money market fund which mainly invests in
the shares of other Oppenheimer mutual funds. The fund also
buys special investment contracts from financial institutions
such as banks that are intended to stabilize the fund's share
prices. The fund's shares are offered only to retirement plans
and 403(b)(7) custodial plans. The fund is designed to seek
high current income while seeking to maintain stable prices
for its shares.
Fidelity Advisor Dividend Growth Fund - Participant's assets
are invested in a mutual fund which is designed to provide
access to companies whose stocks are recognized for their
potential to increase or begin paying dividends, which
represents a company's financial strength and growth
potential. The fund is designed to invest in companies in the
technology and finance areas with stable growth.
Federated Max-Cap Index Fund - Participant's assets are
invested in a mutual fund which invests in a portfolio of
large-cap stocks that correspond to the aggregate price and
dividend performance of publicly traded common stocks
comprising the S&P 500 Composite Stock Index. The fund's
objective is to parallel the return of the S&P 500 Stock
Index.
Fidelity Advisor Mid Cap Fund - Participant's assets are
invested in a mutual fund which invests in stocks of mid-cap
corporations. The fund seeks to provide diversification and
the potential for high returns.
John Hancock Small Cap Equity Fund - Participant's assets are
invested in a mutual fund which invests primarily in stocks
of companies believed to be undervalued. The fund's objective
is to seek capital appreciation.
6
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(1), CONTINUED
(e), CONTINUED
Calvert Income Fund - Participant's assets are invested in a
mutual fund which invests in bonds and other income-producing
securities. The fund invests in selected investment-grade
bonds, which produce high current income. The fund's objective
is to maximize long-term income combined with the preservation
of capital.
Foot Locker Common Stock Fund - Participant's assets are
invested in Foot Locker Shares. Foot Locker Shares may be
obtained by the Trustee directly from the Company out of its
authorized but unissued shares of common stock or out of its
treasury shares, or on the open market.
As of December 31, 2001, the following investment options were
available to participants. Participants were able to direct their
contributions to any of the listed funds during 2001 in 5% increments.
These funds have since been eliminated as investment options.
Scudder Stable Value Fund - Participant's assets were invested
in a collective investment trust with a portfolio of
guaranteed investment contracts, bank investment contracts,
synthetic contracts, private placements and cash equivalents
including traditional money market instruments. This fund is
designed to have minimal fluctuation in principal value.
Scudder Growth and Income Fund - Participant's assets were
invested in a mutual fund with a diversified stock portfolio
investing primarily in common stocks, preferred stocks, and
securities convertible into common stock. The fund allocates
its investments among different industries and companies and
adjusts its portfolio securities for investment considerations
and not for trading purposes.
Scudder Stock Index Fund - Participant's assets were invested
in a bank-maintained collective investment trust. The fund's
objective is to match the total return of the Standard &
Poor's 500 Stock Index.
Scudder Global Fund - Participant's assets were invested in a
mutual fund with a diversified portfolio of marketable
securities, primarily equity securities, including common
stocks, preferred stocks, and convertible debt securities. The
fund invests on a worldwide basis in companies, which are
incorporated in the U.S. or in foreign countries.
Scudder Pathway Balanced Portfolio - Participant's assets were
invested in a mix of Scudder stock, bond and stable value
mutual funds. The portfolio provides built-in diversification
and the growth potential of equity investments mixed with the
income potential of fixed-income investments.
Managers Special Equity Fund - Participant's assets were
invested primarily in equity securities expected to have
superior earnings and growth potential. The fund invests at
least 65% of its assets in equity securities of
small-to-medium capitalization companies with emphasis placed
on those with market capitalizations of under $1 billion.
7
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(1), CONTINUED
(e), CONTINUED
Foot Locker Common Stock Fund - Participant's assets were
invested in Foot Locker Shares. Foot Locker Shares may be
obtained by the Trustee directly from the Company out of its
authorized but unissued shares of common stock or out of its
treasury shares, or on the open market.
In addition to the investment options prior to January 1, 2002, certain
contributions of former participants of the Eastbay Plan were invested
in the New England Guaranteed Fund. The fund was in the general
account of and was included in the general assets of the New England
Mutual Life Insurance Company ("New England") and earned a guaranteed
rate of interest. Under the agreement between Eastbay, Inc. (a wholly
owned subsidiary of the Company) and New England, these monies could
not be transferred to other funds within the Plan until the contracts
expired. The contracts were for a term of seven years and expired
annually through 2004 or earlier, which was at the discretion of New
England. As the contracts expired, the monies were rolled over into the
Scudder Stable Value Fund, an equivalent fixed income fund and the
participants were then able to reallocate the funds at their
discretion. The New England Fund was not available for additional
investments and all contracts were terminated by the end of 2002.
(f) PARTICIPANT LOANS RECEIVABLE
Effective January 1, 2002, participants may borrow from their
fund accounts once each year a minimum of $1,000 (prior to
this date, the minimum loan amount was $500) up to a maximum
equal to the lesser of $50,000 or 50% of their total vested
account balance (excluding matching contributions). Loan
transactions are treated as transfers between the investment
funds and the participant loans fund. Loan terms range up to 5
years, or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the
participant's account and bear a rate of interest equal to the
prime rate on the date of the loan distribution. Principal and
interest is paid ratably through regular payroll deductions.
(g) PAYMENT OF BENEFITS
Participants are eligible for a distribution on termination of
service, death, disability or retirement. A participant will
receive a lump-sum amount equal to the fair market value of
the participant's vested interest in his or her account. A
participant may elect to have the investment in the Foot
Locker Common Stock Fund and vested Company matching
contributions distributed in either cash or Foot Locker
Shares.
Participants are eligible for a distribution due to financial
hardship under certain conditions. The amount of a hardship
withdrawal may not exceed the cost associated with the
financial hardship in addition to any mandatory federal income
tax withholding, state and local income taxes or penalties
incurred.
8
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(1), CONTINUED
(h) EXPENSES OF ADMINISTERING THE PLAN
To the extent expenses of administering the Plan are not paid
using forfeitures, the expenses are paid by the Company and
therefore are not included in the accompanying financial
statements.
(i) FORFEITURES
Forfeitures are allocated as of the last day of the Plan year.
Forfeitures are used to pay for administrative expenses
of the Plan and then to reduce future matching contributions.
In 2002 and 2001 all administrative expenses were paid from
forfeited non-vested accounts. At December 31, 2002 and 2001,
forfeited non-vested accounts totaled $81,981 and $58,321,
respectively.
(2) SUMMARY OF ACCOUNTING PRINCIPLES
(a) BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the
accrual basis of accounting. The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and changes therein and disclosure of contingent
assets and liabilities. Actual results are not expected to
differ significantly from those estimates.
(b) INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of
registered investment companies are valued at quoted market
prices, which represent the net asset value of shares held by
the Plan at year-end. The Foot Locker Shares are valued at
quoted market price. Participant loans are valued at cost,
which approximates fair value. Loan interest income is
allocated to the investment fund from which the amount is
borrowed.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
(c) PAYMENT OF BENEFITS
Benefits are recorded when paid.
9
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(3) TRANSFERS FROM PLAN
In September 2001, the Company sold the stock of The San Francisco
Music Box Company ("SFMB"). The SFMB participants' account balances
remained in the Foot Locker 401(k) Plan throughout the remainder of
2001 and continued to participate in the earnings, losses and benefits
of the Plan. During 2002, the SFMB participants' balances, which
amounted to $1,760,861, were transferred to The San Francisco Music Box
Company 401(k) Plan.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants will become 100% vested in their
accounts.
(5) TAX STATUS
The Company received a favorable determination letter from the Internal
Revenue Service with respect to the qualification of the Plan dated
October 15, 2002. The Company believes that the Plan currently is
designed and is being operated in compliance with the applicable
requirements of the Internal Revenue Code.
(6) CONCENTRATIONS OF RISKS AND UNCERTAINTIES
The Plan may invest in various types of investment securities.
Investment securities are exposed to various risks, such as interest
rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that
changes in the values of investments securities will occur in the near
term and that such changes could materially affect the amounts reported
in the statement of net assets available for plan benefits.
10
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(7) INVESTMENTS
The following investments represent five percent or more of the Plan's
net assets.
December 31,
---------------------------------------
2002 2001
--------------- -------------------
Federated Max-Cap Index Fund - 316,166 shares $ 5,624,610 $ -
Oppenheimer Quest Balanced Value Fund - 439,776 shares $ 5,554,382 $ -
Oppenheimer Capital Preservation Fund - 532,233 shares $ 5,322,330 $ -
Oppenheimer Quest Opportunity Value Fund - 146,834 shares $ 3,819,177 $ -
Oppenheimer Capital Appreciation Fund - 116,723 shares $ 3,491,194 $ -
Oppenheimer Global Fund - 95,201 shares $ 3,450,104 $ -
Scudder Growth and Income Fund - 408,338 shares $ - $ 8,599,600
Scudder Stock Index Fund - 212,234 shares $ - $ 6,942,159
Scudder Stable Value Fund - 4,902,459 shares $ - $ 4,902,459
Scudder Pathway Balanced Portfolio - 378,348 shares $ - $ 4,029,406
Scudder Global Fund - 185,092 shares $ - $ 4,018,354
Foot Locker Common Stock Fund - 547,864 shares and 503,334
shares, respectively $ *5,752,581 $ ** 7,877,151
* 359,291 shares, or $3,772,563 nonparticipant-directed
** 320,428 shares, or $5,014,695 nonparticipant-directed
The Plan's investments (including gains and losses on investments bought and
sold, as well as held during the year) depreciated in value by $9,045,717 and by
$3,454,199 in 2002 and 2001, respectively, as follows:
2002 2001
------------- -------------
Mutual funds $ (6,355,102) $ (3,469,848)
Common stock (2,690,615) 15,649
------------- -------------
$ (9,045,717) $ (3,454,199)
============= =============
11
FOOT LOCKER 401(k) PLAN
Notes to Financial Statements, Continued
(8) RELATED PARTY TRANSACTIONS
The Plan allows for transactions with certain parties who may perform
services or have fiduciary responsibilities to the Plan, including the
Company. Certain Plan investments are shares of various mutual funds
which are owned and managed by OppenheimerFunds, who has been
designated as the investment manager. The Plan invests in Common
Stock of the Company and issues loans to participants, which are
secured by the balances in the participants' accounts. The Cash
Management Trust primarily consists of a cash account that is used to
facilitate the trustee in purchasing shares of the Company's stock.
These transactions qualify as party-in-interest transactions.
(9) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of benefits paid to participants for
the year ended December 31:
2002 2001
---- ----
Benefits paid to participants per the financial statements $ 3,763,199 $ 5,681,808
Add: Amounts payable at December 31, 2002 - -
Less: Amounts payable at December 31, 2001 - (49,205)
------------ ------------
Benefits paid to participants per the Form 5500 $ 3,763,199 $ 5,632,603
============ ============
All amounts for benefit claims of withdrawing participants that were
approved in 2002 were processed, paid and recorded as of December 31,
2002.
12
FOOT LOCKER 401(k) PLAN
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
as of December 31, 2002
Description of investment Market value
------------------------- ------------
Federated Max-Cap Index Fund $ 5,624,610
* Oppenheimer Quest Balanced Value Fund 5,554,382
* Oppenheimer Capital Preservation Fund 5,322,330
* Oppenheimer Quest Opportunity Value Fund 3,819,177
* Oppenheimer Capital Appreciation Fund 3,491,194
* Oppenheimer Global Fund 3,450,104
John Hancock Small Cap Equity Fund 1,145,316
Fidelity Advisor Mid Cap Fund 156,713
Calvert Income Fund 136,230
Fidelity Advisor Dividend Growth Fund 94,811
* Oppenheimer Champion Income Fund 27,091
* Foot Locker Common Stock Fund 5,752,581
* Participant loans receivable (1) 1,309,934
* Cash Management Trust 130,052
---------------
$ 36,014,525
===============
* Party-in-interest as defined by ERISA
(1) 519 loans were outstanding at December 31, 2002, bearing interest at rates
ranging from 9.5% to the current rate of 4.25% for newly issued loans.
See accompanying independent auditors' report.
13
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
this annual report has been signed on behalf of the Plan by the undersigned
hereunto duly authorized.
FOOT LOCKER 401(k) PLAN
By: /s/ Shannon Kelly
-----------------------------
Matrix Capital Bank Trust Services
Trustee of the Plan
Date: June 30, 2003
14
FOOT LOCKER 401(k) PLAN
INDEX OF EXHIBITS
Exhibit No. in Item
601 of Regulation S-K Description
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23 Consent of Independent Auditors
99.1 Certification of Chief Executive
Officer of the Plan Administrator
Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley
Act of 2002.
99.2 Certification of Chief Financial
Officer of the Plan Administrator
Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley
Act of 2002.
15