Annual report of employee stock purchase, savings and similar plans

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION



Washington, D.C. 20549

_____________________________________



FORM 11-K



(Mark One):

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2016



OR



[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from _________________ to ________________________





Commission file number: 1-10299





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.

330 West 34 th Street

New York, N ew York 10 001






























Table of Contents







Report of Independent Registered Public Accounting Firm

1

Statements of Net Assets Available for Benefits as of

December 31, 2016 and 2015

2

Statements of Changes in Net Assets Available for Benefits

for the years ended December 31, 2016 and 2015

3

Notes to Financial Statements

4

Supplemental Schedule*:

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

as of December 31, 2016

12





* Schedules required by Form 5500, which are not applicable, have been omitted.




























































Report of Independent Registered Public Accounting Firm



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, 2016 and 2015 , 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 the standards of the Public Company Accounting Oversight Board (United States). 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, 2016 and 2015 , and the changes in net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.



The supplemental information in the accompanying Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s 2016 financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2016 is fairly stated in all material respects in relation to the 2016 financial statements as a whole.





/s/ KPMG LLP

New York, New York

June 15 , 201 7



1


Fo ot Locker 401(k) Plan

Statements of Net Assets Available for Benefits

December 31, 2016 and 2015







2016

2015

Assets:

Investments, at fair value

$

264,048,078

$

238,500,090

Cash - non-interest bearing

100,606

157,363



264,148,684

238,657,453



Notes receivable from participants

6,875,093

6,681,709



Receivables:

Participant contributions

353,096

256,351

Employer contribution

3,087,345

2,976,317

Due from broker for securities sold

13,446

16,213

Total assets

274,477,664

248,588,043



Liabilities:

Excess contributions payable to participants

130,786

112,297

Net assets available for benefits

$

274,346,878

$

248,475,746



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, 2016 and 2015





2016

2015

Additions to net assets attributed to:

Investment income:

Net appreciation of investments

$

16,068,164

$

4,140,124

Dividends

5,290,651

4,646,994

Total investment income

21,358,815

8,787,118



Interest on notes receivable from participants

202,148

190,653



Contributions:

Participants

20,720,855

19,644,203

Employer

3,087,345

2,976,317

Total contributions

23,808,200

22,620,520



Total additions

45,369,163

31,598,291



Deductions from net assets attributed to:

Benefits paid to participants

18,724,096

14,557,645

Administrative fees

773,935

772,792

Total deductions

19,498,031

15,330,437



Net increase in net assets

25,871,132

16,267,854



Net assets available for benefits:

Beginning of year

248,475,746

232,207,892

End of year

$

274,346,878

$

248,475,746



See accompanying notes to financial statements.



3


Foot Locker 401(k) Plan

Notes to Financial Statements

December 31, 2016 and 2015



(1)         Description of the 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.



(a ) General



The Plan is a defined contribution plan covering generally all U.S. employees of Foot Locker, Inc. (the " Company" or the " Plan Sponsor " ) and its affiliates that adopt the Plan, with the exception of the employees whose primary place of employment is in Puerto Rico and are covered under another affiliate defined contribution plan . Eligible employees are those who have attained age twenty-one and completed one year of service consisting of at least 1,000 hours. 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 3% of pre-tax annual compensation , as defined, for participants who meet the eligibility requirements. The initial automatic enrollment percentage automatically increases each year in 1% increments up to a maximum of 5%. The maximum allowable salary reduction contribution by a participant is 40% of pre-tax annual compensation, as defined in the Plan document. Participants may elect to change their contribution rate and salary reduction agreement as often as daily. In accordance with the Internal Revenue Code ( " IRC " ), as amended , the maximum amount that a participant may contribute under the Plan is $18,000 for 2016 and 2015 . 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 consisting of at least 1,000 hours. 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 make s a matching contribution in an amount equal to 25 % of the employees’ pre-tax contributions on up to the first 4 % of the employees’ compensation (subject to certain limitations). Effective January 1, 2016, as approved by the Retirement Plan Committee at its meeting on October 19, 2015, the Plan was amended to provide that the Company’s matching contributions will be made in cash and invested in accordance with the participants’ investment elections rather than made in the Company’s common stock ( " Foot Locker Shares " ) . Additional contributions may be made at the discretion of the Company and are subject to certain limitations. No additional contributions were made for 2016 or 2015 . Participants who have attained the age of 50 may make catch-up contributions of up to $6,000 in 2016 and 2015 as defined by the Plan. These contributions are not eligible for matching contributions by the Company.



(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 (including maintenance fees paid by the participant) and (d) loan initiation fees, when applicable. Allocations are based on participant’s salary deferrals or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account balance.



4


Foot Locker 401(k) Plan

Notes to Financial Statements

December 31, 2016 and 2015

(1)         Description of the Plan - (c ontinued )



(d ) Vesting



Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company’s matching contributions and earnings thereon is over a five-year period; a participant vests 20% per year beginning after the first year of vesting service and is fully vested for each annual matching contribution after five years of vesting service, as defined in the Plan document.



(e) Investment Options



Participants may change their investment options daily. Participants may elect to allocate up to 25% of their contributions to the Company’s stock. In addition, each participant could direct his or her contributions to the following funds in 1% increments :



Northern Trust Focus Funds (age based) - Each Northern Trust Focus Fund invests in an array of underlying Northern Trust Funds, allowing the p articipant to invest in a mix of stocks, bonds, and capital preservation investments. Some of the underlying funds held by the Northern Trust Focus Funds invest in international securities, which involve risks such as currency fluctuations and economic and political instability.



Northern Trust Focus Income Fund - The fund seeks to provide current income for investors in retirement. The fund will employ a strategic asset allocation strategy which begins with an aggressive allocation and over time moves toward a more conservative allocation. The fund will invest primarily, but will not be limited to, in various equity, fixed income, real estate , and short - term cash collective funds.



Baron Small Cap Fund - The fund seeks capital appreciation through long-term investments primarily in securities of small-sized growth companies. The fund intends that at least 80% of the fund’s total assets are invested in the securities of small-sized growth companies. A small-sized growth company is defined as one having a market capitalization of under $2.5 billion at the time of purchase.



Mainstay Large Cap Growth Fund - The fund seek s long-term growth of capital. The fund normally invests at least 80% of its assets in companies with market capitalization in excess of $4.0 billion at time of purchase.



Northern Trust Collective All Country World Ex-US IMI Fund - The fund seeks to approximate the risk and return characteristics of the Morgan Stanley All Country World Ex - US Investable Market Index. This index is commonly used to represent the non-US equity developed and emerging markets.



Northern Trust S&P 500 Index Fund - The fund seeks to approximate the risk and return characteristics of the S&P 500 Index. This index is commonly used to represent the large-cap segment of the U.S. equity market.



Goldman Sachs Small Cap Value Fund - The fund seeks long-term capital appreciation by investing, under normal circumstances, at least 80% of its assets in a diversified portfolio of equity investments in small-cap issuers with public stock market capitalizations within the range of the market capitalization of companies constituting the Russell 2000 Value Index. The fund invests in small and/or midsize companies.



5


Foot Locker 401(k) Plan

Notes to Financial Statements

December 31, 2016 and 2015

(1)         Description of the Plan - (c ontinued )



( e)  Investment Options - (continued)



Dodge & Cox Stock Fund – The fund seeks long-term growth of principal and income. A secondary objective is to achieve a reasonable current income. The fund invests primarily in a diversified portfolio of equity securities. The fund will invest at least 80% of its total assets in equity securities including common stocks, depository receipts evidencing ownership of common stocks, preferred stocks, securities convertible into common stocks , and securities that carry the right to buy common stocks.



Metropolitan West Total Return Bond Fund - The fund seeks to outperform the Barclays Capital Aggregate Index while maintaining overall risk similar to the index. Investments are made primarily in a diversified portfolio of investment grade, fixed-income securities of various types of bonds and other securities, and can include corporate bonds, notes, collateralized bond obligations, collateralized debt obligations, mortgage and other asset backed securities, bank loans, money-market securities, swaps, futures, options, credit-default swaps, private placements, municipal securities , and restricted securities.



Wells Fargo Stable Return Fund - The fund seeks safety of principal and consistency of returns with minimal volatility. The fund is for conservative investors seeking more income than money market funds and an expectation of less price fluctuation of stock or bond funds. The fund intends to be fully invested in book value investment instruments and employs a broad diversification among contract issuers and underlying securities. The fund’s returns will fluctuate with interest rates and market conditions.



Foot Locker Stock Fund Participants may invest in Foot Locker Shares. Foot Locker Shares may be obtained 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.



(f) Notes Receivable from Participants



Participants may borrow from their accounts , once each year , a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their total vested account balance (excluding matching contributions). At any time , only one loan may be outstanding per participant. 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 bear a rate of interest equal to the prime rate on the date of the loan distribution. Principal and interest is generally paid ratably through regular payroll deductions. Notes receivable from participants totaling $ 6, 875 , 093 and $6,681,709 were outstanding at December 31, 2016 and 2015 , respectively, bearing interest rates ranging from 3.25% to 8. 25 % at December 31, 2016 an d 3.25% to 8.00% at December 31, 2015 .



( g ) Payment of Benefits



Participants are eligible for a distribution upon 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 any investment in the Foot Locker Stock Fund distributed in either cash or Foot Locker Shares.



Participants are eligible for a distribution due to financial hardship under certain conditions in accordance with the Plan document. 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.



6


Foot Locker 401(k) Plan

Notes to Financial Statements

December 31, 2016 and 2015

(1)         Description of the Plan - (c ontinued )



( h ) Administrative Fees



Included in administrative fees are amounts paid by participants for processing loans, administrative fees paid using forfeitures , and investment management fees. To the extent expenses of administering the Plan are not paid by the Plan, the expenses are paid by the Company and , therefore , are not included in the accompanying financial statements. For registered investment companies, investment advisers are reimbursed for costs incurred and receive a management fee for providing advisory services. These reimbursed costs and management fees are reflected in the net appreciation of investments on the statement s of changes in net assets available for benefits.



( i ) Forfeitures



Forfeitures of non-vested employer matching contributions are used to pay for administrative expenses of the Plan and then to reduce future matching contributions. Administrative expenses paid from forfeited non-vested accounts amounted to $ 1 24 , 569 and $175,623 in 2016 and 2015 , respectively. At December 31, 2016 and 2015 , forfeited non-vested accounts totaled $ 1 87 , 858 and $115,584 , respectively.



(2) Summary of Significant Accounting P olicies



( a ) Basis of Accounting



The financial statements of the Plan are prepared using the accrual method of accounting.



( b ) Use of Estimates



The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates and assumptions.



( c ) Investment Valuation and Income Recognition



The Plan's investments are stated at fair value . Investments in commingled funds are valued at the net asset value of units held by the Plan at year-end. Foot Locker Shares held within the Foot Locker Stock Fund and mutual funds are valued at the quoted market price. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date. Interest and dividend income earned from commingled funds are re-invested by the respective funds and are included in net appreciation of investments in the statements of changes in net assets available for benefits. Dividend income earned from the mutual funds and common stock is recorded as dividends in the statements of changes in net assets available for benefits. See Note 7 for a discussion of fair value measurements.



The Plan has a n indirect investment in a fully benefit-responsive common collective trust through the Wells Fargo Stable Return Fund. T his investment is reported at fair value , which approximates contract value. The Wells Fargo Stable Return Fund invests in investment contracts and security-backed contracts. An investment contract is a contract issued by a financial institution to provide a stated rate of return to the buyer of the contract for a specified period of time. A security-backed contract has similar characteristics as a traditional investment contract and is comprised of two parts: the first part is a fixed-income security or portfolio of fixed-income securities; the second part is a contract value guarantee (wrapper) provided by a third party. Wrappers provide contract value payments for certain participant-initiated withdrawals and transfers, a floor crediting rate, and return of fully accrued contract value at maturity. There are no unfunded commitments or reserves as of December 31, 2016 and 2015 .

7


Foot Locker 401(k) Plan

Notes to Financial Statements

December 31, 2016 and 2015

(2) Summary of Significant Accounting P olicies – (continued)



(d) Notes Receivable from Participants



Notes receivable from participants are carried at their outstanding principal balances. Delinquent participant loans are reclassified as distributions based upon the terms of the Plan document.



(e)  Payment of Benefits



Benefits are recorded when paid.



(f)  Excess Contribution s Payable



Amounts payable to participants for contributions in excess of amounts allowed by the IRC are recorded as a liability with a corresponding reduction to participant contributions. The Plan distributed the 2016 excess contributions to the applicable participants prior to March 15, 201 7 .



(g) Recent Accounting Pronouncements

In July 2015 , the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015- 12 , Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. ASU 2015- 12 simplifies the required disclosures related to employee benefit plans. Part I eliminates the requirement to measure and disclose the fair value of fully benefit-responsive contracts. Contract value is the only required measure for fully benefit-responsive investment contracts. Part II eliminates the requirement to disclose individual investments which comprise 5% or more of total net assets available for benefits, as well as the net appreciation or depreciation of fair values by type. Part II also requires plans to continue to disaggregate investments that are measured using fair value by general type, however plans are no longer required to also disaggregate investments by nature, characteristics and risks. Furthermore, the disclosure of information about fair value measurements shall be provided by general type of plan asset. Part III provides a practical expedient to permit plans to measure investments and investment-related accounts as of a month-end date that is closest to the plan's fiscal year-end, when the fiscal period does not coincide with a month-end . ASU 2015-12 is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The P lan adopt ed certain provisions of Part II of ASU 2015-12 retrospectively as of December 31, 2016 , and Part s I and III do not apply to the Plan and will not be adopted.



Other recent accounting pronouncements issued by the FASB did not, or are not believed by management to, have a material effect on the Plan’s financial statements.



(3) 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/or to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts.



(4) Tax Status



The Internal Revenue Service ( " IRS " ) , the primary tax oversight

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