FOOT LOCKER, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Income $/($Expense$),$ net

Other income $/$ expense, net generally includes non$-$operating items, such as:

changes in value for our investments accounted for using the fair value measurement alternative, which

is at cost adjusted for changes in observable prices minus impairment,

our share of earnings or losses related to our equity method investments,

net benefit expense or income related to our pension and postretirement programs, excluding the

service cost component,

changes in fair value, premiums paid, and realized gains associated with foreign currency option

contracts,

changes in the market value of our available$-$for$-$sale security, and

premiums paid to repurchase and retire bonds.

During $2021,$ we invested $$68$ million to take a common stock minority stake in a public entity, Retailors, Ltd$.,$ which

is traded on the Tel Aviv stock exchange. This investment was at a discount to the initial public offering price, resulting

in a non$-$cash gain of $$9$ million in $2021.$ Additionally, changes in fair value related to our Retailors, Ltd$.$ investment

generated non$-$cash gains of $$68$ million during $2021.$ During $2022,$ we sold our position in this investment. A loss of

$$62$ million was recorded during $2022,$ partially offset by $$1$ million of dividend income. Our minority investment in

GOAT is accounted for using the fair value measurement alternative, which is at cost adjusted for changes in

observable prices minus impairment. GOAT received funding at higher valuations in both $2021$ and $2020$ resulting in

non$-$cash gains of $$290$ million and $$190$ million, respectively.

During $2021,$ we recorded $$7$ million of insurance recoveries in excess of the losses sustained in the prior year related

to the social unrest.

Merchandise Inventories

The value of our LIFO inventories as calculated on a LIFO basis, approximates their value as calculated on a FIFO

basis.

Other Current AssetsFOOT LOCKER, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Acquisitions

WSS

In $2021,$ the Company, through its wholly$-$owned subsidiary Foot Locker Retail, Inc., acquired $100\%$ of the shares of

Eurostar, Inc., a Delaware corporation operating as WSS $("$WSS$").$ WSS is a U$.$S$.-$based off$-$mall athletic footwear

and apparel retailer, focused on the Hispanic consumer, which operated $93$ stores at the acquisition, primarily on the

West Coast.

We believe that this acquisition enhances our growth opportunities in North America and creates further diversification

and differentiation in terms of both customers and products.

The results of WSS are included in our consolidated financial statements since the acquisition date. The proforma

effects of the acquisition have not been presented, as their effects were not significant to the consolidated results of

operations.

The aggregate purchase price for the acquisition was $$809$ million $($ $$2$ million paid in $2022$ and $$737$ million paid in

$2021,$ net of cash acquired$)$ and was funded with available cash. During $2022,$ we recorded insignificant changes to

the value of net assets acquired related to income tax balances.

The following table represents the final allocation of the purchase price for WSS$.$ We determined that the WSS

tradename will have an indefinite life and will not be amortized. The excess purchase price over the fair value of

assets was allocated to goodwill.

$($$ in millions$)$

Assets acquired:

Cash and cash equivalents

Merchandise inventories

Other current assets

Property and equipment, net

Operating lease right$-$of$-$use assets

Tradenames

Customer relationships

Other assets

Liabilities assumed:

Accounts payable and accrued liabilities

Current portion of obligations under finance leases

Current portion of lease obligations

Long$-$term portion of obligations under finance leases

Long$-$term lease obligations

Deferred taxes

Other liabilities

atmos

Effective November $1,2021,$ the Company, acquired certain entities collectively operated as atmos, headquartered

in Japan. atmos is a digitally led, culturally$-$connected global brand featuring premium sneakers and apparel, an

exclusive in$-$house label, collaborative relationships with leading vendors in the sneaker ecosystem, experiential

stores, and a robust omni$-$channel platform.

The aggregate purchase price for the acquisition was $$372$ million $($ $$12$ million paid in $2022$ and $$319$ million paid in

$2021,$ net of cash acquired$)$ subject to adjustment for the finalization of the purchase price. At closing, we placed

$$20$ million related to certain indemnifications and this indemnifif