Accordingly, based on all of these actions, we recorded $213 million of pre-tax ($126 million after-tax) restructuring and other charges in the fourth quarter of our fiscal year ended February 2, 2002. Details on the components of the charges are as follows:

During 1998, we announced strategic initiatives to reposition our business and other charges including the guest-focused reformatting of our toy stores into our new store format, as well as a restructuring of our international operations, all of which resulted in a charge of $353 million. Details on the components of the charges are described in the notes to the consolidated financial statements and are as follows:

In the fourth quarter of 2001, we determined that $11 million of unused reserves for the closing of under-performing stores in central Europe would no longer be needed and accordingly, reversed these reserves. In the third quarter of 2001, we completed the satisfaction of certain legal obligations and accordingly, reversed the remaining unused reserve of $5 million. In the third quarter of 2000, we determined that an $11 million unused reserve would no longer be needed and accordingly, reversed this reserve. Remaining reserves at February 2, 2002, primarily long-term lease commitment reserves, will be utilized during 2002 and thereafter.

In 1998, we also recorded markdowns and other charges of $345 million, which included $253 million for markdowns required to clear excess inventory from stores, $29 million for markdowns related to store closings and $63 million for charges to cost of sales for inventory system refinements and changes in accounting estimates.

In 1995, we announced certain initiatives to restructure our worldwide business. In the fourth quarter of 2001, we determined that unused reserves of $13 million for the restructuring of our international business would no longer be needed and accordingly, reversed these reserves. We have substantially completed the remainder of this program, with the exception of long-term lease commitment reserves that will be utilized during 2002 and thereafter.

We believe that unused reserves remaining at February 2, 2002 are reasonable estimates of what is required to complete all remaining initiatives.

Liquidity and Capital Resources

We have a $975 million unsecured committed revolving credit facility from a syndicate of financial institutions. The credit facility includes a $650 million 5-year facility expiring in September 2006 and a $325 million 364-day facility expiring in September 2002. This facility is available for seasonal borrowings and to support our domestic commercial paper borrowings. There were no outstanding balances under any of these committed revolvers at the end of fiscal 2001, 2000 or 1999. Additionally, we have lines of credit with various banks to meet short-term financing needs of our foreign subsidiaries. Cash requirements for operations, capital expenditures and lease commitments will be met primarily through operating activities and issuance of equity and/or debt.

On March 13, 2002, Moody’s revised our long-term debt and commercial paper rating to “Baa3/P-3,” with a stable outlook. Our long-term debt and commercial paper is currently rated “BBB+/A-2” by Standard & Poor’s. However, Standard & Poor’s has placed our long-term debt on watch for possible downgrade. We continue to be confident in our ability to refinance maturing debt, as well as to provide for new capital.

The seasonal nature of our business typically causes cash balances to decline from the beginning of the year through October as inventory increases for the Holiday selling season and funds are used for construction of new stores, remodeling and other initiatives that normally occur in this period. The fourth quarter, including the Holiday season, accounts for more than 40% of our net sales and a significant portion of our operating earnings.