Deferred income taxes are not provided on un-remitted earnings of foreign subsidiaries that are intended to be indefinitely invested. Exclusive of amounts that, if remitted, would result in little or no tax under current U.S. tax laws, unremitted earnings were approximately $607 at February 1, 2003. Net income taxes of approximately $120 would be due if these earnings were remitted.

The company has stock option plans (the "Plans") that provide for the granting of options to purchase the company's common stock. The Plans cover employees and directors of the company and provide for the issuance of non-qualified options, incentive stock options, performance share options, performance units, stock appreciation rights, restricted shares, restricted units and unrestricted shares. The Plans provide for a variety of vesting dates with the majority of the options vesting approximately three years from the date of grant, 50% over the first two years and the remaining 50% over three years. Options granted to directors are exercisable one-third on a cumulative basis commencing on the third, fourth and fifth anniversaries from the date of the grant.

The exercise price per share of all options granted has been the average of the high and low market price of the company's common stock on the date of grant. All options must be exercised within ten years from the date of grant.

At February 1, 2003, an aggregate of 47.7 shares of authorized common stock were reserved for all of the Plans noted above, including 1.6 shares reserved for the future issuance of restricted shares, restricted units, performance units, unrestricted shares and 2 shares reserved for the restricted shares of units granted but not yet vested. Of these amounts, 11.5 were available for future grants. All outstanding options expire at dates ranging from February 17, 2003 to December 30, 2012.

Stock option transactions are summarized as follows:

The following table summarizes information about stock options outstanding at February 1, 2003: Options exercisable and the weighted-average exercise prices were 11.3 and $19.60 at February 3, 2001; 16.1 and $20.74 at February 2, 2002; and 22.6 and $20.07 at February 1, 2003, respectively.

At February 1, 2003 and February 2, 2002, Toysrus.com, the company's internet subsidiary, had approximately 11.3 stock options outstanding to both employees and non-employees of the company. This represents approximately 11% of the authorized common stock of Toysrus.com at February 1, 2003 and February 2, 2002. These outstanding options, with exercise prices ranging between $0.30 and $2.25 per share, entitle each option holder the right to purchase one share of the common stock of Toysrus.com.

The company utilizes a restoration feature to encourage the early exercise of certain options and retention of shares, thereby promoting increased employee ownership. This feature provides for the grant of new options when previously owned shares of company stock are used to exercise existing options. Restoration option grants are non-dilutive, as they do not increase the combined number of shares of company stock and options held by an employee prior to exercise. The new options are granted at a price equal to the fair market value on the date of the new grant and generally expire on the same date as the original options that were exercised.

In 2000, the company authorized the exchange of certain stock options having an exercise price above $22 per share for an economically equivalent grant of restricted stock. The exchange, which was voluntary, replaced approximately 14.4 options with approximately 1.7 restricted shares. Shares of restricted stock resulting from the exchange vest over a period of three years. One-half of the grant vested on April 1, 2002 and the remainder vests on April 1, 2003. Accordingly, the company recognizes compensation expense throughout the vesting period of the restricted stock. The company recorded $3 in compensation expense related to this restricted stock in 2002 and $8 in both 2001 and 2000.