Dick's Sporting Goods 2008 Annual Report Download - page 37

Outlook
Full Year 2009 Comparisons to Fiscal 2008
Based on an estimated 116 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings
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per diluted share of approximately $0.80–1.00, excluding merger and integration costs. For the full year 2008, the Company
reported earnings per diluted share of $1.19, excluding the non-cash impairment charge and merger and integration costs.
On a GAAP basis, the Company is anticipating reporting earnings per diluted share of $0.77–0.97 in 2009 compared to a net loss
of $0.31 per diluted share in 2008.
Comparable store sales are expected to decrease approximately 12 to 8% compared to a 4.8% decrease in 2008. The comparable
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store sales calculation for the full year 2009 includes Dick’s Sporting Goods stores and Golf Galaxy stores. The comparable store
sales calculation for the full year 2008 includes Dick’s Sporting Goods stores only.
The Company currently expects to open approximately 19 new Dick’s Sporting Goods stores, relocate one Dick’s Sporting Goods
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store and open one new Golf Galaxy store. The Company also anticipates closing two Chick’s Sporting Goods stores and converting
the remaining 12 Chick’s Sporting Goods stores to Dick’s Sporting Goods stores.
Newly Issued Accounting Standards
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”)
No. 141 (revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R signifi cantly changes the accounting for business combinations
in a number of areas including the treatment of contingent consideration, preacquisition contingencies, transaction costs, in-process
research and development and restructuring costs. In addition, under SFAS 141R, changes in an acquired entity’s deferred tax assets
and uncertain tax positions after the measurement period will impact income tax expense. SFAS 141R is effective for fi scal years
beginning after December 15, 2008. We will adopt SFAS 141R beginning in the fi rst quarter of fi scal 2009. This standard will change
our accounting treatment for business combinations on a prospective basis, including the treatment of any income tax adjustments
related to past acquisitions.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defi nes fair value,
establishes a framework for measuring fair value and expands disclosures about fair value measurements; however, SFAS 157
does not require any new fair value measurements. The requirements of SFAS 157 are fi rst effective as of the beginning of our 2008
fi scal year. However, in February 2008 the FASB decided that an entity need not apply this standard to nonrecurring nonfi nancial
assets and liabilities until the subsequent year. Accordingly, our adoption of SFAS 157 was limited to fi nancial assets and liabilities.
The adoption of SFAS No. 157 for fi nancial assets and fi nancial liabilities did not have a signifi cant impact on the Company’s results
of operations, fi nancial condition or liquidity. The adoption of SFAS No. 157 in 2009 for nonfi nancial assets and nonfi nancial liabilities
is also not expected to have a signifi cant impact on the Company’s results of operations, fi nancial condition or liquidity.
In April 2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 142-3, “Determination of the Useful Life of Intangible Assets”
(“FSP No. FAS 142-3”). FSP No. FAS 142-3 requires companies estimating the useful life of a recognized intangible asset to consider
their historical experience in renewing or extending similar arrangements or, in the absence of historical experience, to consider
assumptions that market participants would use about renewal or extension as adjusted for entity-specifi c factors. FSP No. FAS
142-3 is effective as of the beginning of our 2009 fi scal year. We are currently evaluating the potential impact, if any, of the adoption
of FSP No. FAS 142-3 on our consolidated fi nancial statements.
In May 2008, the FASB issued FSP No. APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon
Conversion (Including Partial Cash Settlements)” (“FSP APB 14-1”), which will change the accounting treatment for convertible
securities which the issuer may settle fully or partially in cash. Under the fi nal FSP, cash settled convertible securities will be
separated into their debt and equity components. The value assigned to the debt component will be the estimated fair value, as of the
issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the convertible
debt and the amount refl ected as a debt liability will be recorded as additional paid-in capital. As a result, the debt will be recorded at
a discount refl ecting its below market coupon interest rate. The debt will subsequently be accreted to its par value over its expected
life, with the rate of interest that refl ects the market rate at issuance being refl ected on the income statement. This change in
methodology will affect the calculations of net income and earnings per share for many issuers of cash settled convertible securities.
The FSP is effective for fi nancial statements issued for fi scal years beginning after December 15, 2008, and requires retrospective
application. Although FSP APB 14-1 will not impact the Company’s actual past or future cash fl ows, the Company expects the impact
to pre-tax non-cash interest expense for fi scal, 2008, 2007 and 2006 to be approximately $8.0 million, $7.4 million and $6.9 million,
respectively. The Company does not expect adoption of the FSP to have a material impact on the Company’s results in fi scal 2009.
DICK’S SPORTING GOODS, INC. 2008 ANNUAL REPORT 35