Dick's Sporting Goods 2008 Annual Report Download - page 60

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The following table summarizes the activity in fi scal 2008, 2007 and 2006:
Liabilities
Associate Established for Inventory
Severance, the Closing Reserve for
Retention of Acquired Discontinued
and Relocation Locations Merchandise Total
(In thousands)
Balance at January 28, 2006 $ 120 $ (569) $ — $ (449)
Cash paid (net of sublease receipts) (120) (85) — (205)
Adjustments to the estimate — — — —
Clearance of discontinued Galyan’s merchandise — — — —
Balance at February 3, 2007 $ — $ (654) $ — $ (654)
Cash paid (net of sublease receipts) — 121 — 121
Adjustments to the estimate — — — —
Store closing reserves established in conjuction with
the Golf Galaxy acquisition — 2,059 — 2,059
Balance at February 2, 2008 $ — $ 1,526 $ — $ 1,526
Liabilities and reserves established in connection with
Golf Galaxy acquisition and integration 5,491 615 — 6,106
Liabilities and reserves established in connection
with Chick’s acquisition and integration 970 15,143 3,012 19,125
Cash paid (net of sublease receipts) (2,906) (307) — (3,213)
Estimate adjustments and interest accretion — 3,122 — 3,122
Clearance of discontinued Chick’s merchandise — — (934) (934)
Balance at January 31, 2009 $ 3,555 $ 20,099 $ 2,078 $ 25,732
For the year ended January 31, 2009, $18.2 million of the $25.2 million liabilities and reserves established in connection with the
Golf Galaxy and Chick’s acquisition and integration impacted previously recorded goodwill amounts.
As of January 31, 2009 and February 2, 2008, the Company had a sublease receivable of $0.3 million and $3.3 million as our
projected sublease cash fl ows exceed our anticipated rent payments for one of the closed former Galyan’s stores for each of the
relative periods.
6. Store and Corporate Offi ce Closings
At a store’s closing or relocation date, estimated lease termination and other costs to close or relocate a store are recorded in cost
of goods sold, including occupancy and distribution costs on the Consolidated Statements of Operations. The Company also records
store closing reserves for acquired locations it plans to close as described in Note 5. The calculation of accrued lease termination
and other costs primarily includes future minimum lease payments, maintenance costs and taxes from the date of closure or
relocation to the end of the remaining lease term, net of contractual or estimated sublease income. The liability is discounted using
a credit-adjusted risk-free rate of interest. The assumptions used in the calculation of the accrued lease termination and other costs
are evaluated each quarter.
DICK’S SPORTING GOODS, INC. 2008 ANNUAL REPORT
58