Dick's Sporting Goods 2015 Annual Report Download - page 52

Segment Information – The Company is a specialty omni-channel retailer that offers a broad range of products in its specialty
retail stores primarily in the eastern United States. Given the economic characteristics of the store formats, the similar nature of
the products sold, the type of customer and method of distribution, the Company's operating segments are aggregated within
one reportable segment. The following table sets forth the approximate amount of net sales attributable to hardlines, apparel and
footwear for the periods presented (in millions):
Fiscal Year
2015 2014 2013
Hardlines $3,264 $2,992 $2,763
Apparel 2,553 2,461 2,184
Footwear 1,403 1,316 1,222
Other 51 45 44
Total net sales $7,271 $6,814 $6,213
Construction Allowances – All of the Company's store locations are leased. The Company may receive reimbursement from a
landlord for some of the cost of the structure, subject to satisfactory fulfillment of applicable lease provisions. These
reimbursements may be referred to as tenant allowances, construction allowances or landlord reimbursements ("construction
allowances").
The Company's accounting for construction allowances differs if the Company is deemed to be the owner of the asset during
the construction period. Some of the Company's leases have a cap on the construction allowance, which places the Company at
risk for cost overruns and causes the Company to be deemed the owner during the construction period. In cases where the
Company is deemed to be the owner during the construction period, a sale and leaseback of the asset occurs when construction
of the asset is complete and the lease term begins, if relevant sale-leaseback accounting criteria are met. Any gain or loss from
the transaction is included within deferred revenue and other liabilities on the Consolidated Balance Sheets and deferred and
amortized as rent expense on a straight-line basis over the term of the lease. The Company reports the amount of cash received
for the construction allowance as construction allowance receipts within the financing activities section of its Consolidated
Statements of Cash Flows when such allowances are received prior to completion of the sale-leaseback transaction. The
Company reports the amount of cash received from construction allowances as proceeds from sale leaseback transactions
within the investing activities section of its Consolidated Statements of Cash Flows when such amounts are received after the
sale-leaseback accounting criteria have been achieved.
In instances where the Company is not deemed to be the owner during the construction period, reimbursement from a landlord
for tenant improvements is classified as an incentive and included within deferred revenue and other liabilities on the
Consolidated Balance Sheets. The deferred rent credit is amortized as rent expense on a straight-line basis over the term of the
lease. Landlord reimbursements from these transactions are included in cash flows from operating activities as a change in
deferred construction allowances.
Leases – Escalating rent payments, rent abatements and rent holidays are considered in the calculation of minimum lease
payments in the Company's capital lease tests and in determining straight-line rent expense for operating leases. The Company
records any difference between the straight-line rent amount and amounts payable under the lease as part of deferred rent within
long-term deferred revenue and other liabilities on the Consolidated Balance Sheets.
Contingent payments based upon sales and future increases determined by inflation related indices cannot be estimated at the
inception of the lease and accordingly, are charged to operations as incurred. The Company records contingent rent within
accrued expenses on the Consolidated Balance Sheets.
DICK'S SPORTING GOODS,€INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
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