Dick's Sporting Goods 2003 Annual Report Download - page 52

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REGULATION G RECONCILIATIONS
This Annual Report to Stockholders contains certain non-GAAP financial information. The following tables set forth
reconciliations of that non-GAAP financial information to the most directly comparable GAAP information for the stated
periods. This non-GAAP financial information includes EBITDA and ROIC.
EBITDA means earnings before interest, taxes, depreciation and amortization, and should not be considered as an
alternative to net income or any other generally accepted accounting principles measure of performance or liquidity.
EBITDA, as we have defined it, may not be comparable to similarly titled measures reported by other companies.
EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the effect
of changes resulting from financing decisions, tax regulations, and capital investments.
ROIC means return on invested capital. ROIC is expressed as a percentage which is calculated as follows: net income
plus adjustments divided by average total capital for the stated periods. Average total capital includes stockholders’
equity, plus debt and capital leases plus capitalized operating leases (operating lease rent expense multiplied by
a factor of 8). ROIC, as we have defined it, may not be comparable to similarly titled measures reported by other
companies. ROIC is a key metric used by the Company in evaluating the efficiency of its use of capital including
debt and lease commitments.
EBITDA
2003 2002 2001
(Dollars in thousands)
Net income $52,819 $38,264 $ 23,471
Provision for income taxes 35,212 25,509 15,648
Interest expense, net 1,831 2,864 6,241
Depreciation and amortization 17,554 14,420 12,082
EBITDA $107,416 $81,057 $ 57,442
Pro-Forma Net Income and Earnings Per Share The Company believes the use of pro-forma results for prior
periods provides a more meaningful comparison to the current period results due to the significant increase in share
count since October 15, 2002 when the Company completed its initial public offering, and the related reduction in
interest expense due to the application of the net proceeds thereof. The reconciliations of the pro-forma financial
information to the most directly comparable GAAP financial information is presented below:
2003 2002
(Dollars in millions, except per share data)
Net income $38.3 $23.5
Interest expense reduction (after tax) 0.3 0.8
Pro-forma net income $38.6 $24.3
Diluted shares 41.0 35.7
Public offering adjustment 4.0 7.8
Pro-forma diluted shares 45.0 43.5
Pro-forma diluted earnings per share $ 0.86 $ 0.56
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