Dick's Sporting Goods 2004 Annual Report Download - page 50

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48
The following unaudited proforma summary presents information as if Galyan’s had been acquired at the beginning of each period
presented. The proforma amounts include certain reclassifications to Galyan’s amounts to conform them to the Company’s presentation,
and an increase in interest expense of $3.9 million and $7.7 million for the years ended January 29, 2005 and January 31, 2004,
respectively, to reflect the increase in borrowings under the amended credit facility to finance the acquisition as if it had occurred at the
beginning of each period presented. The proforma amounts do not reflect any benefits from economies, which might be achieved from
combining the operations.
The proforma information does not necessarily reflect the actual results that would have occurred had the companies been combined
during the periods presented, nor is it necessarily indicative of the future results of operations of the combined companies.
January 29, January 31,
Year Ended 2005 2004
(Unaudited, in thousands, except per share amounts)
Net sales $ 2,448,643 $ 2,159,065
Net income $ 55,947 $ 51,624
Basic earnings per share $1.17$ 1.15
Diluted earnings per share $1.06$ 1.03
3. Goodwill and Other Intangible Assets
In connection with the acquisition of Galyan’s on July 29, 2004, the Company recorded goodwill and other intangible assets in accordance
with SFAS No. 141, “Business Combinations.” As of January 29, 2005, $157.2 million of goodwill was recorded as the excess of the
purchase price of $369.5 million over the fair value of the net amounts assigned to assets acquired and liabilities assumed. In accordance
with SFAS No. 142, “Accounting for Goodwill and Other Intangible Assets,” the Company will continue to assess on an annual basis
whether goodwill and other intangible assets acquired in the acquisition of Galyan’s are impaired. Additional impairment assessments
may be performed on an interim basis if the Company deems it necessary. Finite-lived intangible assets are amortized over their
estimated useful economic lives and are periodically reviewed for impairment. No amounts assigned to any intangible assets are
deductible for tax purposes.
The change in the carrying amount of goodwill for the year ended January 29, 2005 is as follows:
(In thousands)
Goodwill balance at July 31, 2004 $ 159,398
Change in deferred taxes related to purchase price adjustments 1,978
Elimination of deferred rent (9,628)
Decrease in property and equipment, net for revised store closing estimate 14,932
Record favorable leases based on appraisal (5,310)
Galyan’s transaction fees 7,370
Decrease in accruals related to the corporate headquarters and store closing charge (8,331)
Other (3,164)
Goodwill balance at January 29, 2005 $ 157,245
Acquired intangible assets subject to amortization at January 29, 2005 were as follows:
2004
Accumulated
Gross Amount Amortization
(In thousands)
Favorableleases $ 5,310 $ 1
notes to consolidated financial statements continued