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Dick’s Sporting Goods, Inc. | 2007 Annual Report68
Return On Invested Capital (ROIC)
2007 2006 2005 2004 2003 2002
(Dollars in thousands)
Net income $155,036 $ 112,611 $ 72,980 $ 68,905 $ 52,408 $ 38,137
Merger integration and store
closing costs, after tax —— 22,674 12,202 — —
(Gain) on sale / loss on write-down
of non cash investment, after tax —— (1,106) (6,589) (2,122) 1,468
Adjusted net income 155,036 112,611 94,548 74,518 50,286 39,605
Net Income for ROIC Calculation 155,036 112,611 94,548 74,518 50,286 39,605
Interest expense, net, after tax 6,797 6,015 7,775 4,805 1,099 1,718
Rent expense, net, after tax 161,045 123,473 117,801 86,369 58,232 50,999
Net Income for ROIC after
adjustments (numerator) $ 322,878 $ 242,099 $ 220,124 $ 165,692 $ 109,617 $ 92,322
Total stockholders’ equity $ 888,520 $ 620,550 $ 414,793 $ 313,667 $ 240,894 $ 138,823
Total debt 181,435 181,017 181,201 258,004 3,916 3,577
Operating leases capitalized at
8x annual rent expense 2,140,138 1,646,311 1,570,680 1,151,587 776,427 679,987
Total debt and operating leases
capitalized at 8x annual rent expense 2,321,573 1,827,328 1,751,881 1,409,591 780,343 683,564
Total capital (total stockholders’ equity
+ total debt and operating leases
capitalized at 8x annual rent expense) 3,210,093 2,447,878 2,166,674 1,723,258 1,021,237 822,387
Average total capital (denominator)1$ 2,828,985 $ 2,307,276 $ 1,944,966 $ 1,372,247 $ 921,812 $ 770,555
ROIC 11.4% 10.5% 11.3% 12.1% 11.9% 12.0%
ROIC using GAAP amounts211.4% 10.5% 10.2% 11.7% 12.1% 11.8%
1Average total capital is calculated as the sum of the current and prior year ending total capital divided by two.
2ROIC using GAAP amounts was derived as the quotient of GAAP Net Income for ROIC not adjusted (numerator) and average total capital not adjusted for the
mandatorily redeemable preferred stock (denominator).
The after-tax amounts were calculated using the Company’s effective tax rate.