Dick's Sporting Goods 2010 Annual Report Download - page 54

There were no outstanding borrowings under the Credit Agreement as of January 29, 2011 or January 30, 2010. Total remaining
borrowing capacity, after subtracting letters of credit, as of January 29, 2011 and January 30, 2010 was $418.5 million and
$424.4 million, respectively.
The Credit Agreement contains restrictions regarding the Company’s and related subsidiaries’ ability, among other things, to
merge, consolidate or acquire non-subsidiary entities, to incur certain specified types of indebtedness or liens in excess of certain
specified amounts, to make distributions on the Company’s stock, to make certain investments or loans to other parties, or to
engage in certain lending, borrowing or other commercial transactions with subsidiaries, affiliates or employees. Under the Credit
Agreement, the Company may be obligated to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 in certain
circumstances. The obligations of the Company under the Credit Agreement are secured by interests in substantially all of the
Company’s personal property excluding store and distribution center equipment and fixtures. As of January 29, 2011, the Company
was in compliance with the terms of the Credit Agreement.
The Company believes that cash flows generated by operations and funds available under the Credit Agreement will be sufficient
to satisfy our current capital requirements through fiscal 2011. Normal capital requirements are expected to consist primarily of
capital expenditures related to the addition of new stores, remodeling of existing stores, enhanced information technology and
improved distribution infrastructure. Other investment opportunities, such as potential strategic acquisitions or store expansion
rates substantially in excess of those presently planned, may require additional funding. Currently, the Company plans to open
approximately 34 new Dick’s stores and approximately three new Golf Galaxy stores during fiscal 2011. The Company currently
plans to lease all of its 2011 new stores. This level of store expansion is significantly lower than levels prior to fiscal 2009 largely
as a result of the continued decline in real estate development. The Company also plans to remodel 13 Dick’s stores in fiscal
2011. The Company currently anticipates receiving landlord allowances at eight of its planned 2011 new stores and remodels
totaling approximately $19.8 million. The amount and timing of receipt of these allowances depend, among other things, upon the
timing of new store construction and the ability of landlords to satisfy their contractual obligations.
The Company has a capital appropriations committee that approves all capital expenditures in excess of certain amounts and
groups and prioritizes all capital projects among required, discretionary and strategic. The Company currently expects capital
expenditures, net of deferred construction allowances and proceeds from sale leaseback transactions, to be approximately
$197 million in fiscal 2011.
Off-Balance Sheet Arrangements
The Company’s off-balance sheet contractual obligations and commercial commitments as of January 29, 2011 relate to operating
lease obligations, future minimum guaranteed contractual payments and letters of credit. The Company has excluded these items
from the Consolidated Balance Sheets in accordance with generally accepted accounting principles. The Company does not believe
that any of these arrangements have, or are reasonably likely to have, a material effect on our financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures, or resources.
34 Dick’s Sporting Goods, Inc. ¬2010 Annual Report