Dick's Sporting Goods 2011 Annual Report Download

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2011 ANNUAL REPORT
WHERE THE SPIRIT OF THE TRUE ATHLETE LIVES

Table of contents

  • Page 1
    WHERE THE SPIRIT OF THE TRUE ATHLETE LIVES 2 011 A N N U A L R E P O R T

  • Page 2
    ...the favorable impact of lower litigation settlement costs in 2011. 2009 same store sales include Dick's Sporting Goods and Golf Galaxy sales. 2010 and 2011 same store sales include Dick's Sporting Goods, Golf Galaxy and the Company's eCommerce business. Results exclude goodwill, other intangible and...

  • Page 3
    ... values have made Dick's an undisputed industry leader, with the largest store network and the strongest profitability record of any publicly held full-line sporting goods retailer in the nation. We move ahead driven to achieve financial excellence, skilled in fueling the growth of our business...

  • Page 4
    ... diluted share of $1.63 for 2010. This increase was driven by several factors, including growth in our store network, a 2.0 percent improvement in consolidated same store sales compared with 2010, and operating margin improvement of 134 basis points. We opened 36 new Dick's Sporting Goods locations...

  • Page 5
    ...GROW TH • Added 36 new Dick's Sporting Goods stores, posting an 8.1 percent growth rate • Remodeled 14 Dick's Sporting Goods stores • Expanded our eCommerce functionality, setting the stage for significant future growth • Laid plans to open a 600,000 square foot distribution center in 2013...

  • Page 6
    ... eCommerce business and increasing our margins. We have developed a focused strategy for continuing to advance in each of these areas. On the store growth front, we plan to nearly double the size of our Dick's Sporting Goods chain over time, ultimately opening approximately 400 additional locations...

  • Page 7
    ... more closely correlate our inventory allocation decisions to the specific needs of each store. We also plan to open a new distribution center in 2013 that will allow us to stay ahead of the needs of our growing store network. › Our apparel and footwear PRODUCT MIX - businesses typically deliver...

  • Page 8
    ... our customers to access Dick's products, services and insight through our extensive store network, as well as through our eCommerce site and our growing social media presence. As we continue to develop our sales channels, we are committed to ensuring that service excellence remains at the center of...

  • Page 9
    ... customer service is reï¬,ected by our steady development of a comprehensive omni-channel distribution platform. The goal of this initiative is to leverage all of our sales channels to deliver a consistent, seamless and high-quality customer experience- across our stores, on the web and via mobile...

  • Page 10
    8

  • Page 11
    YOU STEP OUT ONTO THE FIELD. YOU GET THAT FAMILIAR FEELING. THE ANTICIPATION, THE EXCITEMENT. IT'S TIME. TIME TO PROVE YOU'RE READY. TIME TO LIVE UP TO YOUR POTENTIAL. TIME TO COMPETE. WHEN YOU WALK INTO DICK'S, IT'S THAT SAME FEELING. THE GET THE THE FEELING THAT YOU'RE ABOUT TO BET TER. ONE STEP...

  • Page 12
    ...Each of our specialty stores offers the authentic merchandise, top brands and specialized services that sports enthusiasts expect from a premium retailer. At the same time, they deliver the scale advantages of a national chain, including competitive pricing, exclusive products and promotions, and an...

  • Page 13
    11

  • Page 14
    ...er expert product guidance, as well as valuable playing tips and advice on local courses. For avid golfers, excellent equipment is vital to achieving top performance. The Golf Pro Shop at Dick's stocks a premier assortment of equipment, apparel, footwear and accessories from leading national brands...

  • Page 15
    ..., we make The Lodge a true destination store by providing on-site access to an array of value-added services, such as riï¬,e-scope mounting, bore sighting, fishing line spooling and arrow cutting, and we provide on-site archery lanes where customers can give our products a shot before buying. 13

  • Page 16
    ..., and we offer a growing selection of exclusive merchandise from our own Fitness Gear line. Many of our Fitness stores also house dedicated cycle shops, which feature bicycles, accessories and riding apparel, as well as a menu of value-added services, including safety inspections, custom fittings...

  • Page 17
    ...dedication to the team sports arena by acting as the Official Sporting Goods Retailer of Little League Baseball. We honor our Little League commitment by hosting player registrations and instructional clinics for local teams, offering exclusive team discounts, and donating equipment to area coaches...

  • Page 18
    ..."help themselves" with select products, while still being able to draw on the expertise of our specially trained Footwear sales associates. Our customers have heartily endorsed this convenient concept, and we continue to roll it out to additional locations. Dick's Footwear store is where the rubber...

  • Page 19
    ... adidas. We also regularly draw on our relationships with our vendor-partners to develop items and programs that are exclusive to Dick's. Our Athletic Apparel store mirrors the broad demands of our customers by encompassing several distinct departments that cater to men, women and young athletes, as...

  • Page 20
    ...their playing time. We accomplish this by providing a world-class selection of golf equipment, apparel, footwear and accessories from the industry's premier manufacturers. Our assortment includes products from trusted name brands like TaylorMade-adidas Golf, PING, Titleist, Callaway Golf, Adams Golf...

  • Page 21
    ... established in 2010 to coordinate and guide our philanthropic initiatives. In 2011, we continued to develop and administer a variety of programs that enable our Company and our associates to give back to the many communities where we live and work. These include: THE DICK'S SPORTING GOODS COMMUNIT...

  • Page 22
    ... distribution center in Atlanta, driving additional improvements in inventory management Converted the Chick's Sporting Goods stores acquired in 2007 into Dick's Sporting Goods stores, firmly positioning our brand in Southern California Laid plans to move into a new headquarters building in 2010...

  • Page 23
    ... (724) 273-3400 (Address of principal executive offices, zip code, telephone number) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of Each Exchange on which Registered Common Stock, $0.01 par value The New York Stock Exchange Securities registered pursuant...

  • Page 24
    ...Director Independence ...Item 14. Principal Accountant Fees and Services ...Part IV ...Item 15. Exhibits and Financial Statement Schedules ...SIGNATURES ...CERTIFICATIONS ...5 5 15 25 25 27 27 27 27 28 30 43 43 43 43 46 46 46 46 46 47 47 47 47 75 85 2 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 25
    ... to changing business and economic conditions; The intense competition in the sporting goods industry; Lack of available retail store sites on terms acceptable to us, rising real estate prices and other costs and risks relating to our stores, or our inability to open new stores on a timely basis or...

  • Page 26
    ...; The loss of our key executives, especially Edward W. Stack, our Chairman and Chief Executive Officer; Current exchange rate fluctuations; Costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to labor, employment and the sale of...

  • Page 27
    ... full-line sporting goods retailer offering a broad assortment of high quality, competitively-priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer (''Golf Galaxy''), and...

  • Page 28
    ... allowing customers to test golf clubs in our indoor driving range, shoot bows in our archery range, or run on our footwear track. Our Golf Galaxy stores are designed to create an exciting and interactive shopping environment that highlights our extensive product assortments and value-added services...

  • Page 29
    ... Year 2011 2010 2009 29% 19% 52% 100% 28% 18% 54% 100% 28% 16% 56% 100% (1) Includes items such as sporting goods equipment, fitness equipment, hunting and fishing gear and golf equipment. Apparel This category consists of athletic apparel, outerwear and sportswear designed for a broad range of...

  • Page 30
    ...trade areas that have sufficient in-profile customers to support it. Our current Golf Galaxy store model is based on a prototype store that generally ranges from 13,000 to 18,000 square feet. The following table summarizes store openings and closings for 2011 and 2010: Fiscal 2011 Golf Dick's Galaxy...

  • Page 31
    ... turn reports directly to the senior vice president of operations. Support Services We believe that we further differentiate our stores from other large format sporting goods stores by offering support services for the products we sell. At our Dick's and Golf Galaxy stores, we offer a complete range...

  • Page 32
    ... programs. Program members also receive exclusive offers and access to special in-store events as well as direct marketing programs that are based upon their sports preferences and past purchase history in order to enhance our marketing efficiency. 10 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 33
    ..., the Company is currently constructing a 624,000 square foot distribution center in Goodyear, Arizona, which is currently expected to be operational in January 2013. Vendors directly ship floor ready merchandise to our distribution centers, Dick's Sporting Goods, Inc. 2011 Annual Report 11

  • Page 34
    ... large format sporting goods stores and traditional sporting goods stores. Mass Merchants These stores generally range from 50,000 to over 200,000 square feet and are primarily located in shopping centers, freestanding sites or regional malls. Sporting goods merchandise and apparel represent a small...

  • Page 35
    ..., Store Manager and Merchandise Manager. Joseph H. Schmidt - 52, became our President and Chief Operating Officer in February 2009. In 2008, Mr. Schmidt served as Executive Vice President and Chief Operating Officer responsible for all aspects Dick's Sporting Goods, Inc. 2011 Annual Report 13

  • Page 36
    ... to 1990, he held various positions in store operations for Ames Department Stores, Inc. Timothy E. Kullman - 56, joined Dick's Sporting Goods as Senior Vice President and Chief Financial Officer in April 2007 and was promoted to Executive Vice President - Finance, Administration and Chief Financial...

  • Page 37
    ...; changes in demand for the products that we offer; lockouts or strikes involving professional sports teams; retirement of sports superstars used in marketing various products; sports scandals; costs related to the closures of existing stores; Dick's Sporting Goods, Inc. 2011 Annual Report 15

  • Page 38
    ... which we are located and their tenants; new product introductions and changes in our product mix; timing and effectiveness of promotional events; lack of new product introductions to spur growth in the sale of various kinds of sports equipment; and weather conditions in our markets. Our ability to...

  • Page 39
    ... to lose market share and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Lack of available retail store sites on terms acceptable to us, rising real estate prices and other costs and risks relating to new store openings could severely...

  • Page 40
    ... of new regulations could reduce our sales and decrease our profitability. There is a risk that claims or liabilities will exceed our insurance coverage. In addition, we may be unable to retain adequate liability insurance in the future. Although 18 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 41
    ... or, in some cases, face potential liability. Historically, instability in the political and economic environments of the countries in which our vendors or we obtain our products has not had a material adverse effect on our operations. However, Dick's Sporting Goods, Inc. 2011 Annual Report 19

  • Page 42
    ... the fluctuation of their local currency against the U.S. dollar. We source goods from various countries, including China, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of goods that we purchase. 20 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 43
    ... or grow our business, including our e-commerce operations, and there is no assurance that cash flow from operations will be sufficient to meet those needs or that additional sources of capital will be available on acceptable terms or at all. Dick's Sporting Goods, Inc. 2011 Annual Report 21

  • Page 44
    ...facilities, we may lose merchandise and be unable to effectively deliver it to our stores. We currently operate a 725,000 square foot distribution center in Plainfield, Indiana, a 657,000 square foot distribution center near Atlanta, Georgia, and a 601,000 square foot distribution center in Smithton...

  • Page 45
    ... unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practices, it could have a material adverse effect on our business, financial condition and results of operations. Dick's Sporting Goods, Inc. 2011 Annual Report 23

  • Page 46
    ... results; changes in financial estimates by securities analysts; our inability to meet or exceed securities analysts' estimates or expectations; conditions or trends in our industry; changes in the market valuations of other retail companies; 24 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 47
    ... entered into, are at market rate rents. We generally select a new store site six to 18 months before its opening. Our stores are primarily located in shopping centers in regional shopping areas, as well as in freestanding locations and in malls. Dick's Sporting Goods, Inc. 2011 Annual Report 25

  • Page 48
    ... Dick's Golf Galaxy Total Alabama Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nebraska Nevada New Hampshire New Jersey New York North Carolina...

  • Page 49
    ... stock at any time at the holder's option and are automatically converted upon other events. Our common stock began trading on October 16, 2002, following the Company's initial public offering. Set forth below, for the applicable periods indicated, are the high and low closing sales prices per share...

  • Page 50
    ... set forth below should be read in conjunction with other sections of this report including Item 7. ''Management's Discussion and Analysis of Financial Condition and Results of Operations'' and our consolidated financial statements and related notes. 28 Dick's Sporting Goods, Inc. 2011 Annual...

  • Page 51
    ... share - Basic Earnings (loss) per common share Diluted Dividends declared per common share Weighted average common shares outstanding: Basic Diluted Store Data: Same store sales increase (decrease)(7) Number of stores at end of period Total square footage at end of period Net sales per square foot...

  • Page 52
    ... retailer offering a broad assortment of brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer (''Golf Galaxy''). As of January 28, 2012, 30 Dick's Sporting Goods, Inc. 2011 Annual...

  • Page 53
    ... of litigation settlement costs previously accrued during fiscal 2010. Fiscal 2010 net income included expenses relating to future lease payments and asset impairment charges resulting from the closure of 12 underperforming Golf Galaxy stores á"¢ Dick's Sporting Goods, Inc. 2011 Annual Report 31

  • Page 54
    ... 115 (23) 1 124 19 105 38 67 Revenue from retail sales is recognized at the point of sale, net of sales tax. Revenue from e-commerce sales is recognized upon shipment of merchandise and any service-related revenue is recognized as the services are 32 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 55
    ... stores, a 4.3% increase in Golf Galaxy and a 36.4% increase in e-commerce. The inclusion of the e-commerce business resulted in an increase of approximately 100 basis points to the Company's consolidated same store sales calculation for fiscal 2011. Dick's Sporting Goods, Inc. 2011 Annual Report...

  • Page 56
    ... 2011 and fiscal 2010 includes $10.6 million related to rent payments under the Company's financing lease for its corporate headquarters building. The Company did not make any borrowings under its revolving credit facility in fiscal 2011 or 2010. 34 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 57
    ... net sales, selling, general and administrative expenses increased by 115 basis points. Administrative expenses increased 77 basis points as a percentage of net sales from fiscal 2009 primarily due to higher costs related to our relocated corporate Dick's Sporting Goods, Inc. 2011 Annual Report 35

  • Page 58
    headquarters as well as technology and other infrastructure related costs to support our business strategies. In fiscal 2010, the Company recognized expenses of $16.4 million relating to future lease obligations and asset impairment charges resulting from the closure of 12 underperforming Golf ...

  • Page 59
    ... to open approximately 40 new Dick's stores during fiscal 2012, all of which the Company plans to lease. In fiscal 2011, the Company purchased land and entered into a development contract for the construction of a new 624,000 square foot distribution center located in Goodyear, Arizona. Construction...

  • Page 60
    ... in 2011 were favorably impacted by the timing of estimated deductions for qualified capital expenditures; however the Company anticipates making a $30.7 million extension payment related to 2011 during the first quarter of fiscal 2012. á"¢ á"¢ 38 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 61
    ... to opening 26 Dick's stores, remodeling 12 Dick's stores, relocating two Dick's stores and opening two Golf Galaxy stores in fiscal 2010. In fiscal 2011, the Company generated proceeds of $14.1 million from the sale of its remaining investment in GSI Commerce, Inc., the Company's e-commerce service...

  • Page 62
    ... majority are based on various quantitative contract terms. Amounts expected to be received from vendors relating to the purchase of merchandise inventories are treated as a reduction of inventory and reduce cost of goods sold as the merchandise is 40 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 63
    ...of future growth and trends, royalty rates in the category of intellectual property, discount rates and other variables. The Company recognizes an impairment charge when the estimated fair value of the intangible asset is less than the carrying value. Dick's Sporting Goods, Inc. 2011 Annual Report...

  • Page 64
    ... this 10-K for a detailed description of recent accounting pronouncements. We do not expect these recently issued accounting pronouncements to have a material impact on our results of operations, financial condition or liquidity in future periods. 42 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 65
    ... AND PROCEDURES Disclosure Controls and Procedures The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Chief Executive Officer and the Chief Financial Officer, of the Dick's Sporting Goods, Inc. 2011 Annual Report 43

  • Page 66
    ... of a control system to future periods are subject to the risks that, over time, controls may become inadequate because of changes in an entity's operating environment or deterioration in the degree of compliance with policies and procedures. 44 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 67
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the internal control over financial reporting of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of January 28, 2012...

  • Page 68
    ... and Ethics, committee charters and Corporate Governance Guidelines are publicly available on the Investor Relations portion of the Company's website at http://www.dickssportinggoods.com/investors. If the Company makes any amendments to the Code of Business Conduct and Ethics other than technical...

  • Page 69
    ... herein by reference, are filed as part of this Form 10-K. Certain Exhibits are incorporated by reference from documents previously filed by the Company with the SEC pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as amended. (2) Dick's Sporting Goods, Inc. 2011 Annual Report 47

  • Page 70
    ... of Cash Flows for the Fiscal Years Ended January 28, 2012, January 29, 2011 and January 30, 2010 Notes to Consolidated Financial Statements for the Fiscal Years Ended January 28, 2012, January 29, 2011 and January 30, 2010 49 50 51 52 53 54 55-74 48 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 71
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the accompanying consolidated balance sheets of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of January 28, ...

  • Page 72
    ...sales Cost of goods sold, including occupancy and distribution costs GROSS PROFIT Selling, general and administrative expenses Merger and integration costs Pre-opening expenses INCOME FROM OPERATIONS Gain on sale... consolidated financial statements. 50 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 73
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) January 28, 2012 ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Income taxes receivable Inventories, net Prepaid expenses and other current ...

  • Page 74
    ... adjustment, net of tax COMPREHENSIVE INCOME $ 263,906 2,119 (8,738) (4) $ 257,283 $ Fiscal Year Ended January 29, January 30, 2011 2010 $ 182,077 (250) 18 181,845 $ $ 135,359 5,363 108 140,830 See notes to consolidated financial statements. 52 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 75
    ..., January 30, 2010 Exchange of Class B common stock for common stock Exercise of stock options Net income Stock-based compensation Total tax benefit from exercise of stock options Foreign currency translation adjustment, net of taxes of $11 Unrealized loss on securities available-for-sale, net of...

  • Page 76
    ...Payments on other long-term debt and leasing obligations Construction allowance receipts Proceeds from sale of common stock under employee stock purchase plan Proceeds from exercise of stock options Excess tax benefit from exercise of stock options... 54 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 77
    ... Operations - Dick's Sporting Goods, Inc. (together with its subsidiaries, the ''Company'') is a specialty retailer selling sporting goods equipment, apparel and footwear through its 480 Dick's stores and 81 Golf Galaxy stores as of January 28, 2012, the majority of which are located throughout the...

  • Page 78
    ... on an income approach using the relief-from-royalty method. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is 56 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 79
    ... stock options, restricted stock and warrants. Stock-Based Compensation - The Company has the ability to grant restricted shares of common stock and stock options to purchase common stock under the Dick's Sporting Goods, Inc. Amended and Restated 2002 Stock and Incentive Plan and the Golf Galaxy...

  • Page 80
    ...and field support payroll and fringe benefits, advertising, bank card charges, information systems, marketing, legal, accounting, other store expenses and all expenses associated with operating the Company's corporate headquarters. Advertising Costs - Production costs of advertising and the costs to...

  • Page 81
    ...Comprehensive Income,'' which indefinitely deferred the presentation requirements of reclassification adjustments within ASU 2011-05. The Company will adopt ASU 2011-05 and ASU 2011-12 during the first quarter of 2012. The adoption of this guidance Dick's Sporting Goods, Inc. 2011 Annual Report 59

  • Page 82
    ...lived intangible assets is included within selling, general and administrative expenses on the Consolidated Statements of Income, and was $1.4 million, $1.0 million and $1.0 million for fiscal 2011, 2010 and 2009, respectively. The annual estimated 60 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 83
    ... The Company recorded $16.4 million of expenses related to the closure of 12 underperforming Golf Galaxy stores in fiscal 2010. These expenses are included within selling, general and administrative expenses on the Consolidated Statements of Income. The current portion of accrued store closing and...

  • Page 84
    ... make investments; sell assets; and consolidate, merge or transfer all or substantially all of the Company's assets. In addition, the Credit Agreement requires that the Company maintain a minimum adjusted availability of 7.5% of its borrowing base. 62 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 85
    ...a capital lease, which expires in 2014. The Company also leases two buildings from the estate of a former stockholder, who is related to current stockholders of the Company, under a capital lease entered into May 1, 1986 that expires in April 2021. Dick's Sporting Goods, Inc. 2011 Annual Report 63

  • Page 86
    ... and 2009, respectively. The Company entered into sale-leaseback transactions related to store fixtures, buildings and equipment that resulted in cash receipts of $21.1 million, $20.0 million and $31.6 million for fiscal 2011, 2010 and 2009, respectively. 64 Dick's Sporting Goods, Inc. 2011 Annual...

  • Page 87
    ... provides for eligible employees to purchase shares of the Company's common stock. As of January 28, 2012, shares of common stock available for future issuance pursuant to the Plans and ESPP were 8,870,610 shares and 950,398 shares, respectively. Dick's Sporting Goods, Inc. 2011 Annual Report 65

  • Page 88
    ... the declaration of the dividend reflect an expected dividend yield of 1.25%. (2) (3) (4) The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and experience. 66 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 89
    ... stock options was approximately $14.7 million, net of estimated forfeitures, which is expected to be recognized over a weighted average period of approximately 1.76 years. The Company issues new shares of common stock upon exercise of stock options. Dick's Sporting Goods, Inc. 2011 Annual Report...

  • Page 90
    ... to the employee's continuing employment as of that date. The restricted stock activity from January 31, 2009 through January 28, 2012 is presented in the following table: Weighted Average Grant Date Fair Value Shares Nonvested, January 31, 2009 Granted Vested Forfeited Nonvested, January 30, 2010...

  • Page 91
    ...the fair market value of the stock on the first business day or the last business day of the semi-annual offering period. The total number of shares issuable under the plan is 4,620,000. The Company suspended the ESPP in March 2009, such that its employees were not permitted to purchase shares under...

  • Page 92
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Components of deferred tax assets (liabilities) consist of the following as of the fiscal periods ended (in thousands): 2011 2010 Store closing expense Stock-based compensation Employee benefits ...

  • Page 93
    ...pre-tax gain of $13.9 million resulting from the sale of its remaining available-for-sale securities held in GSI, in connection with GSI's acquisition by eBay, Inc. There were no sales of the Company's investment in GSI during fiscal 2010 and 2009. Dick's Sporting Goods, Inc. 2011 Annual Report 71

  • Page 94
    ... 2016, $3.7 million; and thereafter, $27.7 million. In December 2009, the Company entered into an asset assignment agreement with a related party. The Company made deposits totaling $8 million in fiscal 2009 and $5 million in fiscal 2011 under the 72 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 95
    ... fiscal 2011. The fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated book value due to the short-term nature of these instruments at both January 28, 2012 and January 29, 2011. Dick's Sporting Goods, Inc. 2011 Annual Report 73

  • Page 96
    .... Subsequent Event On February 13, 2012, the Company's Board of Directors declared a quarterly cash dividend in the amount of $0.125 per common share payable on March 30, 2012 to stockholders of record as of the close of business on March 2, 2012. 74 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 97
    ...report to be signed on its behalf by the undersigned, thereunto duly authorized. DICK'S SPORTING GOODS, INC. (Registrant) By: /s/ TIMOTHY E. KULLMAN Timothy E. Kullman Executive Vice President - Finance, Administration and Chief Financial Officer... Dick's Sporting Goods, Inc. 2011 Annual Report 75

  • Page 98
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the consolidated financial statements of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of January 28, 2012 ...

  • Page 99
    ...,409 4,203 2,727 19,107 2,922 3,670 (18,881) $ (5,575) (5,885) $ (5,664) (7,685) $ (4,777) - $ $ $ (1) $ $ $ (1) Represents increase (decrease) in the required reserve based upon the Company's evaluation of anticipated merchandise returns. Dick's Sporting Goods, Inc. 2011 Annual Report 77

  • Page 100
    ... Form of Option Award entered into between Registrant and various executive officers, directors and employees Option Agreement between Registrant and Edward W. Stack 10.4 10.5 10.6 Option Agreement between Registrant and Edward W. Stack 78 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 101
    ...-31463, filed on March 27, 2008 10.10 Golf Galaxy, Inc. Amended and Restated 1996 Stock Option and Incentive Plan 10.11 Golf Galaxy, Inc. 2004 Stock Incentive Plan 10.12 Offer Letter between Dick's Sporting Goods, Inc. and Timothy E. Kullman, dated February 5, 2007, as amended by letter dated...

  • Page 102
    ... Stock Award Form of Restricted Stock Award Agreement granted under Registrant's Amended and Restated 2002 Stock and Incentive Plan Aircraft Charter Agreement, dated December 19, 2011 between Registrant and Corporate Air, LLC 10.26 10.27 10.28 80 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 103
    ... joint lead arrangers and joint book managers. Offer Letter between the Company and Lauren R. Hobart, Senior Vice President and Chief Marketing Officer Lease Agreement originally dated June 25, 2007, for distribution center located in East Point, Georgia, between Duke Realty Limited Partnership and...

  • Page 104
    ...Timothy E. Kullman, Executive Vice President - Finance, Administration and Chief Financial Officer, dated as of March 16, 2012 and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code... to the liabilities of those sections. 82 Dick's Sporting Goods, Inc. 2011 Annual Report

  • Page 105
    This Page Intentionally Left Blank Dick's Sporting Goods, Inc. | 2011 Annual Report 83

  • Page 106
    ... investors can use to compare core operating results between reporting periods. The Company has provided reconciliations below for EBITDA, ROIC, net income and earnings per share adjusted to exclude a gain on sale of investment, the impact of a litigation settlement, Golf Galaxy store closing costs...

  • Page 107
    ... Share Reconciliation 2011 (Dollars in thousands) 2010 2009 2008 2007 2006 Net income (loss) Impairment of goodwill and other intangible assets, after tax Impairment of store assets, after tax Merger and integration costs, after tax Gain on sale of asset, after tax Golf Galaxy store closing costs...

  • Page 108
    ... 28, 2012 (In thousands, except per share data) As Reported Net sales Cost of goods sold, including occupancy and distribution costs Gross Profit Selling, general and administrative expenses Pre-opening expenses Income From Operations Gain on sale of investment Interest expense Other expense...

  • Page 109
    ...Earnings Per Share Reconciliation Golf Galaxy Store Closing Costs1 Litigation Settlement Charge2 Non-GAAP Total Year Ended January 29, 2011 (In thousands, except per share data) As Reported Net sales Cost of goods sold, including occupancy and distribution costs Gross Profit Selling, general and...

  • Page 110
    ..., advertising and severance expenses associated with the conversions from Chick's Sporting Goods stores to Dick's Sporting Goods stores. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate. 88 Dick's Sporting Goods, Inc. | 2011 Annual Report

  • Page 111
    .../29/10 04/30/10 07/30/10 10/29/10 01/28/11 04/29/11 07/29/11 10/28/11 DATE OF CLOSING PRICE The stock performance graph is not necessarily indicative of future performance. Dick's Sporting Goods, Inc. | 2011 Annual Report 89 01/27/12

  • Page 112
    ...PPG Place Pittsburgh, PA 15222 Common Stock The shares of Dick's Sporting Goods, Inc. common stock are listed and traded on the New York Stock Exchange (NYSE), under the symbol "DKS." The shares of the Company's Class B common stock are neither listed nor traded on any stock exchange or other market...

  • Page 113
    ... 2011 CORPOR ATE OFFICERS Edward W. Stack Chairman & Chief Executive Officer Joseph H. Schmidt President & Chief Operating Officer Timothy E. Kullman Executive Vice President - Finance, Administration & Chief Financial Officer John Duken Executive Vice President - Global Merchandising Lauren...

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    DICK'S SPORTING GOODS, INC. 345 Court Street Coraopolis, PA 15108 724-273-3400 www.dickssportinggoods.com