Dick's Sporting Goods 2011 Annual Report Download - page 93

Download and view the complete annual report

Please find page 93 of the 2011 Dick's Sporting Goods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of January 28, 2012, the liability for uncertain tax positions included $2.9 million for the accrual of
interest and penalties. During the years ended January 28, 2012, January 29, 2011 and January 30,
2010, the Company recorded $1.3 million, $1.2 million and $0.4 million, respectively, for the accrual of
interest and penalties in its Consolidated Statements of Income. The Company has federal, state and
local examinations currently ongoing. It is possible that these examinations may be resolved within
12 months. Due to the potential for resolution of these examinations, and the expiration of various
statutes of limitation, it is reasonably possible that $7.8 million of the Company’s gross unrecognized
tax benefits and interest at January 28, 2012 could be recognized within the next 12 months. The
Company does not anticipate that changes in its unrecognized tax benefits will have a material impact
on the Consolidated Statements of Income during fiscal 2012.
The Company is no longer subject to U.S. Federal examination for years prior to 2008. The Company
is no longer subject to examination in any of its major state jurisdictions for years prior to 2005.
11. Earnings per Common Share
The computations for basic and diluted earnings per share are as follows (in thousands, except per
share data):
Fiscal Year Ended
2011 2010 2009
Earnings per common share - Basic:
Net income $ 263,906 $ 182,077 $ 135,359
Weighted average common shares outstanding 120,232 116,236 113,184
Earnings per common share $ 2.19 $ 1.57 $ 1.20
Earnings per common share - Diluted:
Net income $ 263,906 $ 182,077 $ 135,359
Weighted average common shares outstanding - basic 120,232 116,236 113,184
Dilutive effect of stock-based awards 5,536 5,488 4,771
Weighted average common shares outstanding - diluted 125,768 121,724 117,955
Earnings per common share $ 2.10 $ 1.50 $ 1.15
For fiscal years 2011, 2010 and 2009, 0.6 million, 3.2 million and 6.4 million shares, respectively, were
attributable to outstanding stock-based awards that were excluded from the calculation of diluted
earnings per share because their inclusion would have been anti-dilutive.
12. Investments
In April 2001, the Company entered into a 10-year Internet commerce agreement with GSI. In August
2008, the Company amended its agreement with GSI, which extended the term of the agreement to
February 1, 2024. Under the terms of the amended agreement, the Company assumed operational
responsibility for its Internet commerce business effective February 1, 2009, including merchandise
procurement, assortment and pricing, while GSI became primarily responsible for website hosting and
maintenance, order fulfillment and customer service. GSI is paid a transaction fee by the Company
based on the value and type of orders placed through the website.
During fiscal 2011, the Company realized a 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