Dick's Sporting Goods 2014 Annual Report Download - page 75

Download and view the complete annual report

Please find page 75 of the 2014 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

49
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
Operations – Dick's Sporting Goods, Inc. (together with its subsidiaries, referred to as the "Company", "we", "us" and "our"
unless specified otherwise) is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic,
high-quality sports equipment, apparel, footwear and accessories in a specialty store environment. The Company also owns and
operates Golf Galaxy, Field & Stream and True Runner specialty stores.
Fiscal Year – The Company's fiscal year ends on the Saturday closest to the end of January. Fiscal years 2014, 2013 and 2012
ended on January 31, 2015, February 1, 2014 and February 2, 2013, respectively. All fiscal years presented include 52 weeks of
operations except fiscal 2012, which included 53 weeks.
Principles of Consolidation – The Consolidated Financial Statements include Dick's Sporting Goods, Inc. and its wholly-
owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications – Certain reclassifications have been made to prior year amounts within the Consolidated Statement of Cash
Flows to conform to current year presentation.
Use of Estimates in the Preparation of Financial Statements – The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash Equivalents – Cash and cash equivalents consist of cash on hand and all highly liquid instruments purchased
with a maturity of three months or less at the date of purchase. Cash equivalents are considered Level 1 investments and totaled
$89.0 million and $91.9 million at January 31, 2015 and February 1, 2014, respectively. Interest income from cash equivalents
was $0.1 million, $0.2 million and $1.0 million for fiscal 2014, 2013 and 2012, respectively.
Cash Management – The Company's cash management system provides for the reimbursement of all major bank disbursement
accounts on a daily basis. Accounts payable at January 31, 2015 and February 1, 2014 include $105.9 million and $135.2
million, respectively, of checks drawn in excess of cash balances not yet presented for payment.
Accounts Receivable – Accounts receivable consist principally of amounts receivable from vendors and landlords. The
allowance for doubtful accounts totaled $2.7 million and $3.1 million as of January 31, 2015 and February 1, 2014,
respectively.
Inventories – Inventories are stated at the lower of weighted average cost or market. Inventory costs consist of the direct cost of
merchandise including freight. Inventories are net of shrinkage, obsolescence, other valuation accounts and vendor allowances
totaling $100.2 million and $82.6 million at January 31, 2015 and February 1, 2014, respectively.
Property and Equipment – Property and equipment are recorded at cost and include capitalized leases. For financial reporting
purposes, depreciation and amortization are computed using the straight-line method over the following estimated useful lives:
Buildings 40 years
Leasehold improvements 10-25 years
Furniture, fixtures and equipment 3-7 years
For leasehold improvements and property and equipment under capital lease agreements, depreciation and amortization are
calculated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. Leasehold
improvements made significantly after the initial lease term are depreciated over the shorter of their estimated useful lives or
the remaining lease term, including renewal periods, if reasonably assured. Depreciation expense was $159.1 million, $151.5
million and $123.3 million for fiscal 2014, 2013 and 2012, respectively.
Renewals and betterments are capitalized and repairs and maintenance are expensed as incurred.