Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
 
Introduction
 
On May 15, 2025, DICK’S Sporting Goods, Inc., a Delaware corporation (the “Company” or “DICK’S”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, RJS Sub LLC, a New York limited liability company and a wholly owned subsidiary of the Company (“Merger Sub”), and Foot Locker, Inc., a New York corporation (“Foot Locker”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, and at the closing of the merger contemplated by the Merger Agreement, Merger Sub shall be merged with and into Foot Locker, with Foot Locker surviving as a wholly owned subsidiary of the Company (the “Merger”).
The accompanying unaudited pro forma financial information is prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, of the Securities Act.  The Unaudited Pro Forma Condensed Combined Balance Sheet is presented as if the transaction had occurred on May 3, 2025, and the Unaudited Pro Forma Condensed Combined Statement of Operations for the thirteen weeks ended May 3, 2025 and the year ended February 1, 2025 and, are presented to give effect to the Merger as if it occurred on February 3, 2024.
 
The unaudited pro forma condensed combined financial information gives effect to the accounting for the Merger (the “Transaction Accounting Adjustments”) and financing impacts (the “Financing Adjustments” and, collectively, the “Adjustments”).  All terms defined in this section of the Offering Memorandum are used solely for the purposes of this section and do not apply to any other section of this Offering Memorandum.
 
In the accompanying unaudited pro forma condensed combined financial information, the historical consolidated financial statements of DICK’S and Foot Locker have been adjusted to depict the accounting for the Merger in accordance with generally accepted accounting principles in the United States of America (“GAAP”).  The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances.  All adjustments are preliminary and subject to change.
 
Under the terms of the Merger Agreement, each share of Foot Locker common stock issued and outstanding immediately prior to the effective time (other than cancelled shares and converted shares) will be automatically converted into the right to receive, without interest, at the election of the holder of such share of Foot Locker common stock: (a) $24.00 per share in cash or (b) 0.1168 shares of DICK’S common stock.  The election is not subject to a minimum or maximum amount of cash consideration or stock consideration.  The election period will be a period of not less than twenty (20) business days ending on the date that is five (5) business days prior to DICK’S’ good faith estimate of the closing date of the Merger unless otherwise agreed by the parties.
 
 The Merger Agreement provides that:
 

 		•
Each outstanding Foot Locker time-based restricted stock unit held by an employee and each outstanding performance stock unit will be converted based on the stock consideration into a DICK’S time-based restricted stock unit (with any applicable performance goals being deemed achieved at levels determined under the applicable award agreement or plan if not addressed in the award agreement), which will otherwise continue to be subject to the same terms and conditions applicable to such award;
 

 		•
Each outstanding Foot Locker restricted stock unit (including any deferred units) held by a non-employee director will become fully vested (to the extent unvested) and converted into cash based on the cash consideration; and
 

 		•
Each outstanding in-the-money option, whether or not vested, will be cancelled and converted into the right to receive an amount in cash equal to the product of (A) the total number of shares of Foot Locker common stock subject to such option multiplied by (B) the excess, if any, of the cash consideration over the exercise price of such option (with any Foot Locker option that is not an in-the-money option cancelled for no consideration).
 
In connection with the Merger Agreement, DICK’S entered into a commitment letter, dated as of May 15, 2025, among DICK’S and Goldman Sachs Bank USA (“GS Bank”), pursuant to which GS Bank has agreed to provide, subject to the satisfaction of customary closing conditions, up to $2.4 billion of senior bridge term loans.
 
The unaudited pro forma condensed combined financial information assumes that DICK’S does not anticipate drawing down on the senior bridge term loans but instead financing the Merger through issuance of unsecured senior notes for an amount of $1.7 billion with a fixed interest rate of 6.4% per annum (“Debt Financing”).  The Debt Financing, together with cash on hand, is assumed to be sufficient for purposes of financing the cash consideration and expenses in connection with the Merger.
 
DICK’S has not issued any unsecured senior notes or drawn down on the senior bridge term loans, and any financing related to the Merger may be different from the amount assumed for purposes of the unaudited pro forma condensed combined financial information.  These assumptions and expectations are subject to change, and the debt issuance costs to be incurred and related interest expense could vary significantly from what is assumed in the unaudited pro forma condensed combined financial information.  Other factors that are subject to change include, but are not limited to, the timing of borrowings, the amount of cash on hand at the time of the closing, and inputs to interest rate determination on debt instruments issued.
 
The unaudited pro forma condensed combined financial information is presented under the following two scenarios:
 

 		•
Scenario A - Cash Consideration: Assumes all Foot Locker shareholders elect the right to receive the consideration of $24.00 per share in cash.
 

 		•
Scenario B - Stock Consideration: Assumes all Foot Locker shareholders elect the right to receive 0.1168 shares of DICK’S common stock.
 
The Merger will be accounted for as a business combination using the acquisition method with DICK’S assumed to be the accounting acquirer in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”). Under this method of accounting, the consideration transferred will be allocated to Foot Locker’s assets acquired and liabilities assumed mostly based upon their estimated fair values at the closing date.  Any differences between the fair value of the consideration transferred and the fair value of the assets acquired, and liabilities assumed will be recorded as goodwill.  The process of valuing the net assets of Foot Locker at the closing date, the allocation of the consideration transferred, as well as evaluating accounting policies for conformity, is preliminary and represents DICK’S’ current best estimate and is subject to revision.
 
The unaudited pro forma condensed combined financial information and related notes are provided for illustrative purposes only and do not purport to represent what the combined company’s actual results of operations or financial position would have been had the Merger been completed on the dates indicated, nor are they necessarily indicative of the combined company’s future results of operations or financial position for any future period.  The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated.  It is likely that the actual adjustments upon the completion of the Merger will differ from the pro forma adjustments, and it is possible the differences may be material.
 
The following unaudited pro forma condensed combined financial information gives effect to the Merger, which includes adjustments for the following:
 

 		•
Certain reclassifications to conform Foot Locker’s historical financial statement presentation to DICK’S historical financial statement presentation;
 

 		•
Adjustments to reflect purchase accounting under ASC 805;
 

 		•
Proceeds and uses of the financing entered in connection with the Merger; and
 

 		•
Non-recurring transaction costs in connection with the Merger.
 
2
Unaudited Pro Forma Condensed Combined Balance Sheet
As of May 3, 2025
(in thousands)

               
Scenario A - Cash Consideration
    
Scenario B - Stock Consideration
  
   
DICK’S Sporting Goods, Inc. (Historical)
    
Foot Locker, Inc. (Historical, adjusted)
    
Transaction Accounting
Adjustments
    
Notes
    
Financing
Adjustments
    
Notes
    
Pro Forma Combined
    
Transaction Accounting
Adjustments
    
Notes
    
Pro Forma Combined
  
ASSETS
                                                            
CURRENT ASSETS
                                                            
Cash and cash equivalents
  
$
1,035,889
    
$
343,000
    
$
(2,200,959
)
    
3A1
    
$
1,719,207
      
3
N
   $
753,423
    
$
(16,776
)
    
3A3
    
$
1,218,399
  
                     
(56,363
)
    
3D

   
-
                      
(56,363
)
    
3D

       
                     
(2,000
)
    
3E

   
-
                      
(2,000
)
    
3E

       
                     
(22,551
)
    
3G

   
-
                      
(22,551
)
    
3G

       
                     
(7,500
)
    
3H

   
-
                      
(7,500
)
    
3H

       
                     
(55,300
)
    
3I

   
-
                      
(55,300
)
    
3I

       
Accounts receivable, net
    
256,554
      
174,218
      
-
              
-
              
430,772
      
-
              
430,772
  
Income taxes receivable
    
4,138
      
-
      
-
              
-
              
4,138
      
-
              
4,138
  
Inventories, net
    
3,569,353
      
1,665,000
      
-
              
-
              
5,234,353
      
-
              
5,234,353
  
Prepaid expenses and other current assets
    
164,892
      
184,782
      
-
              
-
              
349,674
      
-
              
349,674
  
Total current assets
    
5,030,826
      
2,367,000
      
(2,344,673
)
            
1,719,207
              
6,772,360
      
(160,490
)
            
7,237,336
  
Property and equipment, net
    
2,268,866
      
908,000
      
105,000
      
3B

   
-
              
3,281,866
      
105,000
      
3B

   
3,281,866
  
Operating lease assets
    
2,396,687
      
2,099,000
      
72,000
      
3K

   
-
              
4,567,687
      
72,000
      
3K

   
4,567,687
  
Intangible assets, net
    
58,598
      
230,000
      
(10,000
)
    
3C1
      
-
              
278,598
      
(210,000
)
    
3C2
      
78,598
  
Goodwill
    
245,857
      
661,000
      
(371,660
)
    
3M1
      
-
              
535,197
      
(543,485
)
    
3M2
      
363,372
  
Deferred income taxes
    
29,510
      
41,000
      
(34,578
)
    
3L1
      
-
              
35,932
      
17,422
      
3L2
      
87,932
  
Other assets
    
404,238
      
252,000
      
(4,190
)
    
3E

   
-
              
596,448
      
(4,190
)
    
3E

   
596,448
  
                     
(55,600
)
    
3A2
      
-
                      
(55,600
)
    
3A4
          
TOTAL ASSETS
  
$
10,434,582
    
$
6,558,000
    
$
(2,643,701
)
          
$
1,719,207
            
$
16,068,088
    
$
(779,343
)
          
$
16,213,239
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                                
CURRENT LIABILITIES
                                                                                
Accounts payable
  
$
1,542,749
    
$
504,000
      
-
              
-
            
$
2,046,749
      
-
            
$
2,046,749
  
Accrued expenses
    
629,484
      
328,000
      
-
              
-
              
957,484
      
-
              
957,484
  
Current portion of debt and obligations under finance leases
    
-
      
-
      
-
              
-
              
-
      
-
              
-
  
Operating lease liabilities
    
496,129
      
499,000
      
-
              
-
              
995,129
      
-
              
995,129
  
Income taxes payable
    
83,489
      
-
      
-
              
-
              
83,489
      
-
              
83,489
  
Deferred revenue and other liabilities
    
360,568
      
110,000
      
-
              
-
              
470,568
      
-
              
470,568
  
Total current liabilities
    
3,112,419
      
1,441,000
      
-
              
-
              
4,553,419
      
-
              
4,553,419
  
LONG-TERM LIABILITIES
                                                                                
Revolving credit borrowings
    
-
      
-
      
-
      

     
-
      

     
-
       -
                 
Long-term debt and obligations under finance leases
    
1,484,462
      
440,000
      
1,670
      
3E

   
1,719,207
      
3
N
    
3,625,339
      
1,670
      
3
E
    
1,906,132
  
                     
(20,000
)
    
3J

   
-
                      
(20,000
)
    
3
J
        
Long-term operating lease liabilities
    
2,587,597
      
1,890,000
      
-
              
-
              
4,477,597
      
-
              
4,477,597
  
Other long-term liabilities
    
197,710
      
179,000
      
-
              
-
              
376,710
      
-
              
376,710
  
Total long-term liabilities
    
4,269,769
      
2,509,000
      
(18,330
)
            
1,719,207
              
8,479,646
      
(18,330
)
            
6,760,439
  
COMMITMENTS AND CONTINGENCIES
    
-
      
-
      
-
              
-
              
-
      
-
              
-
  
STOCKHOLDERS’ EQUITY
                                                                                
Preferred stock
    
-
      
-
      
-
              
-
              
-
      
-
              
-
  
Common stock
    
556
      
808,000
      
(808,000
)
    
3F

   
-
              
556
      
106
      
3A3
      
662
  
     

     

      -
              -
                     
(808,000
)
    
3F

       
Class B common stock
    
236
      
-
      
-
              
-
              
236
      
-
              
236
  
Additional paid-in capital
    
1,483,461
      
-
      
14,663
      
3A1
      
-
              
1,498,124
      
1,893,248
      
3A3
      
3,376,709
  
Retained earnings
    
6,559,483
      
2,131,000
      
(56,363
)
    
3D

   
-
              
6,527,449
      
(56,363
)
    
3D

   
6,513,116
  
                     
(2,131,000
)
    
3F

   
-
                      
(2,131,000
)
    
3F

       
                     
(22,551
)
    
3G

   
-
                      
(22,551
)
    
3G

       
                     
46,880
      
3A2
      
-
                      
32,547
      
3A4
          
Accumulated other comprehensive loss
    
(430
)
    
(325,000
)
    
325,000
      
3F

   
-
              
(430
)
    
325,000
      
3F

   
(430
)
Treasury stock, at cost
    
(4,990,912
)
    
(6,000
)
    
6,000
      
3F

   
-
              
(4,990,912
)
    
6,000
      
3F

   
(4,990,912
)
Total stockholders’ equity
    
3,052,394
      
2,608,000
      
(2,625,371
)
            
-
              
3,035,023
      
(761,013
)
            
4,899,381
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
10,434,582
    
$
6,558,000
    
$
(2,643,701
)
          
$
1,719,207
            
$
16,068,088
    
$
(779,343
)
          
$
16,213,239
  

See accompanying notes to unaudited pro forma condensed combined financial information.
3
Unaudited Pro Forma Condensed Combined Statement of Operations
For the thirteen weeks ended May 3, 2025
(USD in thousands, except per share amounts)
               
Scenario A - Cash Consideration
    
Scenario B - Stock Consideration
  
   
DICK’S
Sporting
Goods, Inc.
(Historical)
    
Foot Locker, Inc. (Historical, adjusted)
    
Transaction Accounting
Adjustments
    
Notes
    
Financing
Adjustments
    
Notes
    
Pro Forma Combined
    
Transaction Accounting
Adjustments
    
Notes
    
Pro Forma
Combined
  
Net Sales
  
$
3,174,677
    
$
1,794,000
      
-
            
-
          
$
4,968,677
      
-
          
$
4,968,677
  
Cost of goods sold, including occupancy and distribution costs
    
2,009,591
      
1,312,000
      
760
      
4A

   
-
            
3,326,851
      
760
      
4A

   
3,326,851
  
                     
4,500
      
4J

   
-
                    
4,500
      
4J

       
GROSS PROFIT
    
1,165,086
      
482,000
      
(5,260
)
            
-
            
1,641,826
      
(5,260
)
            
1,641,826
  
Selling, general and administrative expenses
    
785,528
      
753,000
      
185
      
4A

   
-
            
1,539,300
      
185
      
4A

   
1,539,079
  
                     
221
      
4B1
      
-
                                        
                     
366
      
4D

   
-
                    
366
      
4D

       
Pre-opening expenses
    
13,442
      
-
      
-
              
-
            
13,442
      
-
              
13,442
  
INCOME (LOSS) FROM OPERATIONS
    
366,116
      
(271,000
)
    
(6,032
)
            
-
            
89,084
      
(5,811
)
            
89,305
  
Interest expense
    
12,138
      
6,000
      
113
      
4G

   
27,439
      
4L

   
46,387
      
113
      
4G

   
18,948
  
                     
697
      
4H

   
-
                      
697
      
4H

       
Other expense (income)
    
6,256
      
(7,000
)
    
-
      

      -

           
(744
  )    
-
              
(744
)
INCOME (LOSS) BEFORE INCOME TAXES
    
347,722
      
(270,000
)
    
(6,842
)
            
(27,439
)
            
43,441
      
(6,621
)
            
71,101
  
Provision (benefit) for income taxes
    
83,434
      
93,000
      
(1,779
)
    
4I1
      
(7,134
)
    
4M

   
167,521
      
(1,722
)
    
4I2
      
174,712
  
NET INCOME (LOSS)
  
$
264,288
    
$
(363,000
)
  
$
(5,063
)
          
$
(20,305
)
          
$
(124,080
)
  
$
(4,899
)
          
$
(103,611
)
EARNINGS (LOSS) PER COMMON SHARE:
                                                                                
Basic
  
$
3.33
    
$
(3.81
)
                                  
$
(1.56
)
                  
$
(1.15
)
Diluted
  
$
3.24
    
$
(3.81
)
                                  
$
(1.52
)
                  
$
(1.12
)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
                                                                                
Basic
    
79,341
      
95,300
                                      
79,341
                      
89,971
  
Diluted
    
81,478
      
95,300
                                      
81,727
                      
92,357
  

See accompanying notes to unaudited pro forma condensed combined financial information.

4
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended February 1, 2025
(USD in thousands, except per share amounts)

               
Scenario A - Cash Consideration
    
Scenario B - Stock Consideration
  
   
DICK’S Sporting Goods, Inc. (Historical) - USD
    
Foot Locker, Inc. (Historical) - USD
    
Transaction
Adjustments
    
Notes
    
Financing
Adjustments
    
Notes
    
Pro Forma Combined
    
Transaction
Adjustments
    
Notes
    
Pro Forma Combined
  
Net Sales
  
$
13,442,849
    
$
7,988,000
      
-
            
-
          
$
21,430,849
      
-
          
$
21,430,849
  
Cost of goods sold, including occupancy and distribution costs
    
8,617,153
      
5,785,000
      
8,737
      
4A

   
-
            
14,428,890
      
8,737
      
4A

   
14,428,890
  
                     
18,000
      
4J

   
-
                    
18,000
      
4J

       
GROSS PROFIT
    
4,825,696
      
2,203,000
      
(26,737
)
            
-
            
7,001,959
      
(26,737
)
            
7,001,959
  
Selling, general and administrative expenses
    
3,294,272
      
2,100,000
      
2,296
      
4A

   
-
            
5,475,101
      
2,296
      
4A

   
5,474,216
  
                     
(4,115
)
    
4B1
      
-
                    
(5,000
)
    
4B2
          
                     
48,500
      
4C

   
-
                    
48,500
      
4C

       
                     
4,097
      
4D

   
-
                    
4,097
      
4D

       
                     
22,551
      
4E

   
-
                    
22,551
      
4E

       
                     
7,500
      
4F

   
-
                    
7,500
      
4F

       
Pre-opening expenses
    
57,492
      
-
      
-
              
-
            
57,492
      
-
              
57,492
  
INCOME FROM OPERATIONS
    
1,473,932
      
103,000
      
(107,566
)
            
-
            
1,469,366
      
(106,681
)
            
1,470,251
  
Interest expense
    
52,987
      
24,000
      
7,863
      
4C

   
110,941
      
4L

   
198,981
      
7,863
      
4C

   
88,040
  
                     
453
      
4G

   
-
                      
453
      
4G

       
                     
2,737
      
4H

   
-
                      
2,737
      
4H

       
Other expense (income)
    
(98,088
)
    
28,000
      
(46,880
)
    
4K1
      
-
              
(116,968
)
    
(32,547
)
    
4K2
      
(102,635
)
INCOME BEFORE INCOME TAXES
    
1,519,033
      
51,000
      
(71,739
)
            
(110,941
)
            
1,387,353
      
(85,187
)
            
1,484,846
  
Provision (benefit) for income taxes
    
353,725
      
33,000
      
(18,816
)
    
4I1
      
(28,845
)
    
4M

   
339,064
      
(18,585
)
    
4I2
      
368,140
  
NET INCOME (LOSS)
  
$
1,165,308
    
$
18,000
    
$
(52,923
)
          
$
(82,096
)
          
$
1,048,289
    
$
(66,602
)
          
$
1,116,706
  
EARNINGS PER COMMON SHARE:
                                                                                
Basic
  
$
14.48
    
$
0.19
                                    
$
13.03
                    
$
12.26
  
Diluted
  
$
14.05
    
$
0.19
                                    
$
12.61
                    
$
11.91
  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
                                                                                
Basic
    
80,468
      
95,000
                                      
80,468
                      
91,098
  
Diluted
    
82,929
      
95,500
                                      
83,113
                      
93,743
  

See accompanying notes to unaudited pro forma condensed combined financial information.

5
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
 
Note 1.
Basis of Presentation
 
The accompanying unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, of the Securities Act. The historical information of DICK’S and Foot Locker is presented in accordance with GAAP.
 
The unaudited pro forma condensed combined financial information is prepared using the acquisition method of accounting in accordance with the business combination accounting guidance under ASC 805, with DICK’S as the accounting acquirer for the Merger.  Under ASC 805, assets acquired and liabilities assumed in a business combination are recognized and measured at the Merger date fair value.  Transaction costs associated with a business combination are expensed as incurred.  The excess of consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.  Accordingly, the Merger consideration allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to revision based on a final determination of fair value.
 
The unaudited pro forma condensed combined financial information is presented as follows:
 

 		•
The unaudited pro forma condensed combined balance sheet as of May 3, 2025, was prepared based on (i) the historical unaudited condensed consolidated balance sheet of DICK’S as of May 3, 2025 and (ii) the historical unaudited condensed consolidated balance sheet of Foot Locker as of May 3, 2025.
 

 		•
The unaudited pro forma condensed combined statement of operations for the thirteen weeks ended May 3, 2025 was prepared based on (i) the historical unaudited condensed consolidated statement of operations of DICK’S for the thirteen weeks ended May 3, 2025 and (ii) the historical unaudited condensed consolidated statement of operations of Foot Locker for the thirteen weeks ended May 3, 2025.
 

 		•
The unaudited pro forma condensed combined statement of operations for the year ended February 1, 2025 was prepared based on (i) the historical audited consolidated statement of operations of DICK’S for the year ended February 1, 2025 and (ii) the historical audited consolidated statement of operations of Foot Locker for the year ended February 1, 2025.
 
The unaudited pro forma condensed combined financial information does not reflect any anticipated synergies or dis-synergies, operating efficiencies, or cost savings that may result from the integration costs that may be incurred.  The pro forma adjustments represent DICK’S’ best estimates and are based upon currently available information and certain assumptions that DICK’S believes are reasonable under the circumstances.
 
The unaudited pro forma condensed combined financial information is provided for informational purposes only and may not be indicative of the operating results that would have occurred if the Merger had been completed as of the dates set forth above, nor is it indicative of the future results of DICK’S following the Merger.  In determining the preliminary estimate of fair values of assets acquired and liabilities assumed of Foot Locker, DICK’S used publicly available benchmarking information as well as a variety of other assumptions, including market participant assumptions.  The pro forma purchase price allocation relating to the Merger is preliminary and subject to change, as additional information becomes available and as additional analyses are performed.  There can be no assurances that the valuations will not result in material changes to this purchase price allocation.  Any increase or decrease in fair values of the net assets as compared with the unaudited pro forma condensed combined financial information may change the amount of the total acquisition consideration allocated to goodwill and other assets and liabilities and may impact the Unaudited Pro Forma Condensed Combined Statements of Operations due to adjustments in the depreciation and amortization expense of the adjusted assets.
 
6
Note 2.
Accounting Policies and Reclassifications
 
During the preparation of this unaudited pro forma condensed combined financial information, management performed a preliminary review of Foot Locker’s financial information to identify differences in accounting policies compared to those of DICK’S and differences in financial statement presentation compared to the presentation of DICK’S.  At the time of preparing the unaudited pro forma condensed combined financial information, other than the adjustments described herein, DICK’S is not aware of any other material differences.  However, DICK’S will continue to perform its detailed review of Foot Locker’s accounting policies.  Upon completion of that review, differences may be identified between the accounting policies of DICK’S and Foot Locker that when conformed could have a material impact on the unaudited pro forma condensed combined financial information.
 
Unaudited Pro Forma Condensed Combined Balance Sheet
As of May 3, 2025
(in thousands)

DICK’S Sporting Goods, Inc.
  
Foot Locker, Inc.
  
Foot Locker, Inc.
    
Reclassification Adjustments
    
Notes
    
Foot Locker, Inc.
  
Assets
                            
Current assets
                            
Cash and cash equivalents
  
Cash and cash equivalents
  
$
343,000
                
$
343,000
  
Accounts receivable, net
        
-
      
174,218
      
(2f
)
    
174,218
  
Income taxes receivable
        
-
                      
-
  
Inventories, net
  
Merchandise inventories
    
1,665,000
                      
1,665,000
  
Prepaid expenses and other current assets
  
Other current assets
    
359,000
      
(174,218
)
    
(2f
)
    
184,782
  
Total Current assets
        
2,367,000
      
-
              
2,367,000
  
Property and equipment, net
  
Property and equipment, net
    
908,000
                      
908,000
  
Operating lease assets
  
Operating lease right-of-use assets
    
2,099,000
                      
2,099,000
  
Intangible assets, net
  
Other intangible assets, net
    
230,000
                      
230,000
  
Goodwill
  
Goodwill
    
661,000
                      
661,000
  
Deferred income taxes
  
Deferred taxes
    
41,000
                      
41,000
  
Other assets
  
Other assets
    
137,000
      
115,000
      
(2b
)
    
252,000
  

   Minority investments    
115,000
      
(115,000
)
    
(2b
)
    
-
  
Total Assets
      
$
6,558,000
      
-
            
$
6,558,000
  
Liabilities and Stockholders’ equity
                                    
Current liabilities
                                    
Accounts payable
  
Accounts payable
    
504,000
                      
504,000
  
Accrued expenses
  
Accrued and other liabilities
    
433,000
      
(50,000
)
    
(2a
)
    
328,000
  
                 
(26,000
)
    
(2d
)
        
                 
(29,000
)
    
(2e
)
        
Operating lease liabilities
  
Current portion of lease obligations
    
499,000
                      
499,000
  

  Current portion of debt and obligations under finance leases    
5,000
      
(5,000
)
    
(2c
)
    
-
  
Income taxes payable
        
-
                      
-
  
Deferred revenue and other liabilities
                
50,000
      
(2a
)
    
110,000
  
                 
5,000
      
(2c
)
        
                 
26,000
      
(2d
)
        
                 
29,000
      
(2e
)
        
Total Current liabilities
        
1,441,000
      
-
              
1,441,000
  
Revolving credit borrowings
                                    
Long-term operating lease liabilities
  
Long-term lease obligations
    
1,890,000
                      
1,890,000
  

  Long-term debt and obligations under finance leases    
440,000
                      
440,000
  
Other long-term liabilities
  
Other liabilities
    
179,000
                      
179,000
  
Total Long-term liabilities
        
2,509,000
      
-
              
2,509,000
  
Commitments and contingencies
                                    
Stockholders’ Equity
                                    
Common stock
  
Common stock
    
808,000
                      
808,000
  
Class B common stock
                                
-
  
Additional paid-in capital
        
-
      
-
              
-
  
Retained earnings
  
Retained earnings
    
2,131,000
      
-
              
2,131,000
  
Accumulated other comprehensive loss
  
Accumulated other comprehensive loss
    
(325,000
)
                    
(325,000
)
Treasury stock, at cost
  
Treasury stock at cost
    
(6,000
)
                    
(6,000
)
Total stockholders’ equity
        
2,608,000
      
-
              
2,608,000
  
Total liabilities and stockholders’ equity
      
$
6,558,000
      
-
            
$
6,558,000
  


(2a)
Reclassification of Customer Loyalty Program from “Accrued and Other Liabilities” to “Deferred revenue and other liabilities”.

(2b)
Reclassification of “Minority Investments” to “Other assets”.
 
7
(2c)
Reclassification of “Current portion of debt and obligations under finance leases” to “Deferred revenue and other liabilities”.
 
(2d)
Reclassification of Gift Card Liability from “Accrued and Other Liabilities” to “Deferred revenue and other liabilities”.
 
(2e)
Reclassification of Customer Deposit from “Accrued and Other Liabilities” to “Deferred revenue and other liabilities”.
 
(2f)
Reclassification of Net Receivables from “Other current assets” to “Accounts receivable, net”.
 
8
Unaudited Pro Forma Condensed Combined Statement of Operations
For the thirteen weeks ended May 3, 2025
(in thousands)
 DICK’S Sporting Goods, Inc.
  
Foot Locker, Inc.
  
Foot Locker, Inc.
    
Reclassification Adjustments
    
Notes
    
Foot Locker, Inc.
  
 Net Sales
  
Sales
  
$
1,788,000
    
$
6,000
      
(2g
)
  
$
1,794,000
  

  Other revenue    
6,000
      
(6,000
)
    
(2g
)
    
-
  
Cost of goods sold, including occupancy and distribution costs
  
Cost of sales
    
1,280,000
      
41,000
      
(2h
)
    
1,312,000
  
                 
(9,000
)
    
(2k
)
        
GROSS PROFIT
        
514,000
      
(32,000
)
            
482,000
  
Selling, general and administrative expenses
  
Selling, general and administrative expenses
    
458,000
      
10,000
      
(2h
)
    
753,000
  
                 
276,000
      
(2i
)
        
                 
9,000
      
(2k
)
        

   Depreciation and amortization    
51,000
      
(51,000
)
    
(2h
)
    
-
  

   Impairment and other    
276,000
      
(276,000
)
    
(2i
)
    
-
  
Pre-opening expenses
                
-
              
-
  
INCOME FROM OPERATIONS
        
(271,000
)
    
-
              
(271,000
)
Interest expense
  
Interest expense, net
    
2,000
      
4,000
      
(2j
)
    
6,000
  
Other expense (income)
  
Other expense (income), net
    
(3,000
)
    
(4,000
)
    
(2j
)
    
(7,000
)
INCOME BEFORE INCOME TAXES
        
(270,000
)
    
-
              
(270,000
)
Provision for income taxes
  
Income tax expense (benefit)
    
93,000
                      
93,000
  
NET INCOME
        $ (363,000
)
 

-
   

   
$
(363,000
)


(2g)
Reclassification from “Other revenue” to “Net Sales”.
 
(2h)
Reclassification of Depreciation expense from “Depreciation and amortization” to “Selling, general and administrative expenses” and “Cost of goods sold, including occupancy and distribution costs” for Non-Store Assets and Store Assets, respectively.
 
(2i)
Reclassification from “Impairment and other” to “Selling, general and administrative expenses”.
 
(2j)
Reclassification of Interest income from “Interest expense, net” to “Other expense (income)”.
 
(2k)
Reclassification of buyers’ compensation from “Cost of goods sold, including occupancy and distribution costs” to “Selling, general and administrative expenses”.
 
9
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended February 1, 2025
(in thousands)
 DICK’S Sporting Goods, Inc.
  
Foot Locker, Inc.
  
Foot Locker, Inc.
    
Reclassification Adjustments
    
Notes
    
Foot Locker, Inc.
  
 Net Sales
  
Sales
  
$
7,971,000
    
$
17,000
      
(2l
)
  
$
7,988,000
  

  Licensing revenue    
17,000
      
(17,000
)
    
(2l
)
    
-
  
Cost of goods sold, including occupancy and distribution costs
  
Cost of sales
    
5,666,000
      
156,000
      
(2m
)
    
5,785,000
  
                 
(37,000
)
    
(2q
)
        
GROSS PROFIT
        
2,322,000
      
(119,000
)
            
2,203,000
  
Selling, general and administrative expenses
  
Selling, general and administrative expenses
    
1,920,000
      
41,000
      
(2m
)
    
2,100,000
  
                 
5,000
      
(2n
)
        
                 
97,000
      
(2o
)
        
                 
37,000
      
(2q
)
        

   Depreciation and amortization    
202,000
      
(197,000
)
    
(2m
)
    
-
  
                 
(5,000
)
    
(2n
)
        

   Impairment and other    
97,000
      
(97,000
)
    
(2o
)
    
-
  
Pre-opening expenses
                
-
              
-
  
INCOME FROM OPERATIONS
        
103,000
      
-
              
103,000
  
Interest expense
  
Interest expense, net
    
8,000
      
16,000
      
(2p
)
    
24,000
  
Other expense (income)
  
Other expense (income), net
    
44,000
      
(16,000
)
    
(2p
)
    
28,000
  
INCOME BEFORE INCOME TAXES
        
51,000
      
-
              
51,000
  
Provision for income taxes
  
Income tax expense (benefit)
    
33,000
                      
33,000
  
NET INCOME
      
$
18,000
      
-
            
$
18,000
  
 
(2l)
Reclassification from “Licensing revenue” to “Net Sales”.
 
(2m)
Reclassification of Depreciation expense from “Depreciation and amortization” to “Selling, general and administrative expenses” and “Cost of goods sold, including occupancy and distribution costs” for Non-Store Assets and Store Assets, respectively.
 
(2n)
Reclassification of Amortization expense from “Depreciation and amortization” to “Selling, general and administrative expenses”.
 
(2o)
Reclassification from “Impairment and other” to “Selling, general and administrative expenses”.
 
(2p)
Reclassification of Interest income from “Interest expense, net” to “Other expense (income)”.
 
(2q)
Reclassification of buyers’ compensation from “Cost of goods sold, including occupancy and distribution costs” to “Selling, general and administrative expenses”.
 
10
Note 3. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

Transaction Accounting Adjustments

The adjustments included in the Unaudited Pro Forma Condensed Combined Balance Sheet as of May 3, 2025 are detailed below:

(3A1) The accounting for the Merger is based on currently available information and is considered preliminary.  The final accounting for the Merger may differ materially from that presented in these unaudited pro forma condensed combined financial information.  Refer to the following table for the preliminary estimated fair value of consideration transferred under the cash consideration scenario:

Scenario A: Cash Consideration

(in thousands, except per share data; figures below may not foot due to rounding of shares)
  
As of May 3, 2025
  
Foot Locker’s shares outstanding as of May 31, 2025
    
95,278
  
Existing equity interest in Foot Locker’s by DICK’S (1)
    
(4,270)
Foot Locker’s shares outstanding as of May 31, 2025, excluding shares owned by DICK’S
    
91,008
  
Price per share as per Merger Agreement (actual amount)
  
$
24.00
  
Cash Consideration paid to shareholders
  
$
2,184,183
  
Add: Settlement of equity awards (2)
  
$
16,776
  
Adjusted Cash consideration paid to shareholders
  
$
2,200,959
  
Add: Fair value of existing equity interest held by DICK’S (3)
  
$
102,480
  
Add: Pre-combination value of replaced equity awards (4)
  
$
14,663
  
Fair value of consideration transferred
  
$
2,318,102
  


(1)
During the 13 weeks ended May 3, 2025, DICK’S purchased 4.3 million shares of Foot Locker common stock.

(2)
Represents the estimated fair value of outstanding deferred stock unit awards granted under the Foot Locker 2007 Stock Incentive Plan (“Foot Locker DSU Awards”), restricted stock unit awards granted under the Foot Locker 2007 Stock Incentive Plan or granted as an inducement award (“Foot Locker RSU Awards”), performance stock unit awards granted under the Foot Locker 2007 Stock Incentive Plan or granted as an inducement award (“Foot Locker PSU Awards”), and in-the-money options that are expected to be settled in cash at close.

(3)
Represents the estimated fair value of the 4.3 million shares of Foot Locker common stock held by DICK’S based on the Merger consideration.

(4)
Represents the estimated fair value of outstanding Foot Locker RSU Awards (other than non-employee director Foot Locker RSU Awards) and Foot Locker PSU Awards granted to employees attributable to pre-combination services.

(3A2) In connection with DICK’S’ purchase of 4.3 million shares of Foot Locker common stock, this adjustment reflects the elimination of DICK’S’ investment.  The associated increase in retained earnings is related to the gain recorded in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year end February 1, 2025. Refer to 4K1 for more information.

11
(3A3) The accounting for the Merger is based on currently available information and is considered preliminary.  The final accounting for the Merger may differ materially from that presented in these unaudited pro forma condensed combined financial information.  Refer to the following table for the preliminary estimated fair value of consideration transferred under the stock consideration scenario:

Scenario B: Stock Consideration

(in thousands, except per share data; figures below may not foot due to rounding of shares)
  
As of May 3, 2025
  
Foot Locker’s shares outstanding as of May 31, 2025
    
95,278
  
Existing equity interest in Foot Locker’s by DICK’S (1)
    
(4,270)
Foot Locker’s shares outstanding as of May 31, 2025, excluding shares owned by DICK’S
    
91,008
  
Exchange ratio as per Merger Agreement
    
0.1168
  
Total estimated outstanding shares
    
10,630
  
DICK’S stock price as of June 13, 2025
  
$
176.74
  
Share consideration
  
$
1,878,691
  
Add: Accelerated vesting of equity awards (2)
  
$
16,776
  
Add: Fair value of existing equity interest held by DICK’S (3)
  
$
88,147
  
Add: Pre-combination value of replaced equity awards (4)
  
$
14,663
  
Fair value of consideration transferred
  
$
1,998,277
  

 
(1)
During the 13 weeks ended May 3, 2025, DICK’S purchased 4.3 million shares of Foot Locker common stock.

(2)
Represents the estimated fair value of outstanding Foot Locker DSU Awards and Foot Locker RSU Awards granted to non-employee directors as well as in-the-money options granted to employees.  These Foot Locker RSU Awards will accelerate vest and be settled in cash upon closing.

(3)
Represents the estimated fair value of the 4.3 million shares of Foot Locker common stock held by DICK’S based on the Merger consideration.

(4)
Represents the estimated fair value of outstanding Foot Locker RSU Awards (other than non-employee director Foot Locker RSU Awards) and Foot Locker PSU Awards granted to employees attributable to pre-combination services.

(3A4) In connection with DICK’S purchase of 4.3 million shares of Foot Locker common stock, this adjustment reflects the elimination of DICK’S’ investment.  The associated increase in retained earnings is related to the gain recorded in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended February 1, 2025. Refer to 4K2 for more information.

(In thousands)
  
As of May 3, 2025
  
Common stock
    
106
  
Additional paid-in-capital
    
1,893,248
  
Cash
    
16,776
  

The actual value of DICK’S common stock to be issued will depend on the per share price of DICK’S common stock at the closing date of the Merger, and therefore, the actual stock consideration will fluctuate with the market price of DICK’S common stock until the Merger is completed.  The following table shows the effect of changes in DICK’S stock price and the resulting impact on the estimated stock consideration:

(In thousands, except per share data)
            
Share Price Sensitivity
  
’DICK’S Stock Price
    
Consideration Transferred
  
As presented
  
$
176.74
      
1,998,277
  
10% increase
  
$
194.41
      
2,186,146
  
10% decrease
  
$
159.07
      
1,810,408
  

12
Preliminary Purchase Price Allocation

The determination of the fair value of the identifiable assets of Foot Locker and the allocation of the estimated Merger consideration to these identifiable assets and liabilities is preliminary and is pending finalization of various estimates, inputs and analyses.  The final purchase price allocation will be determined when DICK’S has completed the detailed valuations and necessary calculations.  The final Merger consideration allocation may be materially different than that reflected in the preliminary estimated Merger consideration allocation presented herein.  Any increase or decrease in fair values of the net assets as compared with the unaudited pro forma condensed combined financial information may change the allocation of total Merger consideration to goodwill and other assets and liabilities and may impact the combined company statement of operations due to adjustments in the depreciation and amortization of the adjusted assets.

(In thousands)
  
Scenario A - Cash
Consideration
Fair value
    
Scenario B - Stock
Consideration
Fair value
  
Cash and cash equivalents
  
$
343,000
    
$
343,000
  
Accounts receivable, net
    
174,218
      
174,218
  
Inventories, net
    
1,665,000
      
1,665,000
  
Prepaid expenses and other current assets
    
184,782
      
184,782
  
Property and equipment, net
    
1,013,000
      
1,013,000
  
Operating lease assets
    
2,171,000
      
2,171,000
  
Deferred income taxes
    
6,422
      
58,422
  
Intangible assets, net
    
220,000
      
20,000
  
Other assets
    
247,810
      
247,810
  
Total assets
  
$
6,025,232
    
$
5,877,232
  
Accounts payable
    
504,000
      
504,000
  
Accrued expenses
    
390,800
      
390,800
  
Current portion of lease obligations
    
499,000
      
499,000
  
Deferred revenue and other liabilities
    
110,000
      
110,000
  
Long-term debt and obligations under finance leases
    
423,670
      
423,670
  
Long-term operating lease liabilities
    
1,890,000
      
1,890,000
  
Other long-term liabilities
    
179,000
      
179,000
  
Net assets acquired
    
2,028,762
      
1,880,762
  
Goodwill
    
289,340
      
117,515
  
Fair value of consideration transferred
  
$
2,318,102
    
$
1,998,277
  

Goodwill represents the excess of the preliminary estimated Merger consideration over the estimated fair value of the underlying net assets acquired.  Goodwill will not be amortized but instead will be reviewed for impairment annually, or more frequently if facts and circumstances warrant a review.  Goodwill is attributable to the assembled workforce of Foot Locker, planned growth in new markets, and synergies expected to be achieved from the combined operations of DICK’S and Foot Locker.  Goodwill recognized in the Merger is not expected to be deductible for tax purposes.

(3B) Reflects the preliminary estimated fair value adjustment to property and equipment acquired in the Merger.  The fair value of property and equipment is subject to change.

Fair value of Property and Equipment, net:

(In thousands)
  
Carrying Value as
on May 3, 2025
    
Step-up Value
    
Fair Value
  
Land
  
$
3,000
    
$
2,000
    
$
5,000
  
Buildings
    
30,000
      
13,000
      
43,000
  
Furniture, fixtures, equipment
    
356,000
      
54,000
      
410,000
  
Software development costs
    
60,000
      
-
      
60,000
  
Assets under finance leases
    
45,000
      
-
      
45,000
  
Alterations to leased and owned buildings
    
414,000
      
36,000
      
450,000
  
Total property, plant and equipment acquired and pro forma adjustment
  
$
908,000
    
$
105,000
    
$
1,013,000
  

13
(3C1) Reflects the preliminary estimated asset fair value adjustment to the identifiable intangible assets acquired, primarily consisting of customer relationships, developed technology, and tradenames and trademarks.  The fair value of intangible assets is subject to change as DICK’S finalizes various estimates, inputs and analyses.

Scenario A: Cash Consideration
Fair Value of Intangible Assets:

(In thousands)
  
Carrying Value as
on May 3, 2025
    
Step-up/(down)
    
Fair Value
  
Lease acquisition costs
  
$
-
    
$
-
    
$
-
  
Developed technology
    
-
      
5,000
      
5,000
  
Customer relationships
    
-
      
5,000
      
5,000
  
Trademarks & tradenames
    
230,000
      
(20,000)
   
210,000
  
Total identifiable intangible assets and pro forma adjustment
  
$
230,000
    
$
(10,000)
 
$
220,000
  

(3C2) Reflects the preliminary estimated asset fair value adjustment to the identifiable intangible assets acquired, primarily consisting of customer relationships, developed technology, and tradenames and trademarks.  The fair value of intangible assets is subject to change as DICK’S finalizes various estimates, inputs and analyses.

Scenario B: Stock Consideration
Fair Value of Intangible Assets:

(In thousands)
  
Carrying Value as
on May 3, 2025
    
Step-down
    
Fair Value
  
Lease acquisition costs
  
$
-
    
$
-
    
$
-
  
Developed technology
    
-
      
-
      
-
  
Customer relationships
    
-
      
-
      
-
  
Trademarks & tradenames
    
230,000
      
(210,000)
   
20,000
  
Total identifiable intangible assets and pro forma adjustment
  
$
230,000
    
$
(210,000)
 
$
20,000
  

(3D) Reflects one-time non-recurring transaction-related costs of approximately $56.4 million incurred prior to, or concurrent with, the closing of the Merger including bank fees, legal fees, consulting fees, structuring & upfront fees paid for senior bridge term loans, exchange fee related to senior note exchange and other transaction costs estimated to be incurred by DICK’S.  No amount was incurred or accrued for as of the balance sheet date.

(3E) Reflects a $2.0 million decrease to Cash against the decrease in Long-term debt and obligations under finance leases related to the payment made to noteholders for the bond fee associated with the exchange of the Foot Locker Notes; a $3.7 million increase to Long-term debt and obligations under finance leases against the increase in goodwill related to the reversal of outstanding deferred financing cost balance of the Foot Locker Notes’; and a $4.2 million decrease to Other assets against the increase in Goodwill related to the reversal of outstanding deferred financing cost balance of Foot Locker’s revolving credit facility.

(3F) Reflects the elimination of Foot Locker’s historical equity.

(3G) Reflects the cash payment for the severance benefits total $22.6 million including severance pay and the acceleration of replaced awards by executives.

(3H) Reflects increase in the liabilities assumed of $7.5 million related to retention bonus for certain Foot Locker employees and associated payment at close of the Merger.

14
(3I) Reflects increase in the liabilities assumed of $55.3 million related to estimated seller’s transaction costs and associated payment at close of the Merger.

(3J) Reflects the fair value adjustment of $20.0 million related to the Foot Locker Notes assumed and not extinguished as of the closing of the Merger.

(3K) Reflects a preliminary purchase accounting adjustment of $72.0 million to record favorable contractual lease balance when compared to market terms.

(3L1) Represents a $34.6 million adjustment to deferred tax liabilities under Scenario A primarily as a result of the pro forma adjustments for assets acquired and liabilities assumed—specifically, relative to fair market value adjustments to assets and an adjustment to the acquired deferred tax liability for Goodwill which resets as a result of the Merger.  These estimates are preliminary as adjustments to our deferred taxes could change due to further refinement of our statutory income tax rates used to measure our deferred taxes, changes in judgment regarding realizability of assets, and changes in the estimates of the fair values of assets acquired and liabilities assumed that may occur in conjunction with the closing of the Merger.  These changes in estimates could be material.

(3L2) Represents a $17.4 million adjustment to deferred tax assets under Scenario B primarily as a result of the pro forma adjustments for assets acquired and liabilities assumed—specifically, relative to fair market value adjustments to assets and an adjustment to the acquired deferred tax liability for goodwill which resets as a result of the Merger.  These estimates are preliminary as adjustments to our deferred taxes could change due to further refinement of our statutory income tax rates used to measure our deferred taxes, changes in judgment regarding realizability of assets, and changes in the estimates of the fair values of assets acquired and liabilities assumed that may occur in conjunction with the closing of the Merger.  These changes in estimates could be material.

(3M1, 3M2) Represents the adjustment to goodwill based on the purchase price allocation in respect of both Scenario A and B, as described above.

(In thousands)
  
Scenario A - Cash
Consideration
Amounts
    
Scenario B - Stock
Consideration
Amounts
  
Goodwill resulting from the Merger
  
$
289,340
    
$
117,515
  
Less: Elimination of Foot Locker’s historical Goodwill
    
(661,000
)
    
(661,000)
Pro forma adjustment
  
$
(371,660
)
  
$
(543,485)

Financing Adjustments

(3N) Reflects the adjustment related to the net proceeds received from the Debt Financing issued as part of the financing for the cash consideration in Scenario A, as described above.

(In thousands)
  
As of May 3, 2025
  
Proceeds from the Unsecured Senior Notes
  
$
1,732,000
  
Payment of financing costs
    
(12,793)
Pro forma adjustment
  
$
1,719,207
  

15
Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

The adjustments included in the Unaudited Pro Forma Condensed Combined Statements of Operations for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025 and are as follows:

Transaction Accounting Adjustments

(4A) Reflects adjustment to depreciation expense, on a straight line-basis based on the preliminary fair value of Property and equipment, net and the related useful life.  Depreciation expense is split between “Cost of goods sold, including occupancy and distribution costs” and “Selling, general and administrative expenses”.

(In thousands)
  
Useful Life
    
Fair Value
    
Incremental
Depreciation
Expense for the
Thirteen Weeks
Ended May 3,
2025
    
Incremental
Depreciation
Expense for the
Year Ended
February 1,
2025
  
Land
    
n/a
    
$
5,000
    
$
-
    
$
-
  
Buildings
  
Max 50
      
43,000
      
328
      
1,313
  
Furniture, fixtures, equipment
    
3 - 10
      
410,000
      
34,500
      
138,000
  
Software development costs
    
2 - 5
      
60,000
      
7,500
      
30,000
  
Assets under finance leases
    
7 - 10
      
45,000
      
1,250
      
5,000
  
Alterations to leased and owned buildings
    
7
      
450,000
      
8,500
      
34,000
  
Total property and equipment acquired
            
1,013,000
      
52,078
      
208,313
  
Less: Historical depreciation expense
                    
(51,133
)
    
(197,280)
Pro forma adjustment for incremental depreciation expense
                  
$
945
    
$
11,033
  

(4B1, 4B2) Reflects adjustment to amortization expense, on a straight-line basis based on the preliminary fair value of Intangible assets, net and the related useful life.

Scenario A: Cash Consideration

(In thousands)
  
Useful Life
    
Fair Value
    
Amortization
Expense for the
Thirteen Weeks
Ended May 3,
2025
    
Amortization
Expense for the
Year Ended
February 1,
2025
  
Lease acquisition costs
    
n/a
    
$
-
    
$
-
    
$
-
  
Developed technology
    
10
      
5,000
      
125
      
500
  
Customer relationships
    
13
      
5,000
      
96
      
385
  
Trademarks & tradenames
    
n/a
      
210,000
      
-
      
-
  
Total identifiable intangible assets
    
     
220,000
      
221
      
885
  
Less: Historical Amortization expense
                            
5,000
  
Pro forma adjustment for incremental amortization expense
                  
$
221
    
$
(4,115)

Scenario B: Stock Consideration

(In thousands)
  
Useful Life
    
Fair Value
    
Amortization
Expense for the
Thirteen Weeks
Ended May 3,
2025
    
Amortization
 Expense for the
Year Ended
February 1,
2025
  
Lease acquisition costs
    
n/a
      
-
      
-
      
-
  
Developed technology
    
10
      
-
      
-
      
-
  
Customer relationships
    
13
      
-
      
-
      
-
  
Trademarks & tradenames
    
n/a
      
20,000
      
-
      
-
  
Total identifiable intangible assets
            
20,000
      
-
      
-
  
Less: Historical Amortization expense
                          
$
5,000
  
Pro forma adjustment for incremental amortization expense
                          
$
(5,000)

16
(4C) Reflects estimated non-recurring transaction-related expenses of $56.4 million incurred by DICK’S, including legal, accounting and regulatory fees directly associated with the Merger.  Out of these expenses, $48.5 million are charged under Selling, general and administrative expenses and $7.9 million pertaining to structuring & upfront fee on senior bridge term loans are charged as Interest expense.  These non-recurring expenses are not anticipated to affect the Unaudited Pro Forma Condensed Combined Statement of Operations beyond twelve months after the closing date.

(4D) Represents the adjustment to record the elimination of Foot Locker’s historical stock-based compensation expense and recognition of new stock-based compensation expense for the post-combination portion of the Foot Locker RSU Awards and Foot Locker PSU Awards that are expected to be replaced by DICK’S RSUs, respectively, at the closing of the Merger.

(In thousands)
  
For the Thirteen Weeks
Ended May 3, 2025
    
For the Year Ended
February 1, 2025
  
Post-combination stock-based compensation expense
  
$
4,461
    
$
18,621
  
Less: Historical stock-based compensation expense
    
(4,095)
   
(14,524)
Pro forma adjustment
  
$
366
    
$
4,097
  

(4E) Represents the adjustment to DICK’S selling, general and administrative expenses to record a one-time post-combination expense related to paid severance costs of $22.6 million for executives of Foot Locker, including cash severance and the acceleration of unvested Foot Locker RSU Awards and Foot Locker PSU Awards held by executives.

(4F) The adjustment represents $7.5 million of additional cash retention bonus to certain employees of Foot Locker that remain employed six months after the closing of the Merger.

(4G) Reflects the adjustment to record amortization of exchange fee of $0.1 million and $0.4 million out of the total of $2.0 million, incurred on the same for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.

(4H) Reflects the adjustment to record interest expense for accretion of the preliminary fair value of the Foot Locker Notes assumed and not extinguished as of the closing of the Merger.  In addition, this also reflects the reversal of historical amortization of transaction fees related to both the Foot Locker Notes and Foot Locker’s revolving credit facility, recorded in the income statement of Foot Locker for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.

(4I1) Reflects estimated income tax impact of $1.8 million and $18.8 million related to the transaction accounting adjustments for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.  Tax-related adjustments are based upon an estimated statutory tax rate of 26% and include the tax impacts of certain non-deductible compensation and transaction costs.  The estimated blended statutory tax rate used for the unaudited pro forma condensed combined financial information will likely vary from the actual effective tax rates in periods as of and subsequent to the completion of the Merger.

(4I2) Reflects estimated income tax impact of $1.7 million and $18.6 million related to the transaction accounting adjustments for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.  Tax-related adjustments are based upon an estimated statutory tax rate of 26% and include the tax impacts of certain non-deductible compensation and transaction costs.  The estimated blended statutory tax rate used for the unaudited pro forma condensed combined financial information will likely vary from the actual effective tax rates in periods as of and subsequent to the completion of the Merger.

(4J) Represents an adjustment of $4.5 million and $18.0 million to record amortization expense for favorable contractual lease term when compared to market for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.

17
(4K1) Represents the recognition of one-time gain associated with DICK’S’ investment in Foot Locker reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year end February 1, 2025.

Refer to the following table for the calculation of the gain under the cash consideration in Scenario A:

(in thousands)
  
For the Year Ended
February 1, 2025
  
Fair value of DICK’S’ investment in Foot Locker based on the cash consideration
  
$
102,480
  
Carrying value of DICK’S’ investment in Foot Locker as of May 3, 2025
    
55,600
  
Gain on investment
  
$
46,880
  

(4K2) Represents the recognition of one-time gain associated with DICK’S’ investment in Foot Locker reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year end February 1, 2025.

Refer to the following table for the calculation of the gain under the stock consideration in Scenario B:

(in thousands)
  
For the Year Ended
February 1, 2025
  
Fair value of DICK’S’ investment in Foot Locker based on the stock consideration
  
$
88,147
  
Carrying value of DICK’S’ investment in Foot Locker as of May 3, 2025
    
55,600
  
Gain on investment
  
$
32,547
  

Financing Adjustments

(4L) Reflects the adjustment related to the interest expense and amortization of issuance costs related to the Debt Financing assumed as part of financing the cash consideration in Scenario A, as described above.

(In thousands)
  
For the Thirteen Weeks
Ended May 3, 2025
    
For the Year Ended
February 1, 2025
  
Interest expense on Unsecured Senior Notes
  
$
27,290
    
$
110,365
  
Amortization of debt issuance costs on Unsecured Senior Notes
    
149
      
576
  
Pro forma adjustment
  
$
27,439
    
$
110,941
  

(4M) Reflects estimated income tax impact of $7.1 million and $28.8 million related to the financing adjustments for the thirteen weeks ended May 3, 2025 and for the year ended February 1, 2025, respectively.  Tax-related adjustments are based upon an estimated statutory tax rate of 26%.  The estimated blended statutory tax rate used for the unaudited pro forma condensed combined financial information will likely vary from the actual effective tax rates in periods as of and subsequent to the completion of the Merger.

Note 5. Earnings Per Share

The following tables set forth the computation of pro forma basic and diluted earnings per share for the thirteen weeks ended May 3, 2025.


(in thousands, except per share data)
 
Scenario A - Cash
Consideration for the
Thirteen Weeks
Ended May 3,
2025
    
Scenario B - Stock
Consideration for the
Thirteen Weeks
Ended May 3,
2025
  
Numerator (basic and diluted):                
Pro forma net loss attributable to common shares
  
$
(124,081)
 
$
(103,612)
Denominator:
                
Weighted-average number of common shares outstanding - basic
    
79,341
      
89,971
  
Weighted-average number of common shares outstanding - diluted
    
81,727
      
92,357
  
Pro forma loss per share:
                
Basic
  
$
(1.56)
 
$
(1.15)
Diluted
  
$
(1.52)
 
$
(1.12)

18
(in thousands)  
Scenario A- Cash
Consideration for the
Thirteen Weeks
Ended May 3,
2025
    
Scenario B- Stock
Consideration for the
Thirteen Weeks
Ended May 3,
2025
  
Denominator for Basic
            
Historical weighted-average number of common shares outstanding
    
79,341
      
79,341
  
Shares of DICK’S common stock issued as consideration transferred
    
-
      
10,630
  
Total weighted average common shares outstanding (basic):
    
79,341
      
89,971
  
                 
Denominator for Diluted
                
Historical weighted-average number of common shares outstanding
    
81,478
      
81,478
  
Shares of DICK’S common stock issued as consideration transferred
    
-
      
10,630
  
 Replacement of Foot Locker PSU Awards and Foot Locker RSU Awards
    
249
      
249
  
Total weighted average common shares outstanding (diluted):
    
81,727
      
92,357
  

The following tables set forth the computation of pro forma basic and diluted earnings per share for the year ended February 1, 2025.


(in thousands, except per share data)
 
Scenario A - Cash
Consideration for the
Year Ended
February 1,
2025
    
Scenario B - Stock
Consideration for the
Year Ended
February 1,
2025
  
Numerator (basic and diluted):                
Pro forma net income attributable to common shares
  
$
1,048,289
    
$
1,116,706
  
Denominator:
                
Weighted-average number of common shares outstanding - basic
    
80,468
      
91,098
  
Weighted-average number of common shares outstanding - diluted
    
83,113
      
93,743
  
Pro forma earnings per share:
                
Basic
  
$
13.03
    
$
12.26
  
Diluted
  
$
12.61
    
$
11.91
  

(in thousands)
  
Scenario A - Cash
Consideration for the
Year Ended
February 1,
2025
    
Scenario B - Stock
Consideration for the
Year Ended
February 1,
2025
  
Denominator for Basic
            
Historical weighted-average number of common shares outstanding
    
80,468
      
80,468
  
Shares of DICK’S common stock issued as consideration transferred
    
-
      
10,630
  
Total weighted average common shares outstanding (basic):
    
80,468
      
91,098
  
                 
Denominator for Diluted
                
Historical weighted-average number of common shares outstanding
    
82,929
      
82,929
  
Shares of DICK’S common stock issued as consideration transferred
    
-
      
10,630
  
 Replacement of Foot Locker PSU Awards and Foot Locker RSU Awards
    
184
      
184
  
Total weighted average common shares outstanding (diluted):
    
83,113
      
93,743
  


19