DICK'S SPORTING GOODS, INC. 10-Q10-Q

Financial Statements (unaudited)

adoption of ASU 2020-06; see Part I. Item 1. Financial Statements, Note 1–Description of Business and Basis of Presentation for additional details. Other Expense (Income) Other expense totaled $9.0 million in the current quarter compared to other income of $7.4 million in the prior year quarter. Substantially all of the change was due to changes in our deferred compensation plan investment values, which we account for by recognizing investment income or expense and recording an offsetting charge or reduction to selling, general and administrative costs. Income Taxes Our effective tax rate decreased to 21.5% in the current quarter from 23.0% in the quarter ended May 1, 2021. The current quarter effective tax rate was favorably impacted by the vesting of employee equity awards at a higher share price than awards that vested in the prior year quarter. 18 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our cash on hand at April 30, 2022 was $2.25 billion. We believe that we have sufficient cash flows from operations and cash on hand to operate our business for at least the next twelve months, supplemented by funds available under our unsecured $1.6 billion revolving credit facility (the “Credit Facility”), if necessary. We may require additional funding should we pursue strategic acquisitions, settle all or a portion of the Convertible Senior Notes, undertake share repurchases, pursue other investments or engage in store expansion rates in excess of historical levels. The following sections describe the potential short and long term impacts to our liquidity and capital requirements. Leases We lease all of our stores, three of our distribution centers and certain equipment under non-cancellable operating leases that expire at various dates through 2033. Over two-thirds of our DICK’S Sporting Goods stores will be up for lease renewal at our option over the next five years, and we plan to leverage the significant flexibility within our existing real estate portfolio to capitalize on future real estate opportunities. Revolving Credit Facility We have available to us a $1.6 billion Credit Facility, which includes a maximum amount of $75 million to be issued in the form of letters of credit. Loans under the Credit Facility bear interest at an alternate base rate or an adjusted secured overnight financing rate plus, in each case, an applicable margin percentage. As o