Bed, Bath and Beyond 2009 Annual Report Download - page 21

BED BATH & BEYOND 2009 ANNUAL REPORT
19
J. Goodwill and Other Indefinitely Lived Intangible Assets
The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually or when events or
changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is
based upon the best information available, including estimates of fair value which incorporate assumptions marketplace partici-
pants would use in making their estimates of fair value. The Company has not historically recorded an impairment to its goodwill
and other indefinitely lived intangible assets. The Company completed its annual impairment testing of goodwill and other
indefinitely lived intangible assets and determined that, as of February 27, 2010, no impairment existed because the fair value
of these assets substantially exceeded their carrying values. In the future, if events or market conditions affect the estimated fair
value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the period in which
the impairment occurs.
Included within other assets in the accompanying consolidated balance sheets as of February 27, 2010 and February 28, 2009,
respectively, is $198.7 million for goodwill and $30.9 million for tradenames.
K. Self Insurance
The Company utilizes a combination of insurance and self insurance for a number of risks including workers’ compensation,
general liability, automobile liability and employee related health care benefits (a portion of which is paid by its employees).
Liabilities associated with the risks that the Company retains are estimated by considering historical claims experience,
demographic factors, severity factors and other actuarial assumptions. Although the Company’s claims experience has not
displayed substantial volatility in the past, actual experience could materially vary from its historical experience in the future.
Factors that affect these estimates include but are not limited to: inflation, the number and severity of claims and regulatory
changes. In the future, if the Company concludes an adjustment to self insurance accruals is required, the liability will be
adjusted accordingly.
L. Deferred Rent
The Company accounts for scheduled rent increases contained in its leases on a straight-line basis over the term of the lease
beginning as of the date the Company obtained possession of the leased premises. Deferred rent amounted to $78.7 million and
$79.5 million as of February 27, 2010 and February 28, 2009, respectively.
Cash or lease incentives (“tenant allowances”) received pursuant to certain store leases are recognized on a straight-line basis as a
reduction to rent over the lease term. The unamortized portion of tenant allowances is included in deferred rent and other liabili-
ties. Tenant allowances amounted to $86.8 million and $72.7 million as of February 27, 2010 and February 28, 2009, respectively.
M. Treasury Stock
Between December 2004 and September 2007, the Company’s Board of Directors authorized, through several share repurchase
programs, the repurchase of $2.950 billion of its shares of common stock. The Company was authorized to make repurchases from
time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and
regulations. During fiscal 2009, the Company repurchased approximately 2.7 million shares of its common stock at a total cost of
approximately $94.9 million. During fiscal 2008, the Company repurchased approximately 1.7 million shares of its common stock
at a total cost of approximately $48.1 million. During fiscal 2007, the Company repurchased approximately 20.6 million shares of
its common stock at a total cost of approximately $734.2 million.
N. Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable and certain other
liabilities. The Company’s investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost,
and auction rate securities, which are stated at their approximate fair value. The book value of all financial instruments is repre-
sentative of their fair values. On March 2, 2008 and March 1, 2009, the Company adopted the accounting guidance related to fair
value measurements and disclosures for financial assets and liabilities and for non-financial assets and liabilities, respectively
(See “Fair Value Measurements,” Note 5).
O. Revenue Recognition
Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its
websites. The value of point of sale coupons and point of sale rebates that result in a reduction of the price paid by the customer