CompUSA 2013 Annual Report Download - page 66

Annual rent expense aggregated approximately $34.6 million, $33.4 million and $30.8 million in 2013, 2012 and 2011, respectively.
Included in rent expense was $0.9 million in 2013, 2012 and 2011, to related parties. Rent expense is net of sublease income of $0.1 million
for 2013, and $0.2 million for 2012 and 2011, respectively.
Other Matters
The Company and its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including commercial,
employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course of
business. In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning
intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the
Company sells. The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in
various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities.
These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended. In this regard, the state
of Pennsylvania has claimed that certain of the Company’s consumer electronics e-
commerce sales are subject to sales tax in Pennsylvania;
the Company is defending this matter and believes it has strong defenses. The Company does not expect, based on currently available
information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial
condition or results of operations although the ultimate outcome is inherently unpredictable. Therefore, judgments could be rendered or
settlements entered, that could adversely affect the Company’
s operating results or cash flows in a particular period. The Company routinely
assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of
the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable. In this regard, the Company establishes
accrual estimates for its various
lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired or a
liability incurred at the date of the financial statements and the loss can be reasonably estimated. At December 31, 2013 the Company had
established accruals for certain of its various
lawsuits, claims, investigations and proceedings based upon estimates of the most likely
outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate. The Company
does not believe that at December 31, 2013 any reasonably possible losses in excess of the amounts accrued would be material to the
financial statements.
The Company operates and is internally managed in two operating segments, Technology Products and Industrial Products. The Company’
s
chief operating decision-maker is the Company’
s Chief Executive Officer. Our Chief Executive Officer, in his role as Chief Operating
Decision Maker, evaluates segment performance based on income from operations before net interest, foreign exchange gains and losses and
income taxes. Corporate costs not identified with the disclosed segments are grouped as “Corporate and other expenses.”
The chief
operating decision-
maker reviews assets and makes significant capital expenditure decisions for the Company on a consolidated basis only.
The accounting policies of the segments are the same as those of the Company described in Note 1.
Financial information relating to the Company’s operations by reportable segment was as follows (in millions):
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Table of Contents
12.
SEGMENT AND RELATED INFORMATION
Year Ended December 31,
2013 2012 2011
Net Sales:
Technology Products
$
2,873.3
$
3,137.6
$
3,357.4
Industrial Products
473.8
401.9
319.9
Corporate and other
5.2
4.8
3.3
Consolidated
$
3,352.3
$
3,544.3
$
3,680.6
Depreciation and Amortization Expense:
Technology Products
$
16.1
$
15.1
$
15.0
Industrial Products
2.2
1.9
1.3
Corporate and other
1.0
1.0
1.2
Consolidated
$
19.3
$
18.0
$
17.5
Operating Income (Loss):
Technology Products
$
(40.6
)
$
(47.2
)
$
68.0
Industrial Products
40.0
29.9
35.1
Corporate and other expenses
(20.0
)
(22.6
)
(22.3
)
Consolidated
$
(20.6
)
$
(39.9
)
$
80.8
Total Assets
Technology Products
$
598.2
$
564.4
$
546.7
Industrial Products
75.5
157.7
127.2
Corporate and other
268.7
240.2
215.8
Consolidated
$
942.4
$
962.3
$
889.7