Dillard's 2008 Annual Report Download - page 33

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Fiscal 2008
Gain on disposal of assets increased $11.9 million during fiscal 2008 compared to fiscal 2007. During fiscal
2008, the Company sold its store location at Rivercenter in San Antonio, Texas for $8.0 million, resulting in a
gain of $7.2 million on the sale. The Company also purchased a corporate aircraft by exercising its option under a
synthetic lease and by issuing a $23.6 million note payable, secured by letters of credit. The Company then sold
the aircraft for $44.5 million. A gain of $17.6 million was recognized related to the sale.
Fiscal 2007
Gain on disposal of assets decreased $3.8 million during fiscal 2007 compared to fiscal 2006. During fiscal
2007, the Company recognized a $14.1 million pretax gain relating to hurricane recovery for two stores damaged
by the hurricanes of 2005 as the Company completed the cleanup of the damaged locations during fiscal 2007.
This gain was partially offset when the Company sold its properties in Longmont, Colorado and Richardson,
Texas for $5.8 million, recognizing a net loss of $2.5 million on the sales.
Fiscal 2006
During fiscal 2006, the Company sold its interest in a joint venture, Yuma Palms, for $20.0 million, and
recognized a gain of $13.5 million related to the sale.
Asset Impairment and Store Closing Charges
Fiscal
2008
Fiscal
2007
Fiscal
2006
(in thousands of dollars)
Asset impairment and store closing charges ........... $197,922 $20,500 $—
Fiscal 2008
Asset impairment and store closing charges for fiscal 2008 charges consist of (1) the write-off of $31.9
million of goodwill on seven stores and a write-down of $58.8 million of investment in two mall joint ventures
where the estimated future cash flows were unable to sustain the amount of goodwill and investment; (2) an
accrual of $0.9 million for future rent, property tax and utility payments on one store that was closed during the
year; (3) a write-down of property and equipment and an accrual for future rent, property tax and utility
payments of $5.7 million on a store and distribution center that were closed during the year and (4) a write-down
of property and equipment on 32 stores that were closed, scheduled to close or impaired based on the inability of
the stores’ estimated future cash flows to sustain their carrying value. A breakdown of the asset impairment and
store closing charges for fiscal 2008 follows:
Number of
Locations
Impairment
Amount
(in thousands of dollars)
Store closed in prior year ......................................... 1 $ 800
Stores closed in fiscal 2008 ....................................... 9 31,993
Stores to close in fiscal 2009 ...................................... 5 18,811
Stores impaired based on cash flows ................................ 25 86,094
Non-operating facility ........................................... 1 493
Distribution center .............................................. 1 925
Joint ventures .................................................. 2 58,806
Total ..................................................... 44 $197,922
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