Dillard's 2009 Annual Report Download - page 74

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Leases and Commitments (Continued)
Various other legal proceedings, in the form of lawsuits and claims, which occur in the normal
course of business, are pending against the Company and its subsidiaries. In the opinion of
management, disposition of these matters is not expected to materially affect the Company’s financial
position, cash flows or results of operations
15. Insurance Proceeds
During fiscal 2005, Hurricane Katrina, Hurricane Rita and Hurricane Wilma interrupted
operations in approximately 60 of the Company’s stores for varying amounts of time. Ten stores
suffered damage to either merchandise or property related to the hurricanes. One store in the New
Orleans area was permanently closed. A store in Biloxi, Mississippi was closed throughout the
remainder of fiscal 2005 and remained closed for clean-up and reconstruction until its re-opening in
March 2008.
Property and merchandise losses in the affected stores were covered by insurance. Insurance
proceeds of $22.0 million were received during fiscal 2007. The Company recorded related gains in
fiscal 2007 of $14.1 million and $4.1 million in gain on disposal of assets and cost of sales, respectively.
16. Asset Impairment and Store Closing Charges
During fiscal 2009, the Company recorded a pretax charge of $3.1 million for asset impairment and
store closing costs. The charge consists of the write-down of property of $3.9 million on two stores
closed in a prior year partially offset by the renegotiation of a future rent accrual of $0.8 million on a
store closed in a prior year.
During fiscal 2008, the Company recorded a pretax charge of $197.9 million for asset impairment
and store closing costs. The charge consists 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.
During fiscal 2007, the Company recorded a pretax charge of $20.5 million for asset impairment
and store closing costs. The charge consists of a write-off of goodwill on one store of $2.6 million, an
accrual for future rent, property tax and utility payments on two stores of $1.0 million and a
write-down of property and equipment on 14 stores for $16.9 million.
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