Dillard's 2010 Annual Report Download - page 72

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Notes to Consolidated Financial Statements (Continued)
14. Asset Impairment and Store Closing Charges (Continued)
$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 follows:
Fiscal 2010 Fiscal 2009 Fiscal 2008
Number Number Number
of Impairment of Impairment of Impairment
(in thousands of dollars) Locations Amount Locations Amount Locations Amount
Stores closed in previous fiscal year 1 $2,208 2 $3,084 1 $ 800
Stores closed in current fiscal year . — — — — 9 31,993
Stores to close in next fiscal year . . — — — — 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 ..................... 1 $2,208 2 $3,084 44 $197,922
The following is a summary of the activity in the reserve established for store closing charges:
Balance, Adjustments
Beginning and Balance,
(in thousands of dollars) of Year Charges Cash Payments End of Year
Fiscal 2010
Rent, property taxes and utilities ............... $2,498 $ 680 $1,818 $1,360
Fiscal 2009
Rent, property taxes and utilities ............... 5,240 691 3,433 2,498
Fiscal 2008
Rent, property taxes and utilities ............... 4,355 4,474 3,589 5,240
Reserve amounts are recorded in trade accounts payable and accrued expenses and other
liabilities.
15. Fair Value Disclosures
The estimated fair values of financial instruments which are presented herein have been
determined by the Company using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting market data to develop
estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of
amounts the Company could realize in a current market exchange.
The fair value of the Company’s long-term debt and subordinated debentures is based on market
prices or dealer quotes (for publicly traded unsecured notes) and on discounted future cash flows using
current interest rates for financial instruments with similar characteristics and maturities (for bank
notes and mortgage notes).
F-28