Pep Boys 2014 Annual Report Download - page 62

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2015, February 1, 2014 and February 2, 2013
NOTE 11—STORE CLOSURES AND ASSET IMPAIRMENTS (Continued)
current economic conditions, management’s expectations and projected trends of current operating
results. The fair market value estimates are classified as a Level 2 or Level 3 measure within the fair
value hierarchy. The remaining fair value of the impaired assets was $2.9 million, $4.2 million and
$2.3 million at January 31, 2015, February 1, 2014 and February 2, 2013, respectively.
A store is classified as held for disposal when (i) the Company has committed to a plan to sell,
(ii) the building is vacant and the property is available for sale, (iii) the Company is actively marketing
the property for sale, (iv) the sale price is reasonable in relation to its current fair value and (v) the
Company expects to complete the sale within one year. Assets held for disposal have been valued at
the lower of their carrying amount or their estimated fair value, net of disposal costs. The fair value of
these assets is estimated using readily available market data for comparable properties and is classified
as a Level 2 (as described in Note 17, ‘‘Fair Value Measurements’’) measure within the fair value
hierarchy. No depreciation expense is recognized during the period the asset is held for disposal.
During fiscal 2014, the Company had five stores classified as assets held for disposal, which are as
follows:
Year Ended
January 31,
(dollar amounts in thousands) 2015
Land.................................................. $1,983
Building and improvements .................................. 4,653
Accumulated depreciation ................................... (3,988)
Property and equipment—net ................................ $2,648
Number of properties ...................................... 5
The Company classifies the five properties as held for disposal as the Company continues to
actively market the properties at prices the Company believes reasonable given current market
conditions and expects to sell these properties within the next twelve months. In addition, during fiscal
2014, the Company recorded $1.2 million of impairment charges related to one store classified as held
for disposal of which $0.8 million was charged to merchandise cost of sales and $0.4 million was
charged to service cost of sales. In fiscal 2013, the Company recorded $0.9 million of impairment
charges related to four stores classified as held for disposal of which $0.7 million was charged to
merchandise cost of sales and $0.2 was charged to service cost of sales.
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