Pottery Barn 2011 Annual Report Download - page 64

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In September 2011, the FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing
Goodwill for Impairment. This guidance is intended to simplify how entities test goodwill for impairment. The
new guidance permits an entity to first assess qualitative factors to determine whether it is “more likely than not”
that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is
necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and
Other. This amended guidance is effective for us beginning in the first quarter of fiscal 2012. We do not expect
the adoption of this standard to have a material impact on our consolidated financial statements.
Note B: Property and Equipment
Property and equipment consists of the following:
Dollars in thousands Jan. 29, 2012 Jan. 30, 2011
Leasehold improvements $ 812,701 $ 809,239
Fixtures and equipment 597,453 572,155
Capitalized software 310,761 292,424
Land and buildings 137,943 126,061
Corporate systems projects in progress 172,924 56,602
Construction in progress 22,695 1,568
Total 1,934,477 1,858,049
Accumulated depreciation (1,199,805) (1,127,493)
Property and equipment, net $ 734,672 $ 730,556
1Corporate systems projects in progress as of January 29, 2012 includes approximately $48.2 million for the remaining
portion of our new inventory and order management system currently under development.
2Construction in progress is primarily comprised of leasehold improvements and furniture and fixtures related to new,
expanded or remodeled retail stores where construction had not been completed as of year-end.
Note C: Borrowing Arrangements
Long-term debt consists of the following:
Dollars in thousands Jan. 29, 2012 Jan. 30, 2011
Capital leases $ 349 $ 334
Memphis-based distribution facilities obligation 6,924 8,338
Total debt 7,273 8,672
Less current maturities (1,795) (1,542)
Total long-term debt $ 5,478 $ 7,130
Memphis-Based Distribution Facilities Obligation
As of January 29, 2012 and January 30, 2011, total debt of $6,924,000 and $8,338,000, respectively, consists
entirely of bond-related debt pertaining to the consolidation of one of our Memphis-based distribution facilities
due to its related party relationship and our obligation to renew the lease until the bonds are fully repaid (see
Note F).
The aggregate maturities of long-term debt at January 29, 2012 were as follows:
Dollars in thousands
Fiscal 2012 $ 1,795
Fiscal 2013 1,724
Fiscal 2014 1,786
Fiscal 2015 1,968
Total $ 7,273
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