Radio Shack 2009 Annual Report Download - page 34

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27
The decrease in other SG&A expense was primarily due to a $12.1 million non-cash charge recorded in
connection with our amended headquarters lease in 2008. See below for further discussion.
Amended Corporate Headquarters Lease: In June 2008, Tarrant County College District (“TCC”)
announced that it had purchased from Kan Am Grund Kapitalanlagegesellschaft mbH (“Kan Am”) the
buildings and real property comprising our corporate headquarters in Fort Worth, Texas, which we had
previously sold to Kan Am and then leased for a period of 20 years in a sale and lease-back transaction
in December 2005.
In connection with the above sale to TCC, we entered into an agreement with TCC to convey certain
personal property located in the corporate headquarters and certain real property located in close
proximity to the corporate headquarters in exchange for an amended and restated lease to occupy a
reduced portion of the corporate headquarters for a shorter time period. The amended and restated lease
agreement provides for us to occupy approximately 40% of the corporate headquarters complex for a
primary term of three years with no rental payments required during the term. The agreement also
provides for one two-year option to renew approximately half of the space at market-based rents.
This agreement resulted in a non-cash net charge to other SG&A expense of $12.1 million for the second
quarter of 2008. This net amount consisted of a net loss of $2.8 million related to the assets conveyed to
TCC and a $9.3 million charge to reduce a receivable for economic development incentives associated
with the corporate headquarters to its net realizable value.
Depreciation and Amortization
The table below gives a summary of our total depreciation and amortization by segment.
Year Ended December 31,
(In millions) 2009 2008
2007
U.S. RadioShack company-operated stores $ 45.8 $ 52.9 $ 53.4
Kiosks 3.2 5.8 6.3
Other 5.8 1.8 1.7
Unallocated 38.1 38.6 51.3
Total depreciation and amortization $ 92.9 $ 99.1 $ 112.7
The table below provides an analysis of total depreciation and amortization.
Year Ended December 31,
(In millions) 2009 2008
2007
Depreciation and amortization expense $ 83.7 $ 87.9 $ 102.7
Depreciation and amortization included in
cost of products sold
9.2
11.2
10.0
Total depreciation and amortization $ 92.9 $ 99.1 $ 112.7
Total depreciation and amortization for 2009 declined $6.2 million or 6.3%. This decrease was primarily
due to reduced capital expenditures in recent years when compared with prior years.
Impairment of Long-Lived Assets
Impairment of long-lived assets was $1.5 million and $2.8 million for 2009 and 2008, respectively. These
amounts were related primarily to underperforming U.S. RadioShack company-operated stores and kiosk
locations.