Whole Foods 2009 Annual Report Download - page 62

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depreciation, related to certain land and buildings held for sale as of September 27, 2009 in the “Prepaid expenses and other
current assets” line item on the Consolidated Balance Sheets.
Fixed asset impairment charges were included in the following line items on the Consolidated Statements of Operations for
the fiscal years ended September 27, 2009, September 28, 2008 and September 30, 2007 (in thousands):
2009 2008 2007
Direct store expenses $ 14,514 $ 664 $ -
Relocation, store closure and lease termination costs 8,807 7,703 1,616
Total impairment of fixed assets $ 23,321 $ 8,367 $ 1,616
Total fixed asset impairment charges during fiscal year 2009 included approximately $4.4 million related to locations
included in the FTC settlement. The FTC settlement is discussed further in Note 4 to the consolidated financial statements,
“FTC Settlement Agreement.”
(6) Goodwill and Other Intangible Assets
Goodwill is reviewed for impairment annually at the beginning of the fourth fiscal quarter, or more frequently if impairment
indicators arise. We allocate goodwill to one reporting unit for goodwill impairment testing. During the first quarter of fiscal
year 2009, events or changes in circumstances occurred that indicated a reduction in the fair value of our reporting unit
below its carrying value, could have occurred, including declines in our comparable store sales and market capitalization and
downgrades to our corporate credit ratings. Accordingly, the Company performed an interim evaluation of goodwill for
impairment as of January 18, 2009 in addition to our annual evaluation. There were no impairments of goodwill during fiscal
years 2009, 2008 or 2007. During fiscal year 2009 the Company recorded goodwill adjustments of approximately $1.3
million that relate primarily to certain restructuring reserves and certain tax liabilities. During fiscal year 2007, we acquired
goodwill totaling approximately $546.0 million in connection with the acquisition of Wild Oats, including purchase price
adjustments during fiscal year 2008.
Indefinite-lived intangible assets are evaluated for impairment quarterly, or whenever events or changes in circumstances
indicate the carrying amount may not be recoverable. During fiscal year 2009 we impaired $0.4 million consisting of liquor
licenses related to locations included in the FTC settlement. There were no impairments of indefinite-lived intangible assets
during fiscal year 2008 or 2007.
Definite-lived intangible assets are amortized over the useful life of the related agreement. We acquired definite-lived
intangible assets totaling approximately $1.6 million and $1.7 million during fiscal years 2009 and 2008, respectively,
consisting primarily of acquired leasehold rights. The Company recorded impairment charges totaling approximately $0.8
million during fiscal year 2009 related to certain definite-lived intangible assets. Asset impairment charges of approximately
$0.5 million were related to the FTC settlement and included in the “Relocation, store closure, and lease termination costs”
line item, while approximately $0.3 million related to certain favorable lease assets was included in the “Direct store
expenses” line item on the Consolidated Statements of Operations. During fiscal year 2008, impairment charges totaling
approximately $0.8 million related to certain favorable lease assets were included in the “Direct store expenses” line item on
the Consolidated Statements of Operations. There were no impairment charges to definite-lived intangible assets in fiscal
year 2007. Amortization associated with intangible assets totaled approximately $7.9 million, $12.9 million, and $2.7 million
during fiscal years 2009, 2008 and 2007, respectively.
The components of intangible assets were as follows (in thousands):
2009
2008
Gross carrying Accumulated Gross carrying Accumulated
amount amortization amount amortization
Indefinite-lived contract-based $ 1,566 $ - $ 1,966 $ -
Definite-lived contract-based 96,515 (25,105) 95,424 (18,995)
Definite-lived marketing-related and other 225 (166) 8,319 (8,215)
$ 98,306 $ (25,271) $ 105,709 $ (27,210)
Amortization associated with the net carrying amount of intangible assets is estimated to be approximately $6.1 million in
fiscal year 2010, $6.0 million in fiscal year 2011, $6.0 million in fiscal year 2012, $5.1 million in fiscal year 2013 and $5.0
million in fiscal year 2014.