Circuit City 2004 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2004 Circuit City annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

Intangible and other assets 12,031 13,630
Other 1,032
Valuation allowances (10,643) (12,953)
------- -------
Total non-current 18,645 15,673
------ ------
TOTAL $28,239 $26,379
======= =======
Third Party Related Party
Capitalized Operating Operating
Leases Leases Lease Total
------ ------ ----- -----
2005 $403 $8,170 $612 $9,185
2006 388 7,597 612 8,597
2007 299 6,960 612 7,871
2008 125 5,691 5,816
2009 5,326 5,326
2010-2014 6,924 6,924
--- ----- --- -----
Total minimum lease payments 1,215 40,668 $1,836 43,719
Less: sublease rental income 1,741 1,741
----- -----
Lease obligation net of subleases $38,927 $41,978
======= =======
59
Less amount representing interest 30
The Company has not provided for federal income taxes applicable to the undistributed earnings of its foreign
subsidiaries of $11.1 million as of December 31, 2004, since these earnings are indefinitely reinvested. The
Company has foreign net operating loss carryforwards which expire from 2005 through 2019 except for
carryforwards in the United Kingdom and the Netherlands, which have no expiration. In accordance with SFAS
109 "Accounting for Income Taxes", the Company records these benefits as assets to the extent that utilization of
such assets is more likely than not; otherwise, a valuation allowance has been recorded. The Company has also
provided valuation allowances for certain state net operating loss carryforwards where it is not likely they will be
realized. During the year ended December 31, 2004 valuation allowances increased $1,373,000 as a result of
additional losses incurred and decreased $3,968,000 for carryforward losses and tax credits utilized for which
valuation allowances had been previously provided.
The Company's federal income tax returns for fiscal years 2000 through 2002 are currently being audited by the
Internal Revenue Service. Although proposed adjustments have not been received for these years and the
outcome of tax audits is always uncertain, management believes the ultimate outcome of the audit will not have a
material adverse impact on the Company's consolidated financial statements.
11.
COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
Leases
- The Company is obligated under operating lease agreements for the rental of certain office and
warehouse facilities and equipment which expire at various dates through February 2014. The Company currently
leases one facility in New York from an entity owned by the Company's three principal shareholders and senior
executive officers (see Note 4).
At December 31, 2004, the future minimum annual lease payments for related and third-party leases were as
follows (in thousands):