Circuit City 2009 Annual Report Download - page 51

Table of Contents
will pay the Sellers a royalty based on a percentage of sales over a thirty month period dependent upon levels of sales achieved from the
acquired assets, with a minimum payment of $3.0 million. The Company capitalized legal and other fees incurred of approximately $0.5
million. The acquisition has been accounted for as an asset purchase rather than a business combination as the acquisition does not meet the
definition of a business under applicable accounting principles.
The Company has completed a purchase price allocation with respect to the Circuit City asset acquisition and recorded assets of
approximately $5.0 million for Trademarks and Trade Names, $7.0 million for Domain Names and $2.5 million for Client Lists. These
assets were recorded in the Company’s Technology Products business segment. The Company expects to amortize its Client Lists over a
weighted average 5 year period. All other assets have indefinite lives. The gross carrying amount and accumulated amortization for
amortizable intangible assets related to this acquisition at December 31, 2009 and December 31, 2008 was as follows (in thousands):
On January 5, 2008, the Company, through various subsidiaries, entered into an asset purchase agreement with CompUSA Inc., a Delaware
corporation. Pursuant to the Purchase Agreement, the Company acquired certain assets and liabilities related to the e-commerce business of
CompUSA Inc., certain intellectual property rights owned by CompUSA, and the E-
Commerce Business for $18.9 million in cash. Pursuant
to the Purchase Agreement, the Company also acquired sixteen retail leases from CompUSA Inc. and certain fixtures located at these
locations. This acquisition accelerated the Company’s planned expansion into the retail market place in North America and Puerto Rico.
The Company has recorded assets of approximately $17.0 million for Trademarks and Trade Names, $8.0 million for Domain Names, $3.4
million for Retail Store Leases, $0.4 million for Client Lists, $0.9 million for fixed assets and $0.9 million for Goodwill. These assets were
recorded in the Company’s Technology Products business segment. The Company expects to amortize its Retail Store Leases over the
remaining weighted average life of the leases, 12.9 years, the Client Lists over a weighted average 5 year period and depreciate its fixed
assets over a similar period. All other intangible assets are indefinite lived. All of the Company’s goodwill at December 31, 2009 is
deductible for tax purposes on a straight line basis over 15 years. The gross carrying amount and accumulated amortization for amortizable
intangible assets at December 31, 2009 was as follows (in thousands):
The aggregate amortization expense for material acquisitions was approximately $0.9 million in 2009. The estimated amortization for
material acquisitions for future years ending December 31 is as follows (in thousands):
3.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net consist of the following (in thousands):
48
Gross Carrying
Amount
Accumulated
Amortization
Client Lists
$
2,541
$
370
2009 2008
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Retail store leases
$
3,410
$
484
$
3,410
$
220
Client lists
400
323
400
$
103
$
3,810
$
807
$
3,810
$
323
2010
823
2011
781
2012
771
2013
765
2014 and after
2,034
Total
$
5,174
December 31,
2009 2008
Land and buildings
$
28,458
$
26,556
Furniture and fixtures, office, computer and other equipment and software
123,876
92,137
Leasehold improvements
19,212
14,839
171,546
133,532
Less accumulated depreciation and amortization
105,948
85,067
Property, plant and equipment, net
$
65,598
$
48,465