Circuit City 2010 Annual Report Download - page 53

Annual rent expense aggregated approximately $31.1 million, $27.1 million and $25.0 million in 2010, 2009 and 2008, respectively.
Included in rent expense was $0.9 million, $0.9 million and $0.9 million in 2010, 2009 and 2008, respectively, to related parties. Rent
expense is net of sublease income of $0.2 million, $0.1 million and $0.4 million for 2010, 2009 and 2008, respectively.
Other Matters
The Company and its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including commercial,
employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course
of business. In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning
intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the
Company sells. The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies
in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property
liabilities. These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended. Although
the Company does not expect, based on currently available information, that the outcome in any of these matters, individually or
collectively, will have a material adverse effect on its financial condition or results of operations, the ultimate outcome is inherently
unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’
s operating
results or cash flows in a particular period. Additionally, our Audit Committee, with the assistance of independent counsel, is conducting
an independent investigation into certain anonymous whistleblower allegations concerning our Miami, Florida operations. While the
investigation is not yet complete, it does not appear that there is any material impact on our reported consolidated financial statements.
The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and
records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable.
The Company operates and is internally managed in two operating segments, Technology Products and Industrial Products. The
Company’s chief operating decision-maker is the Company’
s Chief Executive Officer. The Company evaluates segment performance
based on income from operations before net interest, foreign exchange gains and losses, restructuring and other charges and income taxes.
Corporate costs not identified with the disclosed segments and restructuring and other charges are grouped as “
Corporate and other
expenses.” The chief operating decision-
maker reviews assets and makes significant capital expenditure decisions for the Company on a
consolidated basis only. The accounting policies of the segments are the same as those of the Company described in Note 1.
Financial information relating to the Company’s operations by reportable segment was as follows (in thousands):
11.
SEGMENT AND RELATED INFORMATION
Year Ended December 31,
2010
2009
2008
Net Sales:
Technology Products
$
3,337,635
$
2,966,657
$
2,794,948
Industrial Products
250,036
196,129
237,027
Corporate and other
2,318
3,209
986
Consolidated
$
3,589,989
$
3,165,995
$
3,032,961
Depreciation and Amortization Expense:
Technology Products
$
12,117
$
10,112
$
8,197
Industrial Products
1,556
1,476
986
Corporate and other
807
765
1,204
Consolidated
$
14,480
$
12,353
$
10,387
Operating Income (Loss):
Technology Products
$
64,443
$
88,173
$
97,747
Industrial Products
23,814
15,415
24,621
Corporate and other expenses
(19,512
)
(29,959
)
(38,756
)
Consolidated
$
68,745
$
73,629
$
83,612
Total Assets
Technology Products
$
570,234
$
521,900
$
400,340
Industrial Products
136,909
103,370
98,670
Corporate and other
186,957
191,631
203,443
Consolidated
$
894,100
$
816,901
$
702,453
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