CompUSA 2008 Annual Report Download - page 82

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annual periods beginning after December 15, 2008 and will be applied prospectively for all business combinations entered
into after the date of adoption. The impact of SFAS No. 141R will depend on the nature and terms of any future business
combinations, if any.
In December 2007, the FASB issued SFAS No. 160, “Accounting and Reporting of Non-controlling Interest”. The objective
of SFAS No. 160 is to improve the relevance, comparability and transparency of the financial information that reporting
entities provide related to non-controlling interests, sometimes referred to as minority interests. SFAS No. 160 requires,
among other things, that non-controlling interests be shown separately in the consolidated entity’ s equity section of the
balance sheet. SFAS No. 160 also establishes accounting and reporting standards for ownership interest in subsidiaries held
by parties other than the parent, for presentation of amounts of consolidated net income attributable to the parent and the
non-controlling interest, for consistency in accounting for changes in a parent’ s ownership interest when the parent retains a
controlling interest, for the valuation of retained non-controlling equity interests when a subsidiary is deconsolidated and for
providing sufficient disclosure that identifies and distinguishes the interests of the parent and the interests of the non-
controlling owners. SFAS No. 160 is effective beginning January 1, 2009. The Company does not expect the adoption of
SFAS No.160 to have a material impact on its consolidated financial statements.
2. ACQUISITION
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. The Company completed its acquisition of the E-Commerce Business on
January 10, 2008. Pursuant to the Purchase Agreement, the Company also acquired sixteen retail leases from CompUSA
Inc. and certain fixtures located at these locations. The closing of the acquisition of each lease was subject to the receipt of
the consent of the landlord, if required, under the terms of a lease. During February and March 2008 the Company
completed the acquisition of these 16 store leases and fixtures for an aggregate purchase price of approximately $11.7
million. This acquisition accelerated the Company’ s planned expansion into the retail market place in North America and
Puerto Rico. A final purchase price allocation based on the fair market value of acquired assets has been completed and 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 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, 2008 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, 2008 was as follows (in
thousands):
Gross Carrying
Amount
Accumulated
Amortization
Retail store leases $3,410 $220
Client lists 400 103
$3,810 $323
The aggregate amortization expense was approximately $0.3 million in 2008. The estimated amortization for
future years ending December 31 is as follows (in thousands):
2009 $484
2010 322
2011 278
2012 269
2013 264
Thereafter 1,870
Total $3,487