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66 2012 BROWN SHOE COMPANY, INC. FORM 10-K
The Company’s foreign operations primarily consist of wholesale operations in the Far East and retail operations in Canada,
China and Guam. The Far East operations include the manufacture of footwear at facilities owned by the Company and
first-cost transactions, where footwear is sold at foreign ports to customers who then import the footwear into the United
States and other countries.
A summary of the Company’s net sales and long-lived assets by geographic area were as follows:
($ thousands) 2012 2011 2010
Net Sales
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,295,739 $ 2,259,907 $ 2,179,658
Far East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233,843 215,263 217,346
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,483 107,654 107,087
Total net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,598,065 $ 2,582,824 $ 2,504,091
Long-Lived Assets
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 381,459 $ 396,412 $ 331,092
Far East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,478 10,632 3,749
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,824 5,223 4,888
Latin America, Europe and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 71 33
Total long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 398,831 $ 412,338 $ 339,762
Long-lived assets consisted primarily of property and equipment, intangible assets, prepaid pension costs, goodwill and
other noncurrent assets.
8. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
($ thousands) February 2, 2013 January 28, 2012
Land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,774 $ 42,049
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,635 170,824
Technology equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,448 47,371
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,871 64,085
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,622 107,320
Construction in progress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,542 5,034
Property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,892 436,683
Allowances for depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (295,803) (305,212)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146,089 $ 131,471
Useful lives of property and equipment are as follows:
Buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15-30 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20 years
Technology equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 years
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-20 years
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 years
The Company recorded charges for impairment, primarily for leasehold improvements and furniture and fixtures in the
Company’s retail stores, of $4.1 million, $1.9 million and $2.8 million in 2012, 2011 and 2010, respectively. Of the $4.1 million
impairment charges in 2012, $3.6 million is included in restructuring and other special charges, net, and $0.5 million is included
in selling and administrative expenses. All of the charges in 2011 and 2010 are included in selling and administrative expenses.
Fair value was based on estimated future cash flows to be generated by retail stores, discounted at a market rate of interest.
9. GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets were as follows:
($ thousands) February 2, 2013 January 28, 2012
Intangible Assets
Famous Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,800 $ 2,800
Wholesale Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,003 155,003
Specialty Retail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 200
Total intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,003 158,003
Accumulated amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,979) (57,017)
Total intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,024 100,986
Goodwill
Wholesale Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,604 39,604
Total Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,604 39,604
Goodwill and intangible assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 132,628 $ 140,590