Famous Footwear 2012 Annual Report Download - page 74

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72 2012 BROWN SHOE COMPANY, INC. FORM 10-K
charges of $4.1 million in 2012. Of the $4.1 million impairment charges, $1.6 million related to the Famous Footwear
segment, $1.4 million related to the Wholesale Operations segment and $1.1 million related to the Specialty Retail segment.
Of the $1.6 million related to the Famous Footwear segment, $1.3 million is included in restructuring and other special
charges, net, and $0.3 million is included in selling and administrative expenses. The $1.4 million related to the Wholesale
Operations segment is included in restructuring and other special charges, net. Of the $1.1 million related to the Specialty
Retail segment, $0.9 million is included in restructuring and other special charges, net, and $0.2 million is included in
selling and administrative expenses.
The Company recognized impairment charges in selling and administrative expenses, primarily related to underperforming
retail stores, of $1.9 million and $2.8 million during 2011 and 2010, respectively. Of the $1.9 million in 2011, $1.4 million related
to the Famous Footwear segment and $0.5 million related to the Specialty Retail segment. Of the $2.8 million in 2010,
$1.9 million related to the Famous Footwear segment and $0.9 million related to the Specialty Retail segment.
The Company performed its annual impairment tests of indefinite lived intangible assets, which involves estimating the fair
value using significant unobservable inputs (Level 3). As a result of its annual impairment testing, the Company did not
record any impairment charges during 2012 and 2011 related to intangible assets.
The Company performed its annual impairment test of goodwill, which involves estimating the fair value of its reporting
units using significant unobservable inputs (Level 3). The 2012 impairment test, performed as of the first day of the
Company’s fourth fiscal quarter, resulted in no impairment charges. See Note 1 and Note 9 for additional information related
to the impairment test of goodwill.
Fair Value of the Company’s Other Financial Instruments
The fair values of cash and cash equivalents (excluding money market funds discussed above), receivables, trade accounts
payable and borrowing under the revolving credit agreement approximate their carrying values due to the short-term nature of
these instruments.
The carrying amounts and fair values of the Company’s other financial instruments subject to fair value disclosures are as follows:
February 2, 2013 January 28, 2012
Carrying Carrying
($ thousands) Amount Fair Value Amount Fair Value
Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $198,823 $208,000 $198,633 $190,000
The fair value of the Company’s Senior Notes was based upon quoted prices in an inactive market as of the end of the
respective periods (Level 2).
14. COMMON STOCK REPURCHASES
Stock Repurchase Program
In January 2008, the Board of Directors approved a stock repurchase program (“2008 Program”) authorizing the repurchase
of up to 2.5 million shares of the Company’s outstanding common stock. During 2011, the Company repurchased 2.5 million
shares of its outstanding common stock for $25.5 million.
On August 25, 2011, the Board of Directors approved a stock repurchase program (“2011 Program”) authorizing the repurchase
of up to 2.5 million additional shares of the Company’s outstanding common stock. The Company can utilize the repurchase
program to repurchase shares on the open market or in private transactions from time to time, depending on market
conditions. The repurchase program does not have an expiration date. Repurchases of common stock are limited under the
Company’s debt agreements. There have been no shares repurchased under the 2011 Program.
Repurchases Related to Employee Share-based Awards
During 2012 and 2011, 298,636 shares and 37,695 shares, respectively, were tendered by employees related to certain share-
based awards. These shares were tendered in satisfaction of the exercise price of stock options and/or to satisfy minimum
tax withholding amounts for non-qualified stock options, restricted stock and stock performance awards. Accordingly,
these share repurchases are not considered a part of the Company’s publicly announced stock repurchase programs.
15. SHARE-BASED PLANS
The Company has share-based incentive compensation plans under which certain ocers, employees and members of the
Board of Directors are participants and may be granted stock options, restricted stock and stock performance awards.