Office Depot 2010 Annual Report Download - page 47

Other asset impairments
In addition to the exit costs discussed above, during 2008, we recognized other material charges because of the
downturn in our business. Those charges include goodwill and trade name impairment charges, as well as
material asset impairments relating to stores and charges to impair amortizing customer relationship intangible
assets.
We perform our annual review of goodwill and other non-amortizing intangible assets during the fourth quarter.
As a result of this review for 2008, we recorded non-cash charges of $1,213 million to write down goodwill and
$57 million related to the impairment of trade names. Our recoverability assessment of these non-amortizing
intangible assets considered company-specific projections, assumptions about market participant views and the
company’s overall market capitalization around the testing period.
At least annually, we review our stores for possible impairment. Our impairment analysis is based on a cash flow
model at the individual store level, beginning with recent store performance and forecasting the anticipated future
results based on chain-wide and individual store initiatives. If the anticipated undiscounted cash flows of a store
cannot support the carrying amount of the store’s assets, an impairment charge to bring the assets to estimated
fair value is recorded to operations as a component of store and warehouse operating and selling expenses.
Because of the downturn in our business in late 2008, we recorded store asset impairment charges totaling
approximately $98 million in 2008. Store impairment charges totaled approximately $2 million and $3 million in
2010 and 2009, respectively.
We review our amortizing intangible assets at least annually to determine whether events and circumstances
warrant a revision to the remaining period of amortization. In developing forecasts for our assessment of
goodwill in 2008, we concluded that the value of certain amortizing intangible assets was impaired. Accordingly,
during 2008, we incurred a charge of approximately $11 million to fully impair the customer list intangible assets
in our International Division.
NOTE E — PROPERTY AND EQUIPMENT
Property and equipment consisted of:
(Dollars in thousands)
December 25,
2010
December 26,
2009
Land ................................................ $ 36,447 $ 38,456
Buildings ............................................. 340,748 354,630
Leasehold improvements ................................ 994,320 997,919
Furniture, fixtures and equipment ......................... 1,645,750 1,703,691
3,017,265 3,094,696
Less accumulated depreciation ............................ (1,860,252) (1,817,041)
Total ................................................ $ 1,157,013 $ 1,277,655
The above table of property and equipment includes assets held under capital leases as follows:
(Dollars in thousands)
December 25,
2010
December 26,
2009
Buildings ............................................... $267,471 $269,232
Furniture, fixtures and equipment ........................... 49,969 43,443
317,440 312,675
Less accumulated depreciation .............................. (92,695) (78,143)
Total .................................................. $224,745 $234,532
46