Staples 2012 Annual Report Download - page 127

Download and view the complete annual report

Please find page 127 of the 2012 Staples annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

C-15
STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
The changes in the carrying amounts of goodwill during fiscal 2011 and 2012 are as follows (in thousands):
Goodwill
at January 29, 2011 2011 Net Additions 2011 Adjustments
Foreign
Exchange
Fluctuations Goodwill
at January 28, 2012
North American
Commercial $ 1,245,362 $ 1,776 $ (2,104) $ — $ 1,245,034
North American Stores &
Online 630,435 — (560)(321) 629,554
International Operations 2,197,365 — (3,515)(86,308) 2,107,542
Consolidated $ 4,073,162 $ 1,776 $ (6,179)$ (86,629) $ 3,982,130
Goodwill
at January 28, 2012 Impairment
Charges 2012 Adjustments
Foreign
Exchange
Fluctuations Goodwill
at February 2, 2013
North American
Commercial $ 1,245,034 $ — $ — $ — $ 1,245,034
North American Stores &
Online 629,554 — (3,103) 222 626,673
International Operations 2,107,542 (771,493)(414) 13,820 1,349,455
Consolidated $ 3,982,130 $ (771,493)$ (3,517) $ 14,042 $ 3,221,162
There were no accumulated goodwill impairment charges as of the beginning of 2012.
Long-Lived Assets
Prior to performing the interim goodwill impairment tests for Europe Retail and Europe Catalog, the Company tested
long-lived assets to be held and used by these reporting units for impairment on an undiscounted cash flow basis. Based on the
results of this testing, the Company recorded a $4.8 million impairment charge related to the ongoing operations of Europe Retail
and determined that the long-lived assets associated with the ongoing operations of Europe Catalog were not impaired. The
impairment charge primarily related to leasehold improvements at retail stores and was based on estimates of the fair values of
the related assets which were derived using a DCF valuation analysis, incorporating similar assumptions and estimates as discussed
above.
During 2012, the Company closed 46 retail stores in Europe and 15 retail stores in the United States and consolidated
several sub-scale delivery businesses in Europe (see Note B - Restructuring Charges). As a result of these planned actions, the
Company recorded long-lived asset impairment charges of $29.6 million and $5.1 million related to the Company's International
Operations and North American Stores and Online segments, respectively, primarily relating to leasehold improvements and
company-owned facilities.
See Note I - Fair Value Measurements for disclosures related to fair value measurements incorporated in the calculations
of the goodwill and long-lived asset impairment charges.
Also during 2012, the Company rebranded its Australian business, a component of the Company's International Operations
segment, pursuant to which the Company accelerated the transition from the legacy Corporate Express tradename to the exclusive
use of the Staples brand name. As a result, the Company accelerated the remaining amortization totaling $20.0 million in 2012.
This amount was recorded in Amortization of intangibles in the consolidated statement of income. Prior to the decision to rebrand
this business, the carrying value of the tradename was scheduled to be amortized through the end of the Company's fiscal year
2014.