Cabela's 2011 Annual Report Download - page 101

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91
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
15. IMPAIRMENT AND RESTRUCTURING CHARGES
Impairment and restructuring charges consisted of the following for the years ended:
2011 2010 2009
Impairment losses relating to:
Property, equipment, and other assets $ 154 $ 3,792 $ 43,721
Land held for sale 4,617 1,834 16,046
Accumulated amortization of deferred grant income (1) 6,538 — 2,099
Goodwill and intangible assets — — 460
11,309 5,626 62,326
Restructuring charges for:
Severance and related benefits 935 — 4,468
Tot al $ 12,244 $ 5,626 $ 66,794
(1) In 2011 and 2009, deferred grant income was reduced by $24,314 and $8,032, respectively, due to other-
than-temporary impairment losses of the same amounts that were recognized on the Company’s economic
development bonds. These reductions in deferred grant income resulted in increases in depreciation
expense of $6,538 and $2,099 in 2011 and 2009, respectively, which have been included in impairment and
restructuring charges in the consolidated statements of income.
Long-lived assets of the Company are evaluated for possible impairment whenever changes in circumstances
may indicate that the carrying value of an asset may not be recoverable. In 2011, 2010, and 2009, the Company
evaluated the recoverability of property (including existing store locations and future retail store sites), equipment,
land held for sale, economic development bonds, goodwill, and other intangible assets. In accordance with
accounting guidance on asset valuations, the Company recognized impairment losses totaling $11,309, $5,626, and
$62,326 in 2011, 2010, and 2009, respectively. Trends and management projections could change undiscounted cash
flows in future periods which could trigger possible future write downs.
In 2011, 2010, and 2009, the Company evaluated the recovery of certain economic development bonds. In
2011 and 2009, the Company determined that the fair value of the bonds was below carrying value, with the decline
in fair value deemed to be other than temporary, which resulted in fair value adjustments totaling $24,314 and
$8,032 at the end of 2011 and 2009, respectively. These fair value adjustments totaling $24,314 and $8,032 reduced
the carrying value of the economic development bond portfolio at the end of 2011 and 2009, respectively, and
resulted in corresponding reductions in deferred grant income. These reductions in deferred grant income resulted
in increases in depreciation expense of $6,538 and $2,099 in 2011 and 2009, respectively, which have been included
in impairment and restructuring charges in the consolidated statements of income. At the end of 2010, none of the
bonds with a fair value below carrying value were deemed to have other than a temporary impairment.
The Company incurred charges of $935 in 2011 for severance and related benefits. In 2009, the Company
incurred charges totaling $4,468 for severance and related benefits primarily from outplacement costs and a
voluntary retirement plan implemented in February 2009. All impairment and restructuring charges were recorded
to the Corporate Overhead and Other segment.