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Long-Lived Asset Impairment Charges
12 Months Ended
Dec. 29, 2012
Asset Impairment Charges [Text Block]

(5)           Long-Lived Asset Impairment Charges


                Impairment charges of $13.1 million, $0.6 million and $0.9 million were recorded on long-lived assets in fiscal 2012, 2011 and 2010, respectively.  The impairment charges in 2012 primarily related to our Food Distribution facility in Westville, Indiana and our Military distribution center in Junction City, Kansas.  A significant portion of the impairment charge for the Westville, Indiana facility related to the value assigned to customer relationships when this facility was acquired in 2005. 


                The impairment charges in fiscal 2012 related to the Westville and Junction City distribution centers were recorded as a result of annual testing of long-lived and intangible assets for impairment.  In the first step of our analysis, the undiscounted cash flows generated by the related asset groups (the Westville and Junction City distribution centers, individually, inclusive of the value of intangible assets allocated to the Westville distribution center) were compared to the book value of the asset groups.  In the case of both asset groups, the cash flows did not exceed the book value, necessitating the second step of the recoverability test.


                In the second step of the recoverability test, the discounted cash flows attributable to each asset group were compared to the book value of the respective asset group.  In both cases, the discounted cash flows did not exceed the book value of the asset group.  We utilized recent appraisals of the land and buildings at the Westville and Junction City distribution centers to determine the fair value of the asset groups.  As a result of our analysis, we recorded impairment charges of $11.3 million and $1.8 million to write down the value of long-lived and intangible assets belonging to the Westville and Junction City facilities, respectively.  These impairment charges are included in the Consolidated Statements of Income (Loss) under selling, general and administrative expenses.


                The impairment charges in prior years related to three retail stores in 2011 and four retail stores in 2010 that were impaired as a result of increased competition within the respective market areas.  The estimated undiscounted cash flows related to these facilities indicated that the carrying value of the assets may not be recoverable based on current expectations, therefore these assets were written down.