Segments and Geographic Information

12 Months Ended

Jan. 28, 2012

Segments and Geographic Information

Segments and Geographic Information

Note 13.  Segments and Geographic Information

We consider our Michaels - U.S., Michaels — Canada, and Aaron Brothers operations to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting. We determined that our operating segments have similar economic characteristics and meet the aggregation criteria set forth in ASC 280. Therefore, we combine those operating segments into one reporting segment.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in Note 1.

Our sales and assets by country are as follows:

	Fiscal Year
	2011		2010		2009
			(Restated)		(Restated)
	(In millions)
Net Sales:
United States	$	3,825	$	3,673	$	3,572
Canada	385		358		316
Consolidated Total	$	4,210	$	4,031	$	3,888
Total Assets:
United States	$	1,713	$	1,699	$	1,647
Canada	109		81		75
Consolidated Total	$	1,822	$	1,780	$	1,722

We present assets based on their physical, geographic location. Certain assets located in the U.S. are also used to support our Canadian operations, but we do not allocate these assets to Canada.

Our chief operating decision makers evaluate historical operating performance, plan and forecast future periods’ operating performance based on earnings before interest, income taxes, depreciation and amortization (“EBITDA”). We believe EBITDA represents the financial measure that more closely reflects the operating effectiveness of factors over which management has control. As such, an element of base incentive compensation targets for certain management personnel are based on EBITDA. A reconciliation of EBITDA to income before income taxes is presented below.

	Fiscal Year
	2011		2010		2009
Income before income taxes	$	288	$	149	$	157
Interest expense	254		276		257
Loss on early extinguishment of debt	18		53		—
Depreciation and amortization	101		103		116
EBITDA	$	661	$	581	$	530