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Property and Equipment
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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| Property and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment |
(4) Property and Equipment
Property and equipment consisted of the following as of December 31, 2011 and 2010(in thousands):
During the fourth quarter of 2011, we determined that four building leases that we executed in connection with the acquisition of WBI were capital leases. We incorrectly treated these leases as operating leases in our financial statements as of and for the periods ended June 30, 2011 and September 30, 2011. At inception of the leases, we should have recognized assets with offsetting capital lease obligations aggregating $6.7 million, representing the fair value of the buildings at that time per a third party appraisal. At June 30, 2011 and September 30, 2011, total assets and liabilities were understated by $6.7 million and $6.6 million, respectively. We have concluded that this error was not material to the affected financial statements. Additionally, accounting for these leases as operating leases resulted in us overstating rent expense and understating depreciation expense and interest expense in the interim periods. The net impact of this misstatement was inconsequential to the consolidated statements of income and cash flows of the Company for any period in 2011. The error was corrected in the fourth quarter of 2011 Depreciation on the capital leases is included in depreciation expense for the year ended December 31, 2011.
Depreciation and amortization expense for property and equipment for the years ended December 31, 2011, 2010 and 2009 was approximately $6.9 million, $6.4 million and $5.6 million, respectively.
In November 2009, we signed an agreement to lease a new building that will serve as our new headquarters beginning in May 2012. Certain terms in the lease agreement resulted in the capitalization of construction costs due to specific accounting regulations. We recorded an asset and corresponding long-term liability of $26.4 million and $19.2 million, as of December 31, 2011 and 2010, respectively, in connection with this lease, which is included in the 2011 and 2010 amounts for “Buildings and building improvements” in the table above (see Note 11).
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