Harris Teeter 2012 Annual Report Download - page 37

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Stock Options and Stock Awards
The Company uses fair-value accounting for all share-based payments to employees. Compensation expense for stock
awards are based on the grant date fair value and are expensed ratably over their vesting period, resulting in more expense in
the early years. Income tax benefits attributable to stock options exercised are credited to capital stock.
Other Comprehensive Income
Other comprehensive income refers to revenues, expenses, gains and losses that are not included in net earnings but rather
are recorded directly in shareholders’ equity. The components of accumulated other comprehensive loss, net of taxes as of
October 2, 2012, October 2, 2011 and October 3, 2010 consisted of the following (in thousands):
2012 2011 2010
Accumulated unrecognized losses for minimum pension liabilities $113,584 $122,736 $104,992
Accumulated unrecognized losses for postemployment liabilities 158 111 233
Accumulated unrecognized (gains) losses on cash flow hedges (79) 523 1,010
Total accumulated other comprehensive loss, net of taxes $113,663 $123,370 $106,235
Cash Flows
A portion of the discontinued operations are denominated in currencies other than the U.S. dollar. This created an exposure
to foreign currency exchange rates. The impact of changes in the relationship of other currencies to the U.S. dollar has historically
not been significant.
Reclassifications
To conform to classifications used in the current year, the financial statements for the prior year reflect certain
reclassifications.
2. INVENTORIES
Inventories are valued at the lower of cost or market with the cost of a substantial portion of inventories being determined
using the last-in, first-out (LIFO) method. The LIFO cost of such inventories was $42,440,000 and $39,415,000 less than the
first-in, first-out (FIFO) cost method as of October 2, 2012 and October 2, 2011, respectively. Limited categories of inventories
that are valued on the FIFO cost method totaled $49,302,000 and $47,152,000 at the end of fiscal 2012 and fiscal 2011,
respectively.
The following table summarizes the components of inventories as of October 2, 2012 and October 2, 2011 (in thousands):
2012 2011
Finished goods $301,102 $283,699
Raw materials 4,004 3,438
Total inventories $305,106 $287,137
HARRIS TEETER SUPERMARKETS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
33