Napa Auto Parts 2010 Annual Report Download - page 6

Table of Contents
sells automotive parts, functions as a trade association whose members in 2010 operated 64 distribution centers located throughout the
United States, 58 of which were owned and operated by the Company. NAPA develops marketing concepts and programs that may be
used by its members. It is not involved in the chain of distribution.
Among the automotive lines that each NAPA member purchases and distributes are certain lines designated, cataloged, advertised
and promoted as “NAPA” lines. The members are not required to purchase any specific quantity of parts so designated and may, and do,
purchase competitive lines from other supply sources.
The Company and the other NAPA members use the federally registered trademark NAPA® as part of the trade name of their
distribution centers and parts stores. The Company contributes to NAPA’s national advertising program, which is designed to increase
public recognition of the NAPA name and to promote NAPA product lines.
The Company is a party, together with other members of NAPA and NAPA itself, to a consent decree entered by the Federal District
Court in Detroit, Michigan, on May 4, 1954. The consent decree enjoins certain practices under the federal antitrust laws, including the
use of exclusive agreements with manufacturers of automotive parts, allocation or division of territories among several NAPA members,
fixing of prices or terms of sale for such parts among such members, and agreements to adhere to any uniform policy in selecting parts
customers or determining the number and location of, or arrangements with, auto parts customers.

The Industrial Parts Group is operated as Motion Industries, Inc. (“Motion”), a wholly-owned subsidiary of the Company
headquartered in Birmingham, Alabama. Motion distributes industrial replacement parts and related supplies such as bearings,
mechanical and electrical power transmission, industrial automation, hose, hydraulic and pneumatic components, industrial supplies
and material handling products to MRO (maintenance, repair and operation) and OEM (original equipment manufacturer) customers
throughout the United States, Canada and Mexico.
In Canada, industrial parts are distributed by Motion Industries (Canada), Inc. (“Motion Canada”) and BC Bearing Engineers
Limited. The Mexican market is served by Motion Mexico S de RL de CV (“Motion Mexico”). These organizations operate in the
Company’s North American structure.
In March 2010, the Company acquired BC Bearing Engineers Limited and its wholly-owned subsidiary, US Bearings & Things,
Inc., a long-established bearing and power transmission distributor. BC Bearing Engineers joined Motion Industries with 22 locations
throughout western Canada, and U.S. Bearings & Things with 21 branches in the western United States. In 2010, the Company also
acquired TechCan Services, a full-service asset repair, fabrication and engineering business located in Alberta, Canada.
As of December 31, 2010, the Industrial Parts Group served more than 140,000 customers in all types of industries located
throughout North America, including the food, forest products, primary metal, paper, mining, automotive, petrochemical and
pharmaceutical industries; as well as strategically targeted specialty industries such as power generation, wastewater treatment facilities,
wind power generation, solar power, government projects, pipelines, railroad, ports, and others. Motion services all manufacturing and
processing industries with access to a database of 4.3 million parts. Additionally, late in 2010, Motion Industries was awarded a
Government Services Administration (GSA) schedule becoming a supplier to provide government agencies in the U.S. access to more than
985,000 product and replacement parts.
This group provides customers with supply chain efficiencies, achieved through inventory management and logistical solutions
coupled with Motion Industries’ vast product knowledge and system capabilities. The Company meets the MRO demand of a large and
fragmented market with high levels of service in the areas of asset management, inventory and logistics management, product application
and utilization management processes. A highly developed supply chain with vendor partnerships and customer connectivity are
enhanced by Motion’s leading e-business capabilities, such as MiSupplierConnect, which provides integration between the Company’s
information technology network and suppliers’ systems, creating numerous benefits for both the supplier and customer.
5