Pep Boys 2006 Annual Report Download - page 68

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29
The requirement to recognize the funded status of a benefit plan and the additional disclosure
requirements are effective for fiscal years ended after December 15, 2006. Accordingly, the Company
adopted SFAS No.158 for its fiscal year ended February 3, 2007. The incremental effect from applying
SFAS No. 158 on individual line items in the Company’s Consolidated Balance Sheets at February 3, 2007
follows:
Before After
Application of Application of
SFAS No. 158 Adjustments SFAS No. 158
Deferred Income Taxes $ 22,996 $ 1,832 $ 24,828
Other Long Term Assets ..................... 69,635 (1,651) 67,984
Total Assets................................. 1,767,018 181 1,767,199
Accrued Expenses ........................... 292,280 — 292,280
Other Long Term Liabilities .................. 56,998 3,235 60,233
Total Liabilities ............................. 1,196,209 3,235 1,199,444
Accumulated Other Comprehensive Loss ....... (6,326) (3,054) (9,380)
Total Stockholders’ Equity.................... 570,809 (3,054) 567,755
Total Liabilities and Stockholders’ Equity ...... 1,767,018 181 1,767,199
The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal
year-end is effective for fiscal years ending after December 15, 2008. The Company’s current measurement
date is December 31. The Company will not elect early adoption of these additional SFAS No.158
requirements and will adopt these requirements for the fiscal year ended January 31, 2009.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities.” SFAS No. 159 permits entities to choose to measure many financial instruments and
certain other items at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15,
2007. We are currently evaluating the impact of SFAS No. 159.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has market rate exposure in its financial instruments primarily due to changes in
interest rates.
Variable Rate Debt
Pursuant to terms of its revolving credit agreement, changes in the lender’s LIBOR could affect the
rates of which the Company could borrow funds thereunder. At February 3, 2007, the Company had
outstanding borrowings of $17,568,000 against the revolving credit agreement. Additionally, the Company
has a $320,000,000 Senior Secured Term Loan facility that bears interest at three month LIBOR plus
2.75%, which was negotiated to LIBOR plus 2.00% after February 3, 2007, and $117,627,000 of real estate
operating leases and $14,938,000 of equipment operating leases which have lease payments that vary based
on changes in LIBOR. A one percent change in the LIBOR rate for the fiscal year ended February 3, 2007
would have affected net income by approximately $1,493,000 for the fiscal year ended February 3, 2007.