Pep Boys 2006 Annual Report Download - page 81

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 3, 2007, January 28, 2006 and January 29, 2005
(dollar amounts in thousands, except share data)
42
COMPREHENSIVE LOSS Comprehensive loss is reported in accordance with SFAS No. 130,
“Reporting Comprehensive Income.” Other comprehensive loss includes minimum pension liability and
fair market value of cash flow hedges.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company may enter into
interest rate swap agreements to hedge the exposure to increasing rates with respect to its variable rate
debt, when the Company deems it prudent to do so. The Company reports derivatives and hedging
activities in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging
Activities,” as amended by SFAS No. 137, SFAS No. 138 and SFAS No. 149. This statement establishes
accounting and reporting standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the statement of financial position
and measure those instruments at fair value.
SEGMENT INFORMATION The Company reports segment information in accordance with SFAS
No. 131, “Disclosure about Segments of an Enterprise and Related Information.” The Company operates
in one industry, the automotive aftermarket. In accordance with SFAS No. 131, the Company aggregates
all of its stores and reports one operating and reporting segment. Sales by major product categories are as
follows:
Year ended
Feb. 3,
2007
Jan. 28,
2006
Jan. 29,
2005
Parts and Accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,555,406 $1,550,309 $1,539,513
Tires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320,884 304,099 323,502
Total Merchandise Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,876,290 1,854,408 1,863,015
Service Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395,871 383,621 409,881
Total Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,272,161 $2,238,029 $2,272,896
SIGNIFICANT SUPPLIERS During fiscal 2006, the Company’s ten largest suppliers accounted for
approximately 40% of the merchandise purchased by the Company. No single supplier accounted for more
than 17% of the Company’s purchases. The Company has no long-term contracts under which the
Company is required to purchase merchandise. Management believes that the relationships the Company
has established with its suppliers are generally good.
RECENT ACCOUNTING STANDARDS
In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial
Instruments—an amendment of FASB Statements No. 133 and 140.” This statement simplifies accounting
for certain hybrid instruments currently governed by SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” or SFAS No. 133, by allowing fair value remeasurement of hybrid
instruments that contain an embedded derivative that otherwise would require bifurcation. SFAS No. 155
also eliminates the guidance in SFAS No. 133 Implementation Issue No. D1, “Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets,” which provides such beneficial
interests are not subject to SFAS No. 133. SFAS No. 155 amends SFAS No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a Replacement of FASB