Pep Boys 2008 Annual Report Download - page 111

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2009, February 2, 2008 and February 3, 2007
(dollar amounts in thousands, except share data)
DIFM lines of business. The Company aggregates all of its operating segments and has one reportable
segment. Sales by major product categories are as follows:
Jan. 31, Feb. 2, Feb. 3,
Year ended 2009 2008 2007
Parts and Accessories ......................... $1,255,975 $1,423,891 $1,537,076
Tires ..................................... 313,689 325,687 316,001
Total Merchandise Sales ....................... 1,569,664 1,749,578 1,853,077
Service Labor ............................... 358,124 388,497 390,778
Total Revenues .............................. $1,927,788 $2,138,075 $2,243,855
SIGNIFICANT SUPPLIERS During fiscal year 2008, the Company’s ten largest suppliers
accounted for approximately 48% of the merchandise purchased by the Company. No single supplier
accounted for more than 20% of the Company’s purchases. The Company has no long-term contracts
under which the Company is required to purchase merchandise except for a contract to purchase bulk
oil for use in the Company’s service bays, which expires in 2011.
SELF INSURANCE The Company has risk participation arrangements with respect to workers’
compensation, general liability, automobile liability, and other casualty coverages. The Company has a
wholly owned captive insurance subsidiary through which it reinsures this retained exposure. This
subsidiary uses both risk sharing treaties and third party insurance to manage this exposure. In
addition, the Company self insures certain employee-related health care benefit liabilities. The
Company maintains stop loss coverage with third party insurers through which it reinsures certain of its
casualty and health care benefit liabilities. The Company records both liabilities and reinsurance
receivables using actuarial methods utilized in the insurance industry based upon our historical claims
experience.
RECENT ACCOUNTING STANDARDS
The Company adopted the provisions of FIN 48 on February 4, 2007. In connection with the
adoption, the Company recorded a net decrease to retained earnings of $155 and reclassified certain
previously recognized deferred tax attributes as FIN 48 liabilities. For additional information, see
Note 14, ‘‘Income Taxes.’’
In September 2006, the FASB issued SFAS No. 158, ‘‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an Amendment of FASB Statements No. 87, 88, 106 and
132(R)’’ (SFAS 158). SFAS No. 158 requires entities to:
• Recognize on its balance sheet the funded status (measured as the difference between the fair
value of plan assets and the benefit obligation) of pension and other postretirement benefit
plans;
• Recognize, through comprehensive income, certain changes in the funded status of a defined
benefit and post retirement plan in the year in which the changes occur;
• Measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and
• Disclose additional information.
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