Napa Auto Parts 2006 Annual Report Download - page 35

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On September 29, 2006, the FASB issued SFAS No. 158,
Employers’ Accounting for Dened Benet Pension and Other
Postretirement Plans
(“SFAS No. 158”), which amends SFAS No.
87 and SFAS No. 106 to require recognition of the overfunded or
underfunded status of pension and other postretirement benet
plans on the consolidated balance sheet. Under SFAS No. 158,
gains and losses, prior service costs and credits, and any remaining
transition amounts under SFAS No. 87 and SFAS No. 106 that
have not yet been recognized through net periodic benet cost will
be recognized in accumulated other comprehensive (loss) income,
net of tax effects, until they are amortized as a component of net
periodic cost. SFAS No. 158 is effective for publicly-held companies
for scal years ending after December 15, 2006. The Company
adopted the balance sheet recognition provisions of SFAS No. 158
at December 31, 2006, as more fully discussed in Note 7. SFAS
No. 158 has no impact on the consolidated statement of income
for the year ended December 31, 2006.
2. Goodwill and Other Intangible Assets
In accordance with SFAS No. 142, the Company performed an
annual goodwill and indenite lived intangible asset impairment
test during the fourth quarter of 2006, 2005, and 2004. The
present value of future cash ows approach was used to determine
any potential impairment. The Company determined that these
assets were not impaired and, therefore, no impairment was rec-
ognized for the years ended December 31, 2006, 2005, and 2004.
The changes in the carrying amount of goodwill during the years
ended December 31, 2006, 2005 and 2004 by reportable segment,
as well as other identiable intangible assets, are summarized as
follows (in thousands):
Goodwill
Identifiable
Office Intangible
Automotive Industrial Products Assets Total
Balance as of
January 1, 2004 $ 21,617 $ 31,170 $ 2,131 $ 3,110 $ 58,028
Amortization
during the year – – – (356) (356)
Balance as of
December 31,
2004 21,617 31,170 2,131 2,754 57,672
Goodwill acquired
during the year 2,270 239 – 2,932 5,441
Amortization
during the year – – – (396) (396)
Balance as of
December 31,
2005 23,887 31,409 2,131 5,290 62,717
Amortization
during the year – – – (463) (463)
Balance as of
December 31,
2006 $ 23,887 $ 31,409 $ 2,131 $ 4,827 $ 62,254
3. Credit Facilities
The principal amount of the Company’s borrowings subject to
variable rates totaled approximately $881,000 at December 31,
2005. There were no amounts subject to variable rates at
December 31, 2006. The weighted average interest rate on the
Company’s outstanding borrowings was approximately 6.05%
at December 31, 2006 and 2005.
The Company maintains a $350,000,000 unsecured revolving
line of credit with a consortium of nancial institutions that
matures in October 2008 and bears interest at LIBOR plus .25%
(5.57% at December 31, 2006). No amounts were outstanding
under this line of credit at December 31, 2006 and 2005. Certain
borrowings contain covenants related to a maximum debt-to-
equity ratio, a minimum xed-charge coverage ratio, and certain
limitations on additional borrowings. At December 31, 2006,
the Company was in compliance with all such covenants. Due to
the workers compensation and insurance reserve requirements
in certain states, the Company also had unused letters of credit
of $58,955,000 and $52,600,000 outstanding at December 31,
2006 and 2005, respectively.
Amounts outstanding under the Company’s credit facilities consist
of the following:
(in thousands) December 31, 2006 2005
Unsecured term notes:
November 30, 2002, Series A Senior
Notes, $250,000,000, 5.86% fixed,
due November 30, 2008 $ 250,000 $ 250,000
November 30, 2002, Series B Senior
Notes, $250,000,000, 6.23% fixed,
due November 30, 2011 250,000 250,000
Long-term debt 500,000 500,000
Other borrowings – 881
$ 500,000 $ 500,881
Approximate maturities under the Company’s credit facilities are as
follows (in thousands):
2007 $ –
2008 250,000
2009 –
2010 –
2011 250,000
$ 500,000