Napa Auto Parts 2009 Annual Report Download - page 58

Table of Contents
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At December 31, 2009, the total borrowings of the independents and affiliates subject to guarantee by the Company were
approximately $200,857,000. These loans generally mature over periods from one to six years. In the event that the Company is required
to make payments in connection with guaranteed obligations of the independents or the affiliates, the Company would obtain and
liquidate certain collateral (e.g., accounts receivable and inventory) to recover all or a portion of the amounts paid under the guarantee.
When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this
estimated loss. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’
borrowings.
The Company has accrued for guarantees related to the independents’ and affiliates’ borrowings as of December 31, 2009 and 2008.
These liabilities are not material to the financial position of the Company and are included in other long-term liabilities in the
accompanying consolidated balance sheets.
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During 2009, the Company acquired eight companies in the Industrial and Automotive Groups for approximately $71,038,000. The
Company allocated the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective
acquisition dates. The results of operations for the acquired companies were included in the Company’s consolidated statements of
income beginning on their respective acquisition dates. The Company recorded approximately $12,199,000 of goodwill and other
intangible assets associated with the acquisitions.
On June 1, 2009, the Company acquired the remaining noncontrolling interest in its consolidated subsidiary, Balkamp, Inc., for
approximately $63,165,000. The acquisition was accounted for as an equity transaction and the associated noncontrolling interest in the
subsidiary’s equity was eliminated as part of the transaction.
During 2008, the Company acquired eleven companies in the Automotive, Industrial, Office Supply and Electrical/Electronic
Groups for approximately $133,604,000. The Company allocated the purchase price to the assets acquired and the liabilities assumed
based on their fair values as of their respective acquisition dates. The results of operations for the acquired companies were included in
the Company’s consolidated statements of income beginning on their respective acquisition dates. The Company recorded approximately
$84,442,000 of goodwill and other intangible assets associated with these acquisitions.
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The Company has evaluated subsequent events during the period beginning January 1, 2010 through February 26, 2010, the date
the consolidated financial statements were issued. The Company concluded that there were no events or transactions occurring during this
period that required recognition or disclosure in the accompanying consolidated financial statements.
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The Company’s reportable segments consist of automotive, industrial, office products, and electrical/electronic materials. Within the
reportable segments, certain of the Company’s operating segments are aggregated since they have similar economic characteristics,
products and services, type and class of customers, and distribution methods.
The Company’s automotive segment distributes replacement parts (other than body parts) for substantially all makes and models of
automobiles, trucks, and other vehicles.
The Company’s industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission
equipment, including hydraulic and pneumatic products, material handling components, and related parts and supplies.
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