Napa Auto Parts 2010 Annual Report Download - page 46

Table of Contents


Property, Plant, and Equipment
Property, plant, and equipment are stated at cost. Buildings include certain leases capitalized at December 31, 2010 and 2009.
Depreciation and amortization is primarily determined on a straight-line basis over the following estimated useful life of each asset:
buildings and improvements, 10 to 40 years; machinery and equipment, 5 to 15 years.
Long-Lived Assets Other Than Goodwill
The Company assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the
carrying amount may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over
the remaining life of such assets. If these projected cash flows are less than the carrying amount, an impairment would be recognized,
resulting in a write-down of assets with a corresponding charge to earnings. Impairment losses, if any, are measured based upon the
difference between the carrying amount and the fair value of the assets.
Other Long-Term Liabilities
Other long-term liabilities are comprised of the following:

 

Post-employment and other benefit liabilities  $ 26,311
Obligations under capital and other leases  13,504
Insurance liabilities  46,423
Deferred gain on sale-leaseback  17,496
Other taxes payable  39,973
Other  23,129
Total other long-term liabilities  $166,836
The Company’s post-employment and other benefit liabilities consist primarily of actuarially determined obligations and deferred
compensation plans. See Note 4 for further discussion of the Company’s obligations under capital leases and the sale-leaseback
transaction. Other taxes payable consists primarily of unrecognized tax benefits.
Insurance liabilities consist primarily of reserves for the workers’ compensation program. The Company carries various large risk
deductible workers’ compensation policies for the majority of workers’ compensation liabilities. The Company records the workers’
compensation reserves based on an analysis performed by an independent actuary. The analysis calculates development factors, which
are applied to total reserves as provided by the various insurance companies who underwrite the program. While the Company believes
that the assumptions used to calculate these liabilities are appropriate, significant differences in actual experience or significant changes in
these assumptions may materially affect workers’ compensation costs.
Self-Insurance
The Company is self-insured for the majority of group health insurance costs. A reserve for claims incurred but not reported is
developed by analyzing historical claims data provided by the Company’s claims administrators. While the Company believes that the
assumptions used to calculate these liabilities are appropriate, significant differences from historical trends may materially impact
financial results. These reserves are included in accrued expenses in the accompanying consolidated balance sheets as the expenses are
expected to be paid within one year.
F-11