Napa Auto Parts 2010 Annual Report Download - page 47
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Table of Contents
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is comprised of the following:
Foreign currency translation $ 95,513
Unrecognized net actuarial loss, net of tax (444,156)
Unrecognized prior service credit, net of tax 38,746
Total accumulated other comprehensive loss $(309,897)
Fair Value of Financial Instruments
The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, trade accounts receivable and trade
accounts payable approximate their respective fair values based on the short-term nature of these instruments. At December 31, 2010 and
2009, the fair value of fixed rate debt was approximately $529,000,000 and $533,000,000, respectively. The fair value of fixed rate debt
is designated as Level 2 in the fair value hierarchy (i.e. significant observable inputs) and is based primarily on the discounted value of
future cash flows using current market interest rates offered for debt of similar credit risk and maturity.
Shipping and Handling Costs
Shipping and handling costs are classified as selling, administrative and other expenses in the accompanying consolidated
statements of income and totaled approximately $150,000,000, $120,000,000, and $140,000,000 for the years ended December 31, 2010,
2009, and 2008, respectively.
Advertising Costs
Advertising costs are expensed as incurred and totaled $36,800,000, $44,500,000, and $42,800,000 in the years ended
December 31, 2010, 2009, and 2008, respectively.
Accounting for Legal Costs
The Company’s legal costs expected to be incurred in connection with loss contingencies are expensed as such costs are incurred.
Share-Based Compensation
The Company maintains various long-term incentive plans, which provide for the granting of stock options, stock appreciation
rights (SARs), restricted stock, restricted stock units (RSUs), performance awards, dividend equivalents and other share-based awards.
SARs represent a right to receive upon exercise an amount, payable in shares of common stock, equal to the excess, if any, of the fair
market value of the Company’s common stock on the date of exercise over the base value of the grant. The terms of such SARs require
net settlement in shares of common stock and do not provide for cash settlement. RSUs represent a contingent right to receive one share of
the Company’s common stock at a future date. The majority of awards previously granted vest on a pro-rata basis for periods ranging
from one to five years and are expensed accordingly on a straight-line basis. The Company issues new shares upon exercise or conversion
of awards under these plans.
Net Income per Common Share
Basic net income per common share is computed by dividing net income by the weighted average number of common shares
outstanding during the year. The computation of diluted net income per common share includes the
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