Napa Auto Parts 2010 Annual Report Download - page 49

Table of Contents
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
The Company also has the option under this agreement to increase its borrowing an additional $200,000,000. No amounts were
outstanding under this line of credit at December 31, 2010 and 2009. Certain borrowings contain covenants related to a maximum
debt-to-capitalization ratio and certain limitations on additional borrowings. At December 31, 2010, 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 $50,419,000 and $50,403,000 outstanding at December 31, 2010 and 2009, respectively.
Amounts outstanding under the Company’s credit facilities consist of the following:

 

Unsecured term notes:
November 30, 2001, Series B Senior Notes, $250,000,000, 6.23% fixed, due November 30, 2011  $250,000
November 30, 2008, Senior Unsecured Notes, $250,000,000, 4.67% fixed, due November 30, 2013  250,000
Total debt  500,000
Less debt due within one year  —
Long-term debt, excluding current portion  $ 500,000
 
In June 2003, the Company completed an amended and restated master agreement to the $85,000,000 construction and lease
agreement (the Agreement). The lessor in the Agreement was an independent third-party limited liability company, which had as its sole
member a publicly traded corporation. Properties acquired by the lessor were constructed and/or then leased to the Company under
operating lease agreements. On June 26, 2009, the Agreement expired. In accordance with the Agreement, the Company purchased the
properties from the lessor for $72,814,000, including closing costs. The properties are included in property, plant, and equipment in the
accompanying consolidated balance sheets.
Rent expense related to the Agreement is recorded under selling, administrative, and other expenses in our consolidated statements of
income and was $489,000 and $2,586,000 for the years ended December 31, 2009, and 2008, respectively.
In October 2007, the Company entered into a sale-leaseback transaction with a financial institution. In connection with the
transaction, the Company sold certain automotive retail store properties and immediately leased the properties back over a lease term of
twenty years. The lease was classified as an operating lease. Net proceeds from the transaction amounted to approximately $56,000,000.
The Company realized a net gain of approximately $20,000,000, which was deferred and is being amortized over the lease term. The
unamortized portion of the deferred gain is included in other long-term liabilities in the accompanying consolidated balance sheets.
At December 31, 2010 and 2009, buildings include $3,080,000 and $11,550,000 with accumulated depreciation of $1,787,000
and $7,823,000, respectively, for capital leases of distribution centers and stores. Depreciation expense for capital leases was
approximately $1,133,000, $1,828,000, and $2,267,000 in 2010, 2009, and 2008, respectively.
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