Napa Auto Parts 2014 Annual Report Download - page 71

Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
December 31, 2014
marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining
appropriate inventories, and store hours. Separately, the Company concluded the affiliates are not variable inter-
est entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and
affiliates is generally equal to the total borrowings subject to the Company’s guarantee. While such borrowings
of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain
covenants, including a maximum debt to capitalization ratio and certain limitations on additional borrowings. At
December 31, 2014, the Company was in compliance with all such covenants.
At December 31, 2014, the total borrowings of the independents and affiliates subject to guarantee by the
Company were approximately $284,842,000. 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 receiv-
able and inventory) to recover all or a portion of the amounts paid under the guarantee. When it is deemed prob-
able 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.
As of December 31, 2014 and 2013, the Company has recognized certain assets and liabilities amounting to
$29,000,000 for the guarantees related to the independents’ and affiliates’ borrowings. These assets and liabilities
are included in other assets and other long-term liabilities in the consolidated balance sheets.
9. Acquisitions
During 2014, the Company acquired two companies each in the Automotive Group, Office Products Group,
and Electrical/Electronic Materials Group and one company in the Industrial Group for approximately
$260,000,000, net of cash acquired. During 2013, the Company acquired one company each in the Automotive
Group (including GPC Asia Pacific), Industrial Group, and Electrical/Electronic Materials Group for approx-
imately $650,000,000, net of cash acquired. During 2012, the Company acquired one company in the Automotive
Group (Quaker City Motor Parts Co.) for approximately $343,000,000, net of cash acquired.
For each acquisition, 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 and comprehensive
income beginning on their respective acquisition dates. The Company recorded approximately $200,000,000,
$950,000,000 and $230,000,000 of goodwill and other intangible assets associated with the 2014, 2013, and 2012
acquisitions, respectively.
For the 2014 acquisitions, other intangible assets acquired consisted of customer relationships of
$82,000,000 and trademarks of $28,000,000 with weighted average amortization lives of 18 and 40 years,
respectively. For the 2013 acquisitions, other intangible assets acquired consisted of customer relationships of
$235,000,000, trademarks of $141,000,000, and non-competition agreements of $4,000,000 with weighted aver-
age amortization lives of 15, 40, and 1 years, respectively. For the 2012 acquisitions, other intangible assets
acquired consisted of customer relationships of $108,000,000 and trademarks of $2,000,000, with weighted aver-
age amortization lives of 15 and 40 years, respectively.
Additional disclosures on the 2013 automotive acquisition of GPC Asia Pacific and the 2012 automotive
acquisition of Quaker City Motor Parts Co. are provided below.
GPC Asia Pacific
The Company acquired a 30% investment in GPC Asia Pacific, formerly known as the Exego Group, for
approximately $166,000,000 effective January 1, 2012. On April 1, 2013, the Company acquired the remaining
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