True Value 2010 Annual Report Download - page 40

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
Financial Report 2010 19
provides amendments to Codification 820 “Fair Value Measure-
ments and Disclosures.” ASU 2010-06 mainly requires a reporting
entity to disclose separately the amounts of significant transfers
in and out of Level 1 and Level 2 fair value measurements and to
describe the reasons for the transfers as well as disclosures about
purchases, sales, issuances and settlements in the roll forward
of activity in Level 3 fair value measurements. ASU 2010-06 is
effective for interim and annual fiscal periods beginning after
December 15, 2009, except for disclosures about certain Level
3 activity that will not become effective until interim and annual
periods beginning after December 15, 2010. True Value evalu-
ated the impact of this standard and has determined that this
amendment does not have a material impact on True Value’s
Annual Report disclosures.
No other accounting standards issued in 2010 were applicable
to True Value’s Consolidated Financial Statements.
2. inventOries
Inventories consisted of the following at:
January 1, January 2,
($ in thousands) 2011 2010
Manufacturing inventories:
Raw materials $ 2,959 $ 1,784
Work-in-process and finished goods 15,455 15,057
Manufacturing inventory reserves (1,533) (2,354)
16,881 14,487
Merchandise inventories:
Warehouse inventory 277,074 272,659
Merchandise inventory reserves (11,370) (15,686)
265,704 256,973
$ 282,585 $ 271,460
The amount of warehouse, general and administrative costs
included in ending inventory was $19,357 and $19,198 at January1,
2011 and January 2, 2010, respectively. Warehouse, general and
administrative costs incurred for 2010 and 2009, were $89,404
and $90,743, respectively.
3. prOperty, plant & equipment
Property, Plant & Equipment consisted of the following at:
January 1, January 2,
($ in thousands) 2011 2010
Buildings and improvements $ 78,706 $ 72,879
Machinery and warehouse equipment 72,484 74,876
Office and computer equipment,
and software 141,018 134,139
Transportation equipment 18,207 19,257
310,415 301,151
Less: accumulated depreciation (244,438) (240,101)
65,977 61,050
Land 2,340 2,340
$ 68,317 $ 63,390
Depreciation expense, which includes amortization of capital
leases, for 2010, 2009 and 2008, was $12,539, $13,010 and $12,717,
respectively.
4. deBt arrangements
Long-term debt consisted of the following at:
January 1, January 2,
($ in thousands) 2011 2010
Bank Facility $ – $ –
Real estate mortgage 18,557 19,250
Capital lease obligations 3,289 4,776
Total third-party debt 21,846 24,026
Subordinated promissory and subordinated
promissory installment notes 115,540 97,459
137,386 121,485
Less amounts due within one year (41,751) (30,421)
$ 95,635 $ 91,064
The weighted average of stated interest rates on total debt
was 5.11% and 5.65% as of January 1, 2011 and January 2, 2010,
respectively.
At January 1, 2011 and January 2, 2010, True Value had no
outstanding Bank Facility borrowings.