Napa Auto Parts 2009 Annual Report Download - page 57

Table of Contents


The estimated amounts that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in
2010 are as follows:

 
 

Actuarial loss $37,616 $ 1,792
Prior service credit (6,951) (1,059)
Total $30,665 $ 733
The assumptions used in measuring the net periodic benefit costs for the plans follow:
 
     
Weighted average discount rate  6.49% 6.00%  5.75% 5.75%
Rate of increase in future compensation levels  3.75% 3.75%  — —
Expected long-term rate of return on plan assets  8.25% 8.25%  — —
An 8% annual rate of increase in the per capita cost of covered health care benefits was assumed on December 31, 2008. The rate
was assumed to decrease ratably to 5% at December 31, 2014, and thereafter.
The effect of a one-percentage point change in the assumed health care cost trend rate is as follows:
 

Total service and interest cost components of 2009 net periodic postretirement health care benefit cost $ (358) $ 587
Accumulated postretirement benefit obligation for health care benefits at December 31, 2009 (1,147) 1,576
The Company has two defined contribution plans that cover substantially all of its domestic employees. The Company’s matching
contributions are determined based on the employee’s participation in the U.S. pension plan. Pension plan participants who continue
earning credited service after 2008 receive a matching contribution of 20% of the first 6% of the employee’s salary. Other employees
receive a matching contribution of 100% of the first 5% of the employee’s salary. Total plan expense for both plans was approximately
$31,783,000 in 2009, $7,252,000 in 2008, and $7,245,000 in 2007.
 
The Company guarantees the borrowings of certain independently controlled automotive parts stores (independents) and certain other
affiliates in which the Company has a noncontrolling equity ownership interest (affiliates). Presently, the independents are generally
consolidated by unaffiliated enterprises that have a controlling financial interest through ownership of a majority voting interest in the
entity. The Company has no voting interest or other equity conversion rights in any of the independents. The Company does not control
the independents or the affiliates, but receives a fee for the guarantee. The Company has concluded that it is not the primary beneficiary
with respect to any of the independents and that the affiliates are not variable interest entities. The Company’s maximum exposure to loss
as a result of its involvement with these independents and affiliates is 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, 2009, the
Company was in compliance with all such covenants.
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