Ace Hardware Corporation and All of Its Subsidiaries That Are Consolidated Under U.S
Total Page:16
File Type:pdf, Size:1020Kb
2015 ACE HARDWARE ANNUAL REPORT FINANCIALS INDEX TO ANNUAL REPORT Page Summary ................................................................................................................................................... 1 Our Company ...................................................................................................................................... 1 Ace’s Capital Stock Structure ............................................................................................................. 2 Membership Applications – Subscription for Class A and Class C Stock .......................................... 2 Repurchase of Shares by Ace .............................................................................................................. 2 Patronage Distributions and Income Tax Treatment ........................................................................... 3 Risks of Membership .......................................................................................................................... 3 Ace’s Business ........................................................................................................................................... 3 Company History ................................................................................................................................ 3 Our Retailer Base ................................................................................................................................ 4 New Store Growth .............................................................................................................................. 5 Our Industry and Our Retailers’ Core Customers ............................................................................... 5 Competitive Strengths ......................................................................................................................... 6 Merchandise Sales to Our Network of Retailers ................................................................................. 7 Private Label Programs ....................................................................................................................... 8 Retailer Conventions ........................................................................................................................... 8 Ace Service Offerings ......................................................................................................................... 9 Other Ace Retailer Programs and Benefits ......................................................................................... 10 Distribution ......................................................................................................................................... 10 Suppliers ............................................................................................................................................. 10 Technology ......................................................................................................................................... 10 Ace International ................................................................................................................................. 11 Trademark and Service Mark Registrations ........................................................................................ 11 Employees ........................................................................................................................................... 12 Legal Proceedings ............................................................................................................................... 12 Regulation ........................................................................................................................................... 12 Competition ......................................................................................................................................... 12 Properties ............................................................................................................................................ 13 Company Management and Directors.................................................................................................... 13 Members of the Board of Directors ..................................................................................................... 13 Committees of the Board of Directors ................................................................................................ 15 How to Communicate with the Board of Directors ............................................................................. 16 Senior Management ............................................................................................................................ 17 Financial Information .............................................................................................................................. 19 Report of Independent Auditors .......................................................................................................... 19 Consolidated Balance Sheets for the Years Ended 2015 and 2014 ..................................................... 20 Consolidated Statements of Income for the Years Ended 2015, 2014 and 2013................................. 21 Consolidated Statements of Comp. Income for the Years Ended 2015, 2014 and 2013 ..................... 22 Consolidated Statements of Equity for the Years Ended 2015, 2014 and 2013 .................................. 23 Consolidated Statements of Cash Flows for the Years Ended 2015, 2014 and 2013 .......................... 24 Notes to Consolidated Financial Statements ....................................................................................... 25 Management’s Discussion and Analysis of Financial Condition and Results of Operations .............. 45 Company Overview ............................................................................................................................ 45 INDEX TO ANNUAL REPORT – (Continued) Domestic Store Count ......................................................................................................................... 45 Results of Operations .......................................................................................................................... 46 Liquidity and Capital Resources ......................................................................................................... 49 Cash Flows .......................................................................................................................................... 51 Off-Balance Sheet Arrangements ........................................................................................................ 51 Contractual Obligations and Commitments ........................................................................................ 52 Application of Critical Accounting Policies and Estimates ................................................................ 52 Impact of New Accounting Standards ................................................................................................ 53 Qualitative and Quantitative Disclosure About Market Risk .............................................................. 54 Disclosure Regarding Forward-Looking Statements .......................................................................... 55 Five Year Summary of Earnings and Distributions ............................................................................ 56 Management’s Responsibility for Financial Statements ..................................................................... 57 Membership Information ........................................................................................................................ 58 Membership Application, Agreements and Stock Subscription .......................................................... 58 Retailer Assessments and Charges ...................................................................................................... 58 Patronage Distributions ....................................................................................................................... 65 Description of Capital Stock .................................................................................................................... 66 Dividend Rights .................................................................................................................................. 66 Voting Rights ...................................................................................................................................... 66 Liquidation Rights ............................................................................................................................... 66 Preemptive Rights ............................................................................................................................... 67 Redemption Provisions ....................................................................................................................... 67 Limitations on Ownership of Stock .................................................................................................... 67 Other Restrictions and Rights ............................................................................................................. 67 Federal Income Taxes .............................................................................................................................. 69 Status of Class