XML 25 R9.htm IDEA: XBRL DOCUMENT
v2.4.0.6

DESCRIPTION OF BUSINESS | 12 Months Ended
--- | ---
Dec. 31, 2012
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1, Description of Business and Summary of Significant Accounting Policies: Business: Haverty Furniture Companies, Inc. ("Havertys," "we," "our," or "us") is a retailer of a broad line of residential furniture in the middle to upper-middle price ranges. We have 122 showrooms in 17 states all operated using the Havertys name and we do not franchise our stores. We offer financing through an internal revolving charge credit plan as well as a third-party finance company. We operate in one reportable segment, home furnishings retailing. Basis of Presentation: The consolidated financial statements include the accounts of Havertys and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassification: We have reclassified amounts in the prior period consolidated balance sheet in "Accrued liabilities" for amounts due vendors for in-transit inventory to "Accounts payable" to conform to the current year's presentation. Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash and cash equivalents includes all liquid investments with a maturity date of less than three months when purchased. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions which typically settle in five days. Restricted Cash and Cash Equivalents: Our insurance carrier requires us to collateralize a portion of our workers' compensation obligations. We chose to change our collateral from a letter of credit to an escrow account during the second quarter of 2011. These funds are investments in money market funds held by an agent. The agreement with our carrier governing these funds is on an annual basis expiring on December 31. Inventories: Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method. Property and Equipment: Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Leasehold improvements and buildings under lease are amortized over the shorter of the estimated useful life or the lease term of the related asset. Amortization of buildings under lease is included in depreciation expense. Estimated useful lives for financial reporting purposes are as follows:
Buildings | 25 – 33 years
Improvements | 5 – 15 years
Furniture and Fixtures | 3 – 15 years
Equipment | 3 – 15 years
Buildings under lease | 15 years
Customer Deposits: Customer deposits consist of cash collections on sales of undelivered merchandise, customer advance payments, and deposits on credit sales for undelivered merchandise, Revenue Recognition: We recognize revenue from merchandise sales and related service fees, net of sales taxes, upon delivery to the customer. A reserve for merchandise returns and customer allowances is estimated based on our historical returns and allowance experience and current sales levels. We typically offer our customers an opportunity for us to deliver their purchases and most choose this service. Delivery fees of approximately $21,699,000, $21,492,000 and $21,854,000 were charged to customers in 2012, 2011 and 2010, respectively, and are included in net sales. The costs associated with deliveries are included in selling, general and administrative expenses and were approximately $31,411,000, $31,218,000 and $30,191,000 in 2012, 2011 and 2010, respectively. Credit service charges are recognized as revenue as assessed to customers according to contract terms. The costs associated with credit approval, account servicing and collections are included in selling, general and administrative expenses. Cost of Goods Sold: Our cost of goods sold includes the direct costs of products sold, warehouse handling and transportation costs. Selling, General and Administrative Expenses: Our selling, general and administrative ("SG&A") expenses are comprised of advertising, selling, occupancy, delivery and administrative costs as well as certain warehouse expenses. The costs associated with our purchasing, warehousing, delivery and other distribution costs included in SG&A expense were approximately $61,991,000, $62,857,000 and $60,253,000 in 2012, 2011 and 2010, respectively. Deferred Escalating Minimum Rent and Lease Incentives: Certain of our operating leases contain predetermined fixed escalations of the minimum rentals during the term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease, beginning with the point at which we obtain control and possession of the leased properties, and record the difference between the amounts charged to operations and amounts paid as "Accrued liabilities." The liability for deferred escalating minimum rent approximated $10,901,000 and $10,946,000 at December 31, 2012 and 2011, respectively. Any lease incentives we receive are deferred and subsequently amortized over a straight-line basis over the life of the lease as a reduction of rent expense. The liability for lease incentives approximated $2,918,000 and $1,456,000 at December 31, 2012 and 2011, respectively. Advertising Expense: Advertising costs, which include television, radio, newspaper and other media advertising, are expensed upon first showing. The total amount of prepaid advertising costs included in other current assets was approximately $631,000 and $1,027,000 at December 31, 2012 and 2011, respectively. We incurred approximately $41,883,000, $41,591,000 and $41,012,000 in advertising expense during 2012, 2011 and 2010, respectively. Interest Expense, net: Interest expense is comprised of amounts incurred related to our debt and lease obligations recorded on our balance sheet, net of interest income. The total amount of interest expense was approximately $866,000, $845,000, and $949,000 during 2012, 2011 and 2010, respectively. Other Income, net: Other income, net includes any gains or losses on sales of property and equipment and miscellaneous income or expense items outside of core operations. Net gains from sales of property and equipment were approximately $1,653,000 in 2010. Self-Insurance: We are self-insured, for amounts up to a deductible per occurrence, for losses related to general liability, workers' compensation and vehicle claims. Beginning in 2012 we became primarily self-insured for employee group health care claims. We maintain an accrual for these costs based on claims filed and an estimate of claims incurred but not reported or paid, based on historical data and actuarial estimates. The reserve for self-insurance is included in accrued liabilities and other liabilities and totaled $7,227,000 and $5,243,000 at December 31, 2012 and 2011, respectively. Fair Values of Financial Instruments: The fair values of our cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and customer deposits approximate their carrying amounts due to their short-term nature. The assets that are related to our self-directed, non-qualified deferred compensation plans for certain executives and employees are valued using quoted market prices, a Level 1 valuation technique. The assets totaled approximately $1,549,000 and $1,450,000 at December 31, 2012 and 2011, respectively and are included in other assets. The related liability of the same amount is included in other liabilities. Impairment of Long-Lived Assets: We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. We evaluate long-lived assets for impairment at the individual property or store level, which is the lowest level at which individual cash flows can be identified. For stores with two consecutive years of negative net contribution, we perform an impairment analysis. When evaluating these assets for potential impairment, we first compare the carrying amount of the asset to the store's estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying amount of the asset, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset to the store's assets' estimated fair value, which is determined on the basis of fair value for similar assets or future cash flows (discounted and with interest charges). If required, an impairment loss is recorded in SG&A expense for the difference in the asset's carrying value and the asset's estimated fair value. Earnings Per Share: We report our earnings per share using the two class method. The income per share for each class of common stock is calculated assuming 100% of our earnings are distributed as dividends to each class of common stock based on their contractual rights. See Note 12 for the computational components of basic and diluted earnings per share. Comprehensive Income: The components of accumulated other comprehensive income, net of income taxes, were comprised primarily of unrecognized pension liability adjustments totaling approximately $23,378,000 and $24,879,000 at December 31, 2012 and 2011, respectively. Accounting Change: On January 1, 2012, we adopted FASB Accounting Standards Update (ASU) 2011-05, an amendment to ASC 220, Comprehensive Income. ASU 2011-05 introduced a new statement, the Consolidated Statement of Comprehensive Income. The amendments affect only the display of those components of equity categorized as other comprehensive income and do not change existing recognition and measurement requirements that determine either other comprehensive income or net income.

X
- Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles. + References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationBasisOfPresentationBusinessDescriptionAndAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration