Advance Auto Parts 2004 Annual Report Download - page 46

44
new฀$100,000฀ tranche฀D฀term฀ loan฀ facility฀and฀$340,000฀
tranche฀ E฀ term฀ loan฀ facility.฀ The฀ borrowings฀ under฀ the฀
tranche฀D฀term฀loan฀facility฀and฀tranche฀E฀term฀loan฀facil-
ity฀were฀used฀to฀replace฀the฀tranche฀A,฀A-1,฀C฀and฀C-1฀term฀
loan฀facilities.
฀ During฀fiscal฀2002,฀the฀Company฀repaid฀a฀portion฀of฀its฀
tranche฀A฀and฀tranche฀B฀term฀loan฀facilities.฀Subsequently,฀
it฀ also฀ refinanced฀ the฀ remaining฀ portion฀ of฀ its฀ tranche฀ B฀
term฀ loan฀ facility฀ under฀ its฀ previous฀ senior฀ credit฀ facility฀
by฀ amending฀ and฀ restating฀ the฀ credit฀ facility฀ to฀ add฀ a฀฀
new฀ $250,000฀ tranche฀ C฀ term฀ loan฀ facility.฀ The฀ borrow-
ings฀ under฀ the฀ tranche฀ C฀ term฀ loan฀ facility฀ were฀ used฀ to฀
refinance฀ the฀ tranche฀ B฀ term฀ loan฀ facility.฀ In฀ conjunc-
tion฀ with฀ the฀ extinguishment฀ of฀ this฀ debt,฀ the฀ Company฀
wrote฀ off฀ deferred฀ financing฀ costs฀ in฀ accordance฀ with฀
EITF฀No.฀96-19.฀The฀write-off฀of฀these฀costs฀is฀classified฀
as฀a฀loss฀on฀extinguishment฀of฀debt฀of฀$8,542฀in฀the฀accom-
panying฀consolidated฀statements฀of฀operations.
฀ During฀fiscal฀2002,฀the฀Company฀also฀repurchased฀and฀
retired฀a฀portion฀of฀its฀senior฀subordinated฀notes฀and฀senior฀
discount฀debentures.฀The฀premiums฀paid฀and฀the฀write-off฀
of฀ the฀ related฀ deferred฀ financing฀ costs฀ are฀ classified฀ as฀ a฀
loss฀on฀extinguishment฀of฀debt฀of฀$8,280฀in฀the฀accompa-
nying฀statements฀of฀operations.
฀ As฀of฀January฀1,฀2005,฀the฀Company฀was฀in฀compliance฀
with฀the฀covenants฀of฀the฀senior฀credit฀facility.฀Substantially฀
all฀ of฀ the฀ net฀ assets฀ of฀ the฀ Company’s฀ subsidiaries฀ are฀
restricted฀at฀January฀1,฀2005.
฀ At฀January฀1,฀2005,฀the฀aggregate฀future฀annual฀maturi-
ties฀of฀long-term฀debt฀are฀as฀follows:
2005฀........................................................................................ $฀ 31,700
2006฀........................................................................................ 24,525
2007฀........................................................................................ 40,200
2008฀........................................................................................ 63,375
2009฀........................................................................................ 52,700
Thereafter฀............................................................................... 257,500
$470,000
13.฀Stock฀Repurchase฀Program
฀ During฀the฀third฀quarter฀of฀fiscal฀2004,฀the฀Company’s฀
Board฀of฀Directors฀authorized฀a฀stock฀repurchase฀program฀
of฀ up฀ to฀ $200,000฀ of฀ the฀ Company’s฀ common฀ stock฀ plus฀
related฀ expenses.฀ The฀ program฀ will฀ allow฀ the฀ Company฀฀
to฀ repurchase฀ its฀ common฀ stock฀ on฀ the฀ open฀ market฀ or฀฀
in฀ privately฀ negotiated฀ transactions฀ from฀ time฀ to฀ time฀ in฀
accordance฀ with฀ the฀ requirements฀ of฀ the฀ Securities฀฀
and฀ Exchange฀ Commission.฀ As฀ of฀ January฀ 1,฀ 2005,฀ the฀
Company฀has฀repurchased฀a฀total฀of฀3,700฀shares฀of฀com-
mon฀stock฀at฀an฀aggregate฀cost฀of฀$146,222,฀or฀$39.52฀per฀
share.฀ At฀ January฀ 1,฀ 2005,฀ the฀ Company฀ had฀ $53,778,฀
excluding฀related฀expenses,฀available฀for฀stock฀repurchases฀
under฀the฀stock฀repurchase฀program.
14.฀Income฀Taxes
฀ The฀ provision฀(benefit)฀for฀ income฀taxes฀from฀ continu-
ing฀operations฀for฀fiscal฀2004,฀fiscal฀2003฀and฀fiscal฀2002฀
consists฀of฀the฀following:
Current Deferred Total
2004
฀ Federal฀........................... $102,171 $฀ 1,318 $103,489
฀ State฀................................ 9,042 5,190 14,232
$111,213 $฀ 6,508 $117,721
2003
฀ Federal฀............................ $฀ 23,759 $44,820 $฀ 68,579
฀ State฀................................ 923 8,922 9,845
$฀ 24,682 $53,742 $฀ 78,424
2002
฀ Federal฀............................ $฀(11,958) $44,740 $฀ 32,782
฀ State฀................................ 62 6,686 6,748
$฀(11,896) $51,426 $฀ 39,530
฀ The฀ provision฀(benefit)฀for฀ income฀taxes฀from฀ continu-
ing฀ operations฀ differed฀ from฀ the฀ amount฀ computed฀ by฀
applying฀the฀federal฀statutory฀income฀tax฀rate฀due฀to:
2004 2003 2002
Income฀from฀continuing฀฀
operations฀at฀statutory฀U.S.฀
federal฀income฀tax฀rate฀........... $107,012 $71,298 $35,587
State฀income฀taxes,฀net฀of฀฀
federal฀income฀tax฀benefit฀..... 9,251 6,399 4,386
Non-deductible฀interest฀and฀
other฀expenses฀........................ 745 1,263 914
Valuation฀allowance฀................... 236 (1,002) 241
Other,฀net฀.................................... 477 466 (1,598)
$117,721 $78,424 $39,530
฀ During฀ the฀ years฀ ended฀ January฀ 1,฀ 2005,฀ January฀ 3,฀
2004฀ and฀December฀28,฀ 2002,฀the฀ Company฀had฀ a฀(loss)฀
income฀ from฀ operations฀ of฀ the฀ discontinued฀ Wholesale฀
Dealer฀Network฀of฀$(63),฀$(572)฀and฀$4,691,฀respectively.฀
The฀Company฀recorded฀an฀income฀tax฀(benefit)฀expense฀of฀
$(24),฀ $(220)฀ and฀ $1,820฀ related฀ to฀ these฀ discontinued฀
operations฀for฀the฀years฀ended฀January฀1,฀2005,฀January฀3,฀
2004฀and฀December฀28,฀2002,฀respectively.
฀ Deferred฀income฀taxes฀are฀recognized฀for฀the฀tax฀conse-
quences฀ in฀ future฀ years฀ of฀ differences฀ between฀ the฀ tax฀
bases฀of฀assets฀and฀liabilities฀and฀their฀financial฀reporting฀
amounts฀at฀each฀period-end,฀based฀on฀enacted฀tax฀laws฀and฀
statutory฀ income฀ tax฀ rates฀ applicable฀ to฀ the฀ periods฀ in฀
which฀the฀differences฀ are฀expected฀to฀affect฀ taxable฀
income.฀Deferred฀income฀taxes฀reflect฀the฀net฀income฀tax฀
effect฀of฀temporary฀differences฀between฀the฀bases฀of฀assets฀
and฀ liabilities฀ for฀ financial฀ reporting฀ purposes฀ and฀ for฀฀
Notes฀to฀Consolidated฀Financial฀Statements฀(continued)
For฀the฀Years฀Ended฀January฀1,฀2005,฀January฀3,฀2004,฀and฀December฀28,฀2002฀(in฀thousands,฀except฀per฀share฀data)