Advance Auto Parts 2005 Annual Report Download - page 51

internal use computer software in accordance with
the American Institute of Certified Public
Accountant’s Statement of Position 98-1,
“Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use,” during
fiscal 2005, fiscal 2004 and fiscal 2003, respectively.
These costs are included in the furniture, fixtures and
equipment category above and are depreciated on the
straight-line method over three to seven years.
10. ASSETS HELD FOR SALE:
The Company applies SFAS No. 144, “Accounting
for the Impairment or Disposal of Long-Lived
Assets,” which requires that long-lived assets and cer-
tain identifiable intangible assets to be disposed of be
reported at the lower of the carrying amount or the
fair market value less selling costs. At December 31,
2005 and January 1, 2005, the Company’s assets held
for sale were $8,198 and $18,298, respectively, pri-
marily consisting of closed stores as a result of the
Discount integration and a closed distribution center.
11. ACCRUED EXPENSES:
Accrued expenses consist of the following:
December 31, January 1,
2005 2005
Payroll and related benefits ............. $ 58,553 $ 50,753
Warranty .......................................... 11,352 10,960
Capital expenditures ........................ 39,105 21,479
Self-insurance reserves.................... 39,840 30,605
Other ................................................ 116,587 84,682
Total accrued expenses .................... $265,437 $198,479
12. OTHER LONG-TERM LIABILITIES:
Other long-term liabilities consist of the following:
December 31, January 1,
2005 2005
Employee benefits............................. $17,253 $18,658
Restructuring and
closed store liabilities................... 2,231 3,122
Deferred income taxes ...................... 36,958 43,636
Other ................................................. 18,432 14,806
Total other long-term liabilities ........ $74,874 $80,222
13. LONG-TERM DEBT:
Long-term debt consists of the following:
December 31, January 1,
2005 2005
Senior Debt:
Tranche A, Senior Secured Term
Loan at variable interest rates
(5.66% and 3.92% at
December 31, 2005 and
January 1, 2005, respectively),
due September 2009 .................... $170,000 $200,000
Tranche B, Senior Secured Term
Loan at variable interest rates
(5.89% and 4.17% at
December 31, 2005 and
January 1, 2005, respectively),
due September 2010 .................... 168,300 170,000
Delayed Draw, Senior Secured
Term Loan at variable interest
rates (5.91% and 4.22% at
December 31, 2005 and
January 1, 2005, respectively),
due September 2010 .................... 100,000 100,000
Revolving facility at variable
interest rates (5.66% and 3.92%
at December 31, 2005 and
January 1, 2005, respectively)
due September 2009 .................... ——
Other................................................. 500 —
438,800 470,000
Less: Current portion of
long-term debt.............................. (32,760) (31,700)
Long-term debt, excluding
current portion ............................. $406,040 $438,300
On November 3, 2004, the Company entered into a
new amended and restated $670,000 senior credit
facility. This new senior credit facility initially pro-
vided for a $200,000 tranche A term loan and a
$170,000 tranche B term loan. Proceeds from these
term loans were used to refinance the Company’s pre-
viously existing tranche D and E term loans and
revolver under the Company’s previous senior credit
facility. Additionally, the new senior credit facility
initially provided for a $100,000 delayed draw term
loan, which was available exclusively for stock buy-
backs under the Company’s stock repurchase pro-
gram, and a $200,000 revolving facility, or the
revolver (which provides for the issuance of letters of
credit with a sub limit of $70,000).
In conjunction with this refinancing, the Company
wrote-off existing deferred financing costs related to
the Company’s tranche D and E term loans in accor-
dance with EITF Issue No. 96-19, “Debtor’s
Accounting for a Modification or Exchange of Debt
Instruments.” The write-off of these costs combined
with the related refinancing costs incurred to set up
the new credit facility resulted in a loss on extin-
guishment of debt of $2,818 in the accompanying
consolidated statements of operations for the year
ended January 1, 2005. During fiscal 2004, prior to
the refinancing of its credit facility, the Company
repaid $105,000 in debt prior to its scheduled maturity.
In conjunction with these partial repayments, the
Company wrote-off deferred financing costs in the
amount of $412, which is classified as a loss on
extinguishment of debt in the accompanying consoli-
dated statement of operations for the year ended
January 1, 2005.
Advance Auto Parts I Annual Report 2005 I 49