Advance Auto Parts 2006 Annual Report Download

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2006 Annual Report
Customer Service ...The Advance Way.
Customer Service ... The Advance Way.

Table of contents

  • Page 1
    2006 Annual Report Customer Service ...The Advance Way.

  • Page 2

  • Page 3
    ... awareness with our customers that Advance is the destination for free installation services on products such as automotive batteries and wiper blades. We also are using new prom otional concepts, such as a 10-for-$10 sale, to drive additional footsteps to our stores. Advance has always been known...

  • Page 4
    ... companies could sell the merchandise we offer, or replicate our pricing. But when we give customers consistently superior service, we establish their loyalty for life - giving customers no reason to shop anywhere else for their auto parts and accessories. That's the Advance Way. 2006 marked a year...

  • Page 5
    ... shopping experience that is memorable and extraordinary. Offering to install windshield wipers, batteries and other products free for our customers provides confidence that the job will be done correctly and efficiently. Importantly, it means our customers will think of Advance first, the next time...

  • Page 6
    Advance Auto Parts, Inc. â-² Annual Report 2006 Five-year Financials Financially, 2006 was a challenging year. Nonetheless, Advance continued to grow its store count, comparable-store sales and earnings per share - a real testament to our resilience and determination. We continue to focus on our ...

  • Page 7
    ... shares outstanding ...107,124 Selected Store Data: Comparable store sales growth ...Number of stores, end of period...Total store square footage, end of period (in thousands) (6)...Average net sales per store (7)...Average net sales per square foot (8) ... Statement of Operations Data: 5-Year...

  • Page 8
    Advance Auto Parts, Inc. â-² Annual Report 2006 Differentiation the Advance Way Since Arthur Taubman founded Advance Auto Parts in 1932, we have operated with the belief that customers deserve a great shopping experience; we owe it to them. In order to make that a reality, we must employ a top-...

  • Page 9
    7

  • Page 10
    ... to serve their customers better than anyone. For example, we stepped up our efforts to tout our famous fast, free services, including free wiper blade installation, electrical system testing, oil recycling and battery installation and recycling. These services differentiate Advance from many other...

  • Page 11
    ... did we have the battery she needed, our Team Member, Guillermo, took a half hour to properly handle a complicated installation. Gayle left with a new battery ...and a whole lot more. She left our parking lot knowing Advance has the products she needs, at the right price, with helpful people who are...

  • Page 12
    10

  • Page 13
    ... Legendary Customer Service New, bright, well-kept stores offer a clear point of difference to customers, giving them many reasons to prefer Advance to all other auto parts stores. We use custom mix and micromarketing to match each store's inventory to local demand. Unique, high-quality merchandise...

  • Page 14
    Advance Auto Parts, Inc. â-² Annual Report 2006 In 2006, we took the "5" Basics of Sales and Customer Satisfaction to new levels. Perhaps most notably, we launched our Special Order Center, an in-store kiosk that provides customers with access to more than 1 million incremental items we never ...

  • Page 15
    ... Advance to expand parts availability further. We're adding more vendors and products to our Special Order Center; we plan to grow our store brands business through the introduction of additional new products; and we're identifying opportunities to expand our direct-import mix - providing customers...

  • Page 16
    ... celebrated our fifth year as a public company. During that five-year interval, Advance nearly doubled its store count, and emerged as a real leader in the auto aftermarket. Along the way, we've grown our commercial sales to be a $1 billion business, begun paying a cash dividend to our stockholders...

  • Page 17
    15

  • Page 18
    Advance Auto Parts, Inc. â-² Annual Report 2006 Your 2006 Leadership Team The True Advance Auto Parts Triangle Our focus on Team Members, customers and profitability pervades everything we do. That focus is driven by our leaders, who ensure Advance grows business by balancing the "7," the "5" and...

  • Page 19
    ... Board of Directors, consisting solely of outside directors, meets periodically with members of Company management, the Company's internal audit department and the Company's independent registered public accounting firm to discuss accounting, auditing, control and other financial reporting matters...

  • Page 20
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  • Page 21
    ... [ ] ADVANCE AUTO PARTS, INC. (Exact name of registrant as specified in its charter) _____ Delaware (State or other jurisdiction of incorporation or organization) 54-2049910 (I.R.S. Employer Identification No.) 5008 Airport Road Roanoke, Virginia (Address of Principal Executive Offices) 24012...

  • Page 22
    ...business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the 104,791,059 shares of Common Stock held by non-affiliates of the registrant was $3,043,132,353, based on the last sales price of the Common Stock on July 14, 2006, as reported by the New...

  • Page 23
    ..., Executive Officers and Corporate Governance ...39 Executive Compensation...39 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...39 Certain Relationships and Related Transactions, and Director Independence ...39 Principal Accountant Fees and Services...

  • Page 24
    ... imposed under our revolving credit facility; acts of terrorism; and other statements that are not of historical fact made throughout this report, including in the sections entitled "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors...

  • Page 25
    ...cars and light trucks, with no significant concentration in any specific product area. In addition, we operated 37 stores under the "Western Auto" and "Advance Auto Parts" trade names, located primarily in Puerto Rico and the Virgin Islands. The Western Auto stores offer automotive tires and service...

  • Page 26
    ...Suspension parts Engines Transmissions In addition to parts and accessories, we also provide a variety of services free of charge to our customers including: Battery installation Wiper installation "How-To" Project Kiosks "How-To" Video Clinics Electrical system testing Oil and battery recycling 3

  • Page 27
    ... the number of our stores which remain open until midnight or in some cases 24 hours per day. Commercial Sales In addition to the in-store customer service provided to our DIY customers, we also maintain a commercial sales team dedicated to the development of our commercial business and the support...

  • Page 28
    ... service levels, team member productivity and in-stock availability. Point-of-Sale. Our POS system, or APAL, is in all of our stores operating under the "Advance Auto Parts", "Advance Discount Auto Parts" and "Western Auto" trade names. Information maintained by APAL is used to formulate pricing...

  • Page 29
    ... is selected and purchased for our stores by team members at our centralized store support center in Roanoke, Virginia. In 2006, we purchased merchandise from over 400 vendors, with no single vendor accounting for more than 6% of purchases. Our purchasing strategy involves negotiating multi-year...

  • Page 30
    ...for expert advice and useful tips to help customers keep their vehicles running smoothly. The campaign includes creative and compelling television and radio commercials designed to drive sales and build an enduring, positive image of Advance Auto Parts as a special place to shop. Since 2004, we have...

  • Page 31
    ... 30, 2006, we operated 87 stores under the "Autopart International" trade name in the following states throughout the Northeast: Number of Location Stores Location Number of Stores Location Number of Stores Connecticut Maine Massachusetts 17 5 33 New Hampshire New York 8 19 Rhode Island Vermont...

  • Page 32
    ... store location, availability, customer service and product offerings, quality and price. Environmental Matters We are subject to various federal, state and local laws and governmental regulations relating to the operation of our business, including those governing recycling of batteries and used...

  • Page 33
    ...number of light trucks and sport utility vehicles that require more expensive parts, resulting in higher average sales per customer; continued consolidation of automotive aftermarket retailers; move to higher priced premium parts, which offer enhanced features, benefits and/or warranties; and market...

  • Page 34
    ... ability to properly merchandise, market and price the products required in their respective markets. Furthermore, we may acquire stores or businesses from, make investments in, or enter into strategic alliances with, companies that have stores or distribution networks in our current markets or in...

  • Page 35
    ..., including location, price, name recognition and customer service. We compete in both the DIY and DIFM categories of the automotive aftermarket industry, and primarily with national and regional retail automotive parts chains, discount stores and mass merchandisers that carry automotive products...

  • Page 36
    ... on our assets and engaging in sale-leaseback transactions; issuing or selling capital stock of our subsidiaries; transferring or selling assets currently held by us; engaging in transactions with affiliates; entering into any agreements that restrict dividends from our subsidiaries; and engaging in...

  • Page 37
    ... sets forth certain information relating to our distribution and other principal facilities: Opening Facility Main Distribution Centers: Roanoke, Virginia Lehigh, Pennsylvania Lakeland, Florida Gastonia, North Carolina Gallman, Mississippi Salina, Kansas Delaware, Ohio Thomson, Georgia Master PDQ...

  • Page 38
    ...Years 2006-2007 2008-2012 2013-2017 2018-2027 2028-2037 2038-2051 AAP Stores 25 173 602 924 554 129 2,407 AI Stores 8 37 28 14 - 87 Total 33 210 630 938 554 129 2,494 Item 3. Legal Proceedings. We currently and from time to time are involved in litigation incidental to the conduct of our business...

  • Page 39
    ... Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol "AAP." The table below sets forth, for the fiscal periods indicated, the high and low sale prices per share for our common stock, as reported by the NYSE. High Low Fiscal Year...

  • Page 40
    ... Five Year Total Return $300 $250 $200 $150 $100 $50 $0 12/29/2001 12/28/2002 1/3/2004 1/1/2005 12/31/2005 12/30/2006 Total Return To Shareholders ADVANCE AUTO PARTS S&P 500 INDEX of dividends) S&P 500 SPECIALTY RETAIL INDEX (Includes reinvestment Company / Index ADVANCE AUTO PARTS, INC...

  • Page 41
    ... Results of Operations," and our consolidated financial statements and the related notes included elsewhere in this report. Fiscal Year 2006 (1)(2) 2005 2004 2003 (in thousands, except per share data) 2002 Statement of Operations Data: Net sales Cost of sales Gross profit (3) Selling, general and...

  • Page 42
    ... of year New stores (13) Closed stores Number of stores, end of period Relocated stores Stores with commercial delivery program, end of period Total commercial sales, as a percentage of total sales (14) Total store square footage, end of period Average net sales per store (16) Average net sales per...

  • Page 43
    ... specific product area. In addition, we operated 37 stores under the "Western Auto" and "Advance Auto Parts" trade names, located primarily in Puerto Rico and the Virgin Islands. The Western Auto stores offer automotive tires and service in addition to automotive parts, accessories and maintenance...

  • Page 44
    ... energy prices, higher insurance and interest rates, and larger required minimum payments on their credit card balances, which limit their current ability to spend. We have established a high priority of examining our operating expenses, including both corporate and storelevel, in light of our sales...

  • Page 45
    ...; Our focus on making our supply chain more responsive and improving our in-stock position; Consistent growth and execution of our commercial program, including the optimization of delivery vehicles; Our focus on recruiting, training and retaining high-performing team members, especially those who...

  • Page 46
    ... commercial market through internal growth and selected acquisitions; Providing trained parts experts to assist commercial customers' merchandise selections; Shifting commercial delivery vehicles or other commercial resources to store locations where they can be most productive; and Providing credit...

  • Page 47
    ...-line method to amortize this fair value as compensation cost over the requisite service period. Total share-based compensation expense included in selling, general and administrative expenses in our statements of operations for the fiscal years ended 2006 was $19.1 million. The related income tax...

  • Page 48
    ...items will be sold at retail prices that are less than recorded cost. We develop these estimates based on the determination of return privileges with vendors, the level of credit provided by the vendor and management's estimate of the discounts to recorded cost, if any, required by market conditions...

  • Page 49
    ... liabilities at December 30, 2006 would have affected net income by approximately $4.4 million for the fiscal year ended December 30, 2006. Leases and Leasehold Improvements We lease certain store locations, distribution centers, office space, equipment and vehicles. We account for our leases under...

  • Page 50
    ...tax developments would require an increase in our effective tax rate and a possible use of cash in the period of resolution. Share-Based Payments We have a share-based compensation plan, which includes fixed stock options and deferred stock units, or DSUs. We account for our share-based compensation...

  • Page 51
    ... benefits of store support center team members, store support center administrative office expenses, data processing, professional expenses and other related expenses. Consolidated Results of Operations The following table sets forth certain of our operating data expressed as a percentage of net...

  • Page 52
    ... net sales increase was due to an increase in comparable store sales of 8.7%, contributions from the 151 new stores opened within the last year and sales from acquired operations. The comparable store sales increase was driven by an increase in average ticket sales and a slight increase in customer...

  • Page 53
    ... made a $12.5 million contingent payment in 2006 related to the acquisition of Autopart International. Our future capital requirements will depend in large part on the number of and timing for new stores we open or acquire within a given year and the number of stores we relocate or remodel. During...

  • Page 54
    ... health care and life insurance benefits for eligible retired team members through our postretirement plan. At December 30, 2006, our accrued benefit cost related to this plan was $10.5 million. The plan has no assets and is funded on a cash basis as benefits are paid/incurred. The discount rate...

  • Page 55
    ... the sale of our private label credit card portfolio in fiscal 2005; $24.9 million reduction in cash outflows, net of accounts payable, as a result of reducing inventory growth rates in line with our current sales trend; $33.4 million increase in cash flows from other assets related to the timing of...

  • Page 56
    ... million was paid in 2006; increase in capital expenditures of $42.4 million used primarily to accelerate our square footage growth through adding new stores (including ownership of selected new stores) and remodeling existing stores. For fiscal 2005, net cash used in investing activities increased...

  • Page 57
    .... Primarily includes employee benefits accruals and deferred income taxes for which no contractual payment schedule exists. Long Term Debt On October 5, 2006, we entered into a new $750.0 million unsecured five-year revolving credit facility with our subsidiary, Advance Stores Company, Incorporated...

  • Page 58
    .... Under the terms of the new revolving credit facility, the interest rate spread and commitment fee will be based on our credit rating. The revolving credit facility terminates on October 5, 2011. The revolving credit facility is fully and unconditionally guaranteed by Advance Auto Parts, Inc. The...

  • Page 59
    ... periods beginning after December 15, 2006. We present sales net of sales taxes in our consolidated statement of operations and do not anticipate changing our policy as a result of EITF 06-3. In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets - an amendment of...

  • Page 60
    ... long-term debt. Our longterm debt currently consists of borrowings under a revolving credit facility and is primarily vulnerable to movements in the LIBOR rate. While we cannot predict the impact interest rate movements will have on our debt, exposure to rate changes is managed through the use of...

  • Page 61
    ... Control over Financial Reporting. Management's Report on Internal Control over Financial Reporting is set forth in Part IV, Item 15 of this annual report. There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 30, 2006 that has...

  • Page 62
    ... of the Board," "Information Concerning Our Executive Officers," "Audit Committee Report," and "Section 16(a) Beneficial Ownership Reporting Compliance" in our proxy statement for the 2007 annual meeting of stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended...

  • Page 63
    ... Financial Statements of Advance Auto Parts, Inc. and Subsidiaries for the years ended December 30, 2006, December 31, 2005 and January 1, 2005: Management's Report on Internal Control over Financial Reporting...F-1 Reports of Independent Registered Public Accounting Firm ...F-2 Consolidated Balance...

  • Page 64
    ... the Company's consolidated financial statements, has issued an attestation report on management's assessment of the Company's internal control over financial reporting as of December 30, 2006 which is included on page F-3 herein. Michael N. Coppola Chairman, President and Chief Executive Officer...

  • Page 65
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the accompanying consolidated balance sheets of Advance Auto Parts, Inc. and subsidiaries (the Company) as of December 30, 2006 and December...

  • Page 66
    ... the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that Advance Auto Parts, Inc. and subsidiaries (the Company...

  • Page 67
    ... as of and for the year ended December 30, 2006 of the Company and our report dated February 27, 2007 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company's adoption of new accounting standards. McLean, Virginia February 27, 2007...

  • Page 68
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 30, 2006 and December 31, 2005 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents Receivables, net Inventories, net Other current assets Total current assets Property and equipment, ...

  • Page 69
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) 2006 Net sales Cost of sales, including purchasing and warehousing costs Gross profit Selling, general ...

  • Page 70
    ... income Issuance of shares upon the exercise of stock options Tax benefit related to exercise of stock options Stock issued as compensation under employee stock purchase plan Treasury stock purchased Treasury stock retired Other Balance, December 31, 2005 Net income Unrealized loss...

  • Page 71
    ... Payments on credit facilities Payment of debt related costs Proceeds from the issuance of common stock, primarily exercise of stock options Excess tax benefit from share-based compensation Repurchase of common stock Increase (decrease) in borrowings secured by trade receivables Net cash used...

  • Page 72
    ... Years Ended December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands) 2006 Supplemental cash flow information: Interest paid Income tax payments, net Non-cash transactions: Accrued purchases of property and equipment Repurchases of common stock not settled Retirement of common stock...

  • Page 73
    ... in any specific product area. In addition, Stores operates 37 stores under the "Western Auto" and "Advance Auto Parts" trade names, located primarily in Puerto Rico and the Virgin Islands. The Western Auto stores offer automotive tires and service in addition to automotive parts, accessories and...

  • Page 74
    ... year, which is included in other assets, net on the accompanying consolidated balance sheets. Preopening Expenses Preopening expenses, which consist primarily of payroll and occupancy costs, are expensed as incurred. Income Taxes The Company uses the liability method of accounting for income taxes...

  • Page 75
    ... presents sales net of sales taxes in its consolidated statements of operations. Share-Based Payments Prior to January 1, 2006, the Company accounted for its share-based compensation plans as prescribed by Accounting Principles Board, or APB, Opinion No. 25, "Accounting for Stock Issued to Employees...

  • Page 76
    ... fiscal year ended December 30, 2006, the Company reported $5,272 of excess tax benefits as a financing cash inflow. The following table reflects the impact on net income and earnings per share as if the Company had applied the fair value based method of recognizing share-based compensation costs as...

  • Page 77
    ... per share data) 2005 Net income, as reported Add: Total stock-based employee compensation expense included in reported net income, net of related tax effects Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects...

  • Page 78
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) hedged debt. Therefore, the Company has recorded all adjustments to the fair value of the hedge ...

  • Page 79
    ... consolidated balance sheets as Financed Vendor Accounts Payable. Lease Accounting The Company leases certain store locations, distribution centers, office space, equipment and vehicles, some of which are with related parties. Initial terms for facility leases are typically 10 to 15 years, followed...

  • Page 80
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) accompanying consolidated balance sheets. New Accounting Pronouncements In February 2007, the FASB issued ...

  • Page 81
    ... Company acquired Autopart International, Inc., or AI. The acquisition, which included 61 stores throughout New England and New York, a distribution center and AI's wholesale distribution business, complements the Company's growing presence in the Northeast. AI serves the growing commercial market...

  • Page 82
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) September 14, 2005 Cash Receivables, net Inventories Other current assets Property and equipment Goodwill ...

  • Page 83
    ... expenses associated with compensating team members for scheduled work hours for which stores were closed and food and supplies provided to team members and their families. While these costs and sales disruptions were not recoverable from the Company's insurance carrier, the Company did maintain...

  • Page 84
    ... using a new third party provider to process its private label credit card transactions related to its commercial business. In conjunction with this transition, the Company sold the credit card portfolio for proceeds totaling $33,904. Accordingly, the Company's previously recorded receivable balance...

  • Page 85
    ... December 30, 2006 and December 31, 2005. Under the LIFO method, the Company's cost of sales reflects the costs of the most currently purchased inventories while the inventory carrying balance represents the costs relating to prices paid in prior years. The Company's costs to acquire inventory have...

  • Page 86
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) Depreciation of building and leasehold improvements is provided over the shorter of the original useful ...

  • Page 87
    ...-term debt Long-term debt, excluding current portion December 31, 2005 - $ 170,000 168,300 100,000 $ 476,800 440 477,240 (67) 477,173 $ 500 438,800 (32,760) 406,040 On October 5, 2006, the Company entered into a new $750,000 unsecured five-year revolving credit facility with Advance Stores...

  • Page 88
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) The interest rates on borrowings under the new revolving credit facility will be based, at the Company's ...

  • Page 89
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) During fiscal 2005, the Company retired 7,122 shares of common stock, of which 92 shares were repurchased...

  • Page 90
    ...as appropriate. The Company currently has certain years that are open to audit by the Internal Revenue Service. In addition, the Company has certain years that are open for audit by various state and foreign jurisdictions for income taxes and sales, use and excise taxes. In management's opinion, any...

  • Page 91
    ... of business, leases that expire will be renewed or replaced by other leases. At December 30, 2006, future minimum lease payments due under non-cancelable operating leases with lease terms ranging from one year to twenty years through the year 2027 for all open stores are as follows: Total 2007...

  • Page 92
    ...'s financial position, results of operations or liquidity. The Company's accounting for income tax contingencies will change subsequent to December 30, 2006 upon the adoption of FIN 48. The Company has entered into employment agreements with certain team members that provide severance pay benefits...

  • Page 93
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) 17. Benefit Plans: 401(k) Plan The Company maintains a defined contribution team member benefit plan, ...

  • Page 94
    ... combined service and interest cost would have been a decrease of $25 for 2006. The postretirement benefit obligation and net periodic postretirement benefit cost was computed using the following weighted average discount rates as determined by the Company's actuaries for each applicable year: 2006...

  • Page 95
    ...-out periods prescribed by the Company's corporate governance policies. The Company grants DSUs annually to its Board of Directors as provided for in the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives, or the DSU Plan. Each DSU is equivalent to...

  • Page 96
    ... Company's closing stock price of $35.56 as of the last trading day of the period ended December 30, 2006. The aggregate intrinsic value of options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during the fiscal years...

  • Page 97
    ... of store operations within the United States, Puerto Rico and the Virgin Islands which operate under the trade names "Advance Auto Parts," "Discount Advance Auto Parts" and "Western Auto." These stores offer a broad selection of brand name and proprietary automotive replacement parts, accessories...

  • Page 98
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) 2006 Net sales Income before provision for income taxes Provision for income taxes Segment assets ...

  • Page 99
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the consolidated financial statements of Advance Auto Parts, Inc. and subsidiaries (the Company) as of December 30, 2006 ...

  • Page 100
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Balance Sheets December 30, 2006 and December 31, 2005 (in thousands, except per share data) December 30, 2006 Assets Cash and cash equivalents Receivables, net Other current assets ...

  • Page 101
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Statements of Operations For the Years Ended December 30, 2006, December 31, 2005 and January 1, 2005 (in thousands, except per share data) For the Years Ended 2005 $ 165 (165) (59) (106)...

  • Page 102
    ..., end of year Supplemental cash flow information: Interest paid Income taxes paid, net Noncash transactions: Retirement of common stock Declared but unpaid cash dividends Cash dividends paid by Stores on behalf of Parent Proceeds received by Stores from stock transactions under the Parent's stock...

  • Page 103
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Notes to Condensed Parent Company Statements December 30, 2006 and December 31, 2005 (in thousands, except per share data) 1. Presentation These condensed financial statements have been prepared pursuant to the ...

  • Page 104
    ... December 30, 2006 (1) (2) Deductions $ (3,263) (6,066) (1,274) (1) (1) (1) Other $ $ 8,103 4,686 4,640 Accounts written off during the period. These amounts did not impact our statement of operations for any year presented. Reserves assumed in the acquisition of Autopart International. F-41

  • Page 105
    ... Dated: February 28, 2007 ADVANCE AUTO PARTS, INC. By: /s/ Michael O. Moore Michael O. Moore Executive Vice President, Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant...

  • Page 106
    ... Advance Auto 2001 Stock Option Agreement for holders of Discount Auto Parts, Inc. ("Discount") fully converted options. Purchase Agreement dated as of October 31, 2001 among Advance Stores, Advance Trucking Corporation, LARALEV, INC., Western Auto Supply Company, J.P. Morgan Securities Inc., Credit...

  • Page 107
    ...of Advance Stores Company, Incorporated. (4) Filed on April 2, 2001 as an exhibit to the Quarterly Report on Form 10-Q of Discount. (5) Filed on August 16, 2004 as an exhibit to the Quarterly Report on Form 10-Q of Advance Auto Parts, Inc. (6) Filed on May 20, 2004 as an exhibit to Current Report on...

  • Page 108
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  • Page 110
    ....com/isd AAP New York Stock Exchange Common Stock: Ticker Symbol Listing Deloitte & Touche LLP 1750 Tysons Blvd. McLean, Virginia 22102 Independent Registered Public Accounting Firm: SEC FORM 10-K: Stockholders may obtain free of charge a copy of Advance Auto Parts' Annual Report on Form 10...

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    ... Report 2006 Board of Directors John C. Brouillard (1, 2, 5) Retired Chief Administrative and Financial Officer, H.E. Butt Grocery Company William S. Oglesby (3*, 4) Senior Managing Director, The Blackstone Group, L.P. Lawrence P. Castellani (3) Retired Chief Executive Officer, Advance Auto Parts...

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    This photo was taken by a customer at our store on Apple Harvest Drive in Martinsburg, West Virginia. 5008 Airport Road, Roanoke, Virginia 24012 â-² (540) 362-4911 â-² www.AdvanceAutoParts.com