Advance Auto Parts 2006 Annual Report Download - page 103

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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)
See Notes to Consolidated Financial Statements for Additional Disclosures.
1. Presentation
These condensed financial statements have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and note disclosures normally included in annual financial
statements prepared in accordance with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to those rules and regulations, although management believes that the
disclosures made are adequate to make the information presented not misleading.
2. Organization
Advance Auto Parts, Inc. (“the Company”) is a holding company, which was the 100% shareholder of Advance
Stores Company, Incorporated and its subsidiaries ("Stores") during the periods presented. The parent/subsidiary
relationship between the Company and Stores includes certain related party transactions. These transactions consist
primarily of interest on intercompany advances, dividends, capital contributions and allocations of certain costs.
Deferred income taxes have not been provided for financial reporting and tax basis differences on the undistributed
earnings of the subsidiaries. The Company fully and unconditionally guarantees the revolving credit facility of
Stores.
3. Summary of Significant Accounting Policies
Accounting Period
The Company's fiscal year ends on the Saturday nearest the end of December, which results in an extra week
every six years (the next 53 week fiscal year is 2009). All fiscal years presented include 52 weeks of operations.
New Accounting Pronouncements
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items
at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the impact of SFAS No. 159.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 clarifies the
definition of fair value, establishes a framework for measuring fair value, and expands the disclosures on fair value
measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the impact of SFAS No. 157.
In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” or
FIN 48. FIN 48 clarifies the accounting and reporting for income taxes recognized in accordance with SFAS No.
109, “Accounting for Income Taxes.” The interpretation prescribes a recognition threshold and measurement
attribute for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions
taken or expected to be taken in income tax returns. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company does not expect the adoption of FIN 48 to have a material impact on its financial
condition, results of operations or cash flows as the Company utilizes the separate return method of allocating
income taxes to the separate financial statements of the consolidated entity.
F-40