Advance Auto Parts 2007 Annual Report Download

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ADVANCE AUTO PARTS 2007 ANNUAL REPORT

Table of contents

  • Page 1
    ADVANCE AUTO PARTS 2007 ANNUAL REPORT

  • Page 2

  • Page 3
    ... turning" for our Team Members and our customers. It is our promise to our Team Members and customers, and it is the purpose of our business. It is the force that has powered Advance Auto Parts for 75 years. Our values are the engine that drives our Advance machine - building the self confidence...

  • Page 4
    ADVANCE AUTO PARTS 2007 ANNUAL REPORT Jeff Magee, Store Manager in Pennsylvania, has been with the Team for over 14 years. Jeff is a valued resource to his region and his team, having mentored and coached numerous Team Members. Jeff's current store has outstanding results with regards to turnover,...

  • Page 5
    ... the road ahead and encouraged about what I am learning. Where are we? Our Retail and Commercial customers have told us they want parts availability, parts quality and trusted brands, convenient locations and quick parts delivery, and knowledgeable in-store help. Our recent year 2010 store format...

  • Page 6
    ADVANCE AUTO PARTS 2007 ANNUAL REPORT John Brooks, Commercial Parts Pro in Kentucky, has been with our Team for over eight years. John's sales, tenure of drivers and dedication to the community are all reasons that he is a star player for our Team. 4

  • Page 7
    ...Darren R. Jackson, President and Chief Executive Officer Paige McDonnell works for Autopart International in New Store Development at the corporate office. Paige has been Team Member of the Year the past two years for Autopart International, proving her dedication to the Team and also her customers...

  • Page 8
    ... 04 05 06 07 commercial business, improving the sales productivity of our inventory and sales floor while taking out costs and work that the customer is not interested in. Comparable Income from Continuing Operations per Diluted Share 03 04 05 06 07 Number of Stores 6 Five-Year Results

  • Page 9
    ... operations per diluted share (5)...Weighted average diluted shares outstanding ... Selected Store Data: Comparable store sales growth ...Number of stores, end of period ...Total store square footage, end of period (in thousands) ...Average net sales per store (in thousands) (6)(7) ...Average net...

  • Page 10
    ... right parts and know-how to an ever-growing population of vehicle owners. Since Arthur Taubman founded Advance, the automotive aftermarket has been a business that is constantly revolutionizing itself. Today, there are over 220 million vehicles on the road and the average age of those vehicles has...

  • Page 11
    ... chains. Today, the commercial segment of the automotive aftermarket has grown to a highly fragmented $60 billion business. Advance has a tremendous opportunity to gain market share in this industry by serving the DIFM customer better than anyone else. In 2007, Advance Auto Parts started a business...

  • Page 12
    ...Using external research as well as input from our Field Operations Team Members, Store Managers and Parts Pros, we aggressively worked to improve our merchandise mix by year-end and did so in the following ways: Provided better late model and import parts coverage in a number of our key markets...

  • Page 13
    ... new vendor relationships and adding brands that our customers and Team Members tell us they trust. Advance is proud to announce the addition of the following brands to our merchandise mix: BWD ® ignition and emission parts REMY ® and WORLDWIDE ® starters and alternators AIRTEX ® fuel...

  • Page 14
    ... being cost-effective for the Company's bottom line. Future locations for new stores will be carefully considered with respect to both DIY and DIFM customers. This is a significant change from our store location strategy in the past few years, meaning we will look beyond "Main on Main" locations for...

  • Page 15
    ... in business. AI also successfully opened their new distribution center in Norton, Massachusetts in the first quarter, which provides the capacity to serve up to 300 stores. AI and Advance both share similar values regarding legendary customer service, serving as a cornerstone of each company. The...

  • Page 16
    ... prices, interest rates and high heating costs combined to impact our customers' ability to make their usual auto maintenance purchases. At the same time, Advance's cost of doing business prior to 2007 had not declined in response to these economic factors. In fact, certain costs such as new store...

  • Page 17
    ...our focus toward those projects that will help us achieve our new strategic goals. We reduced our projected number of store openings in 2008 to 115 stores, halted our 2010 store remodel program, and have moved the opening of our new Remington, IN distribution center to the beginning of 2010. Overall...

  • Page 18
    ... taken 75 years to build a great company whose engine still purrs like it just left the shop. We've had one solid focus that has never really changed, we've just made it better. It's dedication to providing customers with the right parts and products, empowering them with know-how and encouraging...

  • Page 19
    ... 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. The committee is responsible for the...

  • Page 20
    ADVANCE AUTO PARTS 2007 ANNUAL REPORT Executive Officers Senior Leadership Team DARREN R. JACKSON PRESIDENT AND CHIEF EXECUTIVE OFFICER RICARDO S. CORO SENIOR VICE PRESIDENT, INFORMATION TECHNOLOGY AND CHIEF INFORMATION OFFICER DONALD L. LOCKARD, JR. SENIOR VICE PRESIDENT, STORE OPERATIONS, ...

  • 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
    ... was $4,245,061,592, based on the last sales price of the Common Stock on July 13, 2007, as reported by the New York Stock Exchange. As of February 22, 2008, the registrant had outstanding 94,517,071 shares of Common Stock, par value $0.0001 per share (the only class of common equity of the...

  • Page 23
    ..., Executive Officers and Corporate Governance ...35 Executive Compensation...35 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...35 Certain Relationships and Related Transactions, and Director Independence ...35 Principal Accountant Fees and Services...

  • Page 24
    ... this report, including in the sections entitled "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors." We assume no obligations to update publicly any forward-looking statements, whether as a result of new information, future...

  • Page 25
    ... and light trucks. In addition, we operated 30 stores under the "Western Auto" and "Advance Auto Parts" trade names, located in Puerto Rico and the Virgin Islands, or Offshore. We also provide our customers online shopping and access to over two million stock keeping units, or SKUs. Our online site...

  • Page 26
    ...Covers Lighting Wash and Waxes 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 Our retail stores are 100% company operated and...

  • Page 27
    ...and auto dealers. Our commercial strategy consists of the development of commercial marketing and merchandising initiatives with the continued focus on getting our DIFM customers to use us as their "first call" supplier. At December 29, 2007, we had 2,604 AAP stores with commercial delivery programs...

  • Page 28
    ... member productivity and in-stock availability. Store Support Center Merchandising. Purchasing for virtually all of the merchandise for our stores is handled by our centralized corporate offices in Roanoke, Virginia, or store support center. In 2007, we purchased merchandise from over 400 vendors...

  • Page 29
    ... supply chain initiatives we expect to further increase the efficient utilization of our distribution capacity. We believe our current capacity will allow us to support in excess of 3,400 stores. During 2007, we announced our plan to build a new distribution center in Indiana now scheduled to open...

  • Page 30
    ...December 29, 2007, we operated 108 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 Jersey New York 8 9 22...

  • Page 31
    ..., (iv) independent operators and (v) automobile dealers that supply parts. We believe that chains of automotive parts stores that, like us, have multiple locations in one or more markets, have competitive advantages in customer service, marketing, inventory selection, purchasing and distribution as...

  • Page 32
    ... automotive products (particularly parts availability), accessories and services in a timely manner; our ability to stimulate DIY customer traffic; and our continued ability to hire and retain qualified personnel, which depends in part on the types of recruiting, training, compensation and benefit...

  • Page 33
    ...higher fuel prices, higher credit costs, possible recession and other factors, both DIY and DIFM customers may defer vehicle maintenance or repair; the decline of the average age of vehicles, miles driven or number of cars on the road may result in a reduction in the demand for our product offerings...

  • Page 34
    ... our relationships with vendors or in our vendors' operations could increase our cost of goods sold. Our business depends on developing and maintaining close relationships with our vendors and upon the vendors' ability or willingness to sell quality products to us at favorable prices and terms. Many...

  • Page 35
    ...not maintained by us, will cause us to be in default under our credit facilities. Any of these defaults, if not waived, could result in the ...borrow sufficient funds to refinance it. Even if new financing were available, it may be on terms that are less favorable or otherwise not acceptable to us...

  • Page 36
    ... 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 37
    ...3. Legal Proceedings. We currently and from time to time are involved in litigation incidental to the conduct of our business, including litigation arising from claims of employment discrimination or other types of employment matters as a result of claims by current and former employees. Although we...

  • Page 38
    ... of our common stock for the quarter ended December 29, 2007 (amounts in thousands, except per share amounts): Average Price Paid per Share (1) $ 35.63 38.10 37.07 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) 841 1,171 2,012 Maximum Dollar Value that May Yet...

  • Page 39
    ... of securities remaining available for future issuance under equity compensation (1)(3) plans 6,097 (4) $32.68 3,766 6,097 $32.68 3,766 (3) (4) Number of shares presented is in thousands. Includes weighted average exercise price of outstanding stock options and stock appreciation rights, or...

  • Page 40
    ... in this report. Fiscal Year 2007 (1)(2) 2006 2005 2004 (in thousands, except per share data) 2003 Statement of Operations Data: Net sales Cost of sales Gross profit (3) Selling, general and administrative expenses (4) Expenses associated with merger and integration Operating income Interest...

  • Page 41
    ... Total debt (10) Total net debt Total stockholders' equity Selected Store Data: Comparable store sales growth Number of stores at beginning of year New stores Closed stores Number of stores, end of period Relocated stores Stores with commercial delivery program, end of period Total commercial sales...

  • Page 42
    .... In addition, we operated 30 stores under the "Western Auto" and "Advance Auto Parts" trade names, located in Puerto Rico and the Virgin Islands, or Offshore. At December 29, 2007, we operated 108 stores in the AI segment under the "Autopart International" trade name. We acquired AI in September...

  • Page 43
    ... $ 475 $ 604 47.7% 8.7% 2007 Total net sales (in thousands) Total commercial net sales (in thousands) Comparable store net sales growth DIY comparable store net sales growth DIFM comparable store net sales growth Average net sales per store (in thousands) Average net sales per square foot Inventory...

  • Page 44
    ...environment, including higher fuel and credit costs faced by our customers, higher unemployment and lower consumer confidence. In order to structure our DIFM business for further growth, we continue to examine store staffing and training, compensation policies and truck utilization. Commercial sales...

  • Page 45
    ... increase to our cost of sales, for our stores and distribution centers based on our extensive and frequent cycle counting program. Our estimates of these shrink reserves depend on the accuracy of the program, which is dependent on compliance rates of our facilities and the execution of the required...

  • Page 46
    ..., workers' compensation and the health care claims of our team members, although we maintain stop-loss coverage with third-party insurers to limit our total liability exposure. Our self-insurance program, started in 2001, has not reached full maturity. A reserve for liabilities associated with these...

  • Page 47
    ... ended December 29, 2007. Components of Statement of Operations Net Sales Net sales consist primarily of comparable store sales and new store net sales. We calculate comparable store sales based on the change in net sales starting once a store has been opened for 13 complete accounting periods. We...

  • Page 48
    ...than anticipated sales, additional expenses associated with the transition to AI's new distribution center early in 2007 and the reinvestment of resources to accelerate AI's store growth and roll out of certain AI branded product. Interest expense for 2007 was $34.8 million, or 0.7% of net sales, as...

  • Page 49
    ...associated with higher costs for insurance programs, including workers' compensation, auto liability and general liability. Additionally, AI contributed approximately 0.2% of selling, general and administrative expenses as a result of the reinvestment of working capital to accelerate their new store...

  • Page 50
    ... 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 2008, we anticipate adding 100 new AAP and 15 AI stores and relocating 10 to 20 AAP stores. We do not plan to remodel any stores in 2008. We also plan to make continued...

  • Page 51
    ...growth in line with our current sales trend, while maintaining adequate levels of inventory to support our parts availability initiative; and a $35.7 million increase in cash flows comprised of other movements in working capital, including the timing in payment of certain operating expenses. x For...

  • Page 52
    ...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 payments for...

  • Page 53
    ... for training and development. All of these agreements expire in 2008. Primarily includes employee benefits accruals, restructuring and closed store liabilities and deferred income taxes for which no contractual payment schedule exists and we expect the payments to occur beyond 12 months from...

  • Page 54
    ....0 million unsecured four-year term loan with our subsidiary, Advance Stores Company, Incorporated, or Stores, serving as borrower. Proceeds from this term loan will be used to repurchase shares of our common stock under our stock repurchase program. As of December 29, 2007, Stores had borrowed $50...

  • Page 55
    ... black-out periods prescribed by our corporate governance policies. We continue to use the Black-Scholes option-pricing model to value all awards and the straight-line method to amortize this fair value as compensation cost over the requisite service period. The unvested shares vest at the end of...

  • Page 56
    ...elected to apply the alternate transition method under which a 14-month measurement will cover the period from November 1, 2007 through December 29, 2007. We do not expect the change in the measurement date to have a material impact on our financial condition, results of operations or cash flows. In...

  • Page 57
    ... on Internal 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 were no changes in our internal control over financial reporting that occurred during the quarter ended December 29, 2007 that...

  • Page 58
    ... No. 1 - Election of Directors," "Corporate Governance," "Meetings and Committees 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 2008 annual meeting of stockholders...

  • Page 59
    ... Statement Schedules. (a)(1) Financial Statements Audited Consolidated Financial Statements of Advance Auto Parts, Inc. and Subsidiaries for the years ended December 29, 2007, December 30, 2006 and December 31, 2005: Management's Report on Internal Control over Financial Reporting ...F-1 Reports of...

  • Page 60
    ..., has issued an attestation report on the Company's internal control over financial reporting as of December 29, 2007 which is included on page F-3 herein. /s/ Darren R. Jackson Darren R. Jackson President, Chief Executive Officer and Director February 26, 2008 /s/ Michael A. Norona Michael...

  • Page 61
    ... in Income Taxes, in 2007, its method of accounting for share-based payments to conform to FASB Statement No. 123(R), Share-Based Payment, in 2006, and changed its method of accounting for other postretirement benefits to conform to FASB Statement No. 158, Employers' Accounting for Defined...

  • Page 62
    ... FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and subsidiaries Roanoke, Virginia We have audited the internal control over financial reporting of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of December 29, 2007, based on criteria established in...

  • Page 63
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 29, 2007 and December 30, 2006 (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 64
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) 2007 Net sales Cost of sales, including purchasing and warehousing costs Gross profit Selling, general...

  • Page 65
    ... Tax benefit from share-based compensation Share-based compensation Stock issued under employee stock purchase plan Treasury stock purchased Treasury stock retired Cash dividends Other Balance, December 30, 2006 Net income Changes in net unrecognized other postretirement benefit costs, net...

  • Page 66
    ... under credit facilities 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 Borrowings secured by trade receivables Net cash used in...

  • Page 67
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) For the Years Ended December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands) 2007 Supplemental cash flow information: Interest paid Income tax payments, net Non-cash transactions: Accrued ...

  • Page 68
    ... automotive replacement parts, accessories and maintenance items for domestic and imported cars and light trucks. In addition, the Company operates 30 stores under the "Western Auto" and "Advance Auto Parts" trade names, located in Puerto Rico and the Virgin Islands. Autopart International, an...

  • Page 69
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) The Company recognizes other promotional incentives earned under long-term agreements as a reduction...

  • Page 70
    ...' compensation and the health care claims of its team members although the Company maintains stop-loss coverage with third-party insurers to limit its total liability exposure. Liabilities associated with these losses are calculated for claims filed and claims incurred but not yet reported using...

  • Page 71
    ... SFAS No. 123. The Company uses the Black-Scholes option-pricing model to value all awards and the straight-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...

  • Page 72
    ...as if the Company had applied the fair value based method of recognizing share-based compensation costs as prescribed by SFAS No. 123 for the fiscal year ended December 31, 2005. 2005 Net income, as reported Add: Total stock-based employee compensation expense included in reported net income, net of...

  • Page 73
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) The fair value at December 29, 2007 and December 30, 2006, respectively, was an unrecognized loss of...

  • Page 74
    ... sheets as Financed Vendor Accounts Payable. Lease Accounting The Company leases certain store locations, distribution centers, office space, equipment and vehicles. Initial terms for facility leases are typically 10 to 15 years, followed by additional terms containing renewal options at five year...

  • Page 75
    ...or LAWs, and Parts Delivered Quickly warehouses, or PDQs, to our retail stores after the customer has special-ordered the merchandise; Æ" Self-insurance costs; Æ" Professional services; and Æ" Other administrative costs, such as credit card service fees, supplies, travel and lodging. New Accounting...

  • Page 76
    ... 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 77
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) September 14, 2005 Cash Receivables, net Inventories Other current assets Property and equipment ...

  • Page 78
    ... store closures, stores operating on limited hours and lower sales trends due to evacuations. The Company also incurred and recognized incremental expenses associated with compensating team members for scheduled work hours for which stores were closed and food and supplies provided to team members...

  • Page 79
    ... of certain parts and batteries and are valued under the first-in, first-out ("FIFO") method. Core values are included as part of our merchandise costs and are either passed on to the customer or returned to the vendor. Additionally, these products are not subject to the frequent cost changes like...

  • Page 80
    ... and the historical analysis of product sales and current market conditions. The nature of the Company's inventory is such that the risk of obsolescence is minimal and excess inventory has historically been returned to the Company's vendors for credit. The Company provides reserves when less than...

  • Page 81
    ... 477,240 (67) 477,173 $ $ On December 4, 2007, the Company entered into a new $200,000 unsecured four-year term loan with Stores serving as borrower. Proceeds from this term loan will be used to repurchase shares of the Company's common stock under its stock repurchase program. As of December 29...

  • Page 82
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) The revolving credit facility also provides for the issuance of letters of credit with a sub limit ...

  • Page 83
    ... 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. During fiscal 2007, the Company repurchased 8,341 shares of common stock at an aggregate cost of $285,869, or an average price of...

  • Page 84
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) Provision (benefit) for income taxes from continuing operations for fiscal 2007, fiscal 2006 and ...

  • Page 85
    ... for tax Net operating loss carryforwards Total current deferred income tax assets (liabilities) Long-term deferred income tax liabilities Property and equipment Postretirement benefit obligation Share-based compensation Net operating loss carryforwards Valuation allowance Other, net Total long-term...

  • Page 86
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) Net rent expense for fiscal 2007, fiscal 2006 and fiscal 2005 was as follows: 2007 $ 245,135 730 5,...

  • Page 87
    ...a deferred compensation liability for this plan. At December 29, 2007 and December 30, 2006 these liabilities were $4,668 and $3,402, respectively. Postretirement Plan The Company provides certain health care and life insurance benefits for eligible retired team members through a postretirement plan...

  • Page 88
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) 2007 Change in benefit obligation: Benefit obligation at beginning of the year Interest cost ...

  • Page 89
    ... benefit cost in fiscal 2008. 16. Share-Based Compensation Plans: The Company has share-based compensation plans as allowed under its long-term incentive plan, or LTIP. Historically, the Company has granted fixed stock options and deferred stock units, or DSUs, to its employees under these plans...

  • Page 90
    ...10.54 per share, respectively. The aggregate intrinsic value in the preceding table is based on the Company's closing stock price of $38.17 as of the last trading day of the period ended December 29, 2007. The aggregate intrinsic value of options and SARs (the amount by which the market price of the...

  • Page 91
    ... eligible team members may purchase common stock at 95% of fair market value at the date of purchase. There are annual limitations on team member elections of either $25 per team member or ten percent of compensation, whichever is less. Under the plan, team members acquired 53, 90 and 110 shares in...

  • Page 92
    ...Information: The Company has the following two reportable segments: Advance Auto Parts, or AAP, and AI. The AAP segment is comprised of store operations within the United States, Puerto Rico and the Virgin Islands which operate under the trade names "Advance Auto Parts," "Advance Discount Auto Parts...

  • Page 93
    ... share data) 2007 Net Sales AAP AI Total Net Sales Percentage of Sales, by Product Group (1) in AAP Segment Parts Accessories Chemicals Oil Other Total Income (loss) before provision (benefit) for income taxes AAP AI Total income (loss) before provision (benefit) for income taxes Provision (benefit...

  • Page 94
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) 19. Quarterly Financial Data (unaudited): The following table summarizes quarterly financial data ...

  • Page 95
    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 29, 2007...

  • Page 96
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Balance Sheets December 29, 2007 and December 30, 2006 (in thousands, except per share data) December 29, 2007 Assets Cash and cash equivalents Other current assets Investment in ...

  • Page 97
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Statements of Operations For the Years Ended December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands, except per share data) For the Years Ended 2006 $ 165 (165) (58) (...

  • Page 98
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Statements of Cash Flows For the Years Ended December 29, 2007, December 30, 2006 and December 31, 2005 (in thousands) For the Years Ended 2006 2005 2007 Cash flows from operating ...

  • Page 99
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Notes to the Condensed Parent Company Statements December 29, 2007 and December 30, 2006 (in thousands, except per share data) 1. Presentation These condensed financial statements have been prepared pursuant to ...

  • Page 100
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Notes to the Condensed Parent Company Statements December 29, 2007 and December 30, 2006 (in thousands, except per share data) In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in ...

  • Page 101
    ADVANCE AUTO PARTS, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period $ 8,103 4,686 4,640 Charges to Expenses $ 2,081 1,228 996 Balance at End of Period $ 4,686 4,640 3,987 Allowance for doubtful accounts receivable: December 31, 2005 December 30, ...

  • Page 102
    ..., this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature /s/ Darren R. Jackson Darren R. Jackson Title President, Chief Executive Officer and Director (Principal Executive Officer) Executive Vice President...

  • Page 103
    ...Term Incentive Plan Award Notice. 10.22 Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (as amended January 1, 2008). 10.23(8) Amended Advance Auto Parts, Inc. Employee Stock Purchase Plan. 10.24 Advance Auto Parts, Inc. Deferred Compensation Plan...

  • Page 104
    ...of December 4, 2007 among Advance Auto Parts, Inc. and JPMorgan Chase Bank, N.A., as administrative agent for the lenders. 10.32(13) Employment Agreement effective January 7, 2008 between Advance Auto Parts, Inc., and Darren R. Jackson. 10.32(15) Advance Auto Parts, Inc. Executive Incentive Plan. 21...

  • Page 105
    ...(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 3. 4. 5. Date: February 26, 2008 /s/ Darren R. Jackson Darren R. Jackson President, Chief Executive Officer and Director

  • Page 106
    ... FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael A. Norona, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Advance Auto Parts, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit...

  • Page 107
    ...Jackson Name: Darren R. Jackson Title: President, Chief Executive Officer and Director I, Michael A. Norona, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Annual Report on Form 10-K of Advance Auto Parts...

  • Page 108
    ...AUTO PARTS, INC. John C. Brouillard Lawrence P. Castellani Darren R. Jackson DARREN R. JACKSON PRESIDENT AND CHIEF EXECUTIVE OFFICER, ADVANCE AUTO PARTS, INC. NICHOLAS J. LAHOWCHIC (1, 3) RETIRED EXECUTIVE VICE PRESIDENT, LIMITED BRANDS, INC. WILLIAM S. OGLESBY (3*, 4) SENIOR MANAGING DIRECTOR...

  • Page 109
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