Advance Auto Parts 2007 Annual Report Download - page 31

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Intellectual Property
We own a number of trade names and own and have federally registered several service marks and trademarks,
including “Advance Auto Parts,” “Western Auto,” “Parts America,” “Autopart International” and “PDQ” for use in
connection with the automotive parts retailing business. In addition, we own and have registered a number of
trademarks for our proprietary products. We believe that these trade names, service marks and trademarks are
important to our merchandising strategy. We do not know of any infringing uses that would materially affect the use
of these trade names and marks, and we actively defend and enforce them.
Competition
We operate in both the DIY and DIFM markets of the automotive aftermarket industry. Our primary
competitors are (i) both national and regional retail chains of automotive parts stores, including AutoZone, Inc.,
O'Reilly Automotive, Inc., CSK Auto Corporation and The Pep Boys–Manny, Moe & Jack, (ii) discount stores and
mass merchandisers that carry automotive products, (iii) wholesalers or jobber stores, including those associated
with national parts distributors or associations, such as NAPA and Carquest, (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 compared to independent retailers and jobbers that are not part of a chain or
associated with other retailers or jobbers. The principal methods of competition in our business include 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 lead-acid batteries and used oil, and ownership and operation of
real property. We sell consumer products containing hazardous materials as part of our business. In addition, our
customers may bring lead-acid batteries or used oil onto our properties. We currently provide collection and
recycling programs for used automotive, lead-acid batteries and used oil at all of our stores as a service to our
customers. Pursuant to agreements with third party vendors, lead-acid batteries and used oil are collected by our
team members, deposited onto pallets or into vendor supplied containers and stored by us until collected by the third
party vendors for recycling or proper disposal. The terms of our contracts with the third party vendors provide that
they are in compliance with all applicable laws and regulations. Persons who arrange for the removal, disposal,
treatment or other handling of hazardous or toxic substances may be liable for the costs of removal or remediation at
any affected disposal, treatment or other site affected by such substances. Based on our experience, we do not
believe that there are any material environmental costs associated with the current business practice of accepting
lead-acid batteries and used oil as these costs are borne by the respective third parties.
We own and lease real property. Under various environmental laws and regulations, a current or previous owner
or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on,
under or in such property. These laws often impose joint and several liability and may be imposed without regard to
whether the owner or operator knew of, or was responsible for, the release of such hazardous or toxic substances.
Other environmental laws and common law principles also could be used to impose liability for releases of
hazardous materials into the environment or work place, and third parties may seek recovery from owners or
operators of real properties for personal injury or property damage associated with exposure to released hazardous
substances. From time to time, we receive notices from the Environmental Protection Agency and state
environmental authorities indicating that there may be contamination on properties we own, lease or operate or may
have owned, leased or operated in the past or on adjacent properties for which we may be responsible. Compliance
with these laws and regulations has not had a material impact on our operations to date.
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