Advance Auto Parts 2007 Annual Report Download - page 89

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)
Amount
2008 930$
2009 1,008
2010 1,010
2011 1,015
2012 994
2013-2017 3,989
The Company reserves the right to change or terminate the benefits or contributions at any time. The Company
also continues to evaluate ways in which it can better manage these benefits and control costs. Any changes in the
plan or revisions to assumptions that affect the amount of expected future benefits may have a significant impact on
the amount of the reported obligation, annual expense and projected benefit payments.
The Company adopted the recognition provisions of SFAS No. 158 on December 30, 2006. As a result, the
Company recorded an actuarial gain to accumulated other comprehensive income, net of tax, and recognized
previously unamortized prior service cost that had not yet been included in net periodic postretirement benefit cost
as of December 30, 2006. The adoption of SFAS No. 158 had no impact on net income, but increased
comprehensive income by $3,316, net of tax. The table below shows the incremental effect of applying SFAS No.
158 on individual line items in the Company’s consolidated balance sheet as of December 30, 2006:
Before
Application of
Statement 158 Adjustments
After Application
of Statement 158
Accrued expenses 251,955$ 1,020$ 252,975$
Other long-term liabilities 65,570 (4,336) 61,234
Accumulated other comprehensive income 156 3,316 3,472
Total stockholders' equity 1,027,538 3,316 1,030,854
At December 29, 2007, the net unrealized gain on the postretirement plan consists of an unrealized gain of
$5,370 related to prior service cost and an unrealized net gain of $1,037 related to actuarial gains. Approximately
$581 of the unrealized gain related to prior service cost and $14 related to the actuarial gain is expected to be
recognized as a component of net periodic postretirement 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. Beginning in fiscal 2007, the Company primarily granted stock appreciation rights, or SARs, and
restricted stock, or unvested shares. The stock options and SARs authorized to be granted are non-qualified and
terminate on the seventh anniversary of the grant date. Additionally, the stock options and SARs vest over a three-
year period in equal annual installments beginning on the first anniversary of the grant date and contain no post-
vesting restrictions other than normal trading black-out periods prescribed by the Company’s corporate governance
policies.
The unvested shares vest at the end of a three-year period. During this period, holders of the unvested shares are
entitled to dividend and voting rights. The unvested shares are restricted until they vest and cannot be sold by the
recipient until the restriction has lapsed at the end of the three-year period.
In addition to stock options, 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 one share of common stock of the Company. The DSUs are immediately
vested upon issuance but are held on behalf of the director until he or she ceases to be a director. The DSUs are then
distributed to the director following his or her last date of service. Additionally, the DSU Plan provides for the
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