Advance Auto Parts 2007 Annual Report Download - page 99

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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)
See Notes to the 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 is 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 term loan and revolving credit
facility of Stores. These debt agreements do not contain restrictions on the payment of dividends, loans or advances
between the Company and Stores and Stores’ subsidiaries. Therefore, there are no such restrictions as of December
29, 2007 and December 30, 2006.
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 several years (the next 53 week fiscal year is 2008). All fiscal years presented include 52 weeks of operations.
New Accounting Pronouncements
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 as it related to other accounting
pronouncements that require or permit fair value measurements, and expands the disclosures on fair value
measurements. In February 2008, the FASB issued a staff position that delays the effective date of SFAS No. 157
for all nonfinancial assets and liabilities except for those recognized or disclosed at least annually. Except for the
delay for nonfinancial assets and liabilities, SFAS No. 157 is effective for fiscal years beginning after December 15,
2007 and interim periods within such years. The Company is currently evaluating the impact, if any, of adopting
SFAS No. 157.
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, if any, of adopting SFAS No. 159.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which replaces SFAS No.
141, “Business Combinations.” SFAS No. 141R, among other things, establishes principles and requirements for
how an acquirer entity recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed and any controlling interests in the acquired entity; recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial effects of the business
combination. Costs of the acquisition will be recognized separately from the business combination. SFAS No. 141R
applies to business combinations for fiscal years beginning after December 15, 2008.
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