Advance Auto Parts 2008 Annual Report Download - page 79

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 3, 2009, December 29, 2007 and December 30, 2006
(in thousands, except per share data)
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-25
January 3, December 29, December 30,
2009 2007 2006
Warranty reserves, beginning of period 17,757$ 13,069$ 11,352$
Additions to warranty reserves 38,459 24,722 17,352
Reserves utilized (27,554) (20,034) (15,635)
Warranty reserves, end of period 28,662$ 17,757$ 13,069$
Effective December 30, 2007, the Company began including in its warranty reserve the warranty obligation on
certain other products sold in addition to batteries. A portion of this obligation is funded by the Company’s vendors.
The overall increase in the Company’s warranty reserves is primarily attributable to an increase in the quantity and
cost of batteries sold during fiscal 2008 as well as an increase in related warranty claims.
Self-insurance Reserves
The following table presents changes in the Company’s self-insurance reserves:
January 3, December 29, December 30,
2009 2007 2006
Self-insurance reserves, beginning of period 85,523$ 71,519$ 54,899$
Additions to self-insurance reserves 89,315 102,641 97,201
Reserves utilized (84,284) (88,637) (80,581)
Self-insurance reserves, end of period 90,554$ 85,523$ 71,519$
11. Stock Repurchase Program:
On May 15, 2008, the Company’s Board of Directors authorized a new $250,000 stock repurchase program.
The new program cancelled and replaced the remaining portion of the Company’s previous $500,000 stock
repurchase program (authorized on August 8, 2007). The program allows the Company to repurchase its 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 2008, the Company repurchased 6,136 shares of its common stock at an aggregate cost of
$216,470, or an average price of $35.28 per share, of which 4,563 shares of common stock were repurchased under
the previous $500,000 stock repurchase program. Additionally, the Company settled $2,959 on shares repurchased
at the end of fiscal 2007.
As of January 3, 2009, the Company had repurchased 1,573 shares of its common stock at an aggregate cost of
$61,089, excluding related expenses, under its $250,000 stock repurchase program leaving $188,911 remaining
under this program, excluding related expenses.
12. Income Taxes:
The Company adopted the provisions of FIN 48 on December 31, 2006 and upon adoption the Company
recorded an increase of $2,275 to the liability for unrecognized tax benefits and a corresponding decrease in its
balance of retained earnings. The following table lists each category and summarizes the activity of the Company’s
unrecognized tax benefits for the fiscal years ended January 3, 2009 and December 29, 2007: