Advance Auto Parts 2009 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2009 Advance Auto Parts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

ADVANCE AUTO PARTS, INC.
SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
Notes to the Condensed Parent Company Statements
January 2, 2010 and January 3, 2009
(in thousands, except per share data)
See Notes to the Consolidated Financial Statements for Additional Disclosures.
F-48
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. Effective Fiscal 2008, the Company and its subsidiaries realigned duties and
responsibilities within its overall organization that resulted in certain operating expenses being included in and
recognized at the parent company level.
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 January 2, 2010 and January 3,
2009.
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. Accordingly, our fiscal year ended January 3, 2009, or Fiscal 2008, included 53 weeks of
operations. All other fiscal years presented included 52 weeks of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
materially from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash in banks and money market funds with original maturities of three
months or less.
Share-Based Payments
The Company provides share-based compensation to its employees and board of directors. The Company is
required to exercise judgment and make estimates when determining the projected (i) fair value of each award
granted and (ii) number of awards expected to vest. The Company uses the Black-Scholes option-pricing model to
value all share-based awards at the date of grant and the straight-line method to amortize this fair value as
compensation cost over the requisite service period.