Advance Auto Parts 2009 Annual Report Download - page 62

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 2, 2010, January 3, 2009 and December 29, 2007
(in thousands, except per share data)
.
F-9
1. Organization and Description of Business:
Advance Auto Parts, Inc. (“Advance”) conducts all of its operations through its wholly owned subsidiary,
Advance Stores Company, Incorporated (“Stores”) and its subsidiaries (collectively, the “Company”). The
Company operates 3,264 stores within the United States, Puerto Rico and the Virgin Islands. The Company operates
3,238 stores throughout 39 states in the Northeastern, Southeastern and Midwestern regions of the United States.
These stores operate under the “Advance Auto Parts” trade name except for certain stores in the State of Florida
which operate under the “Advance Discount Auto Parts” trade name. These stores offer a broad selection of brand
name and proprietary automotive replacement parts, accessories and maintenance items for domestic and imported
cars and light trucks to do-it-yourself, or DIY, and do-it-for-me, or Commercial, customers. The Company’s
Commercial customers consist of both walk-in and delivery customers. For Commercial delivery sales, the
Company utilizes a fleet of vehicles to deliver product from its 2,868 store locations with delivery service to
Commercial customers’ places of business, including independent garages, service stations and auto dealers. In
addition, the Company operates 26 stores located in Puerto Rico and the Virgin Islands under the “Western Auto”
and “Advance Auto Parts” trade names.
Autopart International (“AI”) is an independently run subsidiary of Stores and operates 156 stores under the
“Autopart International” trade name located primarily throughout the Northeastern region of the United States.
2. 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.
Principles of Consolidation
The consolidated financial statements include the accounts of Advance and its wholly owned subsidiaries. All
intercompany balances and transactions have been eliminated in consolidation.
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, Cash Equivalents and Bank Overdrafts
Cash and cash equivalents consist of cash in banks and money market funds with original maturities of three
months or less. Included in cash equivalents are credit card and debit card receivables from banks, which generally
settle within two to four business days. Credit and debit card receivables included in Cash and cash equivalents at
January 2, 2010 and January 3, 2009 were $24,308 and $18,800, respectively. Bank overdrafts consist of
outstanding checks not yet presented to a bank for settlement, net of cash held in accounts with right of offset. Bank
overdrafts of $9,528 are included in Other current liabilities at January 2, 2010.