Advance Auto Parts 2009 Annual Report Download - page 72

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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-19
Prior to Effect
of Accounting
Change Adjustments As Reported
Cost of sales, including purchasing
and warehousing costs 2,698,907$ 69,490$ 2,768,397$
Gross profit 2,713,716$ (69,490)$ 2,644,226$
Selling, general and administrative
ex
p
enses 2,259,331$ (69,490)$ 2,189,841$
As Previously
Reported Adjustments As Adjusted
Cost of sales, includin
g
p
urchasin
g
and warehousing costs 2,679,191$ 63,940$ 2,743,131$
Gross profit 2,463,064$ (63,940)$ 2,399,124$
Selling, general and administrative
ex
p
enses 2,048,137$ (63,940)$ 1,984,197$
As Previously
Reported Adjustments As Adjusted
Cost of sales, including purchasing
and warehousing costs 2,523,435$ 62,230$ 2,585,665$
Gross
p
rofit 2,320,969$ (62,230)$ 2,258,739$
Selling, general and administrative
ex
p
enses 1,904,540$ (62,230)$ 1,842,310$
Fifty-Two week period ended December 29, 2007
Fifty-Two week period ended January 2, 2010
Fifty-Three week period ended January 3, 2009
4. Store Closures and Impairment:
During Fiscal 2009, the Company closed 55 stores and relocated 10 stores, 45 of which were designated under
the store divestiture plan. The remaining store closures were part of the Company’s routine review and closure of
underperforming stores at or near the end of their respective lease terms. The store divestiture plan consisted of a
review of operating stores to identify locations for potential closing based on both financial and operating factors.
These factors included cash flow, profitability, strategic market importance, store full potential and current lease
rates.
During Fiscal 2009, the Company recognized $27,725 of total expense associated with its closed store activities,
$26,057 of which was divestiture related, or divestiture expense. For Fiscal 2009, divestiture expense included
closed store exit costs of $21,121. The closed store exit costs primarily included the establishment of the liability for
future lease obligations as well as severance. Closed store liabilities include the present value of the remaining lease
obligations and management’s estimate of future costs of insurance, property tax and common area maintenance
(reduced by the present value of estimated revenues from subleases and lease buyouts). New provisions are
established by a charge to SG&A in the accompanying consolidated statements of operations at the time the
facilities actually close.
A summary of the Company’s closed store liabilities, which are recorded in Accrued expenses (current portion)
and Other long-term liabilities (long-term portion) in the accompanying consolidated balance sheet, are presented in
the following table: