Advance Auto Parts 2009 Annual Report Download - page 76

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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-23
access to the Louisville, Kentucky market. This acquisition improved the Company’s trademark rights, opened a
new metropolitan market for the Company and is expected to increase traffic to the Company’s website.
FY 2009 FY 2008 FY 2007
Amortization expense 1,148$ 1,227$ 1,082$
Future Amortization Expense
The table below shows expected amortization expense for the next five years for acquired intangible assets
recorded as of January 2, 2010:
Fiscal Year Amount
2010 1,054$
2011 967
2012 967
2013 967
2014 967
7. Receivables, net:
Receivables consist of the following:
January 2, January 3,
2010 2009
Trade 16,389$ 17,843$
Vendor 79,006 81,265
Other 2,801 3,125
Total receivables 98,196 102,233
Less: Allowance for doubtful accounts (5,636) (5,030)
Receivables, ne
t
92,560$ 97,203$
8. Derivative Instruments and Hedging Activities:
Current outstanding interest rate swaps have fixed the Company’s interest rate on an aggregate of $275,000 of
hedged debt at rates ranging from 4.01% to 4.98%. The Company elects to receive interest payments based on the
90-day adjusted LIBOR interest rate and has the intent and ability to continue to use this rate on its hedged
borrowings. Accordingly, the Company does not recognize any ineffectiveness on the swaps. All of the Company’s
interest rate swaps expire in October 2011.
The fair value of these interest rate swaps are determined based on a forward yield curve and the contracted
interest rates stated in the interest rate swap agreements. The fair value of the Company’s interest rate swaps was an
unrecognized loss of $17,344 and $21,979, at January 2, 2010 and January 3, 2009, respectively, which is reflected
in Accumulated other comprehensive income (loss). Any amounts received or paid under these hedges are recorded
in the consolidated statement of operations during the accounting period the interest on the hedged debt is paid.
Based on the estimated current and future fair values of the hedge arrangements at January 2, 2010, the Company
estimates amounts currently included in Accumulated other comprehensive income (loss) pertaining to the interest
rate swaps that will be reclassified and recorded in the consolidated statement of operations in the next 12 months
will consist of a net loss of $10,700.