Advance Auto Parts 2009 Annual Report Download - page 77

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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-24
The table below presents the fair value of the Company’s derivative financial instruments as well as their
classification on the consolidated balance sheets as of January 2, 2010 and January 3, 2009:
Balance Sheet Fair Value as of Fair Value as of
Location January 2, 2010 January 3, 2009
Derivatives designated as hedging
instruments:
Interest rate swaps Accrued expenses 10,700$ 9,222$
Interest rate swaps Other long-term liabilities 6,644 12,757
17,344$ 21,979$
Liability Derivatives
The table below presents the effect of the Company’s derivative financial instruments on the statement of
operations for Fiscal 2009, 2008 and 2007, respectively:
Derivatives in
Cash Flow
Hedging
Relationships
Amount of
Gain or
(Loss)
Recognized
in OCI on
Derivative,
net of tax
(Effective
Portion)
Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
Amount of
Gain or
(Loss)
Reclassified
from
Accumulated
OCI into
Income, net of
tax (Effective
Portion)
Location of Gain or (Loss)
Recognized in Income on
Derivative (Ineffective
Portion and Amount
Excluded from
Effectiveness Testing)
A
mount o
f
Gain or (Loss)
Recognized in
Income on
Derivative, net
of tax
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing)
2009
Interest rate swaps 3,034$ Interest expense (6,618)$ Other income (expense), net (130)$
2008
Interest rate swaps (8,729)$ Interest expense (2,152)$ Interest expense -$
2007
Interest rate swaps (4,809)$ Interest expense 523$ Interest expense -$
The Company reclassified $213 from accumulated other comprehensive loss to earnings during fiscal 2009 in
connection with the $75,000 repayment of the Company’s revolver. The amount reclassified to earnings represents
an estimate of the forecasted interest that will not be paid as a result of the revolver repayment. The Company
intends to reborrow $75,000 on its revolver subsequent to January 2, 2010 and will redesignate the applicable
interest rate swap at that time.
Forward Contracts
During Fiscal 2009 and 2008, the Company hedged approximately 50% and 70%, respectively, of its diesel fuel
consumption. All of these agreements expired during 2009.