Advance Auto Parts 2009 Annual Report Download - page 88

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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-35
Deferred Compensation
The Company maintains a non-qualified deferred compensation plan for certain Team Members. This plan
provides for a minimum and maximum deferral percentage of the Team Member’s base salary and bonus, as
determined by the Retirement Plan Committee. The Company establishes and maintains a deferred compensation
liability for this plan. At January 2, 2010 and January 3, 2009 these liabilities were $6,966 and $4,097, respectively.
Postretirement Plan
The Company provides certain health and life insurance benefits for eligible retired Team Members through a
postretirement plan, or Plan. These benefits are subject to deductibles, co-payment provisions and other limitations.
The Plan has no assets and is funded on a cash basis as benefits are paid.
Funded Status of Benefit Obligations
The following table provides a reconciliation of the accrued postretirement benefit obligation recorded, included
in Other long-term liabilities in the accompanying consolidated balance sheets, and the funded status of the Plan as
of January 2, 2010 and January 3, 2009:
2009 2008
Change in benefit obligation:
Benefit obligation at beginning of the year 7,750$ 8,763$
Interest cost 456 581
Benefits paid (1,047) (767)
Actuarial gain (47) (827)
Benefit obligation at end of the year 7,112 7,750
Change in plan assets:
Fair value of plan assets at beginning of the year - -
Employer contributions 1,047 767
Participant contributions 743 868
Benefits paid (1,790) (1,635)
Fair value of plan assets at end of year - -
Funded status of plan (7,112)$ (7,750)$
Net periodic postretirement benefit cost is as follows:
2009 2008 2007
Service cost -$ -$ -$
Interest cost 456 581 550
Amortization of the prior service cost (581) (677) (581)
Amortization of recognized net gains (96) (16) -
(221)$ (112)$ (31)$
The health care cost trend rate was assumed to be 9.1% for 2010, 8.7% for 2011, 8.4% for 2012, 8.0% for 2013,
7.7% for 2014, 7.3% for 2015 and 6.9% to 4.5% for 2016 and thereafter. If the health care cost were increased 1%
for all future years the accumulated postretirement benefit obligation would have increased by $161 as of January 2,
2010. The effect of this change on the combined service and interest cost would have been an increase of $11 for
Fiscal 2009. If the health care cost were decreased 1% for all future years the accumulated postretirement benefit
obligation would have decreased by $146 as of January 2, 2010. The effect of this change on the combined service