Advance Auto Parts 2010 Annual Report Download

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Service is our best part.SM
2010 Annual Report

Table of contents

  • Page 1
    Service is our best part. 2010 Annual Report SM

  • Page 2
    ...expenses in fiscal 2009 and the results from the 53rd week and non-cash inventory adjustment in fiscal 2008. Refer to the Management Overview of "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 21 of our 2010 Form 10 -K in this Annual Report for further...

  • Page 3
    ... Jackson Chief Executive Officer On behalf of our 51,000 Advance Auto Parts Team Members, I am honored to present to you our 2010 Annual Report. I would like to thank the Advance Team and acknowledge their contributions in 2010. Their passion for serving our customers led our Company to new levels...

  • Page 4
    .... That's why Service Leadership isn't simply a business strategy - it's our commitment. It's our responsibility to be prepared when our customers are most vulnerable. Whether we're helping a DIYer with their latest project or working with shops to quickly deliver the parts they need, our job is to...

  • Page 5
    ... customers' pain points and developed tools and redesigned systems to address those pain points, and positioned our team to better serve our customers. Our stockholders benefited from strong growth in our stock price this year. In addition, our Company achieved a full investment grade credit rating...

  • Page 6
    ...240 basis points to 17.5% • Team Member engagement scores increased from 75 to 79 • Continued increases in our DIY e-commerce platform in all key metrics - traffic, conversion rates and sales • Connecting with more commercial customers than ever through our new business - to - business site In...

  • Page 7
    ...achieve respect in the eyes of our customers. From the sales oor to the distribution center, the ability to have virtually any part within our reach is the goal behind our dedication to Superior Availability. Whether it's a DIYer with an emergency repair or a shop with its reputation on the line, we...

  • Page 8
    ... of our Company culture. As the title sponsor of the Advance Auto Parts Monster Jam, we're able to connect with our customers nationwide and recognize them in meaningful ways. It's our greatest honor to be able to give back to the communities that help make us successful. TM 6 | Advance Auto Parts

  • Page 9
    ... about our potential in 2011 as we dramatically raise the bar on customer service. We plan to strengthen our business through our focus on our Team Members and our customers while prioritizing differentiation through service and availability. Differentiation will require going to the next level...

  • Page 10
    Superior Availability will be squarely focused on always getting the right parts to the right place at the right time to drive profitable customer relationships. This strategy will compel us to maximize the storage capacity of our stores and warehouses, as well as increase delivery speed to our ...

  • Page 11
    ... The consolidated financial statements and related financial information presented in this Annual Report have been prepared with integrity, consistency and objectivity and are the responsibility of the management of Advance Auto Parts, Inc. (the Company). The consolidated financial statements have...

  • Page 12
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  • Page 13
    ...Virginia (Address of Principal Executive Offices) 24012 (Zip Code) (540) 362-4911 (Registrant's telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock New York ($0.0001 par value...

  • Page 14
    ...fiscal quarter, the aggregate market value of the 83,856,893 shares of Common Stock held by non-affiliates of the registrant was $4,296,827,197, based on the last sales price of the Common Stock on July 16, 2010, as reported by the New York Stock Exchange. As of February 26, 2011, the registrant had...

  • Page 15
    ... and Financial Disclosure ...36 Item 9A. Controls and Procedures ...37 Item 9B. Other Information ...37 Part III. Item 10. Item 11. Item 12. Directors, Executive Officers and Corporate Governance ...38 Executive Compensation...38 Security Ownership of Certain Beneficial Owners and Management and...

  • Page 16
    ... employees, or Team Members; deterioration in general macro-economic conditions, including unemployment, inflation or deflation, consumer debt levels, high fuel and energy costs, uncertain credit markets or other recessionary type conditions could have a negative impact on our business, financial...

  • Page 17
    ... name and private label automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars and light trucks. In addition, we operated 26 AAP stores under the "Advance Auto Parts" and "Western Auto" trade names, located in Puerto Rico and the Virgin Islands, or...

  • Page 18
    ..., engines and engine parts, radiators, starters, transmissions and water pumps; Accessories, including floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; Chemicals, including antifreeze, freon, fuel additives and car washes and waxes; Oil and...

  • Page 19
    ... & wiper installation Battery charging Check engine light reading where allowed by law Electrical system testing, including batteries, starters, alternators and sensors "How-To" Video Clinics & Project Brochures Oil and battery recycling Loaner tool program Our stores are 100% company operated and...

  • Page 20
    ... our store Team Members to assist our customers in their parts selection and ordering based on the year, make, model and engine type of their vehicles. Our centrally-based EPC data management system enables us to reduce the time needed to (i) exchange data with our vendors and (ii) catalog and...

  • Page 21
    ... service levels, Team Member productivity and in-stock availability. Store Support Center Merchandising. Purchasing for virtually all of the merchandise for our stores is handled by our merchandise teams located in three primary locations Store support center in Roanoke, Virginia, Regional office...

  • Page 22
    ... communication plan is built around television, direct marketing, online, radio, and local marketing. The plan is supported by public relations, in-store and event signage as well as mobile and social media through Facebook. The television advertising is a combination of national and regional media...

  • Page 23
    ...: Number of Location Stores Location Number of Stores Location Number of Stores Connecticut Delaware Florida Maine Maryland 17 1 38 4 13 Massachusetts New Hampshire New Jersey New York 32 8 16 25 Pennsylvania Rhode Island Vermont Virginia 23 4 1 12 The following table sets forth information...

  • Page 24
    ...automobile dealers that supply parts. We believe that chains of automotive parts stores that, like us, have multiple locations in one or more markets, have competitive advantages in customer service, marketing, inventory selection, purchasing and distribution as compared to independent retailers and...

  • Page 25
    ... recognition, location, price, quality, product availability and customer service. We compete in both the DIY and Commercial categories of the automotive aftermarket industry, primarily with: (i) national and regional retail automotive parts chains, (ii) discount stores and mass merchandisers that...

  • Page 26
    ... at cost-effective interest rates; and our ability to manage the expansion and hire, train and retain qualified sales associates. We are unsure whether we will be able to open and operate new stores on a timely or sufficiently profitable basis, or that opening new stores in markets we already...

  • Page 27
    ...of distribution centers, PDQ® warehouses and HUB stores. As we service our growing store base, we will need to increase the capacity of our supply chain network in order to provide the added parts availability under our Superior Availability strategy while maintaining productivity and profitability...

  • Page 28
    ... to pay for accessories, maintenance or repair of their vehicles, which results in lower sales in our stores. Higher fuel costs may also reduce the overall number of miles driven by our customers resulting in less parts failures and elective maintenance required to be completed. Impact on Operating...

  • Page 29
    ... (through an impact on our inventory availability, cost of sales, operations or demand for the products we sell) could adversely affect our business, financial condition, results of operations and cash flows. Significant increases in fuel economy requirements or new federal or state restrictions on...

  • Page 30
    ... Fort Myers, Florida Brooklyn Heights, Ohio Chicago, Illinois Rochester, New York Leicester, Massachussetts Washington, DC Houston, Texas Denver, Colorado West Deptford, New Jersey Indianapolis, Indiana Durham, North Carolina Corporate/Administrative Offices: Roanoke, Virginia Minneapolis, Minnesota...

  • Page 31
    ... an adverse verdict in one or more of these claims and were ordered to pay damages that were not covered by insurance, these claims could have a material adverse effect on our operating results, financial position and liquidity. If the number of claims filed against us or any of our subsidiaries...

  • Page 32
    ... on the open market at prevailing market rates plus related expenses under our stock repurchase program, which authorized the repurchase of up to $300 million in common stock. Our stock repurchase program was authorized by our Board of Directors and publicly announced on August 10, 2010. Our $300...

  • Page 33
    ... of Cumulative Five Year Total Return $200 $150 $100 $50 $0 Dec 31, 2005 Dec 30, 2006 Dec 29, 2007 Jan 3, 2009 Jan 2, 2010 Jan 1, 2011 Advance Auto Parts S&P 500 Index S&P 500 Specialty Retail Index Company / Index Advance Auto Parts S&P 500 Index S&P 500 Specialty Retail Index Dec 31, 2005...

  • Page 34
    ... beginning of year New stores Closed stores Number of stores, end of period Relocated stores Stores with commercial delivery program, end of period Total commercial sales, as a percentage of total sales (in 000s) (9) Average net sales per store (in 000s) (10) Operating income per store (in 000s) (11...

  • Page 35
    ...an extensive product line for cars, vans, sport utility vehicles and light trucks. We serve both DIY and Commercial customers. At January 1, 2011, we operated 3,563 stores throughout 39 states, Puerto Rico and the Virgin Islands. We operate in two reportable segments: Advance Auto Parts, or AAP, and...

  • Page 36
    ... market from its store locations in the Northeastern and Mid-Atlantic regions of the United States and Florida. In addition, its North American Sales Division services warehouse distributors and jobbers throughout North America. Management Overview During Fiscal 2010, we produced favorable financial...

  • Page 37
    ... since the program's inception. Both our Commercial and DIY sales have benefitted from our added parts availability and merchandising initiatives. We added many new brands to our parts offering in Fiscal 2009 and we continued to rollout custom assortments of product in our stores in Fiscal 2010. We...

  • Page 38
    .... Fiscal 2008 comparable store sales exclude the effect of the 53rd week. Cost of Sales Our cost of sales consists of merchandise costs, net of incentives under vendor programs; inventory shrinkage, defective merchandise and warranty costs; and warehouse and distribution expenses. Gross profit as...

  • Page 39
    ... expenses, including salaries and related benefits of store support center Team Members, share-based compensation expense, store support center administrative office expenses, data processing, professional expenses, self-insurance costs, closed store expense, impairment charges, if any, and other...

  • Page 40
    ...million for Fiscal 2009. AI's operating income decreased during Fiscal 2010 primarily due to a lower gross profit rate as well as higher SG&A expenses associated with the acceleration of new store openings. Interest Expense Interest expense for Fiscal 2010 was $26.9 million, or 0.5% of net sales, as...

  • Page 41
    ... in store labor and Commercial sales force; higher incentive compensation driven by the favorable financial results in fiscal 2009; and continued investments to improve our gross profit rate and to operate our new e-commerce operation. These increases were partially offset by lower advertising...

  • Page 42
    ... our current operations include payroll and benefits, the purchase of inventory, contractual obligations and capital expenditures as well as the payment of quarterly cash dividends and income tax payments. In addition, we have used available funds to repay borrowings under our revolving credit...

  • Page 43
    ...large part on the number of and timing for new stores we open within a given year and the investments we make in information technology and supply chain networks. We anticipate adding approximately 110 to 120 AAP and 10 to 20 AI stores and closing approximately 10 total stores during Fiscal 2011. We...

  • Page 44
    ... supply chain savings in the form of pricing, payment terms or vendor funding, created by facilitating our suppliers' ability to finance payment obligations at more favorable discount rates, while providing them with greater working capital flexibility. Any deterioration in the credit markets could...

  • Page 45
    ...senior unsecured notes in Fiscal 2010, net of debt related costs; and a $103.9 million decrease in cash flow from financed vendor accounts payable (is primarily offset in operating activities above as a result of the our vendor program transition in Fiscal 2009). • For Fiscal 2009, net cash used...

  • Page 46
    ...an alternate base rate, plus a margin. The current margin is 0.625% and 0.0% per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. Under the terms of the revolving credit facility, the interest rate and commitment fee are based on our credit rating. As of January 1, 2011...

  • Page 47
    ... taxes, self-insurance liabilities, unrecognized income tax benefits, closed store liabilities and obligations for employee benefit plans for which no contractual payment schedule exists and we expect the payments to occur beyond 12 months from January 1, 2011. Accordingly, the related balances...

  • Page 48
    ...iii) current market conditions. We also provide reserves when less than full credit is expected from a vendor or when liquidating product will result in retail prices below recorded costs. At the end of Fiscal 2008, we reviewed our inventory productivity and changed our inventory management approach...

  • Page 49
    ..., but are not limited to, assumptions about health care costs, the severity of accidents and the incidence of illness and the average size of claims. Effective January 1, 2011, we classified $50.3 million of our self-insurance liability as long-term because the timing of future payments is now more...

  • Page 50
    ... respective carrying value of our reporting units may not be indicative of the total company due to differences in the individual reporting units, including but not limited to size and projected growth. It is our policy to conduct impairment testing based on our current business strategy in light of...

  • Page 51
    ... about Market Risks. On April 29, 2010, we issued $300 million of senior unsecured notes with an interest rate of 5.75% due in 2020 and repaid $275 million outstanding under our revolving credit facility and term loan with the proceeds from the notes offering. Our revolving credit facility currently...

  • Page 52
    ... that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions...

  • Page 53
    ... No. 1 - Election of Directors," "Corporate Governance," "Meetings and Committees of the Board," "Information Concerning Our Executive Officers," "Audit Committee Report," and "Section 16(a) Beneficial Ownership Reporting Compliance" in our proxy statement for the 2011 annual meeting of stockholders...

  • Page 54
    ... Financial Statements of Advance Auto Parts, Inc. and Subsidiaries for the years ended January 1, 2011, January 2, 2010 and January 3, 2009: Management's Report on Internal Control over Financial Reporting ...F-1 Reports of Independent Registered Public Accounting Firm ...F-2 Consolidated Balance...

  • Page 55
    0$1$*(0(17¶65(325721,17(51$/&21752/29(5 ),1$1&,$/5(3257,1* 0DQDJHPHQWRI$GYDQFH$XWR3DUWV,QFDQGLWVVXEVLGLDULHV FROOHFWLYHO\WKH³&RPSDQ\´ LVUHVSRQVLEOHIRU HVWDEOLVKLQJDQGPDLQWDLQLQJDGHTXDWHLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJDVGHILQHGLQ5XOH D ± I XQGHU...

  • Page 56
    ... of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the accompanying consolidated balance sheets of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of January 1, 2011 and January 2, 2010, and the related consolidated statements...

  • Page 57
    ... ACCOUNTING FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the internal control over financial reporting of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of January 1, 2011 based on criteria established in...

  • Page 58
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS January 1, 2011 and January 2, 2010 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents Receivables, net Inventories, net Other current assets Total current assets Property and equipment, net of...

  • Page 59
    ... AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 2010 (52 weeks) Fiscal Years 2009 (52 weeks) 2008 (53 weeks) Net sales Cost of sales, including purchasing...

  • Page 60
    ...Amortization of restricted stock balance Share-based compensation Stock issued under employee stock purchase plan Treasury stock purchased Cash dividends Other Balance, January 2, 2010 Net income Changes in net unrecognized other postretirement benefit costs, net of $282 tax Amortization of...

  • Page 61
    ... of senior unsecured notes Payment of debt related costs Early extinguishment of debt Borrowings under credit facilities Payments on credit facilities Payments on note payable Dividends paid Proceeds from the issuance of common stock, primarily exercise of stock options Excess tax benefit from...

  • Page 62
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) For the Years Ended January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands) 2010 (52 weeks) Supplemental cash flow information: Interest paid Income tax payments, net Non-cash transactions: ...

  • Page 63
    ...3,018 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 "Advance Auto Parts" and "Western Auto" trade...

  • Page 64
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) accounts based upon factors related to the credit risk of specific customers or vendors, historical payment trends, ...

  • Page 65
    ... $78,809, $65,431 and $75,321 in Fiscal 2010, 2009 and 2008, respectively. Self-Insurance The Company is self-insured for general and automobile liability, workers' compensation and health care claims of its employees, or Team Members, while maintaining stop-loss coverage with third-party...

  • Page 66
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) the related warranty expense, the excess is recorded as a reduction to cost of sales. Revenue Recognition The Company ...

  • Page 67
    ... estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). Financed Vendor Accounts Payable The Company is party to a short-term financing program with a bank allowing it to extend its payment terms on certain merchandise purchases. The...

  • Page 68
    ... the Company pay taxes, maintenance, insurance and certain other expenses applicable to the leased premises. Management expects that in the normal course of business leases that expire will be renewed or replaced by other leases. Property and Equipment Property and equipment are stated at cost, less...

  • Page 69
    ...commercial delivery program, including payroll and benefit costs, and transportation expenses associated with moving merchandise inventories from our retail stores to our customer locations; Æ" Self-insurance costs; Æ" Professional services; Æ" Other administrative costs, such as credit card service...

  • Page 70
    ...'s inventory costs have decreased in recent years as a result of the Company's execution of merchandise strategies and realization of supply chain efficiencies. As a result of utilizing LIFO, the Company recorded a reduction to cost of sales of $29,554 and $16,040 for Fiscal 2010 and Fiscal 2009...

  • Page 71
    ...current market conditions. The Company provides reserves when less than full credit is expected from a vendor or when liquidating product will result in retail prices below recorded costs. At the end of Fiscal 2008, the Company reviewed its inventory productivity and changed its inventory management...

  • Page 72
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Intangible Assets Other Than Goodwill The carrying amount and accumulated amortization of acquired intangible assets as ...

  • Page 73
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 5. Receivables, net: Receivables consist of the following: January 1, 2011 Trade Vendor Other Total receivables Less: ...

  • Page 74
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Senior Unsecured Notes On April 29, 2010, the Company sold $300,000 aggregate principal amount of 5.75% senior unsecured...

  • Page 75
    ... base rate, plus a margin. The current margin is 0.625% and 0.0% per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. Under the terms of the revolving credit facility, the interest rate and commitment fee are based on the Company's credit rating. On April 29, 2010, the...

  • Page 76
    ... rate swaps Fair Value as of January 2, 2010 Accrued expenses Other long-term liabilities $ $ 9,321 9,321 $ $ 10,700 6,644 17,344 The table below presents the effect of the Company's derivative financial instruments on the statement of operations for Fiscal 2010, 2009 and 2008, respectively...

  • Page 77
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) determined using pricing models for which the assumptions utilize management's estimates of market participant ...

  • Page 78
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 9. Property and Equipment: Property and equipment consists of the following: Original Useful Lives Land and land ...

  • Page 79
    ... income taxes Self-insurance reserves Other Total long-term liabilities $ 51,117 50,292 64,534 165,943 $ January 2, 2010 54,982 66,662 121,644 $ $ 12. Stock Repurchase Program: The Company's stock repurchase program allows it to repurchase its common stock on the open market or in privately...

  • Page 80
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 13. Earnings per Share: Certain of the Company's shares granted to employees in the form of restricted stock are ...

  • Page 81
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 14. Income Taxes: Provision for Income Taxes Provision (benefit) for income taxes for Fiscal 2010, 2009 and 2008 ...

  • Page 82
    ...Interest rate swaps Other, net Total current deferred income tax assets (liabilities) Long-term deferred income tax assets (liabilities): Property and equipment Postretirement benefit obligation Share-based compensation Accrued medical and workers compensation Closed store related Net operating loss...

  • Page 83
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Unrecognized Tax Benefits The following table lists each category and summarizes the activity of the Company's gross ...

  • Page 84
    ... 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 2010 and 2009...

  • Page 85
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) estimate of future costs of insurance, property tax and common area maintenance (reduced by the present value of ...

  • Page 86
    ... such claims and lawsuits will not have a material adverse effect on the Company's financial position, results of operations or liquidity. 18. Benefit Plans: 401(k) Plan The Company maintains a defined contribution benefit plan, which covers substantially all Team Members after one year of service...

  • Page 87
    ... service and interest cost would have been a decrease of $7 for Fiscal 2010. The postretirement benefit obligation and net periodic postretirement benefit cost was computed using the following weighted average discount rates as determined by the Company's actuaries for each applicable year: 2010...

  • Page 88
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) The Company expects plan contributions to completely offset benefits paid. The following table summarizes the Company's ...

  • Page 89
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Share-Based Compensation Expense & Cash Flows The expense the Company has incurred annually related to the issuance of ...

  • Page 90
    ...Forfeited Nonvested at January 1, 2011 559 82 (237) (20) 384 $ The fair value of each share of restricted stock is determined based on the market price of the Company's common stock on the date of grant. The weighted average fair value of shares granted during Fiscal 2010, 2009 and 2008 was $64.58...

  • Page 91
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Performance-Based Awards Performance shares granted in the following tables represent the performance portion of awards ...

  • Page 92
    ...fair market value on the date of purchase. There are annual limitations on Team Member elections of either $25 per Team Member or ten percent of compensation, whichever is less. Under the plan, Team Members acquired 41, 51 and 80 shares in Fiscal 2010, 2009 and 2008, respectively. At January 1, 2011...

  • Page 93
    ... and Related Information: The Company has the following two reportable segments: AAP, and AI. The AAP segment is comprised of 3,369 stores as of January 1, 2011, which operated in the United States, Puerto Rico and the Virgin Islands under the trade names "Advance Auto Parts," "Advance Discount Auto...

  • Page 94
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 2010 Net Sales AAP AI Eliminations (1) Total net sales Percentage of Sales, by Product Group in AAP Segment Parts and Batteries Accessories Chemicals Oil Other Total...

  • Page 95
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) 22. Quarterly Financial Data (unaudited): The following table summarizes quarterly financial data for Fiscal 2010 and ...

  • Page 96
    ... ACCOUNTING FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the consolidated financial statements of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of January 1, 2011 and January 2, 2010, and for each of the...

  • Page 97
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Balance Sheets January 1, 2011 and January 2, 2010 (in thousands, except per share data) January 1, 2011 Assets Cash and cash equivalents Other current assets Property and equipment, net ...

  • Page 98
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Statements of Operations For the Years Ended January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands, except per share data) Fiscal Years 2009 (52 Weeks) 2010 (52 Weeks) 2008...

  • Page 99
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Condensed Parent Company Statements of Cash Flows For the Years Ended January 1, 2011, January 2, 2010 and January 3, 2009 (in thousands) Fiscal Years 2009 (52 Weeks) 2010 (52 Weeks) 2008 (53 Weeks) Cash flows...

  • Page 100
    ... market funds with original maturities of three months or less. Share-Based Payments The Company grants share-based compensation awards to certain executive-level employees and members of its Board of Directors as provided for under its 2004 Long-Term Incentive Plan. The Company's accounting policy...

  • Page 101
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Notes to the Condensed Parent Company Statements January 1, 2011 and January 2, 2010 (in thousands, except per share data) Earnings per Share The Company uses the two-class method to calculate earnings per share....

  • Page 102
    ADVANCE AUTO PARTS, INC. SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT Notes to the Condensed Parent Company Statements January 1, 2011 and January 2, 2010 (in thousands, except per share data) The Notes bear interest at a rate of 5.75% per year payable semi-annually in arrears on ...

  • Page 103
    ADVANCE AUTO PARTS, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period $ 3,987 5,030 5,636 Balance at End of Period $ 5,030 5,636 4,816 Allowance for doubtful accounts receivable: January 3, 2009 January 2, 2010 January 1, 2011 (1) Charges to ...

  • Page 104
    ... thereunto duly authorized. Dated: March 1, 2011 ADVANCE AUTO PARTS, INC. By: /s/ Michael A. Norona Michael A. Norona Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons...

  • Page 105
    ... 29, 2010, among Advance Auto Parts, Inc., each of the Subsidiary Guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee. Form of 5.750% Note due 2020. Credit Agreement dated as of October 5, 2006 among Advance Auto, Advance Stores Company, Incorporated...

  • Page 106
    ... as of January 1, 2009) and Second Amendment to the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (as amended and restated effective as of January 1, 2010). Amended Advance Auto Parts, Inc. Employee Stock Purchase Plan. Advance Auto Parts, Inc...

  • Page 107
    ... S-4 (No. 333-81180) of Advance Stores Company, Incorporated. Filed as an exhibit to the Quarterly Report on Form 10-Q (No. 001-11276) of Discount. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to...

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    ...Common Stock: Ticker Symbol AAP Listing New York Stock Exchange Independent Registered Public Accounting Firm: Deloitte & Touche LLP 901 East Byrd Street, Suite 820 Richmond, Virginia 23219 SEC FORM 10-K: Stockholders may obtain free of charge a copy of the Advance Auto Parts Annual Report on Form...

  • Page 111
    ... and Financial Officer, H.E. Butt Grocery Company * Denotes Committee Chair Frances X. Frei (4) UPS Foundation Professor of Service Management, Harvard Business School's Technology and Operations Management Department J. Paul Raines (3) Chief Executive Officer, GameStop Corporation Gilbert...

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    5008 Airport Road | Roanoke, Virginia 24012 | (877) Advance | (877) 238 - 2623 | AdvanceAutoParts.com