Advance Auto Parts 2010 Annual Report Download - page 100

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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)
See Notes to the Consolidated Financial Statements for Additional Disclosures.
F-46
1. Organization and Basis of Presentation
Advance Auto Parts, Inc. (“the Company”) is a holding company, which is the 100% shareholder of Advance
Stores Company, Incorporated and its subsidiaries ("Stores"), and conducts substantially all of its business
operations through Stores. The parent/subsidiary relationship between the Company and Stores includes certain
related party transactions. These transactions consist primarily of intercompany advances and interest on
intercompany advances, dividends, capital contributions and allocations of certain costs. Deferred income taxes have
not been provided for financial reporting and tax basis differences on the undistributed earnings of the subsidiaries.
These condensed financial statements have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and note disclosures normally included in annual financial
statements prepared in accordance with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to those rules and regulations, although management believes that the
disclosures made are adequate to make the information presented not misleading. Under a “parent-only”
presentation, the investment of the Company in Stores is presented under the equity method of accounting. These
parent-only financial statements should be read in conjunction with the consolidated financial statements of the
Company included in Item 15 “Exhibits, Financial Statement Schedules” of this Annual Report on Form 10-K
(“consolidated financial statements”).
2. Summary of Significant Accounting Policies
Accounting Period
The Company's fiscal year ends on the Saturday nearest the end of December, which results in an extra week
every several years. Accordingly, our fiscal year ended January 3, 2009, or Fiscal 2008, included 53 weeks of
operations. All other fiscal years presented included 52 weeks of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
materially from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash in banks and money 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
for share-based payments is the same as for the consolidated company which is described in the summary of
significant accounting policies in Note 2 of the consolidated financial statements.