Advance Auto Parts 2011 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
    ... (5) Commercial Customer Satisfaction 15.1% (1) Our fiscal year sales results reported in the referenced charts have been reported on a comparable operating basis to exclude the 53rd week results in fiscal 2008. Refer to "Selected Consolidated Financial Data" on page 18 of our 2010 Form...

  • 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
    ... our new business - to - business site In addition, Team Members, customers and vendor partners raised more than $4.8 million for the Juvenile Diabetes Research Foundation (JDRF), maintaining our status as the #1 worldwide corporate JDRF partner. - continued on page 7 4 | Advance Auto Parts

  • Page 7
    ... 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're focused on...

  • 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
    ..., and commercial customer growth and retention programs. These core capabilities continue to make a difference with customers and to our bottom line. We will further intensify our work around service and availability, while delivering on value propositions that are improving results. In 2011, we...

  • Page 10
    ... in business, this is still fundamental to Advance Auto Parts. As we look forward, we are convinced Service is our best part is the path to leading our industry by winning with the customer. We are looking forward to an exciting year in 2011 and beyond. Sincerely, Darren R. Jackson Chief Executive...

  • Page 11
    ... 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 been prepared in accordance with accounting...

  • 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
    ... Data ...36 Changes in and Disagreements with Accountants on Accounting 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...

  • Page 16
    ... our business, including the location of available and suitable real estate for new store locations, the integration of any acquired businesses and the continued increase in supply chain capacity and efficiency; our ability to attract and retain qualified employees, or Team Members; deterioration...

  • 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
    ... product offerings and services. Our current website was launched in October 2009 as part of our e-commerce strategy to provide an online shopping capability to both our DIY and Commercial customers. Our online website allows our DIY customers to pick up merchandise at a conveniently located store...

  • Page 19
    ... of services free of charge to our customers including Battery & 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...

  • Page 20
    ... system and enables 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...

  • Page 21
    ... improved customer 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...

  • Page 22
    ... Advance Auto Parts brand by positioning AAP as the service leader in the aftermarket auto parts category. We strive to exceed consumers' expectations through our free and value-added services, extensive parts assortment and quality merchandise offerings. We market our brand through a mix of media...

  • Page 23
    ... 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 concerning increases in the total number of our AI stores: Beginning Stores New Stores Stores Closed Ending Stores Seasonality 2010 156 38 194 2009...

  • Page 24
    ... customer service, marketing, inventory selection, purchasing and distribution as compared to independent retailers and jobbers that are not part of a chain or associated with other retailers or jobbers. The principal methods of competition in our business include customer service, product offerings...

  • 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
    ... the cost of items we purchase or create shortages which could have a material adverse effect on our sales and profitability. We will not be able to expand our business if our growth strategy is not successful, including the availability of suitable locations for new store openings, the successful...

  • 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
    ... number of miles driven by our customers resulting in less parts failures and elective maintenance required to be completed. Impact on Operating Expenses Rising energy prices could directly impact our operating costs, including our merchandise distribution, commercial delivery, utility and product...

  • Page 29
    ... 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 emissions...

  • Page 30
    Item 2. Properties. The following table sets forth certain information relating to our distribution and other principal facilities: Opening Facility Main Distribution Centers: Roanoke, Virginia Lehigh, Pennsylvania Lakeland, Florida Gastonia, North Carolina Gallman, Mississippi Salina, Kansas ...

  • Page 31
    ... 2010-2011 2012-2016 2017-2021 2022-2031 2032-2041 2042-2069 AAP Stores 21 223 634 745 925 125 2,673 AI Stores 7 72 68 47 - 194 Total 28 295 702 792 925 125 2,867 Item 3. Legal Proceedings. We currently and from time to time are involved in litigation incidental to the conduct of our business...

  • Page 32
    ...stock for the quarter ended January 1, 2011 (amounts in thousands, except per share amounts); Total Number of Maximum Dollar Shares Purchased as Value that May Yet Average Part of Publicly Be Purchased Under Total Number Price Paid Announced Plans or the Plans or of Shares (1) (2) per Share Programs...

  • Page 33
    ... 2009 82.36 $ 88.96 $ 80.11 $ 100 $ 115.79 123.00 79.39 100 106.64 84.66 67.36 100 Jan 2, 2010 $ 95.56 97.34 86.26 Jan 1, 2011 $ 156.86 112.00 104.75 Item 6. Selected Consolidated Financial Data. The following table sets forth our selected historical consolidated statement of operations, balance...

  • Page 34
    ... Comparable store sales growth Number of stores at 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...

  • 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...

  • Page 36
    ... distributors and jobbers throughout North America. Management Overview During Fiscal 2010, we produced favorable financial results primarily due to strong comparable store sales growth, an increase in our gross profit rate and the repurchase of shares of our common stock resulting in earnings per...

  • 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
    ... share of the total automotive aftermarket with a higher growth potential driven by the more fragmented Commercial market. Store Development by Segment The following table sets forth the total number of new, closed and relocated stores and stores with Commercial delivery programs during Fiscal 2010...

  • 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
    ...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 compared to $23.3 million, or 0.4% of net sales, in Fiscal 2009. The increase in interest...

  • Page 41
    ...we are making to support each of our four key strategies which have already begun to yield benefits in our sales and gross profit results. While our transformation will require continued investments in areas such as Commercial, e-commerce and global sourcing, management plans to balance increases in...

  • Page 42
    ... and long-term borrowings to purchase property and equipment and repurchase shares of our common stock. Additional discussion of our cash flow results, including the comparison of Fiscal 2010 activity to Fiscal 2009, is set forth in the Analysis of Cash Flows section. At January 1, 2011, our...

  • 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
    ...overall 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...

  • Page 45
    ....4 million in repurchases of common stock under our stock repurchase program. Long Term Debt Senior Unsecured Notes On April 29, 2010, we sold $300 million aggregate principal amount of 5.75% senior unsecured notes due May 1, 2020, or the Notes, at a public offering price of 99.587% of the principal...

  • 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
    ... become due in Fiscal 2020. Interest payments in Fiscal 2011 include $9,357 in net payments related to our interest rate swaps which mature in October 2011. We lease certain store locations, distribution centers, office space, equipment and vehicles. Our property leases generally contain renewal...

  • Page 48
    ... analysis of product sales and (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...

  • Page 49
    ... increase in total stores, team members and Commercial delivery vehicles. Our self-insurance reserves consist of the estimated exposure for claims filed, claims incurred but not yet reported and projected future claims and is established using actuarial methods followed in the insurance industry and...

  • Page 50
    ... 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 present industry...

  • Page 51
    .... 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 remains in place...

  • 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
    ... "Related-Party Transactions," "Director Independence," and "Committees of the Board" in the 2011 Proxy Statement, which is incorporated herein by reference. Item 14. Principal Accountant Fees and Services. See the information set forth in the section entitled "2010 and 2009 Audit Fees" in the 2011...

  • 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
    ... 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 of operations...

  • Page 57
    ... REGISTERED PUBLIC 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...

  • 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
    ADVANCE 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 ...

  • 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 1, 2011 The accompanying notes to the consolidated financial statements are an integral part of these statements...

  • 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 share...

  • 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
    ... 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, current economic conditions and other relevant information...

  • Page 65
    ... 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 insurers to limit its total liability...

  • Page 66
    ... which time the Company's walk-in customers take immediate possession of the merchandise or same-day delivery is made to the Company's commercial delivery customers. Sales are recorded net of discounts, sales taxes and estimated allowances. The Company estimates returns based on current sales levels...

  • Page 67
    ... term. At January 1, 2011 and January 2, 2010, $31,648 and $32,092, respectively, was payable to the bank by the Company under this program and is included in the accompanying consolidated balance sheets as Financed vendor accounts payable. Earnings per Share The Company uses the two-class method...

  • Page 68
    ... as those conditions are met. Diluted earnings per share are calculated by including the effect of dilutive securities. Lease Accounting The Company leases certain store locations, distribution centers, office space, equipment and vehicles. Initial terms for facility leases are typically 10 to 15...

  • Page 69
    ... customer locations; Æ" Self-insurance costs; Æ" Professional services; Æ" Other administrative costs, such as credit card service fees, supplies, travel and lodging; Æ" Closed store expenses; and Æ" Impairment charges, if any. New Accounting Pronouncements In January 2010, the Financial Accounting...

  • Page 70
    ... non-consumable portion of certain parts and batteries, which are valued under the first-in, first-out ("FIFO") method. Product cores are included as part of the Company's merchandise costs and are either passed on to the customer or returned to the vendor. Because product cores are not subject to...

  • Page 71
    ... of product sales and (iii) 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...

  • 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
    ... 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 notes due May 1, 2020, or the Notes, at a public offering price...

  • Page 75
    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) In connection with the offering of the Notes, the Company amended its revolving credit facility to add each of the ...

  • Page 76
    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 table below presents the fair value of the Company's derivative financial instruments as well as their ...

  • Page 77
    ...liability. The following table sets forth the Company's financial liabilities that were measured at fair value on a recurring basis as of January 1, 2011 and January 2, 2010: Fair Value Measurements at Reporting Date Using Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets...

  • Page 78
    ...Company capitalized approximately $4,875, $4,657 and $2,388 incurred for the development of internal use computer software during Fiscal 2010, 2009 and 2008, respectively. These costs are included in the furniture, fixtures and equipment category above and are depreciated on the straight-line method...

  • 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
    ... by including the effect of dilutive securities. Share-based awards to purchase approximately 3, 1,224 and 2,747 shares of common stock that had an exercise price in excess of the average market price of the common stock during Fiscal 2010, 2009 and 2008, respectively, were not included in the...

  • Page 81
    ... 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 consists of the following: Current 2010Federal State...

  • Page 82
    ... carryforwards 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...

  • 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
    ... 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, the Company recognized $3,678 and $27,725 of total expense...

  • Page 85
    ... 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 estimated revenues from subleases and lease buyouts). New provisions are established by a charge to...

  • Page 86
    ... deferred compensation liability for this plan. At January 1, 2011 and January 2, 2010 these liabilities were $10,311 and $6,966, respectively. Postretirement Plan The Company provides certain health and life insurance benefits for eligible retired Team Members through a postretirement plan, or Plan...

  • Page 87
    ... 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 Postretirement benefit obligation Net periodic postretirement benefit cost 5.00% 4.50% 2009 6.25% 5.00% . F-33

  • 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
    ...the employee stock purchase plan, or ESPP. Total share-based compensation expense and cash received included in the Company's consolidated statements of operations and consolidated statement of cash flows, respectively, are reflected in the table below, including the related income tax benefits, for...

  • 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
    ... on the Company's probability assessment at January 1, 2011. Compensation expense for performance-based awards of $5,916 and $4,276 in Fiscal 2010 and 2009, respectively, was determined based on management's estimate of the probable vesting outcome. During Fiscal 2008, the Company did not recognize...

  • Page 92
    ... the Company's common stock at 95% of its 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...

  • Page 93
    ...Rico and the Virgin Islands under the trade names "Advance Auto Parts," "Advance Discount Auto Parts" and "Western Auto." These stores offer a broad selection of brand name and proprietary automotive replacement parts, accessories and maintenance items for domestic and imported cars and light trucks...

  • Page 94
    ...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 Income before provision for income taxes AAP AI Total...

  • Page 95
    ... financial data for Fiscal 2010 and 2009: 2010 Net sales Gross profit Net income Basic earnings per share Diluted earnings per share 2009 Net sales Gross profit Net income Basic earnings per share Diluted earnings per share $ First (16 weeks) First (16 weeks) Second (12 weeks) Third (12 weeks...

  • Page 96
    REPORT OF INDEPENDENT REGISTERED PUBLIC 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 ...

  • 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
    ... by and among Advance Aircraft Company, Inc., Advance Merchandising Company, Inc., WASCO Insurance Agency, Inc., Western Auto of Puerto Rico, Inc., Western Auto of St. Thomas, Inc., Discount, DAP Acceptance Corporation, J.P. Morgan Securities, Inc., Credit Suisse First Boston Corporation and Lehman...

  • Page 106
    ... 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. Deferred Compensation Plan (as amended...

  • Page 107
    ... Inc. 2011 SARS Award Agreement and Restricted Stock Award Agreement between Advance Auto Parts, Inc. and Darren R. Jackson. Statement Regarding Computation of Ratio of Earnings to Fixed Charges. Subsidiaries of Advance Auto. Consent of Deloitte & Touche LLP. Certification of Chief Executive Officer...

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    ...: 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 10-K as...

  • Page 111
    ... Board Retired Chief Administrative 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...

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