Advance Auto Parts 2011 Annual Report Download - page 51

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36
Item 7A. Quantitative and Qualitative Disclosures 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 $275 million outstanding under our revolving credit facility and term loan with the proceeds from the
notes offering. Our revolving credit facility currently remains in place and matures in October 2011. Therefore, we
may be exposed to cash flow risk due to changes in LIBOR in the event we borrow under our revolving credit
facility.
Historically we have used interest rate swaps to mitigate the impact that movements in LIBOR would have on
the interest from our bank debt. As we have paid off our bank debt, these interest rate swaps now present their own
exposure to movements in LIBOR.
The table below presents principal cash flows and related weighted average interest rates on our interest rate
swaps outstanding at January 1, 2011, by expected maturity dates. The table includes the impact of the anticipated
average pay and receive rates of our interest rate swaps through their maturity dates. Expected maturity dates
approximate contract terms. Weighted average variable rates are based on implied forward rates in the yield curve at
January 1, 2011. Implied forward rates should not be considered a predictor of actual future interest rates.
Fair
Fiscal Fiscal Fiscal Fiscal Fiscal Market
2011 2012 2013 2014 2015 Thereafter Total Liabilit
y
(dollars in thousands)
Interest rate swap:
Variable to fixed
(1)
275,000$ -$ -$ -$ - - 275,000 9,321$
Weighted average pay rate 4.4% - - - - - 4.4% -
Weighted average receive rate - - - - - - - -
(1) Amounts presented may not be outstanding for the entire year.
Item 8. Financial Statements and Supplementary Data.
See financial statements included in Item 15 “Exhibits, Financial Statement Schedules” of this annual report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.