Advance Auto Parts 2012 Annual Report Download - page 54

F-9
1. Organization and Description of Business:
Advance Auto Parts, Inc. ("Advance") conducts all of its operations through its wholly owned subsidiary, Advance Stores
Company, Incorporated ("Stores"), and its subsidiaries (collectively, the "Company"), all of which are 100% owned. The
Company operated 3,794 stores as of December 29, 2012. The Company operated 3,576 stores throughout 39 states in the
Northeastern, Mid-Atlantic, Southeastern and Midwestern (inclusive of South Central) regions of the United States, Puerto
Rico and the Virgin Islands. These stores operated under the "Advance Auto Parts" trade name except for certain stores in the
State of Florida which operate under the "Advance Discount Auto Parts" trade name. 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 to do-it-yourself, or DIY, and do-it-for-me, or Commercial, customers. The Company offers delivery service to
its Commercial customers' places of business, including independent garages, service stations and auto dealers, utilizing a fleet
of vehicles to deliver product from its 3,266 store locations with delivery service. Autopart International ("AI"), a subsidiary of
Stores, operates 218 stores under the "Autopart International" trade name located primarily throughout the Northeastern, Mid-
Atlantic and Southeastern regions of the United States.
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 (the next 53 week fiscal year is 2014).
Principles of Consolidation
The consolidated financial statements include the accounts of Advance and its wholly owned subsidiaries. All
intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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, Cash Equivalents and Bank Overdrafts
Cash and cash equivalents consist of cash in banks and money market funds with original maturities of three months or
less. Included in cash equivalents are credit card and debit card receivables from banks, which generally settle within two to
four business days. Credit and debit card receivables included in Cash and cash equivalents at December 29, 2012 and
December 31, 2011 were $26,738 and $27,456, respectively. Bank overdrafts consist of outstanding checks not yet presented to
a bank for settlement, net of cash held in accounts with right of offset. Bank overdrafts of $8,722 and $16,181 are included in
Other current liabilities at December 29, 2012 and December 31, 2011, respectively.
Receivables
Receivables, net consist primarily of accounts receivables from vendors and commercial customers. Vendor receivables are
recorded based on amounts owed by the Company's suppliers as provided in incentive agreements and other overall terms of
the Company's purchase agreements. The Company provides an allowance for doubtful accounts based upon factors related to
the credit risk of specific customers or vendors, historical payment trends, current economic conditions and other relevant
information regarding the debtor's ability to pay. The Company has historically extended credit to certain Commercial
customers through a third-party provider of private label credit cards. Receivables under the private label credit card program
were transferred to a third-party provider with the majority under no recourse.
ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2012, December 31, 2011 and January 1, 2011
(in thousands, except per share data)