Advance Auto Parts 2012 Annual Report Download - page 68

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F-23
The following table sets forth the Company’s financial liabilities that were measured at fair value on a recurring basis as of
December 29, 2012 and December 31, 2011:
Fair Value Measurements at Reporting Date Using
Level 1 Level 2 Level 3
Fair Value
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
As of December 29, 2012
Contingent consideration related to
business acquisitions $ 16,999 $ — $ — $ 16,999
As of December 31, 2011
Treasury rate locks $ 4,986 $ — $ 4,986 $ —
Contingent consideration related to
business acquisitions $ 27,776 $ — $ — $ 27,776
The fair values of the Company’s treasury rate locks represent the estimated amounts that the Company would have
received if it terminated the agreement taking into consideration the difference between the contract rate of interest and rates
currently quoted for agreements of similar terms and maturities (based on the forward yield curve). The fair value of the
contingent consideration, which is recorded in Accrued expenses and Other long-term liabilities, is based on various estimates
including the Company's estimate of the probability of achieving the targets and the time value of money. During Fiscal 2012,
contingent consideration decreased primarily due to payments totaling $10,911 resulting from the achievement of performance
conditions, partially offset by amortization of the net present value discount.
The carrying amount of the Company’s cash and cash equivalents, accounts receivable, bank overdrafts, accounts payable,
accrued expenses and current portion of long term debt approximate their fair values due to the relatively short term nature of
these instruments. As of December 29, 2012 and December 31, 2011 the fair value of the Company’s long-term debt with a
carrying value of $604,461 and $415,136, respectively, was approximately $655,000 and $446,000, respectively. The fair value
of the Company’s senior unsecured notes was determined based on quoted market prices. The Company believes that the
carrying value of its other long-term debt and certain long-term liabilities approximate fair value.
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not
measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is
evidence of impairment). At December 29, 2012, the Company had no significant non-financial assets or liabilities that had
been adjusted to fair value subsequent to initial recognition.
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)