Advance Auto Parts 2012 Annual Report Download - page 88

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F-43
ADVANCE AUTO PARTS, INC.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
Notes to the Condensed Parent Company Statements
December 29, 2012, December 31, 2011 and January 1, 2011
(in thousands, except per share data)
Accordingly, earnings per share is computed by dividing net income attributable to the Company's common shareholders
by the weighted-average common shares outstanding during the period. The two-class method is an earnings allocation formula
that determines income per share for each class of common stock and participating security according to dividends declared
and participation rights in undistributed earnings. Diluted income per common share reflects the more dilutive earnings per
share amount calculated using the treasury stock method or the two-class method.
Basic earnings per share of common stock has been computed based on the weighted-average number of common shares
outstanding during the period, which is reduced by stock held in treasury and shares of nonvested restricted stock. Diluted
earnings per share of common stock reflects the weighted-average number of shares of common stock outstanding, outstanding
deferred stock units and the impact of outstanding stock options, and stock appreciation rights (collectively “share-based
awards”). Share-based awards containing performance conditions are included in the dilution impact as those conditions are
met. Diluted earnings per share are calculated by including the effect of dilutive securities.
New Accounting Pronouncements
In June 2011, the FASB issued ASU No. 2011-05 “Comprehensive Income – Presentation of Comprehensive Income.”
ASU 2011-05 requires comprehensive income, the components of net income, and the components of other comprehensive
income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both
choices, an entity is required to present each component of net income along with total net income, each component of other
comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This
update eliminates the option to present the components of other comprehensive income as part of the statement of changes in
stockholders' equity. The amendments in this update do not change the items that must be reported in other comprehensive
income or when an item of other comprehensive income must be reclassified to net income. The amendments in this update
should be applied retrospectively and is effective for interim and annual reporting periods beginning after December 31, 2011.
The Company adopted this guidance in the first quarter of 2012. The adoption of ASU 2011-05 is for presentation purposes
only and had no material impact on the Company’s consolidated financial statements.
3. Intercompany Transactions
On December 29, 2012, Stores declared a non-cash dividend to the Company totaling $2,231,200. The dividend was
comprised of: (i) the forgiveness of the $1,632,300 intercompany receivable owed to Stores by the Company and (ii) the
issuance of a $598,900 intercompany note payable from Stores to the Company.
The intercompany note payable contains terms and conditions that are similar in all material respects to the Notes
discussed in footnote 4 below.
4. Long-Term Debt
Senior Unsecured Notes
The Company’s 5.75% senior unsecured notes were issued in April 2010 at 99.587% of the principal amount of $300,000
and are due May 1, 2020 (the "2020 Notes"). The 2020 Notes bear interest at a rate of 5.75% per year payable semi-annually in
arrears on May 1 and November 1 of each year. The Company’s 4.50% senior unsecured notes were issued in January 2012 at
99.968% of the principal amount of $300,000 and are due January 15, 2022 (the "2022 Notes" or collectively with 2020 Notes,
"the Notes"). The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and
July 15 of each year. The Company served as the issuer of the Notes with certain of the Company’s domestic subsidiaries
currently serving as subsidiary guarantors. The terms of the Notes are governed by an indenture and supplemental indentures
(collectively the “Indenture”) among the Company, the subsidiary guarantors and Wells Fargo Bank, National Association, as
Trustee.