Advance Auto Parts 2014 Annual Report Download - page 22

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15
annual miles driven or the demand for the products we sell and lead to changes in automotive technology. Changes in
automotive technology and compliance with any new or more stringent laws or regulations, or stricter interpretations of
existing laws, could require additional expenditures by us or our suppliers all of which could adversely impact the demand for
our products and our business, financial condition, results of operations or cash flows.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
The following table summarizes the location, ownership status and total square footage of space utilized for distribution
centers and principal corporate offices at the end of 2014:
Square Footage (in thousands)
Location Leased Owned
Distribution Centers 50 locations in 32 states and 4
Canadian provinces 5,999 4,098
Store Support Centers:
Roanoke, Virginia Roanoke, Virginia 270 —
Raleigh, North Carolina Raleigh, North Carolina 195 —
As of January 3, 2015, we owned 819 of our stores and leased 4,553 stores and branches. We also operate several smaller
warehouse locations and subsidiary offices to support our operations.
Item 3. Legal Proceedings.
We currently and from time to time are involved in litigation and regulatory proceedings incidental to the conduct of our
business, including litigation arising from claims of employment discrimination or other types of employment matters as a
result of claims by current and former Team Members. Although we diligently defend against these claims, we may enter into
discussions regarding settlement of these and other lawsuits, and may enter into settlement agreements, if we believe settlement
is in the best interests of the Company and our shareholders. The damages claimed against us in some of these proceedings are
substantial. Although the amount of liability that may result from these matters cannot be ascertained, we do not currently
believe that, in the aggregate, they will result in liabilities material to our consolidated financial condition, future results of
operations or cash flow.
Our Western Auto subsidiary, together with other defendants including, but not limited to, automobile manufacturers,
automotive parts manufacturers and their material suppliers and other retailers, has been named as a defendant in lawsuits
alleging injury as a result of exposure to asbestos-containing products. We and some of our other subsidiaries also have been
named as a defendant in many of these lawsuits. The automotive products at issue in these lawsuits are primarily brake parts.
The plaintiffs have alleged that these products contained asbestos and were manufactured, distributed and/or sold by the various
defendants. Many of the pending cases against us and our subsidiaries are in early stages of litigation. The damages claimed
against the defendants in some of these proceedings are substantial. Additionally, many of the suppliers and manufacturers of
asbestos and asbestos-containing products have dissolved or declared bankruptcy, which will limit plaintiffs’ ability to recover
monetary damages from those entities. Although we diligently defend against these claims, we may enter into discussions
regarding settlement of these and other lawsuits, and may enter into settlement agreements, if we believe settlement is in the
best interests of the Company and our shareholders. We also believe that many of these claims are at least partially covered by
insurance. Based on discovery to date, we do not believe the cases currently pending will have a material adverse effect on us.
However, if we were to incur an adverse verdict in one or more of these claims and were ordered to pay substantial damages
that were not covered by insurance, these claims could have a material adverse effect on our operating results, financial
position and cash flows. Historically, our asbestos claims have been inconsistent in fact patterns alleged and number and have
been immaterial. Furthermore, the outcome of such legal matters is uncertain and our liability, if any, could vary widely. As a
result, we are unable to estimate a possible range of loss with respect to unasserted asbestos claims that may be filed against the
Company or its subsidiaries in the future. If the number of claims filed against us or any of our subsidiaries alleging injury as a
result of exposure to asbestos-containing products increases substantially, the costs associated with concluding these claims,