Advance Auto Parts 2014 Annual Report Download - page 34

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27
SG&A Expenses
SG&A expenses for 2013 were $2,591.8 million, or 39.9% of net sales, as compared to $2,440.7 million, or 39.3% of net
sales, for 2012, an increase of 58 basis points. Included in SG&A expenses in 2013 were $25.0 million, or 38 basis points, of
transaction expenses associated with our acquisition of GPI and $8.0 million, or 12 basis points, of expenses associated with
our integration of BWP. Other primary drivers of the net increase in SG&A expenses, as a percentage of net sales, include costs
associated with increased new store openings and higher incentive compensation, partially offset by lower marketing expense
and a decrease in overall administrative and support costs.
Operating Income
Operating income for 2013 was $660.3 million, representing 10.2% of net sales, as compared to $657.3 million, or 10.6%
of net sales, for 2012, a decrease of 42 basis points. This decrease was due to a higher SG&A rate partially offset by a higher
gross profit rate.
Interest Expense
Interest expense for 2013 was $36.6 million, or 0.6% of net sales, as compared to $33.8 million, or 0.5% of net sales, in
2012.
Income Taxes
Income tax expense for 2013 was $234.6 million, as compared to $236.4 million for 2012. Our effective income tax rate
was 37.5% and 37.9% for 2013 and 2012, respectively.
Net Income
Net income was $391.8 million, or $5.32 per diluted share, for 2013 as compared to $387.7 million, or $5.22 per diluted
share, for 2012. As a percentage of net sales, net income for 2013 was 6.0%, as compared to 6.2% for 2012. The increase in
diluted EPS was driven primarily by the increase in net income.