Advance Auto Parts 2014 Annual Report Download - page 68

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 3, 2015, December 28, 2013 and December 29, 2012
(in thousands, except per share data)
F-21
Integration of Carquest stores
The Company also approved plans in June 2014 to begin consolidating its Carquest stores acquired on January 2, 2014. As
of January 3, 2015, 98 Carquest stores had been consolidated into existing Advance Auto Parts stores and 10 Carquest stores
had been converted to the Advance Auto Parts format. Plans are in place to consolidate or convert the remaining Carquest stores
over the next few years. In addition, the Company will continue to consolidate or convert the remaining Carquest named stores
that were acquired with BWP on December 31, 2012, 34 of which were consolidated and 19 were converted during 2014. The
Company estimates that the total exit costs to be incurred as a result of consolidations and conversions during Fiscal 2015 will
be approximately $5,500, consisting primarily of closed store lease obligations.
Contract termination costs, such as those associated with leases on closed stores will be recognized at the cease-use date.
Closed lease liabilities include the present value of the remaining lease obligations and management’s estimate of future costs
of insurance, property tax and common area maintenance (reduced by the present value of estimated revenues from subleases
and lease buyouts). The Company’s closed store lease obligations at January 3, 2015 included $5,812 related to the
consolidations of Carquest stores during 2014.
Other Exit Activities
In August 2014, the Company approved plans to consolidate 33 of its 40 Autoparts International ("AI") stores located in
Florida into Advance Auto Parts stores by the end of 2015. Eleven of these stores were consolidated in 2014. The Company also
plans to convert the remaining 7 AI stores in Florida to Advance Auto Parts stores by the end of 2015. The total exit costs
associated with the AI consolidations is expected to be immaterial.
Total Restructuring Liabilities
A summary of the Company’s restructuring liabilities, which are recorded in accrued expenses (current portion) and long-
term liabilities (long-term portion) in the accompanying condensed consolidated balance sheet, are presented in the following
table:
Closed Store
Lease
Obligations Severance
Relocation
and Other
Exit Costs Total
For the year ended January 3, 2015:
Balance, December 28, 2013 $ 11,212 $ — $ — $ 11,212
Reserves acquired with GPI 3,455 — — 3,455
Reserves established 11,138 8,038 7,053 26,229
Change in estimates 1,053 (1,307)—
(254)
Cash payments (7,588)(927)(5,237)(13,752)
Balance, January 3, 2015 $ 19,270 $ 5,804 $ 1,816 $ 26,890