Advance Auto Parts 2014 Annual Report Download - page 86

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-39
Deferred Stock Units
The Company grants share-based awards annually to its Board of Directors in connection with its annual meeting of
stockholders. These awards are granted in the form of DSUs as provided for in the Advance Auto Parts, Inc. Deferred Stock
Unit Plan for Non-Employee Directors and Selected Executives, or the DSU Plan. Each DSU is equivalent to one share of
common stock of the Company. The DSUs granted in 2014 fully vest after one year of board service and are distributed in
common shares after the director’s service on the Board ends. Additionally, the DSU Plan provides for the deferral of
compensation earned in the form of (i) an annual retainer for directors, and (ii) wages for certain highly compensated Team
Members of the Company. These DSUs are settled in common stock with the participants at a future date, or over a specified
time period, as elected by the participants in accordance with the DSU Plan.
The Company granted 7 DSUs in 2014. The weighted average fair value of DSUs granted during 2014, 2013 and 2012 was
$122.80, $83.63, and $69.82, respectively. The DSUs are awarded at a price equal to the market price of the Company’s
underlying stock on the date of the grant. For 2014, 2013 and 2012, respectively, the Company recognized a total of $862,
$840, and $960 on a pre-tax basis, in compensation expense for these DSU grants.
Employee Stock Purchase Plan
The Company also offers an employee stock purchase plan (ESPP). Under the ESPP, eligible Team Members may elect
salary deferrals to purchase the Company’s common stock at a discount to its fair market value on the date of purchase. During
2012, the Company increased this discount from 5% to 10%. There are annual limitations on the amounts a Team Member may
elect of either $25 per Team Member or 10% of compensation, whichever is less. Under the plan, Team Members acquired 39,
23 and 34 shares in 2014, 2013 and 2012, respectively. As of January 3, 2015, there were 1,100 shares available to be issued
under the plan.
20. Accumulated Other Comprehensive Income (Loss):
Comprehensive income is computed as net earnings plus certain other items that are recorded directly to stockholders’
equity during the accounting period. In addition to net earnings, comprehensive income also includes changes in unrealized
gains or losses on hedge arrangements, postretirement plan benefits and foreign currency translation gains (losses), net of tax.
Accumulated other comprehensive income (loss), net of tax, for 2014, 2013 and 2012 consisted of the following:
Unrealized Gain
(Loss) on Hedging
Arrangements
Unrealized Gain
(Loss)
on Postretirement
Plan
Currency
Translation
Accumulated
Other
Comprehensive
Income (Loss)
Balance, December 31, 2011 $ (254) $ 3,058 $ — $ 2,804
Fiscal 2012 activity 254 (391)— (137)
Balance, December 29, 2012 $ — $ 2,667 $ — $ 2,667
Fiscal 2013 activity — 1,016 — 1,016
Balance, December 28, 2013 $ — $ 3,683 $ — $ 3,683
Fiscal 2014 activity — (752)(15,268)(16,020)
Balance, January 3, 2015 $ — $ 2,931 $ (15,268)$ (12,337)
21. Segment and Related Information:
As a result of the acquisition of GPI on January 2, 2014, which is described in Note 4, Acquisitions, the Company
reevaluated the composition of its reportable segments. Based on this analysis, the Company determined that it operates as a
single reportable segment. As of January 3, 2015, the Company's operations are comprised of 5,261 stores and 111 distribution
branches, which operate in the United States, Canada, Puerto Rico and the U.S. Virgin Islands primarily under the trade names
“Advance Auto Parts,” "Carquest," "Autopart International" and "Worldpac." These locations offer a broad selection of brand
name, OEM and proprietary automotive replacement parts, accessories, and maintenance items primarily for domestic and