Advance Auto Parts 2015 Annual Report Download

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2015 ANNUAL REPORT

Table of contents

  • Page 1
    2015 ANNUAL REPORT

  • Page 2
    ...14 15 NUMBER OF STORES (2) (1) Sales and diluted earnings per share have been reported on a comparable basis to exclude General Parts International, Inc. ("GPI") integration costs in 2015 and 2014, amortization related to the acquired intangible assets from GPI in 2015 and 2014, store closure and...

  • Page 3
    ... S In 2015, we took measurable steps to grow key parts of our business while accelerating integration milestones to strengthen our core and position us for continued growth and value creation. INSPIRED TEAM Leveraging the passion, commitment and expertise developed over more than 80 years to create...

  • Page 4
    ... to you our 2015 Annual Report. Thanks to the ongoing hard work and dedication of • We delivered more than $50 million in cost synergy savings. approximately 73,000 Team Members, Advance Auto Parts remains a clear industry leader with a growing number of customers and Commercial capabilities...

  • Page 5
    ... are guided by THREE KEY PILLARS: 1. Providing SUPERIOR PARTS AVAILABILITY to ensure we deliver the right part, in the right place, at the right time. We are investing to improve inventory coverage and develop processes that empower and enable our stores to best serve their local customers' unique...

  • Page 6
    ... laser-focused on growing sales. LEADING AUTOMOTIVE AFTERMARKET RETAILER IN NORTH AMERICA Advance operates more than 5,200 stores across 49 states, Canada, Puerto Rico and the Virgin Islands. We also serve approximately 1,300 independently owned Carquest locations, which gives us presence in all...

  • Page 7
    ... In 2016, we will further develop great Commercial, field and store teams; deliver focused sales and service execution; and scale key Commercial programs such as our strategic accounts and membership programs including TECHNET and ProRewards. apply across the businesses. We will continue to build on...

  • Page 8
    ...to the communities we serve. Thanks to the generosity of our valued Team Members, customers and vendor partners, Advance continued this tradition in 2015 by giving a total of more than $4 million to Building Homes for Heroes, JDRF and many other worthy organizations. With the generous support of our...

  • Page 9
    ... and store team development. FOCUSED AND INSPIRED TEAMS Empowered to take broader ownership of their stores, resulting in a simplified and customer-focused operating model. We are providing them the tools to succeed with a hyper-local business model, new sales incentives, and the full support of...

  • Page 10
    ... support we raised in addition to the countless hours our Team Members and their families volunteer each year. We are committed to delivering improved outcomes, providing great customer service and generating long-term value in 2016. IN SUMMARY We have a tremendous platform across Commercial and...

  • Page 11
    ... file number 001-16797 _____ ADVANCE AUTO PARTS, INC. (Exact name of registrant as specified in its charter) _____ Delaware (State or other jurisdiction of incorporation or organization) 54-2049910 (I.R.S. Employer Identification No.) 5008 Airport Road Roanoke, VA (Address of Principal Executive...

  • Page 12
    ...,585, based on the last sales price of the Common Stock on July 17, 2015, as reported by the New York Stock Exchange. As of February 25, 2016, the registrant had outstanding 73,322,495 shares of Common Stock, par value $0.0001 per share (the only class of common stock of the registrant outstanding...

  • Page 13
    ... Officers and Corporate Governance...Executive Compensation...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence...Principal Accountant Fees and Services ... 40 40 40 40 40 Item...

  • Page 14
    ... new store locations, the integration of any acquired businesses and the continued increase in supply chain capacity and efficiency; our dependence on our suppliers to provide us with products that comply with safety and quality standards; the risk that we may experience difficulty in successfully...

  • Page 15
    ...historical fact made throughout this report, including the sections entitled "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors." We assume no obligations to update publicly any forward-looking statements, whether as a result of new...

  • Page 16
    ... Commercial delivery program in 1996 and have steadily increased our sales to Commercial customers since 2000. We have grown significantly as a result of comparable store sales growth, new store openings and strategic acquisitions. Our parent company, Advance Auto Parts, Inc., a Delaware corporation...

  • Page 17
    ... on the Commercial customer. These stores specialize in imported aftermarket and private label branded auto parts. The AI stores offer approximately 39,000 SKUs through routine replenishment from its supply chain. We acquired the Carquest and Worldpac operations as part of our acquisition of GPI on...

  • Page 18
    ... free of charge to our customers including Battery and wiper installation; Battery charging; Check engine light reading; Electrical system testing, including batteries, starters, alternators and sensors; "How-To" video clinics; Oil and battery recycling; and Loaner tool programs. Store Development...

  • Page 19
    ... Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Location Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia...

  • Page 20
    ... real-time parts availability on over 110,000 parts, view images on over 85,000 parts, check prices, place orders, view invoices and self-service returns. Store Support Centers We serve our Advance Auto Parts and Carquest stores primarily from our store support centers in Roanoke, VA and Raleigh, NC...

  • Page 21
    ... annually. MotoShop - is a technology solution portfolio consisting of a suite of electronic tools that supports our Commercial customers with: (i) online marketing solutions, (ii) fully searchable diagnostic and repair service resources, (iii) online shop tech training and (iv) a shop management...

  • Page 22
    ..., purchasing and distribution as compared to independent retailers and jobbers that are not part of a chain or associated with other retailers or jobbers. The principal methods of competition in our business include customer service, product offerings, availability, quality, price and store location...

  • Page 23
    ... aftermarket industry we may lose customers, our revenues may decline, and we may be less profitable or potentially unprofitable. The sale of automotive parts, accessories and maintenance items is highly competitive in many ways, including name recognition, location, price, quality, product...

  • Page 24
    ...expectations of financial analysts or investors. The acquisition of GPI could cause disruptions in and create uncertainty surrounding our business, including affecting our relationships with existing and future customers, wholesalers, independently-owned and jobber stores, suppliers and Team Members...

  • Page 25
    ... end of our 2005 fiscal year to 5,293 stores as of January 2, 2016. We intend to continue to increase the number of our stores and expand the markets we serve as part of our growth strategy, primarily by opening new stores. We may also grow our business through strategic acquisitions. We do not know...

  • Page 26
    ... operations and higher ongoing labor costs. If we fail or are unable to maintain competitive compensation, our customer service and execution levels could suffer by reason of a declining quality of our workforce, which could adversely affect our business, financial condition, results of operations...

  • Page 27
    ... or repair of their vehicles, which results in lower sales in our stores. An increase in fuel costs may also reduce the overall number of miles driven by our customers resulting in fewer parts failures and a reduced need for elective maintenance. Impact on Operating Costs Rising energy prices could...

  • Page 28
    ... computer systems, website and other online offerings, a compromise of our data security systems or those of businesses we interact with could result in information related to our customers, suppliers, Team Members or business being obtained by unauthorized persons or adverse operational effects or...

  • Page 29
    ... in the process of identifying a permanent chief executive officer. Changes in Board composition and/or management may affect our corporate governance, business models and strategic priorities, which could have an adverse effect on our business, financial condition, results of operations and cash...

  • Page 30
    ...Roanoke, Virginia Raleigh, North Carolina 270 204 - - As of January 2, 2016, we owned 817 of our stores and leased 4,476 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...

  • Page 31
    PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol "AAP". The table below sets forth the high and low sale prices per share for our common ...

  • Page 32
    ... solely on historical data and is not intended to forecast the possible future performance of our common stock. COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ADVANCE AUTO PARTS, INC., S&P 500 INDEX AND S&P RETAIL INDEX Company/Index Advance Auto Parts S&P 500 Index S&P Retail Index January 1, 2011...

  • Page 33
    ... and Results of Operations", and our consolidated financial statements and the related notes included elsewhere in this report. Fiscal Year (1) 2015 2014 2013 2012 2011 (in thousands, except per share data, store data and ratios) Statement of Operations Data: Net sales Cost of sales Gross profit...

  • Page 34
    ... store sales growth for 2014 and 2015 excludes sales from the 53rd week of 2014. Store count activity includes Worldpac branches. Includes 1,336 stores and branches resulting from our acquisition of GPI during 2014 and 124 stores resulting from our acquisition of BWP during 2013. The number of store...

  • Page 35
    ... end of 2015, we have converted 170 and consolidated 178 of these stores into Advance Auto Parts locations. On December 31, 2012, we acquired BWP, a privately-held company that supplied, marketed and distributed automotive aftermarket parts and products principally to Commercial customers. Prior to...

  • Page 36
    ... opening of new stores and branches. We generated operating cash flow of $689.6 million during 2015, a decrease of 2.7% compared to 2014, primarily due to a decrease in net income, partially offset by changes in working capital. We consolidated 80 and converted 160 Carquest stores into Advance Auto...

  • Page 37
    ...• • Our multi-year GPI integration plan remains underway which is focused on the integration of our Advance Auto Parts and Carquest operations. During 2015, we completed the support center consolidations that were initiated in 2014, integrated our field teams, harmonized pricing and brands and...

  • Page 38
    ... 2015 New Closed Consolidated (2) Converted (3) January 2, 2016 Stores with commercial delivery programs (1) (2) (1) New stores for Carquest represents stores acquired during 2015. Consolidated stores include AI, BWP and Carquest stores whose operations were consolidated into existing AAP locations...

  • Page 39
    ...of store support center Team Members, share-based compensation expenses, store support center administrative office expenses, data processing, professional expenses, selfinsurance costs, depreciation and amortization, closed facility expense and impairment charges, if any, and other related expenses...

  • Page 40
    ... and average transaction amount, partially offset by a decrease in DIY sales driven by lower traffic count. Our overall transaction value increased primarily due to higher priced products sold and a higher mix of Commercial sales. 2014 Comparable Store Sales % Net Stores Added (excluding GPI stores...

  • Page 41
    ... to $2,591.8 million, or 39.9% of net sales, for 2013, a decrease of 332 basis points. The primary driver of the net decrease in SG&A expenses, as a percentage of net sales, was the result of the acquired GPI business having a lower SG&A cost structure. Partially offsetting this decrease were $73...

  • Page 42
    ... that the presentation of financial results that exclude the 53rd week of operations in 2014, non-cash charges related to the acquired GPI intangibles and expenses associated with the integration of GPI, store consolidation costs and support center restructuring costs provide meaningful supplemental...

  • Page 43
    ... 2015, an increase of $6.3 million from 2014. Our future capital requirements will depend in large part on the number and timing of new stores we open within a given year and the investments we make in existing stores, information technology, supply chain network and the integration of GPI. In 2016...

  • Page 44
    ...accrued expenses and other assets related to the timing of payroll and payments to non-merchandise vendors. The benefit from accounts payable was expected as we were able to integrate terms for certain vendors serving both Carquest and Advance Auto Parts. $ Fiscal Year 2014 (in millions) 689.6 $ 709...

  • Page 45
    ... activities was primarily driven by cash used in the acquisition of GPI. Financing Activities For 2015, net cash used in financing activities increased by $1,021.9 million to $446.0 million. This increase was primarily a result of net payments on the revolving credit facility and term loan. For 2014...

  • Page 46
    ... or assets, pay distributions, repay loans, or guarantee indebtedness of its subsidiaries, and (iv) engage in sale-leaseback transactions; and (d) Advance to, among other things, change its holding company status. Advance and Advance Stores are required to comply with financial covenants with...

  • Page 47
    ... result in increased working capital requirements. Conversely, if these credit ratings improve, our interest rate may decrease. Off-Balance-Sheet Arrangements We guarantee loans made by banks to various of our independent store customers totaling $29.7 million as of January 2, 2016. These loans are...

  • Page 48
    ... vendors within a short period of time. We currently do not have minimum purchase commitments under our vendor supply agreements nor are our open purchase orders binding agreements. Accordingly, we have excluded open purchase orders from the above table. Critical Accounting Policies Our financial...

  • Page 49
    ... comparable times throughout the year. Our inventory consists primarily of parts, batteries, accessories and other products used on vehicles that have reasonably long shelf lives. Although the risk of obsolescence is minimal, we also consider whether we may have excess inventory based on our current...

  • Page 50
    ... in retail prices below recorded costs. We are also in the process of integrating GPI and we expect the integration to continue for multiple years. Final decisions about product offerings, brand usage, store conversions and other elements of the integration plan could be different from current plans...

  • Page 51
    ... and not covered by the manufacturer. Merchandise sold with warranty coverage by us primarily includes batteries but may also include other parts such as brakes and shocks. We estimate and record a reserve for future warranty claims at the time of sale based on the historical return experience of...

  • Page 52
    ...be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our...

  • Page 53
    ...Directors," "Corporate Governance," "Meetings and Committees of the Board," "Information Concerning Our Executive Officers," "Audit Committee Report," and "Section 16(a) Beneficial Ownership Reporting Compliance" in our proxy statement for the 2016 annual meeting of stockholders to be filed with the...

  • Page 54
    ...'s Report on Internal Control Over Financial Reporting...Audited Consolidated Financial Statements of Advance Auto Parts, Inc. and Subsidiaries for the years ended January 2, 2016, January 3, 2015 and December 28, 2013: Reports of Independent Registered Public Accounting Firm...Consolidated Balance...

  • Page 55
    ... the Securities Exchange Act of 1934, as amended. The Company's internal control over financial reporting is a process designed under the supervision of the Company's principal executive officer and principal financial officer, and effected by the Company's Board of Directors, management and other...

  • Page 56
    ... of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the accompanying consolidated balance sheets of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of January 2, 2016 and January 3, 2015, and the related consolidated statements of operations, comprehensive...

  • Page 57
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Advance Auto Parts, Inc. and Subsidiaries Roanoke, Virginia We have audited the internal control over financial reporting of Advance Auto Parts, Inc. and subsidiaries (the "Company") as of January 2, 2016, based on...

  • Page 58
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS January 2, 2016 and January 3, 2015 (in thousands, except per share data) January 2, 2016 $ 90,782 597,788 4,174,768 77,408 4,940,746 1,434,577 989,484 687,125 82,633 8,134,565 $ January 3, 2015 104,671 579,825 3,936,955 119,589 ...

  • Page 59
    ... AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) 2015 (52 weeks) Fiscal Years 2014 (53 weeks) 2013 (52 weeks) Net sales Cost of sales, including purchasing...

  • Page 60
    ...Share-based compensation Stock issued under employee stock purchase plan Repurchase of common stock Cash dividends declared ($0.24 per common share) Other Balance, January 3, 2015 Net income Total other comprehensive loss Issuance of shares upon the exercise of stock appreciation rights Tax...

  • Page 61
    ... related costs Borrowings under credit facilities Payments on credit facilities Dividends paid Proceeds from the issuance of common stock, primarily for employee stock purchase plan Tax withholdings related to the exercise of stock appreciation rights Excess tax benefit from share-based compensation...

  • Page 62
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands) Fiscal Years 2015 (52 weeks) Supplemental cash flow information: Interest paid Income tax payments Non-cash transactions: Accrued ...

  • Page 63
    ... items primarily for domestic and imported cars and light trucks. The Company offers delivery service to its Commercial customers' places of business, including independent garages, service stations and auto dealers, utilizing a fleet of vehicles to deliver product from its 4,745 store locations...

  • Page 64
    ...primarily determined using the last-in, first-out ("LIFO") method. Under the LIFO method, the Company's cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs relating to prices paid in prior years. Vendor Incentives The...

  • Page 65
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Income Taxes The Company accounts for income taxes under the asset and liability method which requires the recognition...

  • Page 66
    ... cost of sales for returns based on current sales levels and the Company's historical return experience. The Company's reserve for sales returns and allowances was not material as of January 2, 2016 and January 3, 2015. Share-Based Payments The Company provides share-based compensation to its Team...

  • Page 67
    ... in the dilution impact as those conditions are met. Lease Accounting The Company leases certain store locations, distribution centers, office spaces, equipment and vehicles. The total amount of minimum rent is expensed on a straight-line basis over the initial term of the lease unless external...

  • Page 68
    .... When items are sold or retired, the related cost and accumulated depreciation are removed from the account balances, with any gain or loss reflected in the consolidated statements of operations. Depreciation of land improvements, buildings, furniture, fixtures and equipment, and vehicles is...

  • Page 69
    ... our stores and branches to our customer locations; Self-insurance costs; Professional services; Other administrative costs, such as credit card service fees, supplies, travel and lodging; Closed facility expense; Impairment charges; GPI acquisition-related expenses and integration costs; and BWP...

  • Page 70
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This ...

  • Page 71
    ... Inventories, net: Merchandise Inventory The Company used the LIFO method of accounting for approximately 89% and 88% of inventories at January 2, 2016 and January 3, 2015, respectively. Under LIFO, the Company's cost of sales reflects the costs of the most recently purchased inventories, while the...

  • Page 72
    ... a privately-held company, was a leading distributor and supplier of original equipment and aftermarket replacement products for Commercial markets operating under the Carquest and Worldpac brands. As of the acquisition date, GPI operated 1,233 Carquest stores and 103 Worldpac branches located in 45...

  • Page 73
    ...AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Purchase Price Allocation The following table summarizes the consideration paid for GPI and the amounts of the assets acquired...

  • Page 74
    ..., 2012, the Company acquired B.W.P. Distributors, Inc. ("BWP") in an all-cash transaction. BWP, formerly a privately-held company, supplied, marketed and distributed automotive aftermarket parts and products principally to Commercial customers. Prior to the acquisition, BWP operated or supplied 216...

  • Page 75
    ... FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Under the terms of the agreement, the Company acquired the net assets in exchange for a purchase price of $187,109. Following the closing of the acquisition, the Company sold...

  • Page 76
    ...located in Florida into Advance Auto Parts stores. All of the AI consolidations and conversions were complete as of the second quarter of fiscal 2015. During 2015, the Company incurred $2,700 of exit costs, consisting primarily of closed facility lease obligations, associated with these plans. Total...

  • Page 77
    ... THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Intangible Assets Other Than Goodwill In 2014, the Company recorded an increase to intangible assets of $757,453 related to the acquisition of GPI and nine stores. The...

  • Page 78
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) 6. Receivables, net: Receivables consist of the following: January 2, 2016 Trade Vendor Other Total receivables Less: ...

  • Page 79
    ...AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) The interest rate on borrowings under the revolving credit facility is based, at the Company's option, on adjusted LIBOR, plus...

  • Page 80
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) acceleration having been rescinded or annulled within 10 days after receipt by the Company of notice of the default by...

  • Page 81
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs...

  • Page 82
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) 10. Accrued Expenses: Accrued expenses consist of the following: January 2, 2016 Payroll and related benefits Taxes ...

  • Page 83
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) The following table illustrates the computation of basic and diluted earnings per share for 2015, 2014 and 2013, ...

  • Page 84
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate due...

  • Page 85
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Temporary differences which give rise to significant deferred income tax assets (liabilities) are as follows: January ...

  • Page 86
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) The Company files a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions....

  • Page 87
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) plaintiffs have alleged that these products contained asbestos and were manufactured, distributed and/or sold by the ...

  • Page 88
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) 17. Share-Based Compensation: Overview The Company grants share-based compensation awards to its Team Members and ...

  • Page 89
    ...AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Share-Based Compensation Expense & Cash Flows Total share-based compensation expense and cash received included in the Company...

  • Page 90
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Stock Appreciation Rights The following table summarizes the time-vested SARs activity for 2015: WeightedAverage ...

  • Page 91
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Compensation expense for performance-based awards of $14,659, $6,161, and $1,141 in 2015, 2014 and 2013, respectively,...

  • Page 92
    ...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 imported cars and light trucks. While the mix of Commercial...

  • Page 93
    ...'s online ordering platforms, Commercial customers can conveniently place orders with a designated store location for delivery to their places of business or pick-up. The following table summarizes financial information for each of the Company's product groups for the years ended January 2, 2016...

  • Page 94
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Condensed Consolidating Balance Sheets As of January 2, 2016 Advance Auto Parts, Inc. Assets Current assets: Cash and ...

  • Page 95
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Condensed Consolidating Balance Sheets As of January 3, 2015 Advance Auto Parts, Inc. Assets Current assets: Cash and ...

  • Page 96
    ..., INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Condensed Consolidating Statements of Operations For Fiscal 2015 Advance Auto Parts, Inc. $ - - - 24,186 (24,186) (52,210) 76,987 24...

  • Page 97
    ..., INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) Condensed Consolidating Statements of Comprehensive Income For Fiscal 2015 Advance Auto Parts, Inc. Net income Other comprehensive loss...

  • Page 98
    ... per share data) Condensed Consolidating Statements of Cash Flows For Fiscal 2015 Advance Auto Parts, Inc. Net cash (used in) provided by operating activities Cash flows from investing activities: Purchases of property and equipment Business acquisitions, net of cash acquired Proceeds from sales of...

  • Page 99
    ... the issuance of common stock, primarily for employee stock purchase plan Tax withholdings related to the exercise of stock appreciation rights Excess tax benefit from share-based compensation Repurchase of common stock Contingent consideration related to previous business acquisition Other Net cash...

  • Page 100
    ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS January 2, 2016, January 3, 2015 and December 28, 2013 (in thousands, except per share data) 21. Quarterly Financial Data (unaudited): The following table summarizes quarterly financial data for Fiscal 2015 and ...

  • Page 101
    ADVANCE AUTO PARTS, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period $ 5,919 13,295 16,152 Balance at End of Period (2) Allowance for doubtful accounts receivable: December 28, 2013 January 3, 2015 January 2, 2016 (1) Charges to Expenses $ 11,955 ...

  • Page 102
    ... duly authorized. ADVANCE AUTO PARTS, INC. By: /s/ Michael A. Norona Michael A. Norona Executive Vice President and Chief Financial Officer Dated: March 1, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 103
    Signature /s/ Jeffrey C. Smith Jeffrey C. Smith /s/ Jimmie L. Wade Jimmie L. Wade Director Title Date March 1, 2016 Director March 1, 2016 S-2

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    ...of January 1, 2009) and Second Amendment to the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (as amended and restated effective as of January 1, 2010). 10-Q 8-K 8-K 3.1 8/19/2013 3.1 11/13/2015 4.1 4/29/2010 8-K 4.2 4/29/2010 8-K 10.45...

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    ...and Restated Advance Auto Parts, Inc. Employee Stock DEF Appendix Purchase Plan. 14A C 4/16/2012 10.5 Advance Auto Parts, Inc. Deferred Compensation Plan (as amended 10-K 10.19 3/1/2011 January 1, 2008), including First Amendment to the Advance Auto Parts, Inc. Deferred Compensation Plan (as amended...

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    .... Advance Stores Company, Incorporated, the other lenders from time to time party lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the lenders. 10.38 Supplement No. 1 to Guarantee Agreement. 10.39 First Amendment to the Advance Auto Parts, Inc. Employee Stock Purchase...

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    ... Amendment to the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (As Amended and Restated Effective as of January 1, 2008). 10.50 First Amendment of Employment Agreement dated as of January 1, 2014, between Advance Auto Parts, Inc. and Jimmie...

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    ...FOR THE STOCKHOLDERS Corporate Of ce: 5008 Airport Road Roanoke, Virginia 24012 877-238 -2623 Internet Site: www.AdvanceAutoParts.com Annual Meeting: May 18, 2016 at 8:30 a.m. ET Advance Auto Parts Store Support Center University Building 4709 Hargrove Road Raleigh, North Carolina 27616 Registrar...

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    ...Officer * Executive Officers William H. Carter * Senior Vice President, Business Development and Integration Jose C. Gonzalez Senior Vice President, Sales and Operations Michael J. Pack Senior Vice President, Operations Support Michael A. Norona* Executive Vice President, Chief Financial Officer...

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    5008 Airport Road | Roanoke, Virginia 24012 | 877. 238 . 2623 | AdvanceAutoParts.com