Advance Auto Parts 2015 Annual Report Download - page 42

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Reconciliation of Non-GAAP Financial Measures
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" include certain financial
measures not derived in accordance with generally accepted accounting principles (“GAAP”). Non-GAAP financial measures
should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our
operating performance, financial position or cash flows. However, we have presented the non-GAAP financial measures, as we
believe the reporting of financial results on a non-GAAP basis to remain comparable is important in assessing the overall
performance of the business and is therefore useful to investors and prospective investors. We believe 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 information to both management and investors, which is indicative of our base operations. We have
included a reconciliation of this information to the most comparable GAAP measures in the following table.
(in thousands, except per share data)
2015 2014
Comparable
Adjustments (a)
As
Reported
Comparable
Adjustments (a) Comparable
As
Reported 53rd Week
Integration
Costs Comparable
(52 weeks) (52 weeks) (53 weeks) (52 weeks)
Net sales $ 9,737,018 $ — $ 9,737,018 $ 9,843,861 $ (150,386) $ — $ 9,693,475
Cost of sales 5,314,246 — 5,314,246 5,390,248 (82,606) — 5,307,642
Gross profit 4,422,772 — 4,422,772 4,453,613 (67,780) — 4,385,833
Selling, general and
administrative expenses 3,596,992 (169,340) 3,427,652 3,601,903 (46,720) (124,930) 3,430,253
Operating income 825,780 169,340 995,120 851,710 (21,060) 124,930 955,580
Other, net:
Interest expense (65,408) — (65,408) (73,408) 1,291 — (72,117)
Other income, net (7,484) — (7,484) 3,092 (212) — 2,880
Total other, net (72,892) — (72,892) (70,316) 1,079 — (69,237)
Income before provision
for income taxes 752,888 169,340 922,228 781,394 (19,981) 124,930 886,343
Provision for income taxes 279,490 64,349 343,839 287,569 (7,610) 47,473 327,432
Net income $ 473,398 $ 104,991 $ 578,389 $ 493,825 $ (12,371) $ 77,457 $ 558,911
Basic earnings per
common share (b) $ 6.45 $ 1.42 $ 7.87 $ 6.75 $ (0.17) $ 1.06 $ 7.64
Diluted earnings per
common share (b) $ 6.40 $ 1.42 $ 7.82 $ 6.71 $ (0.17) $ 1.05 $ 7.59
Weighed average common
shares outstanding (b) 73,190 73,190 73,190 72,932 72,932 72,932 72,932
Weighted average diluted
common shares
outstanding (b) 73,733 73,733 73,733 73,414 73,414 73,414 73,414
(a) The comparable adjustments to Selling, general and administrative expenses for 2015 include GPI integration, store
closure and consolidation costs and support center restructuring costs of $127,059 and GPI amortization of acquired
intangible assets of $42,281. The comparable adjustments to Selling, general and administrative expenses for 2014
include adjustments to remove the impact of the 53rd week of operations and the adjustments for GPI integration and store
consolidation costs of $82,234 and GPI amortization of acquired intangible assets of $42,696.
(b) Average common shares outstanding is calculated based on the weighted average number of shares outstanding during the
year. At January 2, 2016 and January 3, 2015, we had 73,314 and 73,074 shares outstanding, respectively.