Advance Auto Parts 2015 Annual Report Download - page 74

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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)
F-20
December 28,
2013
(52 weeks)
Pro forma:
Net sales $ 9,456,405
Net income $ 428,562
Basic earnings per share $ 5.88
Diluted earnings per share $ 5.84
The unaudited consolidated pro forma financial information was prepared in accordance with the acquisition method of
accounting under existing standards and is not necessarily indicative of the results of operations that would have occurred if the
acquisition had been completed on the date indicated, nor is it indicative of the future operating results of the Company.
The unaudited pro forma results have been adjusted with respect to certain aspects of the acquisition to reflect:
• additional amortization expense that would have been recognized assuming fair value adjustments to the existing
GPI assets acquired and liabilities assumed, including favorable and unfavorable lease values and other intangible
assets;
• adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the
acquisition and removal of GPI historical debt;
• elimination of the GPI recognition of a deferred gain in 2013 of $6,385 for the twelve months ended December
31, 2013 from a sale leaseback transaction as the deferred values were subsequently removed in purchase
accounting; and
• elimination of acquisition-related transaction fees incurred by the Company of $26,970 for the fifty-two weeks
ended December 28, 2013.
The unaudited pro forma results do not reflect future events that either have occurred or may occur after the acquisition,
including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods.
They also do not give effect to certain charges that the Company expects to incur in connection with the integration of GPI,
including, but not limited to, additional professional fees, employee integration costs, potential asset impairments, and
accelerated depreciation and amortization.
B.W.P. Distributors, Inc.
On December 31, 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 locations in the northeastern U.S. The Company
believes this acquisition will enable the Company to continue its expansion in the competitive Northeast, which is a strategic
growth area for the Company due to the large population and overall size of the market, and to gain valuable information to
apply to its existing operations as a result of BWP's expertise in Commercial. The amount of acquired goodwill reflects this
strategic importance to the Company.
Concurrent with the closing of the acquisition, the Company transferred one distribution center and BWP's rights to
distribute to 92 independently owned locations to an affiliate of GPI. As a result, the Company began operating the 124 BWP
company-owned stores and two remaining BWP distribution centers as of the closing date. The Company has included the
financial results of BWP in its consolidated financial statements commencing December 31, 2012 (Fiscal 2013).