Advance Auto Parts 2015 Annual Report Download - page 81

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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-27
particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to
the asset or liability.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company had no significant assets or liabilities that were measured at fair value on a recurring basis during 2015 or
2014.
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not
measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is
evidence of impairment). During 2015 and 2014, the Company recorded impairment charges of $11,017 and $11,819,
respectively, on various store and corporate assets. The remaining fair value of these assets was not significant.
Fair Value of Financial Assets and Liabilities
The carrying amount of the Company’s cash and cash equivalents, accounts receivable, bank overdrafts, accounts payable,
accrued expenses and the current portion of long term debt approximate their fair values due to the relatively short term nature
of these instruments. The fair value of the Company’s senior unsecured notes was determined using Level 2 inputs based on
quoted market prices, and the Company believes that the carrying value of its other long-term debt and certain long-term
liabilities approximate fair value. The carrying value and fair value of the Company's long-term debt as of January 2, 2016 and
January 3, 2015, respectively, are as follows:
January 2,
2016
January 3,
2015
Carrying Value $ 1,213,161 $ 1,636,311
Fair Value $ 1,262,000 $ 1,728,000
9. Property and Equipment:
Property and equipment consists of the following:
Original
Useful Lives
January 2,
2016
January 3,
2015
Land and land improvements 0 - 10 years $ 441,048 $ 438,638
Buildings 30 - 40 years 468,237 460,187
Building and leasehold improvements 3 - 30 years 418,352 394,259
Furniture, fixtures and equipment 3 - 20 years 1,464,791 1,402,563
Vehicles 2 - 13 years 25,060 37,051
Construction in progress 106,855 71,691
2,924,343 2,804,389
Less - Accumulated depreciation (1,489,766)(1,372,359)
Property and equipment, net $ 1,434,577 $ 1,432,030
Depreciation expense was $223,728, $235,040 and $199,821 for 2015, 2014 and 2013, respectively. The Company
capitalized $13,529, $11,436 and $11,534 incurred for the development of internal use computer software during 2015, 2014
and 2013, respectively. These costs are included in the furniture, fixtures and equipment category above and are depreciated on
the straight-line method over three to ten years.