Condensed Consolidating Financial Statements

12 Months Ended

Dec. 28, 2019

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements:

Certain 100% wholly owned domestic subsidiaries of Advance, including its Material Subsidiaries (as defined in the 2017 Credit Agreement) serve as guarantors of Advance’s senior unsecured notes (“Guarantor Subsidiaries”). The subsidiary guarantees related to Advance’s senior unsecured notes are full and unconditional, joint and several and there are no restrictions on the ability of Advance to obtain funds from its Guarantor Subsidiaries. Certain of Advance’s wholly owned subsidiaries, including all of its foreign subsidiaries and captive insurance subsidiary, do not serve as guarantors of Advance’s senior unsecured notes (“Non-Guarantor Subsidiaries”).

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations, and cash flows of (i) Advance, (ii) the Guarantor Subsidiaries, (iii) the Non-Guarantor Subsidiaries, and (iv) the eliminations necessary to arrive at consolidated information for Advance. Investments in subsidiaries of Advance are presented under the equity method. The statement of operations eliminations relate primarily to the sale of inventory from a Non-Guarantor Subsidiary to a Guarantor Subsidiary. The balance sheet eliminations relate primarily to the elimination of intercompany receivables and payables and subsidiary investment accounts.

The following tables present condensed consolidating balance sheets, condensed consolidating statements of operations, comprehensive income and cash flows, and should be read in conjunction with the consolidated financial statements herein.

Condensed Consolidating Balance Sheet

As of December 28, 2019

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	285,100	$	133,565	$	—		$	418,665
Receivables, net	1,529		646,686		41,254		—			689,469
Inventories	—		4,233,562		198,606		—			4,432,168
Other current assets	12,710		150,316		3,442		(11,227		)	155,241
Total current assets	14,239		5,315,664		376,867		(11,227		)	5,695,543
Property and equipment, net of accumulated depreciation	54		1,423,920		9,239		—			1,433,213
Operating lease right-of-use assets	—		2,325,170		40,155		—			2,365,325
Goodwill	—		943,364		48,876		—			992,240
Intangible assets, net	—		670,386		39,370		—			709,756
Other assets	2,358		38,311		14,137		(2,358		)	52,448
Investment in subsidiaries	4,445,209		550,910		—		(4,996,119		)	—
Intercompany note receivable	749,354		—		—		(749,354		)	—
Due from intercompany, net	—		571,981		342,832		(914,813		)	—
	$	5,211,214	$	11,839,706	$	871,476	$	(6,673,871	)	$	11,248,525
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	3,231,927	$	190,060	$	—		$	3,421,987
Accrued expenses	—		523,518		23,572		(11,227		)	535,863
Other current liabilities	—		508,811		11,041		—			519,852
Total current liabilities	—		4,264,256		224,673		(11,227		)	4,477,702
Long-term debt	747,320		—		—		—			747,320
Noncurrent operating lease liabilities	—		1,986,039		31,120		—			2,017,159
Deferred income taxes	—		320,822		15,549		(2,358		)	334,013
Other long-term liabilities	—		74,026		49,224		—			123,250
Intercompany note payable	—		749,354		—		(749,354		)	—
Due to intercompany, net	914,813		—		—		(914,813		)	—
Commitments and contingencies
Stockholders' equity	3,549,081		4,445,209		550,910		(4,996,119		)	3,549,081
	$	5,211,214	$	11,839,706	$	871,476	$	(6,673,871	)	$	11,248,525

Condensed Consolidating Balance Sheet

As of December 29, 2018

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	785,605	$	110,922		$	—		$	896,527
Receivables, net	—		590,269		34,703			—			624,972
Inventories	—		4,182,973		179,574			—			4,362,547
Other current assets	3,103		191,318		3,987			—			198,408
Total current assets	3,103		5,750,165		329,186			—			6,082,454
Property and equipment, net of accumulated depreciation	77		1,359,980		8,928			—			1,368,985
Goodwill	—		943,364		46,873			—			990,237
Intangible assets, net	—		510,586		40,007			—			550,593
Other assets	2,408		47,815		564			(2,408		)	48,379
Investment in subsidiaries	3,945,862		474,772		—			(4,420,634		)	—
Intercompany note receivable	1,048,993		—		—			(1,048,993		)	—
Due from intercompany, net	—		102,886		297,580			(400,466		)	—
	$	5,000,443	$	9,189,568	$	723,138		$	(5,872,501	)	$	9,040,648
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	2,954,632	$	218,158		$	—		$	3,172,790
Accrued expenses	3,444		603,460		16,237			—			623,141
Other current liabilities	—		91,994		(1,975		)	—			90,019
Total current liabilities	3,444		3,650,086		232,420			—			3,885,950
Long-term debt	1,045,720		—		—			—			1,045,720
Deferred income taxes	—		306,127		14,634			(2,408		)	318,353
Other long-term liabilities	—		238,500		1,312			—			239,812
Intercompany note payable	—		1,048,993		—			(1,048,993		)	—
Due to intercompany, net	400,466		—		—			(400,466		)	—
Commitments and contingencies
Stockholders' equity	3,550,813		3,945,862		474,772			(4,420,634		)	3,550,813
	$	5,000,443	$	9,189,568	$	723,138		$	(5,872,501	)	$	9,040,648

Condensed Consolidating Statement of Operations

For the Year Ended December 28, 2019

(in thousands)	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	9,342,240		$	568,522		$	(201,759	)	$	9,709,003
Cost of sales, including purchasing and warehousing costs	—			5,252,418			336,110			(134,271		)	5,454,257
Gross profit	—			4,089,822			232,412			(67,488		)	4,254,746
Selling, general and administrative expenses	28,216			3,503,529			160,717			(114,896		)	3,577,566
Operating (loss) income	(28,216		)	586,293			71,695			47,408			677,180
Other, net:
Interest expense	(37,366		)	(2,310		)	(222		)	—			(39,898		)
Other income (expense), net	66,842			(16,274		)	(2,695		)	(47,409		)	464
Total other, net	29,476			(18,584		)	(2,917		)	(47,409		)	(39,434		)
Income before provision for income taxes	1,260			567,709			68,778			(1		)	637,746
Provision for income taxes	2,429			131,885			16,537			(1		)	150,850
(Loss) income before equity in earnings of subsidiaries	(1,169		)	435,824			52,241			—			486,896
Equity in earnings of subsidiaries	488,065			52,241			—			(540,306		)	—
Net income	$	486,896		$	488,065		$	52,241		$	(540,306	)	$	486,896

Condensed Consolidating Statement of Operations

For the Year Ended December 29, 2018

(in thousands)	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	9,225,772		$	519,883		$	(165,101	)	$	9,580,554
Cost of sales, including purchasing and warehousing costs	—			5,169,076			357,166			(165,101		)	5,361,141
Gross profit	—			4,056,696			162,717			—			4,219,413
Selling, general and administrative expenses	20,235			3,547,645			98,412			(51,154		)	3,615,138
Operating (loss) income	(20,235		)	509,051			64,305			51,154			604,275
Other, net:
Interest (expense) income	(52,253		)	(4,336		)	1			—			(56,588		)
Other income (expense), net	73,174			(6,961		)	(7,482		)	(51,154		)	7,577
Total other, net	20,921			(11,297		)	(7,481		)	(51,154		)	(49,011		)
Income before provision for income taxes	686			497,754			56,824			—			555,264
Provision for income taxes	2,519			117,015			11,883			—			131,417
(Loss) income before equity in earnings of subsidiaries	(1,833		)	380,739			44,941			—			423,847
Equity in earnings of subsidiaries	425,680			44,941			—			(470,621		)	—
Net income	$	423,847		$	425,680		$	44,941		$	(470,621	)	$	423,847

Condensed Consolidating Statement of Operations

For the Year Ended December 30, 2017

(in thousands)	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	9,034,790		$	550,450		$	(211,456	)	$	9,373,784
Cost of sales, including purchasing and warehousing costs	—			5,107,063			393,128			(211,456		)	5,288,735
Gross profit	—			3,927,727			157,322			—			4,085,049
Selling, general and administrative expenses	30,478			3,453,406			82,155			(51,202		)	3,514,837
Operating (loss) income	(30,478		)	474,321			75,167			51,202			570,212
Other, net:
Interest (expense) income	(52,305		)	(6,496		)	—			—			(58,801		)
Other income (expense), net	83,840			(17,729		)	(6,061		)	(51,202		)	8,848
Total other, net	31,535			(24,225		)	(6,061		)	(51,202		)	(49,953		)
Income before provision for income taxes	1,057			450,096			69,106			—			520,259
Provision for income taxes	641			32,623			11,490			—			44,754
Income before equity in earnings of subsidiaries	416			417,473			57,616			—			475,505
Equity in earnings of subsidiaries	475,089			57,616			—			(532,705		)	—
Net income	$	475,505		$	475,089		$	57,616		$	(532,705	)	$	475,505

Condensed Consolidating Statement of Comprehensive Income

For the Year Ended December 28, 2019

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	486,896	$	488,065		$	52,241	$	(540,306	)	$	486,896
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(142		)	—		—			(142		)
Currency translation adjustments	—		—			9,766		—			9,766
Equity in other comprehensive income of subsidiaries	9,624		9,766			—		(19,390		)	—
Total other comprehensive income	9,624		9,624			9,766		(19,390		)	9,624
Comprehensive income	$	496,520	$	497,689		$	62,007	$	(559,696	)	$	496,520

Condensed Consolidating Statement of Comprehensive Income

For the Year Ended December 29, 2018

(in thousands)	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	423,847		$	425,680		$	44,941		$	(470,621	)	$	423,847
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(294		)	—			—			(294		)
Currency translation adjustments	—			—			(18,945		)	—			(18,945		)
Equity in other comprehensive loss of subsidiaries	(19,239		)	(18,945		)	—			38,184			—
Total other comprehensive loss	(19,239		)	(19,239		)	(18,945		)	38,184			(19,239		)
Comprehensive income	$	404,608		$	406,441		$	25,996		$	(432,437	)	$	404,608

Condensed Consolidating Statement of Comprehensive Income

For the Year Ended December 30, 2017

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	475,505	$	475,089		$	57,616	$	(532,705	)	$	475,505
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(194		)	—		—			(194		)
Currency translation adjustments	—		—			14,941		—			14,941
Equity in other comprehensive income of subsidiaries	14,747		14,941			—		(29,688		)	—
Total other comprehensive income	14,747		14,747			14,941		(29,688		)	14,747
Comprehensive income	$	490,252	$	489,836		$	72,557	$	(562,393	)	$	490,252

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 28, 2019

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	—	$	845,364		$	21,545		$	—	$	866,909
Cash flows from investing activities:
Purchases of property and equipment	—		(268,342		)	(1,787		)	—		(270,129		)
Purchase of an indefinite-lived intangible asset	—		(201,519		)	—			—		(201,519		)
Proceeds from sales of property and equipment	—		8,708			1			—		8,709
Net cash used in investing activities	—		(461,153		)	(1,786		)	—		(462,939		)
Cash flows from financing activities:
(Decrease) increase in bank overdrafts	—		(61,902		)	2,563			—		(59,339		)
Redemption of senior unsecured notes	—		(310,047		)	—			—		(310,047		)
Dividends paid	—		(17,185		)	—			—		(17,185		)
Proceeds from the issuance of common stock	—		3,334			—			—		3,334
Repurchases of common stock	—		(498,435		)	—			—		(498,435		)
Other, net	—		(481		)	—			—		(481		)
Net cash (used in) provided by financing activities	—		(884,716		)	2,563			—		(882,153		)
Effect of exchange rate changes on cash	—		—			321			—		321
Net (decrease) increase in cash and cash equivalents	—		(500,505		)	22,643			—		(477,862		)
Cash and cash equivalents, beginning of period	—		785,605			110,922			—		896,527
Cash and cash equivalents, end of period	$	—	$	285,100		$	133,565		$	—	$	418,665

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 29, 2018

(in thousands)	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	—		$	753,948		$	57,080		$	—		$	811,028
Cash flows from investing activities:
Purchases of property and equipment	—			(192,156		)	(1,559		)	—			(193,715		)
Proceeds from sales of property and equipment	—			1,842			46			—			1,888
Other, net	—			—			—			—			—
Net cash used in investing activities	—			(190,314		)	(1,513		)	—			(191,827		)
Cash flows from financing activities:
Increase (decrease) in bank overdrafts	—			35,280			(3,266		)	—			32,014
Borrowings under credit facilities	—			—			—			—			—
Payments on credit facilities	—			—			—			—			—
Dividends paid	—			(17,819		)	—			—			(17,819		)
Proceeds from the issuance of common stock	—			3,200			—			—			3,200
Repurchases of common stock	—			(281,354		)	—			—			(281,354		)
Other, net	(23		)	44			—			23			44
Net cash used in financing activities	(23		)	(260,649		)	(3,266		)	23			(263,915		)
Effect of exchange rate changes on cash	—			—			(5,696		)	—			(5,696		)
Net (decrease) increase in cash and cash equivalents	(23		)	302,985			46,605			23			349,590
Cash and cash equivalents, beginning of period	23			482,620			64,317			(23		)	546,937
Cash and cash equivalents, end of period	$	—		$	785,605		$	110,922		$	—		$	896,527

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 30, 2017

(in thousands)	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	—	$	593,091		$	7,714		$	—		$	600,805
Cash flows from investing activities:
Purchases of property and equipment	—		(187,993		)	(1,765		)	—			(189,758		)
Proceeds from sales of property and equipment	—		11,085			14			—			11,099
Other, net	—		480			(460		)	—			20
Net cash used in investing activities	—		(176,428		)	(2,211		)	—			(178,639		)
Cash flows from financing activities:
Increase (decrease) in bank overdrafts	—		16,290			(2,286		)	—			14,004
Borrowings under credit facilities	—		534,400			—			—			534,400
Payments on credit facilities	—		(534,400		)	—			—			(534,400		)
Dividends paid	—		(17,854		)	—			—			(17,854		)
Proceeds from the issuance of common stock	—		4,076			—			—			4,076
Repurchases of common stock	—		(6,498		)	—			—			(6,498		)
Other, net	1		(8,600		)	—			(1		)	(8,600		)
Net cash provided by (used in) financing activities	1		(12,586		)	(2,286		)	(1		)	(14,872		)
Effect of exchange rate changes on cash	—		—			4,465			—			4,465
Net increase in cash and cash equivalents	1		404,077			7,682			(1		)	411,759
Cash and cash equivalents, beginning of period	22		78,543			56,635			(22		)	135,178
Cash and cash equivalents, end of period	$	23	$	482,620		$	64,317		$	(23	)	$	546,937