10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 8, 2016

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________.

Commission 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, Virginia 24012

(Address of Principal Executive Offices)

(Zip Code)

(540) 362-4911

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report).

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Registration S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o  (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of November 10, 2016, the registrant had outstanding 73,653,625 shares of Common Stock, par value $0.0001 per share (the only class of common stock of the registrant outstanding).

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements of Advance Auto Parts, Inc. and Subsidiaries (unaudited):
		Condensed Consolidated Balance Sheets as of October 8, 2016 and January 2, 2016	1
		Condensed Consolidated Statements of Operations for the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015	2
		Condensed Consolidated Statements of Comprehensive Income for the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015	2
		Condensed Consolidated Statement of Changes in Stockholders' Equity for the Forty Week Period Ended October 8, 2016	3
		Condensed Consolidated Statements of Cash Flows for the Forty Week Periods Ended October 8, 2016 and October 10, 2015	4
		Notes to the Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
	Item 6.	Exhibits	42
SIGNATURE			S-1

i

PART I.  FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

October 8, 2016 and January 2, 2016

(in thousands, except per share data)

(unaudited)

	October 8, 2016			January 2, 2016
Assets
Current assets:
Cash and cash equivalents	$	119,494		$	90,782
Receivables, net	686,947			597,788
Inventories, net	4,357,013			4,174,768
Other current assets	98,672			77,408
Total current assets	5,262,126			4,940,746
Property and equipment, net of accumulated depreciation of $1,628,756 and $1,489,766	1,442,173			1,434,577
Goodwill	991,392			989,484
Intangible assets, net	652,361			687,125
Other assets, net	66,593			75,769
	$	8,414,645		$	8,127,701
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	372		$	598
Accounts payable	3,197,075			3,203,922
Accrued expenses	590,325			553,163
Other current liabilities	49,579			39,794
Total current liabilities	3,837,351			3,797,477
Long-term debt	1,042,633			1,206,297
Deferred income taxes	455,348			433,925
Other long-term liabilities	223,592			229,354
Commitments and contingencies
Stockholders' equity:
Preferred stock, nonvoting, $0.0001 par value	—			—
Common stock, voting, $0.0001 par value	8			7
Additional paid-in capital	620,220			603,332
Treasury stock, at cost	(132,009		)	(119,709		)
Accumulated other comprehensive loss	(37,496		)	(44,059		)
Retained earnings	2,404,998			2,021,077
Total stockholders' equity	2,855,721			2,460,648
	$	8,414,645		$	8,127,701

The accompanying notes to the condensed consolidated financial statements

are an integral part of these statements.

1

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Twelve and Forty Week Periods Ended

October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

	Twelve Week Periods Ended						Forty Week Periods Ended
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Net sales	$	2,248,855		$	2,295,203		$	7,484,788		$	7,703,473
Cost of sales, including purchasing and warehousing costs	1,260,650			1,262,816			4,136,437			4,189,873
Gross profit	988,205			1,032,387			3,348,351			3,513,600
Selling, general and administrative expenses	794,437			826,862			2,666,900			2,788,498
Operating income	193,768			205,525			681,451			725,102
Other, net:
Interest expense	(13,581		)	(14,384		)	(46,545		)	(51,599		)
Other (expense) income, net	(2,349		)	1,276			7,018			(4,440		)
Total other, net	(15,930		)	(13,108		)	(39,527		)	(56,039		)
Income before provision for income taxes	177,838			192,417			641,924			669,063
Provision for income taxes	63,994			71,948			244,667			250,484
Net income	$	113,844		$	120,469		$	397,257		$	418,579
Basic earnings per common share	$	1.54		$	1.64		$	5.38		$	5.70
Diluted earnings per common share	$	1.53		$	1.63		$	5.36		$	5.66
Dividends declared per common share	$	0.06		$	0.06		$	0.18		$	0.18
Weighted average common shares outstanding	73,638			73,215			73,524			73,168
Weighted average common shares outstanding - assuming dilution	73,860			73,763			73,847			73,695

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

For the Twelve and Forty Week Periods Ended

October 8, 2016 and October 10, 2015

(in thousands)

(unaudited)

	Twelve Week Periods Ended						Forty Week Periods Ended
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Net income	$	113,844		$	120,469		$	397,257		$	418,579
Other comprehensive (loss) income:
Changes in net unrecognized other postretirement benefit costs, net of $88, $86, $295 and $288 tax	(136		)	(134		)	(455		)	(446		)
Currency translation adjustments	(4,939		)	811			7,018			(19,270		)
Total other comprehensive (loss) income	(5,075		)	677			6,563			(19,716		)
Comprehensive income	$	108,769		$	121,146		$	403,820		$	398,863

The accompanying notes to the condensed consolidated financial statements

are an integral part of these statements.

2

Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders' Equity For the Forty Week Period Ended October 8, 2016 (in thousands, except per share data) (unaudited)
	Preferred Stock			Common Stock			Additional Paid-in Capital			Treasury Stock, at cost				Accumulated Other Comprehensive Loss			Retained Earnings			Total Stockholders' Equity
	Shares	Amount		Shares	Amount					Shares	Amount
Balance, January 2, 2016	—	$	—	74,775	$	7	$	603,332		1,461	$	(119,709	)	$	(44,059	)	$	2,021,077		$	2,460,648
Net income																	397,257			397,257
Total other comprehensive income														6,563						6,563
Issuance of shares upon the exercise of stock appreciation rights				119	1		—													1
Tax withholdings related to the exercise of stock appreciation rights							(15,764		)											(15,764		)
Tax benefit from share-based compensation, net							17,582													17,582
Restricted stock units vested				278																—
Share-based compensation							11,633													11,633
Stock issued under employee stock purchase plan				23			3,290													3,290
Repurchase of common stock										81	(12,300		)							(12,300		)
Cash dividends declared ($0.18 per common share)																	(13,336		)	(13,336		)
Other							147													147
Balance, October 8, 2016	—	$	—	75,195	$	8	$	620,220		1,542	$	(132,009	)	$	(37,496	)	$	2,404,998		$	2,855,721

The accompanying notes to the condensed consolidated financial statements

are an integral part of these statements.

3

Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Forty Week Periods Ended October 8, 2016 and October 10, 2015 (in thousands) (unaudited)
	Forty Week Periods Ended
	October 8, 2016			October 10, 2015
Cash flows from operating activities:
Net income	$	397,257		$	418,579
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	199,262			207,496
Share-based compensation	11,664			25,941
Loss on property and equipment, net	4,602			9,737
Other	(2,657		)	2,045
Provision (benefit) for deferred income taxes	21,130			(13,486		)
Excess tax benefit from share-based compensation	(17,615		)	(10,291		)
Net increase in:
Receivables, net	(87,488		)	(86,610		)
Inventories, net	(175,678		)	(202,901		)
Other assets	(15,804		)	(16,522		)
Net (decrease) increase in:
Accounts payable	(9,222		)	91,590
Accrued expenses	84,897			93,101
Other liabilities	(931		)	1,409
Net cash provided by operating activities	409,417			520,088
Cash flows from investing activities:
Purchases of property and equipment	(204,213		)	(161,232		)
Business acquisitions, net of cash acquired	(2,672		)	(18,893		)
Proceeds from sales of property and equipment	1,483			178
Net cash used in investing activities	(205,402		)	(179,947		)
Cash flows from financing activities:
Increase in bank overdrafts	8,765			23,455
Borrowings under credit facilities	686,100			509,200
Payments on credit facilities	(846,100		)	(852,600		)
Dividends paid	(17,734		)	(17,642		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	3,438			3,870
Tax withholdings related to the exercise of stock appreciation rights	(15,764		)	(11,713		)
Excess tax benefit from share-based compensation	17,615			10,291
Repurchase of common stock	(12,300		)	(1,820		)
Other	(323		)	(294		)
Net cash used in financing activities	(176,303		)	(337,253		)
Effect of exchange rate changes on cash	1,000			(2,213		)
Net increase in cash and cash equivalents	28,712			675
Cash and cash equivalents, beginning of period	90,782			104,671
Cash and cash equivalents, end of period	$	119,494		$	105,346

4

Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Forty Week Periods Ended October 8, 2016 and October 10, 2015 (in thousands) (unaudited)
	Forty Week Periods Ended
	October 8, 2016			October 10, 2015
Supplemental cash flow information:
Interest paid	$	36,286		$	42,477
Income tax payments	171,975			185,085
Non-cash transactions:
Accrued purchases of property and equipment	20,300			17,350
Changes in other comprehensive income from post retirement benefits	(455		)	(446		)

The accompanying notes to the condensed consolidated financial statements

are an integral part of these statements.

5

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

1. Basis of Presentation:

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company and include the accounts of Advance Auto Parts, Inc. ("Advance"), its wholly owned subsidiary, Advance Stores Company, Incorporated ("Advance Stores"), and its subsidiaries (collectively, the "Company"). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company, the results of its operations and cash flows have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted based upon the Securities and Exchange Commission ("SEC") interim reporting guidance. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for Fiscal 2015 (filed with the SEC on March 1, 2016).

The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. These policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report.

The results of operations for the interim periods are not necessarily indicative of the operating results to be expected for the full fiscal year. The first quarter of each of the Company's fiscal years contains 16 weeks. The Company's remaining three quarters consist of 12 weeks.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Segment and Related Information

Effective in the second quarter of 2016, the Company realigned its five geographic areas which included the operations of the stores operating under the Advance Auto Parts, Carquest and Autopart International trade names into three geographic divisions. As a result of this realignment the Company has reduced its number of operating segments from six to four. Each of the Advance Auto Parts geographic divisions, in addition to Worldpac, are individually considered operating segments which continue to be aggregated into one reportable segment.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update ("ASU") 2015-3 "Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs" effective January 3, 2016, or the beginning of fiscal 2016. ASU 2015-3 simplifies the presentation of debt issuance costs by requiring such costs be presented as a deduction from the corresponding debt liability. Concurrently, the Company also adopted ASU 2015-15 "Interest - Imputed Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" which clarifies that entities may continue to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize the deferred costs ratably over the term of the arrangement. The adoption of these ASU's have been retrospectively applied and resulted in a reclassification of $6,864 of debt issuance costs from Other assets, net to Long-term debt in the accompanying consolidated balance sheets as of January 2, 2016.

The Company adopted ASU 2014-12 “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service

6

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Period" effective the beginning of fiscal 2016. The amendments in this ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The adoption of this standard did not impact the Company's consolidated financial statements as the Company's policies were already consistent with the new guidance.

Recently Issued Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. The ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires businesses to present financial assets, measured at an amortized cost basis, at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis, such as trade receivables. The measurement of expected credit loss will be based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and requires a modified retrospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" aimed at simplifying certain aspects of accounting for share-based payment transactions. The areas for simplification include the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company will adopt ASU 2016-09 in the first quarter of fiscal 2017. The standard will be applied both prospectively and retrospectively depending on the provision. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This ASU is a comprehensive new lease standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets, and lease liabilities by lessees, for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. Practical expedients are available for election as a package and if applied consistently to all leases. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows but believes the adoption of this guidance will have a significant impact on the consolidated balance sheets.

In January 2016, the FASB issued ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." Although the ASU retains many of the current requirements for financial instruments, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is

7

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In July 2015, the FASB issued ASU 2015-11 "Inventory (Topic 330): Simplifying the Measurement of Inventory." ASU 2015-11 requires entities to measure most inventory at the lower of cost or net realizable value, simplifying the current requirement that inventories be measured at the lower of cost or market. The ASU will not apply to inventories that are measured using the last-in, first-out method or retail inventory method. The guidance will be effective prospectively for annual periods, and interim periods within those annual periods, that begin after December 15, 2016; earlier adoption is permitted. As the majority of the Company's inventory is accounted for under the last-in, first-out method, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. This ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers." This ASU, along with subsequent ASU's issued to clarify certain provisions of ASU 2014-09, provides a comprehensive new revenue recognition model that expands disclosure requirements and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 will become effective during annual reporting periods beginning after December 15, 2017 and interim reporting periods during the year of adoption with public entities permitted to early adopt for reporting periods beginning after December 15, 2016. Entities may choose from two transition methods, with certain practical expedients, a full retrospective method or the modified retrospective method. The Company is in the process of evaluating the potential future impact, if any, of this standard on its consolidated financial position, results of operations and cash flows, and which method of adoption is most appropriate for the Company.

2. Inventories, net:

Inventories are stated at the lower of cost or market. The Company used the LIFO method of accounting for approximately 88% and 89% of inventories at October 8, 2016 and January 2, 2016, respectively. Under LIFO, the Company’s cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs for inventories purchased in Fiscal 2016 and prior years. As a result of changes in the LIFO reserve, the Company recorded a reduction to cost of sales of $48,675 and $46,356 for the forty weeks ended October 8, 2016 and October 10, 2015, respectively. The Company's overall costs to acquire inventory for the same or similar products have generally decreased historically as the Company has been able to leverage its continued growth and execution of merchandising strategies.

An actual valuation of inventory under the LIFO method is performed by the Company at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected fiscal year-end inventory levels and costs.

8

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Inventory balances at October 8, 2016 and January 2, 2016 were as follows:

	October 8, 2016		January 2, 2016
Inventories at FIFO, net	$	4,143,211	$	4,009,641
Adjustments to state inventories at LIFO	213,802		165,127
Inventories at LIFO, net	$	4,357,013	$	4,174,768

3. Exit Activities:

Integration of Carquest stores

The Company approved plans in June 2014 to begin consolidating its Carquest stores acquired with General Parts International, Inc. (“GPI”) on January 2, 2014 as part of a multi-year integration plan. As of October 8, 2016, 316 Carquest stores acquired with GPI had been consolidated into existing Advance Auto Parts stores and 266 stores had been converted to the Advance Auto Parts format. In addition, as of October 8, 2016 the Company had completed the consolidation and conversion of the stores that were acquired with B.W.P. Distributors, Inc. ("BWP") on December 31, 2012 (which also operated under the Carquest trade name). During the twelve weeks ended October 8, 2016 a total of 22 Carquest stores were consolidated and 35 Carquest stores were converted. During the forty weeks ended October 8, 2016 a total of 139 Carquest stores were consolidated and 107 Carquest stores were converted. Plans are in place to consolidate or convert the remaining Carquest stores over the next few years. As of October 8, 2016, the Company had 640 stores still operating under the Carquest name. The Company incurred $2,192 and $2,193 of exit costs related to the consolidations and conversions during the twelve weeks ended October 8, 2016 and October 10, 2015, respectively, and $17,621 and $7,202 during the forty weeks ended October 8, 2016 and October 10, 2015, respectively.

Contract termination costs, such as those associated with leases on closed stores, are recognized at the cease-use date. Closed lease liabilities include the present value of the remaining lease obligations and management’s estimate of future costs of insurance, property tax and common area maintenance (reduced by the present value of estimated revenues from subleases and lease buyouts).

Office Consolidations

In June 2014, the Company approved plans to relocate operations from its Minneapolis, Minnesota and Campbell, California offices to other existing offices of the Company, including its offices in Newark, California, Roanoke, Virginia and Raleigh, North Carolina, and to close its Minneapolis and Campbell offices. The Company also relocated various functions between its existing offices in Roanoke and Raleigh. The relocations and office closings were substantially complete by the end of 2015. The Company incurred restructuring costs of approximately $22,100 under these plans through the end of 2015. Substantially all of these costs were cash expenditures. During the twelve and forty weeks ended October 10, 2015, the Company recognized $431 and $3,459, respectively, of severance/outplacement benefits under these restructuring plans and other severance related to the acquisition of GPI. During the twelve and forty weeks ended October 10, 2015, the Company recognized $928 and $3,699 of relocation costs, respectively.

Other Exit Activities

As of October 10, 2015 the Company had completed its plans approved in August 2014 to consolidate and covert its 40 Autopart International ("AI") stores located in Florida into Advance Auto Parts stores. The Company incurred $2,700 of exit costs associated with this plan during the forty weeks ended October 10, 2015, consisting primarily of closed facility lease obligations.

9

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Total Restructuring Liabilities

A summary of the Company’s restructuring liabilities, which are recorded in accrued expenses (current portion) and other long-term liabilities (long-term portion) in the accompanying condensed consolidated balance sheet, are presented in the following table:

	Closed Facility Lease Obligations			Severance			Relocation and Other Exit Costs			Total
Balance, July 16, 2016	$	47,582		$	1,339		$	159		$	49,080
Reserves established	2,234			298			48			2,580
Change in estimates	(95		)	—			—			(95		)
Cash payments	(4,444		)	(382		)	(53		)	(4,879		)
Balance, October 8, 2016	$	45,277		$	1,255		$	154		$	46,686
Balance, January 2, 2016	42,490			6,255			351			49,096
Reserves established	20,280			908			238			21,426
Change in estimates	(2,066		)	(397		)	—			(2,463		)
Cash payments	(15,427		)	(5,511		)	(435		)	(21,373		)
Balance, October 8, 2016	45,277			1,255			154			46,686

4. Goodwill and Intangible Assets:

Goodwill

The following table reflects the carrying amount of goodwill and the changes in goodwill carrying amounts.

	October 8, 2016		January 2, 2016
	(40 weeks ended)		(52 weeks ended)
Goodwill, beginning of period	$	989,484	$	995,426
Acquisitions	—		1,995
Changes in foreign currency exchange rates	1,908		(7,937		)
Goodwill, end of period	$	991,392	$	989,484

During 2015, the Company added $1,995 of goodwill associated with the acquisition of 23 stores.

10

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Intangible Assets Other Than Goodwill

Amortization expense was $11,313 and $12,382 for the twelve weeks ended October 8, 2016 and October 10, 2015, respectively, and $37,089 and $40,595 for the forty weeks ended October 8, 2016 and October 10, 2015, respectively. The gross carrying amounts and accumulated amortization of acquired intangible assets as of October 8, 2016 and January 2, 2016 are comprised of the following:

	October 8, 2016							January 2, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets:
Customer relationships	$	349,764	$	(82,747	)	$	267,017	$	358,655	$	(70,367	)	$	288,288
Acquired technology	—		—			—		8,850		(8,850		)	—
Favorable leases	56,092		(30,388		)	25,704		56,040		(23,984		)	32,056
Non-compete and other	54,285		(30,383		)	23,902		57,430		(25,368		)	32,062
	460,141		(143,518		)	316,623		480,975		(128,569		)	352,406
Unamortized intangible assets:
Brands, trademark and tradenames	335,738		—			335,738		334,719		—			334,719
Total intangible assets	$	795,879	$	(143,518	)	$	652,361	$	815,694	$	(128,569	)	$	687,125

During the forty weeks ended October 8, 2016, the Company retired $21,950 of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

Future Amortization Expense

The table below shows expected amortization expense for the next five years for acquired intangible assets recorded as of October 8, 2016:

Fiscal Year	Amount
Remainder of 2016	$	11,778
2017	46,360
2018	43,477
2019	32,386
2020	32,242
Thereafter	150,380

11

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

5. Receivables, net:

Receivables consist of the following:

	October 8, 2016			January 2, 2016
Trade	$	463,260		$	379,832
Vendor	233,012			229,496
Other	20,984			14,218
Total receivables	717,256			623,546
Less: Allowance for doubtful accounts	(30,309		)	(25,758		)
Receivables, net	$	686,947		$	597,788

6. Long-term Debt:

Long-term debt consists of the following:

	October 8, 2016			January 2, 2016
Revolving facility at variable interest rates (3.60% and 2.05% at October 8, 2016 and January 2, 2016, respectively) due December 5, 2018	$	—		$	80,000
Term loan at variable interest rates (1.69% at January 2, 2016)	—			80,000
5.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $2,129 and $2,577 at October 8, 2016 and January 2, 2016, respectively) due May 1, 2020	297,871			297,423
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $1,448 and $1,660 at October 8, 2016 and January 2, 2016, respectively) due January 15, 2022	298,552			298,340
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $3,790 and $4,179 at October 8, 2016 and January 2, 2016) due December 1, 2023	446,210			445,821
Other	372			5,311
	1,043,005			1,206,895
Less: Current portion of long-term debt	(372		)	(598		)
Long-term debt, excluding current portion	$	1,042,633		$	1,206,297

Adoption of new accounting pronouncement

The Company adopted ASU 2015-3 and ASU 2015-15 effective the beginning of fiscal 2016. ASU 2015-3 simplifies the presentation of debt issuance costs by requiring such costs be presented as a deduction from the corresponding debt liability. ASU 2015-15 clarifies that entities may continue to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize the deferred costs ratably over the term of the arrangement. The adoption of these ASU's has been retrospectively applied and resulted in a reclassification of $6,864 of debt issuance costs from Other assets to Long-term debt as of January 2, 2016.

Bank Debt

The Company has a credit agreement (the “2013 Credit Agreement”) which provides a $1,000,000 unsecured revolving credit facility with Advance Stores, as Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. The revolving credit facility also provides for the issuance of letters of credit with a sub-limit of $300,000 and swingline loans in an amount not to exceed $50,000. The Company may request, subject to agreement by one or more lenders, that the total revolving commitment be increased by an amount not to exceed $250,000 by those respective lenders (up to a total

12

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

commitment of $1,250,000) during the term of the 2013 Credit Agreement. Voluntary prepayments and voluntary reductions of the revolving balance are permitted in whole or in part, at the Company’s option, in minimum principal amounts as specified in the 2013 Credit Agreement. Under the terms of the 2013 Credit Agreement the revolving credit facility terminates in December 2018. The 2013 Credit Agreement previously included a term loan, which was repaid in full as of October 8, 2016.

As of October 8, 2016, under the 2013 Credit Agreement, the Company had no outstanding borrowings under the revolver. As of October 8, 2016, the Company had letters of credit outstanding of $100,719, which reduced the availability under the revolver to $899,281. The letters of credit generally have a term of one year or less and primarily serve as collateral for the Company’s self-insurance policies.

The interest rate on borrowings under the revolving credit facility is based, at the Company’s option, on adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. The current margin is 1.10% and 0.10% per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. A facility fee is charged on the total amount of the revolving credit facility, payable in arrears. The current facility fee rate is 0.15% per annum. Under the terms of the 2013 Credit Agreement, the interest rate and facility fee are subject to change based on the Company’s credit rating.

The 2013 Credit Agreement contains customary covenants restricting the ability of: (a) subsidiaries of Advance Stores to, among other things, create, incur or assume additional debt; (b) Advance Stores and its subsidiaries to, among other things, (i) incur liens, (ii) make loans and investments, (iii) guarantee obligations, and (iv) change the nature of its business conducted by itself and its subsidiaries; (c) Advance, Advance Stores and their subsidiaries to, among other things (i) engage in certain mergers, acquisitions, asset sales and liquidations, (ii) enter into certain hedging arrangements, (iii) enter into restrictive agreements limiting its ability to incur liens on any of its property or assets, pay distributions, repay loans, or guarantee indebtedness of its subsidiaries, and (iv) engage in sale-leaseback transactions; and (d) Advance, among other things, to change its holding company status. Advance and Advance Stores are required to comply with financial covenants with respect to a maximum leverage ratio and a minimum consolidated coverage ratio. The 2013 Credit Agreement also provides for customary events of default, including non-payment defaults, covenant defaults and cross-defaults to Advance Stores’ other material indebtedness. The Company was in compliance with its covenants with respect to the 2013 Credit Agreement as of October 8, 2016.

Senior Unsecured Notes

The Company's 4.50% senior unsecured notes were issued in December 2013 at 99.69% of the principal amount of $450,000 and are due December 1, 2023 (the “2023 Notes”). The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year. The Company's 4.50% senior unsecured notes were issued in January 2012 at 99.968% of the principal amount of $300,000 and are due January 15, 2022 (the “2022 Notes”). The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year. The Company’s 5.75% senior unsecured notes were issued in April 2010 at 99.587% of the principal amount of $300,000 and are due May 1, 2020 (the “2020 Notes” or collectively with the 2023 Notes and the 2022 Notes, “the Notes”). The 2020 Notes bear interest at a rate of 5.75% per year payable semi-annually in arrears on May 1 and November 1 of each year. Advance served as the issuer of the Notes with certain of Advance's domestic subsidiaries currently serving as subsidiary guarantors. The terms of the Notes are governed by an indenture (as amended, supplemented, waived or otherwise modified, the “Indenture”) among the Company, the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee.

The Company may redeem some or all of the Notes at any time or from time to time, at the redemption price described in the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in the Indenture for the Notes), the Company will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. The Notes are currently fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. The Company will be permitted to release guarantees without the consent of holders of the Notes under the circumstances described in the Indenture: (i) upon the release of the guarantee of the Company’s other debt that resulted in the affected subsidiary becoming a guarantor of this debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii) upon the Company’s exercise of its legal or covenant defeasance option.

13

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by the Company or any of its subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25,000 without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by the Company of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting the Company and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains covenants limiting the ability of the Company and its subsidiaries to incur debt secured by liens and to enter into sale and lease-back transactions.

Debt Guarantees

The Company is a guarantor of loans made by banks to various independently-owned Carquest stores that are customers of the Company ("Independents") totaling $27,258 as of October 8, 2016. The Company has concluded that some of these guarantees meet the definition of a variable interest in a variable interest entity. However, the Company does not have the power to direct the activities that most significantly affect the economic performance of the Independents and therefore is not the primary beneficiary of these stores. Upon entering into a relationship with certain Independents, the Company guaranteed the debt of those stores to aid in the procurement of business loans. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized in these agreements is $71,741 as of October 8, 2016. The Company believes that the likelihood of performance under these guarantees is remote, and any fair value attributable to these guarantees would be very minimal.

7. Fair Value Measurements:

The Company’s financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of these assets or liabilities. These levels are:

• Level 1 – Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date.

• Level 2 – Inputs other than quoted prices that are observable for assets and liabilities at the measurement date, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are less active, and inputs other than quoted prices that are observable for the asset or liability or corroborated by other observable market data.

• Level 3 – Unobservable inputs for assets or liabilities that are not able to be corroborated by observable market data and reflect the use of a reporting entity’s own assumptions. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The fair value hierarchy requires the use of observable market data when available. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been categorized based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a 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

During the forty weeks ended October 8, 2016, the Company had no significant assets or liabilities that were measured at fair value on a recurring basis.

14

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

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 the forty weeks ended October 8, 2016, the Company had no significant fair value measurements of non-financial assets or liabilities.

Fair Value of Financial Assets and Liabilities

The carrying amounts 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 October 8, 2016 and January 2, 2016, respectively, are as follows:

	October 8, 2016		January 2, 2016
Carrying Value	$	1,042,633	$	1,206,297
Fair Value	$	1,135,000	$	1,262,000

The adoption of ASU 2015-3 resulted in a reclassification of $6,864 of debt issuance costs from Other assets, net to Long-term debt decreasing the carrying value as of January 2, 2016.

8. Stock Repurchases:

The Company’s stock repurchase program allows it to repurchase its common stock on the open market or in privately negotiated transactions from time to time in accordance with the requirements of the SEC. The Company's $500,000 stock repurchase program in place as of October 8, 2016 was authorized by its Board of Directors on May 14, 2012.

During the twelve and forty week periods ended October 8, 2016 the Company repurchased no shares of its common stock under its stock repurchase program. The Company had $415,092 remaining under its stock repurchase program as of October 8, 2016.

The Company repurchased 1 share of its common stock at an aggregate cost of $121, or an average price of $159.16 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units during the twelve weeks ended October 8, 2016. The Company repurchased 81 shares of its common stock at an aggregate cost of $12,300, or an average price of $152.65 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units during the forty weeks ended October 8, 2016.

9. Earnings per Share:

Certain of the Company’s shares granted to Team Members in the form of restricted stock and restricted stock units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. For the twelve week periods ended October 8, 2016 and October 10, 2015, earnings of $520 and $425, respectively, were allocated to the participating securities. For the forty week periods ended October 8, 2016 and October 10, 2015, earnings of $1,712 and $1,503, respectively, were allocated to the participating securities.

Diluted earnings per share are calculated by including the effect of dilutive securities. Share-based awards to purchase approximately 22 and 1 shares of common stock that had an exercise price in excess of the average market price of the common stock during the twelve week periods ended October 8, 2016 and October 10, 2015, respectively, were not included in the calculation of diluted earnings per share because they were anti-dilutive. Share-based awards to purchase approximately 22 and 1 shares of common stock that had an exercise price in excess of the average market price of the common stock during the forty

15

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

week periods ended October 8, 2016 and October 10, 2015, respectively, were not included in the calculation of diluted earnings per share because they were anti-dilutive.

The following table illustrates the computation of basic and diluted earnings per share for the twelve and forty week periods ended October 8, 2016 and October 10, 2015:

	Twelve Weeks Ended						Forty Weeks Ended
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Numerator
Net income	$	113,844		$	120,469		$	397,257		$	418,579
Participating securities' share in earnings	(520		)	(425		)	(1,712		)	(1,503		)
Net income applicable to common shares	$	113,324		$	120,044		$	395,545		$	417,076
Denominator
Basic weighted average common shares	73,638			73,215			73,524			73,168
Dilutive impact of share-based awards	222			548			323			527
Diluted weighted average common shares	73,860			73,763			73,847			73,695
Basic earnings per common share
Net income applicable to common stockholders	$	1.54		$	1.64		$	5.38		$	5.70
Diluted earnings per common share
Net income applicable to common stockholders	$	1.53		$	1.63		$	5.36		$	5.66

10. Share-Based Compensation:

The Company grants share-based compensation awards to its Team Members and members of its Board of Directors as provided for under the Company’s 2014 Long-Term Incentive Plan, or 2014 LTIP, which was approved by the Company's shareholders on May 14, 2014. Currently, the grants are in the form of stock appreciation rights (“SARs”), restricted stock units ("RSUs") and deferred stock units (“DSUs”).

The Company granted 52 performance-based RSUs, 57 time-based RSUs, 81 performance-based SARs and 69 time-based SARs during the forty week period ended October 8, 2016. The majority of these grants represent an off-cycle award granted in accordance with the employment agreement reached with the Company’s new CEO hired in April 2016. The weighted average fair values of the performance-based and time-based RSUs granted during the forty week period ended October 8, 2016 were $160.99 and $156.63 per share, respectively. The fair value of each RSU was determined based on the market price of the Company’s stock on the date of grant. The weighted average fair values of the performance-based and time-based SARs granted during the forty week period ended October 8, 2016 were $36.58 and $43.64 per share, respectively.

The Company also granted a broad-based incentive award to store and field team members of 364 performance-based RSUs during the twelve-week period ended October 8, 2016, which vests based on the achievement of performance metrics during the Company's third and fourth fiscal quarters of 2016, subject to a continued one-year service period. The Company expects only 71 of the performance-based RSUs to be earned based on performance. The weighted-average fair value of the performance-based RSUs granted was $164.36. The fair value of each performance-based RSU was determined based on the market price of the Company’s stock on the date of grant.

16

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

The fair value of each SAR was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Black-Scholes Option Valuation Assumptions	October 8, 2016
Risk-free interest rate (1)	1.2	%
Expected dividend yield	0.2	%
Expected stock price volatility (2)	27.7	%
Expected life of awards (in months) (3)	55

⁽¹⁾  The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having a term consistent with the expected life of the award.

⁽²⁾  Expected volatility is determined using a blend of historical and implied volatility.

⁽³⁾  The expected life of the Company's awards represents the estimated period of time until exercise and is based on historical experience of previously granted awards.

See the Company's Annual Report on Form 10-K for the year ended January 2, 2016, for a more detailed discussion regarding the terms of the Company’s share-based compensation awards.

The Company recognizes share-based compensation expense on a straight-line basis net of estimated forfeitures. Forfeitures are estimated based on historical experience. Total share-based compensation expense included in the Company’s consolidated statements of operations was $2,522 for the twelve week period ended October 8, 2016 and the related income tax benefit recognized was $951. Total share-based compensation expense included in the Company’s consolidated statements of operations was $11,664 for the forty week period ended October 8, 2016 and the related income tax benefit recognized was $4,252. As of October 8, 2016, there was $33,263 of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted average period of 1.5 years.

The aggregate intrinsic value for outstanding awards at October 8, 2016 was approximately $88,885 based on the Company's closing stock price of $148.13 as of the last trading day of the first fiscal quarter ending October 8, 2016. For the forty weeks ended October 8, 2016, the aggregate intrinsic value for awards exercised was $68,810.

11. Warranty Liabilities:

The following table presents changes in the Company’s warranty reserves:

	October 8, 2016			January 2, 2016
	(40 weeks ended)			(52 weeks ended)
Warranty reserve, beginning of period	$	44,479		$	47,972
Additions to warranty reserves	32,439			44,367
Reserves utilized	(32,187		)	(47,860		)
Warranty reserve, end of period	$	44,731		$	44,479

The Company’s warranty liabilities are included in Accrued expenses in its condensed consolidated balance sheets.

17

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

12. Condensed Consolidating Financial Statements:

Certain 100% wholly-owned domestic subsidiaries of Advance, including its Material Subsidiaries (as defined in the 2013 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 and 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, do not serve as guarantors of Advance's senior unsecured notes ("Non-Guarantor Subsidiaries"). The Non-Guarantor Subsidiaries do not qualify as minor as defined by SEC regulations. Accordingly, the Company presents below the condensed consolidating financial information for the Guarantor Subsidiaries and Non-Guarantor Subsidiaries. Investments in subsidiaries of the Company are required to be presented under the equity method, even though all such subsidiaries meet the requirements to be consolidated under GAAP.

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 the Company. 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 as of October 8, 2016 and January 2, 2016, condensed consolidating statements of operations and comprehensive income for the twelve and forty weeks ended October 8, 2016 and October 10, 2015, and condensed consolidating statements of cash flows for the forty weeks ended October 8, 2016 and October 10, 2015 and should be read in conjunction with the condensed consolidated financial statements herein.

18

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Balance Sheets

As of October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	22	$	82,857	$	36,637	$	(22	)	$	119,494
Receivables, net	—		653,750		33,197		—			686,947
Inventories, net	—		4,162,779		194,234		—			4,357,013
Other current assets	—		97,366		1,447		(141		)	98,672
Total current assets	22		4,996,752		265,515		(163		)	5,262,126
Property and equipment, net of accumulated depreciation	134		1,432,328		9,711		—			1,442,173
Goodwill	—		943,359		48,033		—			991,392
Intangible assets, net	—		605,961		46,400		—			652,361
Other assets, net	7,429		65,941		652		(7,429		)	66,593
Investment in subsidiaries	2,941,307		355,513		—		(3,296,820		)	—
Intercompany note receivable	1,048,362		—		—		(1,048,362		)	—
Due from intercompany, net	—		—		325,159		(325,159		)	—
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	372	$	—	$	—		$	372
Accounts payable	335		2,903,985		292,755		—			3,197,075
Accrued expenses	2,859		563,876		23,731		(141		)	590,325
Other current liabilities	—		47,296		2,305		(22		)	49,579
Total current liabilities	3,194		3,515,529		318,791		(163		)	3,837,351
Long-term debt	1,042,633		—		—		—			1,042,633
Deferred income taxes	—		443,796		18,981		(7,429		)	455,348
Other long-term liabilities	—		221,407		2,185		—			223,592
Intercompany note payable	—		1,048,362		—		(1,048,362		)	—
Due to intercompany, net	95,706		229,453		—		(325,159		)	—
Commitments and contingencies
Stockholders' equity	2,855,721		2,941,307		355,513		(3,296,820		)	2,855,721
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645

19

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Balance Sheets

As of January 2, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	8	$	63,458	$	27,324	$	(8	)	$	90,782
Receivables, net	—		568,106		29,682		—			597,788
Inventories, net	—		4,009,335		165,433		—			4,174,768
Other current assets	178		78,904		1,376		(3,050		)	77,408
Total current assets	186		4,719,803		223,815		(3,058		)	4,940,746
Property and equipment, net of accumulated depreciation	154		1,425,319		9,104		—			1,434,577
Goodwill	—		943,319		46,165		—			989,484
Intangible assets, net	—		640,583		46,542		—			687,125
Other assets, net	9,500		75,025		745		(9,501		)	75,769
Investment in subsidiaries	2,523,076		302,495		—		(2,825,571		)	—
Intercompany note receivable	1,048,161		—		—		(1,048,161		)	—
Due from intercompany, net	—		—		325,077		(325,077		)	—
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	598	$	—	$	—		$	598
Accounts payable	103		2,903,287		300,532		—			3,203,922
Accrued expenses	2,378		529,076		24,759		(3,050		)	553,163
Other current liabilities	—		36,270		3,532		(8		)	39,794
Total current liabilities	2,481		3,469,231		328,823		(3,058		)	3,797,477
Long-term debt	1,041,584		164,713		—		—			1,206,297
Deferred income taxes	—		425,094		18,332		(9,501		)	433,925
Other long-term liabilities	—		227,556		1,798		—			229,354
Intercompany note payable	—		1,048,161		—		(1,048,161		)	—
Due to intercompany, net	76,364		248,713		—		(325,077		)	—
Commitments and contingencies
Stockholders' equity	2,460,648		2,523,076		302,495		(2,825,571		)	2,460,648
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701

20

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,174,483		$	112,072		$	(37,700	)	$	2,248,855
Cost of sales, including purchasing and warehousing costs	—			1,219,636			78,714			(37,700		)	1,260,650
Gross profit	—			954,847			33,358			—			988,205
Selling, general and administrative expenses	6,665			778,643			20,807			(11,678		)	794,437
Operating (loss) income	(6,665		)	176,204			12,551			11,678			193,768
Other, net:
Interest (expense) income	(11,932		)	(1,669		)	20			—			(13,581		)
Other income (expense), net	18,809			(4,791		)	(4,689		)	(11,678		)	(2,349		)
Total other, net	6,877			(6,460		)	(4,669		)	(11,678		)	(15,930		)
Income before provision for income taxes	212			169,744			7,882			—			177,838
Provision for income taxes	361			62,252			1,381			—			63,994
(Loss) income before equity in earnings of subsidiaries	(149		)	107,492			6,501			—			113,844
Equity in earnings of subsidiaries	113,993			6,501			—			(120,494		)	—
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	2,223,582		$	132,404	$	(60,783	)	$	2,295,203
Cost of sales, including purchasing and warehousing costs	—			1,226,663			96,936		(60,783		)	1,262,816
Gross profit	—			996,919			35,468		—			1,032,387
Selling, general and administrative expenses	4,269			814,492			21,017		(12,916		)	826,862
Operating (loss) income	(4,269		)	182,427			14,451		12,916			205,525
Other, net:
Interest (expense) income	(11,929		)	(2,478		)	23		—			(14,384		)
Other income (expense), net	16,243			(3,843		)	1,792		(12,916		)	1,276
Total other, net	4,314			(6,321		)	1,815		(12,916		)	(13,108		)
Income before provision for income taxes	45			176,106			16,266		—			192,417
Provision for income taxes	110			68,435			3,403		—			71,948
(Loss) income before equity in earnings of subsidiaries	(65		)	107,671			12,863		—			120,469
Equity in earnings of subsidiaries	120,534			12,863			—		(133,397		)	—
Net income	$	120,469		$	120,534		$	12,863	$	(133,397	)	$	120,469

21

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,240,681		$	432,170		$	(188,063	)	$	7,484,788
Cost of sales, including purchasing and warehousing costs	—			4,023,979			300,521			(188,063		)	4,136,437
Gross profit	—			3,216,702			131,649			—			3,348,351
Selling, general and administrative expenses	17,965			2,620,217			72,028			(43,310		)	2,666,900
Operating (loss) income	(17,965		)	596,485			59,621			43,310			681,451
Other, net:
Interest (expense) income	(40,148		)	(6,457		)	60			—			(46,545		)
Other income (expense), net	58,524			(6,315		)	(1,881		)	(43,310		)	7,018
Total other, net	18,376			(12,772		)	(1,821		)	(43,310		)	(39,527		)
Income before provision for income taxes	411			583,713			57,800			—			641,924
Provision for income taxes	1,008			231,664			11,995			—			244,667
(Loss) income before equity in earnings of subsidiaries	(597		)	352,049			45,805			—			397,257
Equity in earnings of subsidiaries	397,854			45,805			—			(443,659		)	—
Net income	$	397,257		$	397,854		$	45,805		$	(443,659	)	$	397,257

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,466,695		$	465,035		$	(228,257	)	$	7,703,473
Cost of sales, including purchasing and warehousing costs	—			4,081,261			336,869			(228,257		)	4,189,873
Gross profit	—			3,385,434			128,166			—			3,513,600
Selling, general and administrative expenses	15,377			2,744,555			72,981			(44,415		)	2,788,498
Operating (loss) income	(15,377		)	640,879			55,185			44,415			725,102
Other, net:
Interest (expense) income	(40,280		)	(11,481		)	162			—			(51,599		)
Other income (expense), net	55,886			(11,077		)	(4,834		)	(44,415		)	(4,440		)
Total other, net	15,606			(22,558		)	(4,672		)	(44,415		)	(56,039		)
Income before provision for income taxes	229			618,321			50,513			—			669,063
Provision for income taxes	564			241,885			8,035			—			250,484
(Loss) income before equity in earnings of subsidiaries	(335		)	376,436			42,478			—			418,579
Equity in earnings of subsidiaries	418,914			42,478			—			(461,392		)	—
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579

22

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(136		)	—			—			(136		)
Currency translation adjustments	—			—			(4,939		)	—			(4,939		)
Equity in other comprehensive loss of subsidiaries	(5,075		)	(4,939		)	—			10,014			—
Other comprehensive loss	(5,075		)	(5,075		)	(4,939		)	10,014			(5,075		)
Comprehensive income	$	108,769		$	108,918		$	1,562		$	(110,480	)	$	108,769

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	120,469	$	120,534		$	12,863	$	(133,397	)	$	120,469
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(134		)	—		—			(134		)
Currency translation adjustments	—		—			811		—			811
Equity in other comprehensive income of subsidiaries	677		811			—		(1,488		)	—
Other comprehensive income	677		677			811		(1,488		)	677
Comprehensive income	$	121,146	$	121,211		$	13,674	$	(134,885	)	$	121,146

23

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	397,257	$	397,854		$	45,805	$	(443,659	)	$	397,257
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(455		)	—		—			(455		)
Currency translation adjustments	—		—			7,018		—			7,018
Equity in other comprehensive income of subsidiaries	6,563		7,018			—		(13,581		)	—
Other comprehensive income	6,563		6,563			7,018		(13,581		)	6,563
Comprehensive income	$	403,820	$	404,417		$	52,823	$	(457,240	)	$	403,820

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(446		)	—			—			(446		)
Currency translation adjustments	—			—			(19,270		)	—			(19,270		)
Equity in other comprehensive loss of subsidiaries	(19,716		)	(19,270		)	—			38,986			—
Other comprehensive loss	(19,716		)	(19,716		)	(19,270		)	38,986			(19,716		)
Comprehensive income	$	398,863		$	399,198		$	23,208		$	(422,406	)	$	398,863

24

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	14	$	398,034		$	11,369		$	—		$	409,417
Cash flows from investing activities:
Purchases of property and equipment	—		(202,382		)	(1,831		)	—			(204,213		)
Business acquisitions, net of cash acquired	—		(2,672		)	—			—			(2,672		)
Proceeds from sales of property and equipment	—		1,481			2			—			1,483
Net cash used in investing activities	—		(203,573		)	(1,829		)	—			(205,402		)
Cash flows from financing activities:
Increase (decrease) in bank overdrafts	—		10,006			(1,227		)	(14		)	8,765
Borrowings under credit facilities	—		686,100			—			—			686,100
Payments on credit facilities	—		(846,100		)	—			—			(846,100		)
Dividends paid	—		(17,734		)	—			—			(17,734		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,438			—			—			3,438
Tax withholdings related to the exercise of stock appreciation rights	—		(15,764		)	—			—			(15,764		)
Excess tax benefit from share-based compensation	—		17,615			—			—			17,615
Repurchase of common stock	—		(12,300		)	—			—			(12,300		)
Other	—		(323		)	—			—			(323		)
Net cash used in financing activities	—		(175,062		)	(1,227		)	(14		)	(176,303		)
Effect of exchange rate changes on cash	—		—			1,000			—			1,000
Net increase in cash and cash equivalents	14		19,399			9,313			(14		)	28,712
Cash and cash equivalents, beginning of period	8		63,458			27,324			(8		)	90,782
Cash and cash equivalents, end of period	$	22	$	82,857		$	36,637		$	(22	)	$	119,494

25

Advance Auto Parts, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

For the Twelve and Forty Week Periods Ended October 8, 2016 and October 10, 2015

(in thousands, except per share data)

(unaudited)

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	526,749		$	(6,661	)	$	—		$	520,088
Cash flows from investing activities:
Purchases of property and equipment	—		(159,442		)	(1,790		)	—			(161,232		)
Business acquisitions, net of cash acquired	—		(18,583		)	(310		)	—			(18,893		)
Proceeds from sales of property and equipment	—		174			4			—			178
Net cash used in investing activities	—		(177,851		)	(2,096		)	—			(179,947		)
Cash flows from financing activities:
Increase in bank overdrafts	—		18,535			4,920			—			23,455
Borrowings under credit facilities	—		509,200			—			—			509,200
Payments on credit facilities	—		(852,600		)	—			—			(852,600		)
Dividends paid	—		(17,642		)	—			—			(17,642		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,870			—			—			3,870
Tax withholdings related to the exercise of stock appreciation rights	—		(11,713		)	—			—			(11,713		)
Excess tax benefit from share-based compensation	—		10,291			—			—			10,291
Repurchase of common stock	—		(1,820		)	—			—			(1,820		)
Other	—		(294		)	—			—			(294		)
Net cash (used in) provided by financing activities	—		(342,173		)	4,920			—			(337,253		)
Effect of exchange rate changes on cash	—		—			(2,213		)	—			(2,213		)
Net increase (decrease) in cash and cash equivalents	—		6,725			(6,050		)	—			675
Cash and cash equivalents, beginning of period	9		65,345			39,326			(9		)	104,671
Cash and cash equivalents, end of period	$	9	$	72,070		$	33,276		$	(9	)	$	105,346

26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that appear elsewhere in this report. Our first quarter consists of 16 weeks divided into four equal periods. Our remaining three quarters consist of 12 weeks with each quarter divided into three equal periods. Unless the context otherwise requires, "Advance," "we," "us," "our," and similar terms refer to Advance Auto Parts, Inc., its predecessor, its subsidiaries and their respective operations.

Certain statements in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements are usually identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “projection,” “should,” “strategy,” “will,” or similar expressions. We intend for any forward-looking statements to be covered by, and we claim the protection under, the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based upon assessments and assumptions of management in light of historical results and trends, current conditions and potential future developments that often involve judgments, estimates, assumptions and projections. Forward-looking statements reflect current views about our plans, strategies and prospects, which are based on information currently available.

Although we believe that our plans, intentions and expectations as reflected in or suggested by any forward-looking statements are reasonable, we do not guarantee or give assurance that such plans, intentions or expectations will be achieved. Actual results may differ materially from our anticipated results described or implied in our forward-looking statements, and such differences may be due to a variety of factors. Our business could also be affected by additional factors that are presently unknown to us or that we currently believe to be immaterial to our business.

Listed below and discussed in our Annual Report on Form 10-K for the year ended January 2, 2016 (filed with the Securities and Exchange Commission, or SEC, on March 1, 2016), which we refer to as our 2015 Form 10-K, are some important risks, uncertainties and contingencies which could cause our actual results, performance or achievements to be materially different from any forward-looking statements made or implied in this report. These include, but are not limited to, the following:

• a decrease in demand for our products;

• competitive pricing and other competitive pressures;

• the risk that the anticipated benefits of the acquisition of General Parts International, Inc. (“GPI”), including synergies, may not be fully realized or may take longer to realize than expected, that we may experience difficulty integrating GPI’s operations into our operations, or that management's attention may be diverted from our other businesses in association with the acquisition of GPI;

• the possibility that the acquisition of GPI may not advance our business strategy or prove to be an accretive investment or may impact third-party relationships, including customers, wholesalers, independently-owned and jobber stores and suppliers;

• the risk that the additional indebtedness from the financing agreements in association with the acquisition of GPI may limit our operating flexibility or otherwise strain our liquidity and financial condition;

• the risk that we may experience difficulty retaining key GPI employees;

• our ability to implement our business strategy;

• our ability to expand our business, including the location of available and suitable real estate for 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 implementing leadership changes, including the failure to ensure effective transfer of knowledge necessary for the persons appointed to lead and provide results in their new role; the potential disruption to our business resulting from announced leadership changes; the impact of announced leadership changes on our relationships with customers, suppliers and other business partners; and our ability to attract, develop and retain executives and other employees, or Team Members;

• the potential for fluctuations in the market price of our common stock and the resulting exposure to securities class action litigation;

27

• deterioration in general macro-economic conditions, including unemployment, inflation or deflation, consumer debt levels, high fuel and energy costs, higher tax rates or uncertain credit markets;

• regulatory and legal risks, including being named as a defendant in administrative investigations or litigation, and the incurrence of legal fees and costs, the payment of fines or the payment of sums to settle litigation or administrative investigations or proceedings;

• a security breach or other cyber security incident;

• business interruptions due to the occurrence of natural disasters, extended periods of unfavorable weather, computer system malfunction, wars or acts of terrorism; and

• the impact of global climate change or legal and regulatory responses to such change.

We assume no obligations to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In evaluating forward-looking statements, you should consider these risks and uncertainties, together with the other risks described from time to time in our other reports and documents filed with the SEC and you should not place undue reliance on those statements.

Introduction

We are a leading automotive aftermarket parts provider in North America, serving "do-it-for me", or Professional, and "do-it-yourself", or DIY, customers as well as independently-owned operators. As of October 8, 2016, we operated a total of 5,058 stores and 127 distribution branches, primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. Our stores operate primarily under the trade names "Advance Auto Parts (AAP)," "Autopart International (AI)" and "Carquest," and our distribution branches operate under the "Worldpac" trade name. In addition, we serve approximately 1,250 independently-owned Carquest stores ("independent stores").

Our stores and branches offer a broad selection of brand name, original equipment manufacturer ("OEM") and private label automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy duty trucks. Through our integrated operating approach, we serve our Professional and DIY customers from our store and branch locations and online at www.AdvanceAutoParts.com and www.Worldpac.com. Our Professional customers, consisting primarily of delivery customers for whom we deliver product from our store and branch locations to our Professional customers’ places of business, including independent garages, service stations and auto dealers, can conveniently place their orders online through these websites. Our online websites also allow our DIY customers to pick up merchandise ordered online at a conveniently located store or have their purchases shipped directly to them.

Management Overview

We generated diluted earnings per share, or diluted EPS, of $1.53 during our twelve weeks ended October 8, 2016 (or the third quarter of Fiscal 2016) compared to $1.63 for the comparable period of Fiscal 2015. When adjusted for the following non-operational items, our adjusted diluted earnings per share ("Adjusted EPS") was $1.73 during the third quarter of Fiscal 2016 compared to $1.95 during the comparable period of Fiscal 2015:

	Q3 2016		Q3 2015
GPI integration, store consolidation and support center restructuring	$	0.12	$	0.24
Amortization related to the acquired intangible assets from GPI	$	0.08	$	0.08

Refer to the "Reconciliation of Non-GAAP Financial Measures" section for further details of our non-GAAP adjustments.

The decrease in our diluted EPS for the third quarter of fiscal 2016 compared to fiscal 2015 was driven primarily by declines in our sales and gross profit rate. Our comparable store sales declined 1.0% compared to the third quarter of Fiscal 2015, but improved sequentially from the second quarter of fiscal 2016, reflecting improvements in product availability and service levels. We have a number of availability pilots underway and are able to leverage some of the learnings from these pilots immediately, while other aspects will take longer and form part of our availability improvement plan in 2017 and beyond. In terms of profitability, our results largely reflect the impact of lower gross profit performance in the quarter primarily due to higher supply chain expenses.

28

Summary of ThirdQuarter Financial Results

A high-level summary of our financial results for the third quarter of Fiscal 2016 is included below:

• Total sales during the third quarter of Fiscal 2016 were $2,248.9 million, a decrease of 2.0% as compared to the third quarter of Fiscal 2015. This decrease was primarily driven by a comparable store sales decline of 1.0%, store closures and the effect of Carquest store consolidations.

• Our operating income for the third quarter of Fiscal 2016 was $193.8 million, a decrease of $11.8 million from the comparable period of Fiscal 2015. As a percentage of total sales, operating income was 8.6%, a decrease of 34 basis points versus the comparable period of Fiscal 2015.

• Our inventory balance as of October 8, 2016 increased $182.2 million, or 4.4%, over our inventory balance as of January 2, 2016. Sequentially, our inventory levels are down from the first quarter. However, the year-over-year increase in inventory was primarily driven by the build-up of transitional inventory associated with our Carquest store consolidations, the opening of new locations, including a new Worldpac distribution center, and lower than expected sales for the quarter.

• We generated operating cash flow of $409.4 million during the forty weeks ended October 8, 2016, a decrease of 21.3% from the comparable period of Fiscal 2015, primarily due to cash outflows associated with inventory, net of accounts payable.

Refer to the "Results of Operations" and "Liquidity and Capital Resources" sections for further details of our income statement and cash flow results, respectively.

Business and Industry Update

Our focus in 2016 is to regain top line sales growth as the first step towards driving sustainable, long-term performance improvement. Under the leadership of our CEO, who joined the Company in April 2016, we have evaluated all facets of our business in conjunction with the development of a strategic business plan that is intended to significantly improve our customer service and financial performance over the next five years.

The underlying framework of this plan focuses on growth, productivity and people and culture. The growth and margin expansion elements of our strategic business plan include i) Supply Chain, ii) Professional, iii) DIY and iv) Productivity. This agenda will be supported and executed with a focus on our talent and culture. In 2017, we plan to roll out new supply chain capabilities that will enhance inventory positioning in our network, improve assortment and in-market availability and improve speed and accuracy of delivery. Over the longer-term we will continue to further streamline our supply chain network and systems from the GPI acquisition to enable a more seamless inventory transfer throughout the entire value chain across both corporate and independent stores, driving productivity. The GPI integration plan has been fully embedded in our strategic business plan. For our Professional customers our focus is on providing high quality parts, improved product availability, consistency of service and fast delivery. We will also work to grow our DIY base by providing more relevant services in a consistent fashion across the network and improving both our store and online experience. Our productivity agenda will focus on removing unnecessary costs while driving new capabilities and investing in long-term growth creation.

Our strategic business plan takes advantage of the favorable industry fundamentals. Operating within the automotive aftermarket industry, we are influenced by a number of general macroeconomic factors similar to those affecting the overall retail industry. These factors include, but are not limited to, fuel costs, unemployment rates, consumer confidence and competition. We believe the macroeconomic environment should position our industry favorably in 2016 as lower fuel costs, a stabilized labor market and increasing disposable income should help to provide a positive impact. In addition, industry fundamentals continue to be strong with miles driven increasing and the number of vehicles 11 years and older continuing to increase. We believe that two key drivers of demand within the automotive aftermarket are (i) the number of miles driven in the U.S. and (ii) the number and average age of vehicles on the road.

Favorable industry dynamics include:

• an increase in the number of vehicles and stabilization of the average age of vehicles;

• a long-term expectation that miles driven will continue to increase based on historical trends; and

• a steadily improving job market and lower fuel prices.

Conversely, the factors negatively affecting the automotive aftermarket industry include:

• deferral of elective automotive maintenance in the near term as more consumers contemplate new automobile purchases; and

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• longer maintenance and part failure intervals on newer cars due to improved quality.

We remain encouraged by the (i) positive fundamentals of the automotive aftermarket industry and (ii) initiatives that we have underway to support our strategic business plan. In the short-term, we are beginning to see favorable results from addressing issues surrounding product availability, service levels and overall execution levels throughout the organization.

Store Development

We serve our Professional and DIY customers in a similar fashion through four different store brands. The table below sets forth detail of our store and branch development activity for the twelve and forty weeks ended October 8, 2016, including the consolidation of stores as part of our integration plans and the number of locations with Professional delivery programs. In addition to the changes in our store counts detailed below, during the twelve and forty weeks ended October 8, 2016 we relocated 11 and 37 of our stores, respectively.

	AAP		AI		CARQUEST (1)		WORLDPAC	Total
July 16, 2016	4,189		181		696		126	5,192
New	16		—		2		1	19
Closed	(3	)	—		(1	)	—	(4	)
Consolidated (2)	—		—		(22	)	—	(22	)
Converted (3)	35		—		(35	)	—	—
October 8, 2016	4,237		181		640		127	5,185
January 2, 2016	4,102		184		885		122	5,293
New	42		—		6		5	53
Closed	(11	)	(3	)	(5	)	—	(19	)
Consolidated (2)	(3	)	—		(139	)	—	(142	)
Converted (3)	107		—		(107	)	—	—
October 8, 2016	4,237		181		640		127	5,185
Locations with professional delivery programs	3,574		181		640		127	4,522

⁽¹⁾ Includes activity for stores acquired with B.W.P. Distributors, Inc. that operate under the Carquest trade name.

⁽²⁾ Consolidated stores include Carquest stores whose operations were consolidated into existing AAP locations as a result of the planned integration of Carquest.

⁽³⁾ Converted stores include Carquest stores that were re-branded as an AAP store as a result of the planned integration of Carquest.

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Our discussion and analysis of the financial condition and results of operations are based on these financial statements. The preparation of these financial statements requires the application of accounting policies in addition to certain estimates and judgments by our management. Our estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ materially from these estimates. During the twelve and forty weeks ended October 8, 2016, we consistently applied the critical accounting policies discussed in our 2015 Form 10-K. For a complete discussion regarding these critical accounting policies, refer to the 2015 Form 10-K.

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Components of Statement of Operations

Net Sales

Net sales consist primarily of merchandise sales from our store and branch locations to both our Professional and DIY customers, sales from our e-commerce websites and sales to independently-owned Carquest stores. Sales are recorded net of discounts and rebates, sales taxes and estimated returns and allowances. Our total sales growth is comprised of both comparable store sales and new store sales. We calculate comparable store sales based on the change in store or branch sales starting once a store location has been open for 13 complete accounting periods (approximately one year) and by including e-commerce sales. Sales to independently-owned Carquest stores are excluded from our comparable store sales. We include sales from relocated stores in comparable store sales from the original date of opening. Acquired stores are included in our comparable store sales once the stores have completed 13 complete accounting periods following the acquisition date (approximately one year).

Cost of Sales

Our cost of sales consists of merchandise costs, net of incentives under vendor programs; inventory shrinkage, defective merchandise and warranty costs; and warehouse and distribution expenses, including depreciation and amortization. Gross profit as a percentage of net sales may be affected by (i) variations in our product mix, (ii) price changes in response to competitive factors and fluctuations in merchandise costs, (iii) vendor programs, (iv) inventory shrinkage, (v) defective merchandise and warranty costs and (vi) warehouse and distribution costs. We seek to minimize fluctuations in merchandise costs and instability of supply by entering into long-term purchasing agreements, without minimum purchase volume requirements, when we believe it is advantageous. Our cost of sales and gross profit rates may not be comparable to that of our competitors due to differences in industry practice regarding the classification of certain costs and mix of Professional and DIY sales.

Selling, General and Administrative Expenses

SG&A expenses consist of store payroll, store occupancy (including rent and depreciation), advertising expenses, acquisition and integration related expenses, Professional delivery expenses, other store expenses and general and administrative expenses, including salaries and related benefits of store support center Team Members, share-based compensation expenses, store support center administrative office expenses, data processing, professional expenses, self-insurance costs, depreciation and amortization, closed facility expense and impairment charges, if any, and other related expenses.

Results of Operations

The following table sets forth certain of our operating data expressed as a percentage of net sales for the periods indicated.

	Twelve Week Periods Ended				Forty Week Periods Ended
	October 8, 2016		October 10, 2015		October 8, 2016		October 10, 2015
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales, including purchasing and warehousing costs	56.1		55.0		55.3		54.4
Gross profit	43.9		45.0		44.7		45.6
Selling, general and administrative expenses	35.3		36.0		35.6		36.2
Operating income	8.6		9.0		9.1		9.4
Interest expense	(0.6	)	(0.6	)	(0.6	)	(0.7	)
Other income (expense), net	(0.1	)	0.1		0.1		(0.1	)
Provision for income taxes	2.8		3.1		3.3		3.3
Net income	5.1	%	5.2	%	5.3	%	5.4	%

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Net Sales

Net sales for the twelve weeks ended October 8, 2016 were $2,248.9 million, a decrease of $46.3 million, or 2.0%, as compared to net sales for the twelve weeks ended October 10, 2015. The sales decrease was primarily due to our comparable store sales decrease of 1.0% and the portion of sales that did not transfer from stores that were consolidated. In addition our store closures, net of new stores, reduced our store count by a net of four stores over the last four quarters. While our number of transactions was down during the third quarter, we saw a modest increase in ticket size compared to the prior year.

Despite improved comparable store sales performance across most of our regions compared to the second quarter of fiscal 2016, our performance in the Northeast and Great Lakes regions continued to be disproportionately impacted. As previously described the change to daily replenishment negatively impacted the operations of the distribution centers in those regions more than anticipated. We are continuing steps to improve fill rates, accuracy rates and overall availability to our stores serviced by these distribution centers and are seeing improvement in these performance metrics.

Net sales for the forty weeks ended October 8, 2016 were $7,484.8 million, a decrease of $218.7 million, or 2.8%, as compared to net sales for the forty weeks ended October 10, 2015. The sales decrease was primarily due to our comparable store sales decrease of 2.4% and the portion of sales that did not transfer from stores that were consolidated over the last four quarters.

Gross Profit

Gross profit for the twelve weeks ended October 8, 2016 was $988.2 million, or 43.9% of net sales, as compared to $1,032.4 million, or 45.0% of net sales, for the comparable period of last year, representing a decrease of 104 basis points. The 104 basis-point decrease in gross profit rate was primarily due to higher supply chain costs in our Northeast and Great Lakes distribution centers as we executed planned transitions in delivery frequency in these facilities. In addition, we experienced higher supply chain costs associated with elevated inventory levels earlier in the year.

Gross profit for the forty weeks ended October 8, 2016 was $3,348.4 million, or 44.7% of net sales, as compared to $3,513.6 million, or 45.6% of net sales, for the comparable period of last year, representing a decrease of 88 basis points. The 88 basis-point decrease in gross profit rate was similarly driven by higher supply chain costs.

SG&A

SG&A expenses for the twelve weeks ended October 8, 2016 were $794.4 million, or 35.3% of net sales, as compared to $826.9 million, or 36.0% of net sales, for the comparable period of last year, representing a decrease of 70 basis-points. This decrease was primarily the result of lower integration and restructuring related costs during the third quarter of 2016. Excluding the impact of integration and restructuring related costs, our SG&A rate was essentially flat year-over-year reflecting a continued focus on cost discipline offset by costs associated with customer service initiatives.

SG&A expenses for the forty weeks ended October 8, 2016 were $2,666.9 million, or 35.6% of net sales, as compared to $2,788.5 million, or 36.2% of net sales, for the comparable period of last year, representing a decrease of 57 basis-points. This decrease was driven by factors similar to those described above for the twelve weeks ended October 8, 2016.

Operating Income

Operating income for the twelve weeks ended October 8, 2016 was $193.8 million, or 8.6% of net sales, as compared to $205.5 million, or 9.0% of net sales, for the comparable period of last year. The rate is reflective of a decrease in our gross profit rate partially offset by a decrease in our SG&A rate from the comparable period of Fiscal 2015. These changes on a rate basis were due to the gross profit and SG&A drivers previously discussed.

Operating income for the forty weeks ended October 8, 2016 was $681.5 million, or 9.1% of net sales, as compared to $725.1 million, or 9.4% of net sales, for the comparable period of last year. The rate is reflective of a decrease in our gross profit rate partially offset by a decrease in our SG&A rate from the comparable period of Fiscal 2015. These changes on a rate basis were due to the gross profit and SG&A drivers previously discussed.

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Interest Expense

Interest expense for the twelve weeks ended October 8, 2016 was $13.6 million, or 0.6% of net sales, as compared to $14.4 million, or 0.6% of net sales, for the comparable period in Fiscal 2015. The decrease in interest expense for the twelve weeks ended October 8, 2016 was due to repayments made on our credit facility over the last year.

Interest expense for the forty weeks ended October 8, 2016 was $46.5 million, or 0.6% of net sales, as compared to $51.6 million, or 0.7% of net sales, for the comparable period in Fiscal 2015. The decrease in interest expense for the forty weeks ended October 8, 2016 was due to repayments made on our credit facility over the last year.

Income Taxes

Income tax expense for the twelve weeks ended October 8, 2016 was $64.0 million, as compared to $71.9 million for the comparable period of Fiscal 2015. Our effective income tax rate was 36.0% and 37.4% for the twelve weeks ended October 8, 2016 and October 10, 2015, respectively. The decrease in our effective tax rate was primarily due to the state tax statute expirations and the settlement of a state tax audit during the quarter.

Income tax expense for the forty weeks ended October 8, 2016 was $244.7 million, as compared to $250.5 million for the comparable period of Fiscal 2015. Our effective income tax rate was 38.1% and 37.4% for the forty weeks ended October 8, 2016 and October 10, 2015, respectively. The increase in the effective tax rate for the forty weeks ended October 8, 2016 compared to the comparable period of Fiscal 2015 was primarily due to the accrual of an estimated tax settlement of $7.7 million in our second quarter of fiscal 2016 related to an income tax audit of GPI for time periods prior to our acquisition of GPI. We believe this settlement will be largely recoverable under the escrow for indemnification claims in our purchase agreement with GPI and therefore recorded corresponding income of $6.7 million in Other Income, net.

Net Income

Net income for the twelve weeks ended October 8, 2016 was $113.8 million, or $1.53 per diluted share, as compared to $120.5 million, or $1.63 per diluted share, for the comparable period of Fiscal 2015. As a percentage of net sales, net income for the twelve weeks ended October 8, 2016 was 5.1%, as compared to 5.2% for the comparable period of Fiscal 2015. Negatively impacting diluted EPS and net income in the third quarter of Fiscal 2016 and Fiscal 2015 were GPI integration, store consolidation and support center restructuring expenses and amortization of intangible assets related to the GPI acquisition of $23.8 million and $38.3 million, respectively, or $0.20 and $0.32 per diluted share, respectively.

Net income for the forty weeks ended October 8, 2016 was $397.3 million, or $5.36 per diluted share, as compared to $418.6 million, or $5.66 per diluted share, for the comparable period of Fiscal 2015. As a percentage of net sales, net income for the forty weeks ended October 8, 2016 was 5.3%, as compared to 5.4% for the comparable period of Fiscal 2015. Negatively impacting diluted EPS and net income for the forty weeks ended October 8, 2016 and October 10, 2015 were GPI integration, store consolidation and support center restructuring expenses and amortization of intangible assets related to the GPI acquisition of $94.3 million and $112.5 million, respectively, or $0.78 and $0.94 per diluted share, respectively.

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 presentation of financial results that exclude non-cash charges related to the acquired GPI intangibles and non-operational expenses associated with i) the integration of GPI, ii) store consolidation costs and iii) support center restructuring costs is useful and indicative of our base operations because the expenses vary from period to period in terms of size, nature and significance and relate to the integration of GPI and store closure activity in excess of historical levels. These measures assist in comparing our current operating results with past periods and with the operational performance of other companies in our industry. The disclosure of these measures allow investors to evaluate our performance using the same measures management uses in developing internal budgets and forecasts and in evaluating management’s compensation. Included below is a description of the expenses we have determined are not normal, recurring cash operating expenses necessary to operate our business and the rationale for why providing these measures are useful to investors as a supplement to the GAAP measures.

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GPI Integration Expenses - As disclosed in the our filings with the SEC, we acquired GPI for $2.08 billion on January 2, 2014 and are in the midst of a multi-year integration plan to integrate the operations of GPI with Advance Auto Parts. This includes the integration of product brands and assortments, supply chain and information technology. The integration is being completed in phases and the nature and timing of expenses will vary from quarter to quarter over several years. The integration of product brands and assortments was primarily completed in 2015 and our focus has shifted to integrating the supply chain and information technology systems beginning in 2016. Due to the size of the acquisition, we consider these expenses to be outside of our base business. Therefore, we believe providing additional information in the form of non-GAAP measures that exclude these costs is beneficial to the users of our financial statements in evaluating the operating performance of our base business and our sustainability once the integration is completed.

Store Closure Consolidation Expenses - Store closure and consolidation expenses consist of expenses associated with the our announced plans to (i) convert and consolidate the Carquest stores acquired from GPI, (ii) close our Autopart International stores in Florida and (iii) close approximately 80 underperforming Advance Auto Parts stores in the fourth quarter of fiscal 2015. The conversion and consolidation of the Carquest stores is a multi-year process that began in 2014. As of October 8, 2016, 316 Carquest stores acquired from GPI had been consolidated into existing Advance Auto Parts stores and 266 stores had been converted to the Advance Auto Parts format. As of October 8, 2016, we operated 640 stores under the Carquest name. The closure of the 40 Autopart International stores in Florida, primarily in the first quarter of 2015, and closure of 80 underperforming Advance Auto Parts stores in the fourth quarter of 2015 significantly exceeded our average historical store closure activity. While periodic store closures are common, these closures represent major programs outside of our typical market evaluation process. We also continue to have store closures that occur as part of our normal market evaluation process and have not excluded the expenses associated with these store closures in computing our non-GAAP measures. We believe it is useful to provide additional non-GAAP measures that exclude these costs to provide investors greater comparability of our base business and core operating performance.

Support Center Restructuring Expenses - The costs excluded for support center restructuring activities include costs associated with (i) closing our Minnesota office and relocating functions to existing offices, (ii) relocating functions within our Roanoke, VA office and Raleigh, NC office (formerly the headquarters for GPI) and (iii) eliminating duplicative functions between these two offices. These actions are a direct consequence of the acquisition and integration of GPI and therefore we do not consider these expenses to be normal, recurring, cash operating expenses necessary to operate our business. These actions were substantially completed as of the end of fiscal 2015 and we have had no material store support center restructuring expenses following the end of fiscal 2015.

We have included a reconciliation of this information to the most comparable GAAP measures in the following tables.

	Twelve Week Periods Ended (in thousands, except per share data)						Forty Week Periods Ended (in thousands, except per share data)
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Net income (GAAP)	$	113,844		$	120,469		$	397,257		$	418,579
SG&A adjustments (a)	23,816			38,283			94,292			112,459
Provision for income taxes on adjustments (b)	(9,050		)	(14,548		)	(35,831		)	(42,734		)
Adjusted net income	$	128,610		$	144,204		$	455,718		$	488,304
Diluted earnings per common share (GAAP)	$	1.53		$	1.63		$	5.36		$	5.66
SG&A adjustments, net of tax	0.20			0.32			0.78			0.94
Adjusted Cash EPS	$	1.73		$	1.95		$	6.14		$	6.60

(a) The adjustments to SG&A expenses for the twelve and forty weeks ended October 8, 2016 include GPI integration, store consolidation costs and support center restructuring costs of $14,389 and $62,745 and GPI amortization of acquired intangible assets of $9,426 and $31,547, respectively. The adjustments to SG&A expenses for the twelve and forty weeks ended October 10, 2015 include GPI integration, store consolidation costs and support center restructuring costs of $28,555 and $79,846 and GPI amortization of acquired intangible assets of $9,728 and $32,614, respectively.

(b) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments.

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Liquidity and Capital Resources

Overview

Our primary cash requirements to maintain our current operations include payroll and benefits, the purchase of inventory, contractual obligations, capital expenditures, the payment of income taxes and funding of our strategic business plan. In addition, we may use available funds for acquisitions, to repay borrowings under our credit agreement, to periodically repurchase shares of our common stock under our stock repurchase programs and for the payment of quarterly cash dividends. Historically, we have funded these requirements primarily through cash generated from operations, supplemented by borrowings under our credit facilities and notes offerings as needed. We believe funds generated from our expected results of operations, available cash and cash equivalents, and available borrowings under our credit facility will be sufficient to fund our primary obligations for the next fiscal year. Cash holdings in our foreign affiliates are not significant relative to our overall operations and therefore would not restrict the liquidity needs for our domestic operations.

At October 8, 2016, our cash and cash equivalents balance was $119.5 million, an increase of $28.7 million compared to January 2, 2016. This increase in cash during the forty weeks ended October 8, 2016 was primarily a result of cash generated by operating activities, net of capital expenditures and net repayments on our credit facilities. Additional discussion of our cash flow results, including the comparison of the activity for the forty weeks ended October 8, 2016 to the comparable period of Fiscal 2015, is set forth in the Analysis of Cash Flows section.

As of October 8, 2016, our outstanding indebtedness was $1,043.0 million consisting primarily of our senior unsecured notes. This is $163.9 million lower when compared to January 2, 2016, as a result of net repayments on our credit facility. As of October 8, 2016, we had no borrowings outstanding under our term loan or revolving credit facility. We had $100.7 million in letters of credit outstanding, which reduced the available borrowings on our revolver to $899.3 million as of October 8, 2016.

Capital Expenditures

Our primary capital requirements have been the funding of our new store development (leased and owned locations), maintenance of existing stores, investments in supply chain and information technology and GPI integration expenditures. We lease approximately 84% of our stores. Our capital expenditures were $204.2 million for the forty weeks ended October 8, 2016.

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 fiscal 2016, we anticipate that our capital expenditures will be approximately $275.0 million but may vary with business conditions. These investments will primarily include GPI integration expenditures for store conversions and supply chain and systems integration activities; new store development (leased and owned locations); and investments in our existing stores, supply chain network and systems. During the forty weeks ended October 8, 2016, we opened 48 stores and five Worldpac branches compared to 73 stores and seven branches during the comparable period of last year. We anticipate opening between 65 to 75 stores and Worldpac branches during Fiscal 2016.

Stock Repurchases

Our stock repurchase program allows us to repurchase our common stock on the open market or in privately negotiated transactions from time to time in accordance with the requirements of the SEC. Our $500 million stock repurchase program in place as of October 8, 2016 was authorized by our Board of Directors on May 14, 2012. During the forty weeks ended October 8, 2016, we repurchased no shares of our common stock under our stock repurchase program. At October 8, 2016, we had $415.1 million remaining under our stock repurchase program.

Dividend

Since Fiscal 2006, our Board of Directors has declared quarterly dividends of $0.06 per share to stockholders of record. On November 8, 2016, our Board of Directors declared a quarterly dividend of $0.06 per share to be paid on January 6, 2017 to all common stockholders of record as of December 23, 2016.

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Analysis of Cash Flows

A summary and analysis of our cash flows for the forty week period ended October 8, 2016 as compared to the forty week period ended October 10, 2015 is included below.

	Forty Week Periods Ended
	October 8, 2016			October 10, 2015
	(in millions)
Cash flows provided by operating activities	$	409.4		$	520.1
Cash flows used in investing activities	(205.4		)	(179.9		)
Cash flows used in financing activities	(176.3		)	(337.3		)
Effect of exchange rate changes on cash	1.0			(2.2		)
Net increase in cash and cash equivalents	$	28.7		$	0.7

Operating Activities

For the forty weeks ended October 8, 2016, net cash provided by operating activities decreased by $110.7 million to $409.4 million compared to the comparable period of 2015. The net decrease in operating cash flow compared to the prior year was primarily driven by changes in working capital and a decrease in net income. The decrease in cash flows from working capital was primarily driven by an increase in inventory, net of accounts payable. Our inventory growth was driven mainly by the build-up of transitional inventory associated with our Carquest products and store integration, the opening of new locations, including a new Worldpac distribution center, and lower than expected sales during the period. In addition, our ratio of accounts payable to inventory has decreased primarily related to the timing of the increase in inventory which occurred early in 2016.

Investing Activities

For the forty weeks ended October 8, 2016, net cash used in investing activities increased by $25.5 million to $205.4 million compared to the comparable period of 2015. Cash used in investing activities for the forty weeks ended October 8, 2016 consisted primarily of purchases of property and equipment, which is $43.0 million higher than the prior year primarily as a result of increased investments in supply chain and existing stores.

Financing Activities

For the forty weeks ended October 8, 2016, net cash used in financing activities was $176.3 million, as compared to $337.3 million for the forty weeks ended October 10, 2015, a decrease of $161.0 million. This decrease was primarily a result of net repayments under our credit facility during the forty weeks ended October 8, 2016 of $160.0 million compared to net repayments of $343.4 million during the forty weeks ended October 10, 2015. As of October 8, 2016, we had no amounts outstanding under our credit facility. We remain focused on maintaining our leverage ratio and our investment grade ratings, while making investments in our business and deploying our capital allocation strategy that includes our share repurchase program and dividends.

Long-Term Debt

Bank Debt

We have a credit agreement (the "2013 Credit Agreement") which provides a $1.0 billion unsecured revolving credit facility with Advance Stores Company, Inc. ("Advance Stores"), as Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. The revolving credit facility also provides for the issuance of letters of credit with a sub-limit of $300.0 million and swingline loans in an amount not to exceed $50.0 million. We may request, subject to agreement by one or more lenders, that the total revolving commitment be increased by an amount not to exceed $250.0 million by those respective lenders (up to a total commitment of $1.25 billion) during the term of the 2013 Credit Agreement. Voluntary prepayments and voluntary reductions of the revolving balance are permitted in whole or in part, at our option, in minimum principal amounts as specified in the 2013 Credit Agreement. Under the terms of the 2013 Credit Agreement, the revolving credit facility terminates in December 2018. The 2013 Credit Agreement previously included a term loan that was repaid in full as of October 8, 2016.

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As of October 8, 2016, under the 2013 Credit Agreement, we had no outstanding borrowings under the revolver. As of October 8, 2016, we had letters of credit outstanding of $100.7 million, which reduced the availability under the revolver to $899.3 million. The letters of credit generally have a term of one year or less and primarily serve as collateral for our self-insurance policies.

The interest rate on borrowings under the revolving credit facility is based, at our option, on adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. The current margin as of October 8, 2016 was 1.10% and 0.10% per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. A facility fee is charged on the total amount of the revolving credit facility, payable in arrears. The current facility fee rate as of October 8, 2016 was 0.15% per annum. Under the terms of the 2013 Credit Agreement, the interest rate and facility fee are subject to change based on our credit rating.

The 2013 Credit Agreement contains customary restrictive covenants, which include a maximum leverage ratio and minimum consolidated coverage ratio, and are further described in Note 6, Long-term Debt, in this Form 10-Q. We were in compliance with our covenants with respect to the 2013 Credit Agreement at October 8, 2016.

As of October 8, 2016, we had a credit rating from Standard & Poor’s of BBB- and from Moody’s Investor Service of Baa2. The current outlooks by Standard & Poor’s and Moody’s are both stable. The current pricing grid used to determine our borrowing rate under the 2013 Credit Agreement is based on our credit ratings. Therefore, if these credit ratings decline, our interest rate on outstanding balances may increase and our access to additional financing on favorable terms may become more limited. In addition, it could reduce the attractiveness of our vendor payment program, where certain of our vendors finance payment obligations from us with designated third party financial institutions, which could result in increased working capital requirements. Conversely, if these credit ratings improve, our interest rate may decrease.

Senior Unsecured Notes

At October 8, 2016 our outstanding senior unsecured notes consisted of i) $450 million of 4.50% notes maturing in December 2023 (the “2023 Notes”); ii) $300 million of 4.50% notes maturing in January 2022 (the “2022 Notes”); and iii) $300 million of 5.75% notes maturing in May 2020 (the “2020 Notes” or collectively with the 2023 Notes and 2022 Notes, “the Notes”). The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year. The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year. The 2020 Notes bear interest at a rate of 5.75% per year payable semi-annually in arrears on May 1 and November 1 of each year.

Advance served as the issuer of the Notes with certain of Advance's domestic subsidiaries currently serving as subsidiary guarantors. The terms of the Notes are governed by an indenture (as amended, supplemented, waived or otherwise modified, the “Indenture”) among us, the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee. The terms of the Indenture are further described in Note 6, Long-term Debt, in this Form 10-Q.

Off-Balance-Sheet Arrangements

We guarantee loans made by banks to various of our independent store customers totaling $27.3 million as of October 8, 2016. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. We believe the likelihood of performance under these guarantees is remote and that the fair value of these guarantees is very minimal. As of October 8, 2016, we had no other off-balance-sheet arrangements as defined in Regulation S-K Item 303 of the SEC regulations. We include other off-balance-sheet arrangements in our contractual obligations table in our 2015 Form 10-K, including operating lease payments, interest payments on our Notes and revolving credit facility and letters of credit outstanding.

Contractual Obligations

As of October 8, 2016, there were no material changes to our outstanding contractual obligations as compared to our contractual obligations outstanding as of January 2, 2016. For additional information regarding our contractual obligations see “Contractual Obligations” in our 2015 Form 10-K.

Seasonality

Our business is somewhat seasonal in nature, with the highest sales usually occurring in the spring and summer months.

In addition, our business can be affected significantly by weather conditions. While unusually heavy precipitation tends to soften sales as elective maintenance is deferred during such periods, extremely hot or cold weather tends to enhance sales by

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causing automotive parts to fail at an accelerated rate. Our fourth quarter is generally our most volatile as weather and spending trade-offs typically influence our Professional and DIY sales.

New Accounting Pronouncements

For a description of recently announced accounting standards, including the expected dates of adoption and estimated effects, if any, on our condensed consolidated financial statements, see New Accounting Pronouncements in Note 1 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Internet Address and Access to SEC Filings

Our Internet address is www.AdvanceAutoParts.com. We make available free of charge through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC's website atwww.sec.gov.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our primary financial market risk is due to changes in interest rates. Historically, we have reduced our exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts and treasury lock agreements. We have historically utilized interest rate swaps to convert variable rate debt to fixed rate debt and to lock in fixed rates on future debt issuances. Our interest rate hedge instruments have been designated as cash flow hedges. We had no derivative instruments outstanding as of October 8, 2016.

The interest rates on borrowings under our 2013 Credit Agreement is based, at our option, on adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. As of October 8, 2016 we had no borrowings outstanding under our revolving credit facility and term loan. However, if we elect to borrow on our revolving credit facility, we may be exposed to interest rate risk due to changes in LIBOR or alternate base rate. There is no interest rate risk associated with our 2020, 2022 or 2023 Notes, as the interest rates are fixed at 5.75%, 4.50% and 4.50%, respectively, per annum.

Credit Risk

Our financial assets that are exposed to credit risk consist primarily of trade accounts receivable and vendor receivables. We are exposed to normal credit risk from customers. Our concentration of credit risk is limited because our customer base consists of a large number of customers with relatively small balances, which allows the credit risk to be spread across a broad base. We strive to maintain a close working relationship with our vendors and frequently monitor their financial strength. We have not historically had significant credit losses.

Foreign Currency Exchange Rate Risk

Our primary foreign currency exposure arises from our Canadian operations and the translation of Canadian dollar denominated revenues, profits and net assets into U.S. dollars. During the forty weeks ended October 8, 2016, the translation of the operating results of our Canadian subsidiaries did not significantly impact net income. We view our investments in the Canadian subsidiaries as long-term, and any changes in our net assets in the Canadian subsidiaries relating to foreign currency exchange rates would be reflected in the foreign currency translation component of Accumulated other comprehensive loss, unless the Canadian subsidiaries are sold or otherwise disposed.

In addition, we are exposed to foreign currency exchange rate fluctuations for a portion of the Company's inventory purchases which are denominated in foreign currencies and for intercompany balances. We believe that the price volatility of these inventory purchases as it relates to foreign currency exchange rates is partially mitigated by our ability to adjust selling prices. Losses from foreign currency transactions, which are included in Other (expense) income, net, were $1.2 million during the forty weeks ended October 8, 2016.

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ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to 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 management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures as of October 8, 2016 in accordance with Rule 13a-15(b) under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended October 8, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth the information with respect to repurchases of our common stock for the quarter ended October 8, 2016:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (In thousands)
July 17, 2016 to August 13, 2016	—	$	—	—	$	415,092
August 14, 2016 to September 10, 2016	718	159.69		—	415,092
September 11, 2016 to October 8, 2016	42	150.12		—	415,092
Total	760	$	159.16	—	$	415,092

⁽¹⁾  We repurchased 760 shares of our common stock, at an aggregate cost of $0.1 million, or an average purchase price of $159.16 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units during the twelve weeks ended October 8, 2016.

⁽²⁾  Our $500 million stock repurchase program was authorized by our Board of Directors on May 14, 2012.

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ITEM 6. EXHIBITS

		Incorporated by Reference			Filed
Exhibit No.	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.1	Restated Certificate of Incorporation of Advance Auto Parts, Inc. (“Advance Auto”) (as amended effective as of June 6, 2016).	10-Q	3.1	8/25/2016
3.2	Amended and Restated Bylaws of Advance Auto, effective June 6, 2016.	10-Q	3.2	8/25/2016
10.1	Employment Agreement effective October 3, 2016 between Advance Auto Parts, Inc. and Thomas B. Okray.				X
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ADVANCE AUTO PARTS, INC.
November 15, 2016	By:	/s/ Thomas B. Okray
		Thomas B. Okray Executive Vice President and Chief Financial Officer

S-1

EXHIBIT INDEX

		Incorporated by Reference			Filed
Exhibit No.	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.1	Restated Certificate of Incorporation of Advance Auto Parts, Inc. (“Advance Auto”) (as amended effective as of June 6, 2016).	10-Q	3.1	8/25/2016
3.2	Amended and Restated Bylaws of Advance Auto, effective June 6, 2016.	10-Q	3.2	8/25/2016
10.1	Employment Agreement effective October 3, 2016 between Advance Auto Parts, Inc. and Thomas B. Okray.				X
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

AGREEMENT (the “Agreement”) dated as of October 3, 2016 between Advance Auto Parts, Inc. (“Advance” or the “Company”), a Delaware corporation, its subsidiaries, predecessors, successors, affiliated corporations, companies and partnerships, and its current and former officers, directors, and agents (collectively, the “Company”) and Thomas Okray (the “Executive”).

The Company and the Executive agree as follows:

1.Position; Term of Employment. Subject to the terms and conditions of this Agreement, the Company agrees to employ the Executive, and the Executive agrees to serve the Company, asits Executive Vice President, Chief Financial Officer (“Executive’s Position”). The parties intend that the Executive shall continue to so serve in this capacity throughout the Employment Term (as such term is defined below).

The term of Executive’s employment by the Company pursuant to this Agreement shall commence on October 31, 2016 (“Commencement Date”) and shall end on the day prior to the first anniversary of the Commencement Date, unless sooner terminated under the provisions of Paragraph 4 below (“Employment Term”); provided, however, that commencing on the first anniversary of the Commencement Date (“Anniversary Date”) the Employment Term shall be automatically extended for an additional period of one year unless, not later than 90 days prior to the Anniversary Date, either party shall have given notice to the other that it does not wish to extend the Employment Term (a “Non-Renewal”), in which case the Employment Term shall end on the day prior to the Anniversary Date; and on each Anniversary Date thereafter the Employment Term shall be automatically extended for an additional period of one year unless, not later than 90 days prior to such Anniversary Date, either party shall have given notice of a Non-Renewal to the other, in which case the Employment Term shall end 90 days following such notice.

2.Duties.

(a)Duties and Responsibilities; Location. The Executive shall have such duties and responsibilities of the Executive’s Position and such other duties and responsibilities that are reasonably consistent with the Executive’s Position as the Company may request from time to time and Executive shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries, if any (jointly and severally, “Related Entities”). The Executive shall observe and conform to the applicable policies and directives promulgated from time to time by the Company and its Board of Directors or by any superior officer(s) of the Company. Subject to the provisions of Subsection 2(b) below, the Executive shall devote the Executive’s full time, skill and attention during normal business hours to the business and affairs of the Company and its Related Entities, except for holidays and vacations consistent with applicable Company policy and except for illness or incapacity. The services to be performed by the Executive hereunder may be changed from time to time at the discretion of the Company. The Company shall retain full direction and control of the means and methods by which the Executive performs the Executive’s services and of the place or places at which such services

are to be rendered. Effective on the Commencement Date, the Executive’s principal office location shall be the Company’s offices located in Raleigh, North Carolina. The Executive agrees to relocate his primary residence to the Raleigh, North Carolina area as soon as practicable after the Commencement Date, but in no event later than the first anniversary of the Commencement Date.

(b)Other Activities. During the Term of this Agreement, it shall not be a violation of this Agreement for the Executive to, and the Executive shall be entitled to (i) serve on corporate, civic, charitable, retail industry association or professional association boards or committees within the limitations of the Company’s Guidelines on Significant Governance Issues, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions and (iii) manage personal investments, so long as the activities set forth in (i), (ii), and (iii) above (x) do not significantly interfere with the performance of the Executive’s duties and responsibilities as required by this Agreement and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder, (y) are in compliance with the Company’s policies and procedures in effect from time to time, including the Code of Ethics & Business Conduct and the Guidelines on Significant Governance Issues, in each case as may be amended periodically, and (z) do not violate Section 18 of this Agreement.

3. Compensation.

(a)Base Salary. During the Employment Term, the Company shall pay to the Executive a salary of $500,000.00 per annum, payable consistent with the Company’s standard payroll practices then in effect (“Base Salary”). Such Base Salary shall be reviewed by the Compensation Committee of Advance’s Board of Directors (hereinafter the “Compensation Committee”) at least annually, with any changes taking into account, among other factors, Company and individual performance.

(b)Bonus. The Executive shall receive a bonus in such amounts and based upon achievement of such corporate and/or individual performance and other criteria as shall be approved by the Compensation Committee from time to time, with a target amount, if such performance and other criteria are achieved, of ninety percent (90%) of the Base Salary (the “Target Bonus Amount”), with a maximum payout of one hundred eighty percent (180%) of the Base Salary during the initial Term of this Agreement, which bonus shall be paid in a manner consistent with the Company’s bonus practices then in effect. The Executive shall not be entitled to receive a bonus for fiscal year 2016. For fiscal year 2017, the Executive shall be entitled to receive a minimum annual bonus equal to the Target Bonus Amount, and shall be eligible to earn up to 180% of the Base Salary if the Company’s performance exceeds target level performance as set forth in the Company’s bonus plan for fiscal year 2017. The Target Bonus Amount and the maximum payout for any subsequent renewal Term of the Agreement shall be determined by the Compensation Committee. To be eligible to receive a bonus, the Executive must be employed by the Company on the date the bonus is paid.

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(c)Long-Term Incentive Awards. With respect to each fiscal year that ends during the Employment Term, commencing with fiscal year 2017, the Executive shall be granted a long-term incentive award in an amount determined by the Compensation Committee. Notwithstanding the foregoing, for fiscal year 2017, the grant date fair value of the Executive’s long-term incentive award at target value shall be equal to $1,050,000. The grant-type mix that shall comprise such annual long-term incentive award shall be determined by the Compensation Committee each fiscal year and shall be consistent with grant-type mix used for other senior executives of the Company. The Executive’s long-term incentive award for fiscal year 2017 shall be issued under the Advance Auto Parts, Inc. 2014 Long-Term Incentive Plan (the “2014 LTIP”) and shall be subject to the terms and conditions of the 2014 LTIP and the award agreement evidencing the grant of each such award.

(d)Buy-out Compensation. The Executive shall receive the compensation set forth in this Section 3(d) to replace certain compensation payable to the Executive by the company that employed the Executive immediately prior to the Company (the “Prior Employer”), which the Executive shall forfeit as a result of leaving the employ of the Prior Employer.

(i)Cash Sign-on Bonus. The Company shall pay to the Executive a cash bonus in the amount of $380,000 less applicable taxes (the “Signing Bonus”), which will be included in the Executive’s first paycheck following the Commencement Date; provided, that the Executive shall repay to the Company one-hundred percent (100%) of the Signing Bonus if the Executive voluntarily resigns from the Company without Good Reason (as defined below) prior to the first anniversary of the Commencement Date. In the event Executive is required to repay the Signing Bonus pursuant to this Section 3(d)(i), Executive explicitly authorizes the Company at its option, and to the extent permitted by applicable federal and state law, to deduct the repayment of the Signing Bonus from any monies owed to Executive (including, but not limited to, salary and bonuses) from any pending/final paycheck(s) due to Executive. If Executive’s final paycheck(s) does/do not fully offset the amount due to the Company, Executive shall repay the remaining balance of the Signing Bonus in full within sixty (60) days of Executive’s termination of employment and shall pay interest (at the maximum legal rate authorized by law) after the balance has been due for sixty (60) days until paid in full and any reasonable collection costs incurred by the Company in pursuit of the repayment of the Signing Bonus, including attorneys’ fees and court costs.

(ii)Sign-on Restricted Stock Units (RSUs). Subject to the provisions of this Section 3(d)(ii) as soon as practicable after the Commencement Date, the Executive shall be granted an award of time-based RSUs with a grant date fair value equal to $2,000,000, which shall vest as follows: seventy percent (70%) will vest on the first anniversary of the grant date and the remaining thirty percent (30%) will vest on the second anniversary of the grant date, subject to the Executive’s continued employment with the Company through the applicable vesting date. The Sign-On RSUs shall be issued under the 2014 LTIP and shall be subject to the terms and conditions of the 2014 LTIP and the award agreements evidencing the grant of such Sign-On RSUs.

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(e)Incentive Compensation Clawback. Any compensation provided by the Company to the Executive, excepting only compensation pursuant to Section 3(a) above, shall be subject to the Company’s Incentive Compensation Clawback Policy as such policy shall be adopted, and from time to time amended, by the Board or the Compensation Committee.

(f)Benefit Plans. During the Employment Term, the Executive shall be entitled to participate in all retirement and employment benefit plans and programs of the Company that are generally available to senior executives of the Company, including relocation benefits as agreed between the parties. Such participation shall be pursuant to the terms and conditions of such plans and programs, as the same shall be amended from time to time. The Executive shall be entitled to four (4) weeks paid vacation annually.

(g)Business Expenses. During the Employment Term, the Company shall, in accordance with policies then in effect with respect to payments of business expenses, pay or reimburse the Executive for all reasonable out-of-pocket travel and other expenses (other than ordinary commuting expenses) incurred by the Executive in performing services hereunder; provided, however, that, with respect to reimbursements, if any, not otherwise excludible from the Executive’s gross income, to the extent required to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), no reimbursement of expenses incurred by the Executive during any taxable year shall be made after the last day of the following taxable year, and the right to reimbursement of such expenses shall not be subject to liquidation or exchange for another benefit. All such expenses shall be accounted for in such reasonable detail as the Company may require.

4. Termination of Employment.

(a)Death. In the event of the death of the Executive during the Employment Term, the Executive’s employment shall be automatically terminated as of the date of death and a lump sum amount, equivalent to the Executive’s annual Base Salary and Target Bonus then in effect, shall be paid, within 60 days after the date of the Executive’s death, to the Executive’s designated beneficiary, or to the Executive’s estate or other legal representative if no beneficiary was designated at the time of the Executive’s death. In the event of the death of the Executive during the Employment Term, the restrictions and deferral limitations applicable to any Option, Stock Appreciation Right (“SAR”), Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Deferred Stock Unit, Dividend Equivalent or any Stock Grant Awards (collectively “Awards”), as such Awards are defined in the 2014 LTIP (or any applicable successor or predecessor plan of the Company), granted to the Executive shall be subject to the provisions regarding vesting and transferability in those circumstances as are set forth in the applicable award agreement or grant. The foregoing benefit will be provided in addition to any death, disability or other benefits provided under the Company’s benefit plans and programs in which the Executive was participating at the time of his death. Except in accordance with the terms of the Company’s benefit programs and other plans and programs then in effect, after the date of the Executive’s death, the Executive shall not be entitled to any other compensation or benefits from the Company or hereunder.

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(b)Disability. In the event of the Executive’s Disability as hereinafter defined, the employment of the Executive may be terminated by the Company, effective upon the Disability Termination Date (as defined below). In such event, the Company shall pay the Executive an amount equivalent to thirty percent (30%) of the Executive’s Base Salary for a one year period, which amount shall be paid in one lump sum within 45 days following the Executive’s “separation from service,” as that term is defined in Section 409A of the Code and regulations promulgated thereunder, from the Company (his “Separation From Service”), provided that the Executive or an individual duly authorized to execute legal documents on the Executive’s behalf executes and does not revoke within any applicable revocation period the release described in Section 4(k)(ii)(B). The foregoing benefit will be provided in addition to any disability or other benefits provided under the Company’s benefit plans in which the Executive participates. For the avoidance of doubt, participation by the Executive in the Company’s long-term and/or short-term disability insurance benefit plans is voluntary on the part of the Executive and is made available by the Company at the sole cost of the Executive. The purpose and intent of the preceding three sentences is to ensure that the Executive receives a combination of insurance benefits and Company payments following the Disability Termination Date equal to 100% of his then-applicable Base Salary for such one-year period. In the event that Executive does not elect to participate in the Company’s long-term and/or short-term disability insurance benefit plans, the Company shall not be obligated to pay the Executive any amount in excess of thirty percent (30%) of the Executive’s Base Salary. In the event of the Disability of the Executive during the Employment Term, the restrictions and deferral limitations applicable to any Option, SAR, Restricted Stock, Restricted Stock Unit, Performance Unit, Deferred Stock Unit, Dividend Equivalent or any Stock Grant Awards (collectively “Awards”), as such Awards are defined in the 2014 LTIP (or any applicable successor or predecessor plan of the Company), granted to the Executive shall be subject to the provisions regarding vesting and transferability in those circumstances as are set forth in the applicable award agreement or grant. The Company shall also pay to the Executive a lump sum amount equivalent to the Executive’s Target Bonus Amount then in effect, which amount shall be paid in one lump sum within 45 days following the Executive’s Separation from Service, provided that the Executive or an individual duly authorized to execute legal documents on the Executive’s behalf executes and does not revoke within any applicable revocation period the release described in Section 4(j)(ii)(B). Otherwise, after the Disability Termination Date, except in accordance with the Company’s benefit programs and other plans then in effect, the Executive shall not be entitled to any compensation or benefits from the Company or hereunder.

“Disability,” for purposes of this Agreement, shall mean the Executive’s incapacity due to physical or mental illness causing the Executive’s complete and full-time absence from the Executive’s duties, as defined in Paragraph 2, for either a consecutive period of more than six months or at least 180 days within any 270-day period.

(c)Termination by the Company for Due Cause. Nothing herein shall prevent the Company from terminating the Executive’s employment at any time for “Due Cause” (as hereinafter defined). The Executive shall continue to receive the Base Salary provided for in this Agreement only through the period ending with the date of such termination. Any rights and benefits the Executive may have under employee benefit plans and programs of the Company shall be determined in accordance with the terms of such plans and programs. Except as provided in the two immediately preceding sentences, after termination of employment for Due Cause, the Executive shall not be entitled to any compensation or benefits from the Company or hereunder.

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For purposes of this Agreement, “Due Cause” shall mean:

(i) a material breach by the Executive of the Executive’s duties and obligations under this Agreement or violation in any material respect of any code or standard of conduct generally applicable to the officers of the Company, including, but not limited to, the Company’s Code of Ethics and Business Conduct, which, if curable, has not been cured by the Executive within 15 business days after the Executive’s receipt of notice to the Executive specifying the nature of such breach or violations;

(ii) a material violation by the Executive of the Executive’s Loyalty Obligations as provided in Paragraph 18;

(iii) the commission by the Executive or indictment fora crime of moral turpitude or a felony involving fraud, breach of trust, or misappropriation;

(iv) the Executive’s willfully engaging in bad faith conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise; or

(v) a determination by the Company that the Executive is in violation of the Company’s Substance Abuse Policy.

(d)Termination by the Company Other than for Due Cause, Death or Disability. The foregoing notwithstanding, the Company may terminate the Executive’s employment for any or no reason, as it may deem appropriate in its sole discretion and judgment; provided, however, that in the event such termination is not due to Death, Disability or Due Cause, the Executive shall (i) be entitled to a Termination Payment as hereinafter defined and (ii) be sent written notice stating the termination is not due to Death, Disability or Due Cause. In the event of such termination by the Company, the Executive shall receive certain payments and benefits as set forth in this Subsection 4(d).

(i) Termination Payment. If the Company terminates the Executive’s employment for other than Death, Disability or Due Cause prior to the expiration of the Employment Term, the term “Termination Payment” shall mean a cash payment equal to the sum of:

(A) an amount equal to the Executive’s annual Base Salary, as in effect immediately prior to such termination (unless the termination is in connection with an action that would have enabled the Executive to terminate his employment for Good Reason pursuant to Section 4(e)(i)(A), in which case, it shall be the Base Salary in effect prior to any such material diminution of the Base Salary) (the “Termination Salary Payment”), and

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(B)an amount equal to the average value of the annual bonuses pursuant to Section 3(b)paid to Executive for the three completed fiscal years immediately prior to the date of such termination; provided, however, that if Executive has been employed by the Company for fewer than three complete fiscal years prior to the date of such termination, Executive shall receive an amount equal to the average value of the annual bonuses pursuant to Section 3(b) that the Executive has received during the period of the Executive’s employment.

(ii) Outplacement Services. The Company shall make outplacement services available to the Executive, at a cost to the Company not to exceed $12,000, for a period of time not to exceed 12 months following the date of termination pursuant to the Company’s Executive outplacement program with the Company’s selected vendor, to include consulting, search support and administrative services.

(iii) Medical Coverage. In addition, the Company shall provide the Executive with medical, dental and vision insurance benefits (which may also cover, if applicable, the Executive’s spouse and eligible dependents) for three hundred sixty-five (365) days from the date of the Executive’s termination of employment or until such time as the Executive is eligible for group health coverage under another employer’s plan, whichever occurs first. In order to trigger the Company’s obligation to provide health care continuation benefits, the Executive must elect continuation coverage pursuant to the Consolidation Omnibus Budget Act of 1985, as amended (“COBRA”), upon such eligibility. The Company’s obligation shall be satisfied solely through the payment of the Executive’s COBRA premiums during the 365-day period, but only to the extent that such premiums exceed the amount that would otherwise have been payable by the Executive for coverage of the Executive and the Executive’s eligible dependents that were covered by the Company’s medical, dental, and vision insurance programs at the time of the Executive’s termination of employment had the Executive continued to be employed by the Company.

(iv) Other. If the Company terminates the Executive’s employment for other than Death, Disability or Due Cause, the Sign-On RSUs shall become fully vested as of the Executive’s date of termination; provided that, notwithstanding the foregoing, the Sign-On RSUs will cease vesting as of the Executive’s date of termination as the result of the Executive’s resignation from employment by the Company for Good Reason as defined in Section 4(e) of this Agreement. Any long-term incentive awards granted to the Executive pursuant to Section 3(c) hereof shall be treated in the manner set forth in the 2014 LTIP and the applicable award agreements.

(v)Timing of Payments. The Termination Salary Payment and Termination Bonus Payment shall be paid in one lump sum within 45 days following the date of the Executive’s Separation From Service, provided that the Executive executes and does not revoke within any applicable revocation period the release described in Section 4(j)(ii)(B) below.

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(vi) Entire Obligation. Except as provided in Subsection 4(j) of this Agreement, following the Executive’s termination of employment under this Subsection 4(d), the Executive will have no further obligation to the Company pursuant to this Agreement (other than under Sections 6, 7, 8, 9, 10, 11, 17, 19, 20 (to the extent such policies, guidelines and codes by their terms apply post-employment) and 21). Except for the Termination Payment and as otherwise provided in accordance with the terms of the Company’s benefit programs and plans then in effect or as expressly required under applicable law, after termination by the Company of employment for other than Death, Disability or Due Cause, the Executive shall not be entitled to any other compensation or benefits from the Company or hereunder.

(e)Resignation from Employment by the Company for Good Reason. Termination by the Company without Due Cause under Subsection 4(d) shall be deemed to have occurred if the Executive elects to terminate the Executive’s employment for Good Reason.

(i) Good Reason.For purposes of this Agreement, “Good Reason” shall mean:

(A) a material diminution in the Executive’s “Total Direct Compensation,” which shall mean the value of the total of the Executive’s Base Salary, Target Bonus opportunity, and annual equity award taken together;

(B) a material diminution in the Executive’s authority, duties, or responsibilities;

(C) the Company’s requiring the Executive to be based more than 60 miles from the Company’s office in Raleigh, North Carolina at which the Executive was principally employed immediately prior to the date of the relocation;

(D)delivery by the Company of a notice of a Non-Renewal; or

(E) any other action or inaction that constitutes a material breach by the Company of the terms of this Agreement.

(ii)Notice of Good Reason Condition.In order to be considered a resignation for Good Reason for purposes of this Agreement, the Executive must provide the Company with written notice and description of the existence of the Good Reason condition within 60 days of the initial discovery by the Executive of the existence of said Good Reason condition and the Company shall have 30 business days to cure such Good Reason condition.

(iii)Effective Date of Resignation.The effective date of the Executive’s resignation for Good Reason must occur no longer than six (6) months following the expiration of the cure period set forth in Section 4(e)(ii), above. If Executive has not resigned for Good Reason effective within six (6) months following the expiration of the cure period set forth in Section 4(e)(ii), above the Executive shall be deemed to have waived said Good Reason condition.

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(f)Termination by the Company Other Than For Due Cause, Death or Disability or Resignation from Employment for Good Reason Within Twelve Months After a Change in Control. If the Company terminates the Executive’s employment for other than Death, Disability or Due Cause prior to the expiration of the Employment Term and within twelve (12) months after a Change In Control (as defined below), or if the Executive elects to terminate the Executive’s employment for Good Reason prior to the expiration of the Employment Term and within twelve (12) months after a Change In Control, then (i) the Executive shall be entitled to a Change In Control Termination Payment as hereinafter defined in lieu of the Termination Payment set forth in Subsection 4(d)(i) above, (ii) the Executive shall receive benefits as defined in Subsections 4(d)(ii) and (iii) above, and (iii) either the Company or the Executive, as the case may be, shall provide Notice of Termination pursuant to Subsection 4(j)(i) other than in the case of a Non-Renewal, which shall be communicated in accordance with Section 1.

(i)Change In Control Termination Payment. The term “Change In Control Termination Payment” shall mean a cash payment equal to the sum of:

(A)an amount equal to two times the Executive’s annual Base Salary, as in effect immediately prior to such termination (unless the termination is due to Section 4(e)(i)(A), in which case, it shall be two times the Executive’s annual Base Salary in effect prior to any such material diminution of the Base Salary) (the “Change In Control Termination Salary Payment”), and

(B)an amount equal to two times the Executive’s Target Bonus Amount, as in effect immediately prior to such termination (unless the termination is due to Sections 4(e)(i)(A) or (E), in which case, it shall be two times the Executive’s Target Bonus in effect prior to any such material diminution of the Target Bonus or termination of the bonus plan, respectively) (the “Change In Control Termination Bonus Payment”).

(ii)Timing of Payments. The Change In Control Termination Salary Payment and the Change In Control Termination Bonus Payment shall be paid in lump sum payments within 45 days following the date of the Executive’s Separation From Service, provided that the Executive executes and does not revoke within any applicable revocation period the release described in Section 4(j)(ii) below.

(iii)Entire Obligation. Except as provided in Subsection 4(i) of this Agreement, following the Executive’s termination of employment under this Subsection 4(f), the Executive will have no further obligation to the Company pursuant to this Agreement (other than under Sections 6, 7, 8, 9, 10, 11, 17, 19, 20 (to the extent such policies, guidelines and codes by their terms apply post-employment) and 21). Except for the Change In Control Termination Payment and as otherwise provided in accordance with the terms of the Company’s benefit programs and plans then in effect or as expressly required under applicable law, within twelve (12) months after a Change In Control, after termination by the Company of employment for other than Death, Disability or Due Cause or after termination by the Executive for Good Reason, the Executive shall not be entitled to any other compensation or benefits from the Company or hereunder.

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(iii)Change InControl. For purposes of this Agreement, “Change In Control” shall mean the occurrence of any of the following events:

(A) a Transaction, as defined below, unless securities possessing more than 50% of the total combined voting power of the survivor’s or acquiror’s outstanding securities (or the securities of any parent thereof) are held by a person or persons who held securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities immediately prior to that transaction, or

(B) any person or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time to time) directly or indirectly acquires, including but not limited to by means of a merger or consolidation, beneficial ownership (determined pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the said Exchange Act) of securities possessing more than 25% of the total combined voting power of the Company’s outstanding securities unless pursuant to a tender or exchange offer made directly to the Company’s stockholders that the Board recommends such stockholders accept, other than (i) the Company or any of its Affiliates, (ii) an employee benefit plan of the Company or any of its Affiliates, (iii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, or (iv) an underwriter temporarily holding securities pursuant to an offering of such securities, or

(C) over a period of thirty-six (36) consecutive months or less, there is a change in the composition of the Board such that a majority of the Board members (rounded up to the next whole number, if a fraction) ceases, by reason of one or more proxy contests for the election of Board members, to be composed of individuals who either (i) have been Board members continuously since the beginning of that period, or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in the preceding clause (i) who were still in office at the time that election or nomination was approved by the Board.

For purposes of Section 4(f)(iv)(A), “Transaction” means (1) consummation of any merger or consolidation of the Company with or into another entity as a result of which the Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (2) any sale or exchange of all of the Stock of the Company for cash, securities or other property, (3) any sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions or (4) any liquidation or dissolution of the Company.

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(v) IRC 280G “Net-Best”. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that (A) any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of Executive (whether pursuant to the terms of this Agreement or otherwise) (the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), and (B) the reduction of the amounts payable to Executive to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide Executive with a greater after tax amount than if such amounts were not reduced, then the amounts payable to Executive shall be reduced (but not below zero) to the Safe Harbor Cap. If the reduction of the amounts payable would not result in a greater after tax result to Executive, no amounts payable under this Agreement shall be reduced pursuant to this provision.

(A) Reduction of Payments. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first cash amounts payable under this Agreement (in contrast to benefit amounts), and applying any reduction to amounts payable in the following order: (A) first, any cash amounts payable to Executive as a Termination Payment or Change in Control Termination Payment under this Agreement, as applicable; (B) second, any cash amounts payable by Company for Outplacement Services on behalf of Executive under the terms of this Agreement; (C) third, any amounts payable by Company on behalf of Executive under the terms of this Agreement for continued Medical Coverage; (D) fourth, any other cash amounts payable by Company to or on behalf of Executive under the terms of this Agreement: (E) fifth, outstanding performance-based equity grants to the extent that any such grants would be subject to the Excise Tax; and (F) finally, any time-vesting equity grants to the extent that any such grants would be subject to the Excise Tax.

(B) Determinations by Accounting Firm. All determinations required to be made under this Section 4(f)(v) shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from the Company or Executive that there has been a Payment, or such earlier time as is requested by the Company. Notwithstanding the foregoing, in the event (A) the Board shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules or (B) the Audit Committee of the Board determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (C) the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in Control, the Board shall appoint another nationally recognized public accounting firm reasonably acceptable to Executive to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. If Payments are reduced to the Safe Harbor Cap or the Accounting Firm determines that no Excise Tax is payable by Executive without a reduction in Payments, the Accounting Firm shall provide a written opinion to Executive to the effect that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return, and that the failure to report the Excise Tax, if any, on Executive’s applicable federal income tax return will not result in the

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imposition of a negligence or similar penalty. The determination by the Accounting Firm shall be binding upon the Company and Executive (except as provided in paragraph 4(f)(v)(C) below).

(C) Excess Payment/Underpayment. If it is established pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, Executive, which are in excess of the limitations provided in this Section (referred to hereinafter as an “Excess Payment”), Executive shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination, it is possible that Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made under this Section. In the event that it is determined (i) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to Executive within ten (10) days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to Executive until the date of payment. Executive shall cooperate, to the extent the Executive’s reasonable expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced pursuant to paragraph 4(f)(v)(A) and the value of stock options is subsequently re-determined by the Accounting Firm within the context of Treasury Regulation §1.280G-1 Q/A 33 that reduces the value of the Payments attributable to such options, the Company shall promptly pay to Executive any amounts payable under this Agreement that were not previously paid solely as a result of paragraph 4(f)(v)(A) up to the Safe Harbor Cap.

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(g)Voluntary Termination Without Good Reason. In the event that the Executive terminates the Executive’s employment at the Executive’s own volition prior to the expiration of the Employment Term (except as provided in Subsection 4(e) above), such termination shall constitute a “Voluntary Termination” and in such event the Executive shall be limited to the same rights and benefits as provided in connection with a termination for Due Cause under Subsection 4(c) above.

(h)Compliance With Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and operated so that the payment of the benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Code or shall comply with the requirements of such provision; provided however that in no event shall the Company be liable to the Executive for or with respect to any taxes, penalties or interest which may be imposed upon the Executive pursuant to Section 409A. To the extent that any amount payable pursuant to Subsections 4(b), (d)(i), (d)(iii) or (f) constitutes a “deferral of compensation” subject to Section 409A (a “409A Payment”), then, if on the date of the Executive’s “separation from service,” as such term is defined in Treas. Reg. Section 1.409A-1(h)(1), from the Company (his “Separation from Service”), the Executive is a “specified employee,” as such term is defined in Treas. Reg. Section 1.409-1(i), as determined from time to time by the Company, then such 409A Payment shall not be made to the Executive earlier than the earlier of (i) six (6) months after the Executive’s Separation from Service; or (ii) the date of his death. The 409A Payments under this Agreement that would otherwise be made during such period shall be aggregated and paid in one lump sum, without interest, on the first business day following the end of the six (6) month period or following the date of the Executive’s death, whichever is earlier, and the balance of the 409A Payments, if any, shall be paid in accordance with the applicable payment schedule provided in this Section 4. To the extent any 409A Payment is conditioned on the Executive (or his legal representative) executing a release of claims, which 409A Payment would be made in a later taxable year of the Executive than the taxable year in which his Separation from Service occurs if such release were executed and delivered and became irrevocable at the last possible date allowed under this Agreement, such 409A Payment will be paid no earlier than such later taxable year. In applying Section 409A to compensation paid pursuant to this Agreement, any right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. The Executive hereby acknowledges that he has been advised to seek and has sought the advice of a tax advisor with respect to the tax consequences to the Executive of all payments pursuant to this Agreement, including any adverse tax consequences or penalty taxes under Code Section 409A and applicable State tax law. Executive hereby agrees to bear the entire risk of any such adverse federal and State tax consequences and penalty taxes in the event any payment pursuant to this Agreement is deemed to be subject to Code Section 409A, and that no representations have been made to the Executive relating to the tax treatment of any payment pursuant to this Agreement under Code Section 409A and the corresponding provisions of any applicable State income tax laws.

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(i)Cooperation. During the term of the Executive’s employment by the Company and for a period of one (1) year immediately following the termination of the Executive’s employment with the Company, the Executive agrees to be reasonably available to assist the Company and its representatives and agents with any business and/or litigation (or potential litigation) matters affecting or involving the Company. The Company will reimburse the Executive for all associated reasonable costs of travel.

(j)Notice of Termination, Resignation and Release. Any termination under Subsection 4(b) by the Company for Disability or Subsection 4(c) for Due Cause or by the Executive for Good Reason under Subsection 4(e) or by the Company or the Executive within twelve (12) months after a Change in Control under Subsection 4(f) or by the Executive by Voluntary Termination under Subsection 4(g) shall be communicated by Notice of Termination to the other party thereto given in accordance with Paragraph 10.

(i) Notice of Termination. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such Notice, specifies the termination date (which date shall not be prior to the date of such notice or more than 15 days after the giving of such Notice).

(ii) Resignation and Release. Notwithstanding anything in this Agreement to the contrary, unless the Company provides otherwise, upon termination of employment for any reason, Executive shall be deemed to have resigned as a member of the Board of Directors of the Company, if applicable, and as an officer, director, manager and employee of the Company and its Related Entities and shall execute any documents and take any actions to effect the foregoing as requested by the Company. In order to be eligible to receive any payments or benefits hereunder as a result of the termination of the Executive’s employment, in addition to fulfilling all other conditions precedent to such receipt, the Executive or the Executive’s legal representative must within 21 days (or such other period as required under applicable law) after presentation of a release in form and substance reasonably satisfactory to the Company and its legal counsel, execute said release, and within 7 days (or such other period as required under applicable law) after such execution not revoke said release, on behalf of the Executive and the Executive’s estate, heirs and representatives, releasing the Company, its Related Entities and each of the Company’s and such Related Entities’ respective officers, directors, employees, members, managers, agents, independent contractors, representatives, shareholders, successors and assigns (all of which persons and entities shall be third party beneficiaries of such release with full power to enforce the provisions thereof) from any and all claims related to the Executive’s employment with the Company; termination of the Executive’s employment; all matters alleged or which could have been alleged in a charge or complaint against the Company; any and all injuries, losses or damages to Employee, including any claims for attorney’s fees; any and all claims relating to the conduct of any employee, servant, officer, director or agent of the Company; and any and all matters, transactions or things occurring prior to the date of said release, including any and all possible claims, known or unknown, which could have been asserted against the Company or the Company’s employees, agents, servants, officers or directors. Notwithstanding the foregoing, the form of release shall except out therefrom, and acknowledge the Executive’s continuing rights with respect to, the following: (i) all vested rights that the Executive may have under all welfare, retirement and other plans and programs of the Company in which the Executive was participating at the time of his employment termination, including all equity plans and programs of the Company with respect to which equity awards were made to the Executive, (ii) all continuing rights that the Executive may have under this Agreement, and (iii) all rights that the Executive may have following

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the termination of his employment under the Company’s Certificate of Incorporation and Bylaws, any applicable Company insurance and any indemnity agreements to which the Executive is a party which provide for indemnification, insurance or other, similar coverage for the Executive with respect to his actions or inactions as an officer, employee and/or member of the Board. For clarification, unless and until the Executive executes and does not, within any applicable revocation period, revoke the release, the Company shall have no obligation to make any Termination Payment to the Executive, and, even if the Executive does not execute the release, the Executive shall be bound by the post-termination provisions of this Agreement, including without limitation Section 18.

(k)Earned and Accrued Payments. The foregoing notwithstanding, upon the termination of the Executive’s employment at any time, for any reason, the Executive shall be paid all amounts that had already been earned and accrued as of the time of termination, including but not limited to (i) pay for unused vacation accrued in accordance with the Company’s vacation policy; (ii) any bonus that had been earned but not yet paid; and (iii) reimbursement for any business expenses accrued in accordance with Subsection 3(g).

(l)Employment at Will.The Executive hereby agrees that the Company may terminate the Executive’s employment under this Paragraph 4 at will, without regard to: (i) any general or specific policies (written or oral) of the Company relating to the employment or termination of employment of its employees; (ii) any statements made to the Executive, whether oral or in any document, pertaining to the Executive’s relationship with the Company; or (iii) without a determination of Due Cause by the Company.

5.Treatment of Equity Awards Upon Change In Control. In the event of a Change in Control as defined hereinabove, the restrictions and deferral limitations applicable to any Option, Stock Appreciation Right (“SAR”), Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Deferred Stock Unit, Dividend Equivalent or any Stock Grant Awards (collectively “Awards”) as such Awards are defined in the 2014 LTIP (or any applicable successor or predecessor plan of the Company), granted to the Executive shall be subject to such provisions regarding vesting and transferability in those circumstances as are set forth in the applicable award agreement or grant.

6.Successors and Assigns.

(a)Assignment by the Company. This Agreement shall be binding upon and inure to the benefit of the Company or any corporation or other entity to which the Company may transfer all or substantially all of its assets and business and to which the Company may assign this Agreement, in which case the term “Company,” as used herein, shall mean such corporation or other entity, provided that no such assignment shall relieve the Company from any obligations hereunder, whether arising prior to or after such assignment.

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(b)Assignment by the Executive. The Executive may not assign this Agreement or any part hereof without the prior written consent of the Company; provided, however, that nothing herein shall preclude the Executive from designating one or more beneficiaries to receive any amount that may be payable following occurrence of the Executive’s legal incompetency or Death and shall not preclude the legal representative of the Executive’s estate from assigning any right hereunder to the person or persons entitled thereto under the Executive’s will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to the Executive’s estate. The term “beneficiaries,” as used in this Agreement, shall mean a beneficiary or beneficiaries so designated to receive any such amount or, if no beneficiary has been so designated, the legal representative of the Executive (in the event of the Executive’s incompetency) or the Executive’s estate.

7.Governing Law. This Agreement shall be governed by the laws of the State of North Carolina.

8.Entire Agreement. This Agreement, which shall include the Exhibits hereto, contains all of the understandings and representations between the parties hereto pertaining to the matters referred to herein, and supersedes all undertakings and agreements, whether oral or in writing, previously entered into by them with respect thereto, including without limitation any previous employment, severance or separation agreements (including any severance or change in control benefits contained therein); provided that the obligations set forth in Section 18 of this Agreement are in addition to any similar obligations Executive has to the Company or its affiliates. This Agreement may only be modified by an instrument in writing signed by both parties hereto.

9.Waiver of Breach. The waiver by any party of a breach of any condition or provision of this Agreement to be performed by such other party shall not operate or be construed to be a waiver of a similar or dissimilar provision or condition at the same or any prior or subsequent time.

10.Notices. Any notice to be given hereunder shall be in writing and delivered personally, or sent by certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below or to such other address as such party may subsequently give notice of hereunder in writing:

If to the Company:

Advance Auto Parts, Inc.

5008 Airport Road

Roanoke, VA 24012

Attn: General Counsel

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With a copy to:

Advance Auto Parts, Inc.

2635 E. Millbrook Road

Raleigh, NC 27604

Attn: Chief Executive Officer

If to the Executive:

Thomas Okray

11.Arbitration. Any controversy or claim arising out of or relating to this Agreement, or any breach thereof, excepting only the enforcement of any Loyalty Obligations arising under Paragraph 18 of this Agreement, shall be settled by arbitration in the state of North Carolina in accordance with the Employment Arbitration Rules of the American Arbitration Association then in effect in the State of North Carolina and judgment upon such award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The board of arbitrators shall consist of one arbitrator to be appointed by the Company, one by the Executive, and one by the two arbitrators so chosen. The arbitration shall be held at such place as may be agreed upon at the time by the parties to the arbitration. The cost of arbitration shall be borne as determined by the arbitrators.

12.Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or the Executive’s estate or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes and withholdings as required by law, provided it is satisfied that all requirements of law affecting its responsibilities to withhold have been satisfied.

13.Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions or portions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

14.Titles. Titles to the paragraphs and subsections in this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the title of any paragraph or subsection.

15.Legal Fees. The Company agrees to pay the reasonable fees and expenses of the Executive’s legal counsel in connection with the negotiation and execution of this Agreement up to a maximum amount of $15,000.

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16.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

17.Amendment. Except as provided in Paragraph 13 above, this Agreement may not be modified or amended except by written instrument signed by all parties hereto.

18.Counsel. This Agreement has been prepared by the Company with the assistance of Morgan, Lewis & Bockius LLP, as counsel to the Company (“Counsel”), after full disclosure of its representation of the Company and with the consent and direction of the Company and the Executive. The Executive has reviewed the contents of this Agreement and fully understands its terms. The Executive acknowledges that the Executive is fully aware of the Executive’s right to the advice of counsel independent from that of the Company, that the Company has advised him of such right and disclosed to him the risks in not seeking such independent advice, and that the Executive fully understands the potentially adverse interests of the parties with respect to this Agreement. The Executive further acknowledges that neither the Company nor its Counsel has made representations or given any advice with respect to the tax or other consequences of this Agreement or any transactions contemplated by this Agreement to him and that the Executive has been advised of the importance of seeking independent counsel with respect to such consequences. By executing this Agreement, the Executive represents that the Executive has, after being advised of the potential conflicts between him and the Company with respect to the future consequences of this Agreement, either consulted independent legal counsel or elected, notwithstanding the advisability of seeking such independent legal counsel, not to consult with such independent legal counsel.

19.Loyalty Obligations. The Executive agrees that, immediately upon execution of this Agreement, the following obligations (“Loyalty Obligations”) shall apply in consideration of the Executive’s employment by or continued employment with the Company:

(a)Confidential Information.

(i)Company Information. Except as otherwise provided in Section 18(a)(iii) of this Agreement, the Executive agrees at all times during the term of the Executive’s employment and thereafter, to hold any Confidential Information of the Company or its Related Entities in strictest confidence, and not to use (except for the benefit of the Company to fulfill the Executive’s employment obligations) or to disclose to any person, firm or corporation other than the Company or those designated by it said Confidential Information without the prior authorization of the Company, except as may otherwise be required by law or legal process. The Executive agrees that “Confidential Information” means any proprietary information prepared or maintained in any format, including technical data, trade secrets or know-how in which the Company or Related Entities have an interest, including, but not limited to, business records, contracts, research, product or service plans, products, services, customer lists and customers (including, but not limited to, vendors to the Company or Related Entities on whom the Executive called, with whom the Executive dealt or with whom the Executive became acquainted during the term of the Executive’s employment), pricing data, costs, markets, expansion plans, summaries, marketing and other business strategies, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration or marketing, financial or other business information obtained by the Executive or disclosed to the Executive by the Company or Related Entities or any other person or entity during the term of the Executive’s employment with the Company either directly or indirectly electronically, in writing, orally, by drawings, by observation of services, systems or other aspects of the business of the Company or Related Entities or otherwise. Confidential Information does not include

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information that: (A) was available to the public prior to the time of disclosure, whether through press releases, SEC filings or otherwise; or (B) otherwise becomes available to the public through no act or omission of the Executive or through the wrongful act of a third party.

(ii)Third Party Information. The Executive recognizes that the Company and Related Entities have received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the part of the Company or Related Entities to maintain the confidentiality of such information and to use it only for certain limited purposes. Except as otherwise provided in Section 18(a)(iii) of this Agreement, the Executive agrees at all times during the Executive’s employment and thereafter to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Executive’s work for the Company consistent with the obligations of the Company or Related Entities with such third party.

(iii)Permitted Disclosure. Nothing in this Agreement shall prohibit or restrict the Executive  from lawfully (A) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by the Securities and Exchange Commission (“SEC”), the Department of Justice, the Equal Employment Opportunity Commission (“EEOC”), the Congress, or any other governmental or regulatory agency, entity, or official(s) or self-regulatory organization (collectively, “Governmental Authorities”) regarding a possible violation of any law, rule, or regulation; (B) responding to any inquiry or legal process directed to you individually (and not directed to the Company and/or its subsidiaries) from any such Governmental Authorities, including an inquiry about the existence of this Agreement or its underlying facts or circumstances; (C) testifying, participating or otherwise assisting in an action or proceeding by any such Governmental Authorities relating to a possible violation of law; or (D) making any other disclosures that are protected under the whistleblower provisions of any applicable law, rule, or regulation.   Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made to Executive’s attorney in relation to a lawsuit for retaliation against Executive for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nor does this Agreement require Executive to obtain prior authorization from the Company before engaging in any conduct described in this paragraph, or to notify the Company that Executive has engaged in any such conduct.

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(b)Conflicting Employment. The Executive agrees that, during the term of the Executive’s employment with the Company, the Executive will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company or Related Entities are now involved or become involved during the term of the Executive’s employment. Nor will the Executive engage in any other activities that conflict with the business of the Company or Related Entities. Furthermore the Executive agrees to devote such time as may be necessary to fulfill the Executive’s obligations to the Company and during the term of the Executive’s employment with the Company to refrain from any other occupation, consulting or other business activity without the prior approval or consent of the Company.

(c)Returning Company Property. The Executive agrees that any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by the Executive or others pursuant to or during the Executive’s employment with the Company or otherwise shall be the property of the Company or its Related Entities and their respective successors or assigns. At the time of leaving the employ of the Company, or at any time during employment at the request of the Company, the Executive will deliver all material Company property to the Company or to the Company’s designee and will not keep in the Executive’s possession, recreate or deliver said property to anyone else. In the event of the termination of the Executive’s employment and upon request by the Company, the Executive agrees to sign and deliver the “Termination Certification” attached hereto as Exhibit A. Executive further agrees that at any time during employment or upon termination, at the request of the Company, to reasonably cooperate with the Company to ensure that Executive does not possess any Company property or information within any PDA, personal laptop, hard drive or thumb drive, personal cloud or email account, or any other personal electronic or data storage device, including providing access to any such devices to a third party forensic vendor for purposes of removing any such property and information, at the cost of the Company and through measures designed to protect Executive’s personal information.

(d)Notification of New Employer. In the event that the Executive leaves the employ of the Company, the Executive agrees to notify the Executive’s new employer and hereby grants consent to notification by the Company to the Executive’s new employer (whether the Executive is employed as an employee, consultant, independent contractor, director, partner, officer, advisor, Executive, volunteer or manager) about the Executive’s Loyalty Obligations specified under this Agreement.

(e)Non-Interference. The Executive covenants and agrees that while the Executive is employed by the Company and for a period of one (1) year immediately following the termination of the Executive’s employment with the Company for any reason, the Executive shall not, without the prior written approval of the Company, directly or indirectly, either on behalf of the Executive or any other person or entity, Interfere with the Company or any of its Related Entities.

20

(i) For purposes of this Agreement, “Interfere” shall mean, except in the performance of the Executive’s duties and responsibilities on behalf of and for the benefit of the Company, (A) to solicit, entice, persuade, induce, influence or attempt to influence, directly or indirectly, customers or prospective customers, suppliers or prospective suppliers, employees, agents or independent contractors of the Company or any of its Related Entities to restrict, reduce, sever or otherwise alter their relationship with the Company or any of its Related Entities, or (B) to hire on the Executive’s own behalf or on behalf of any other person or entity, directly or indirectly, any current or former employee or independent contractor of the Company who at any time was supervised (1) directly by the Executive or (2) by another person who was supervised directly by the Executive, or (C) whether as a direct solicitor or provider of such services, or in a direct management or direct supervisory capacity over others who solicit or provide such services, to solicit or provide services that fall within the definition of Restricted Activities as defined in Subsection 18(f)(ii) below to any customer of the Company or its Related Entities. For purposes of this section, a “prospective customer or supplier” is one with which the Company has engaged in material discussions regarding Restricted Activities at the time of the termination of the Executive’s employment or at any time within 12 months prior to the date of such termination.

(ii)After termination of the Executive’s employment, this provision shall only apply to those current or former employees, independent contractors, customers or suppliers of the Company or Related Entities who were such at any time during the 12 months following Executive’s termination and/or within 12 months prior to the date of such termination.

(f)Covenants Not to Compete

(i) Non-Competition. the Executive covenants and agrees that during the period from the date hereof until, one (1) year immediately following the termination, for any reason, of the Executive’s employment with the Company (the “Non-Compete Period”), the Executive will not, directly or indirectly:

(A) own or hold, directly or beneficially, as a shareholder (other than as a shareholder with less than 5% of the outstanding common stock of a publicly traded corporation), option holder, warrant holder, partner, member or other equity or security owner or holder of any company or business that derives more than 15% of its revenue from the Restricted Activities (as defined below) within the Restricted Area (as defined below), or any company or business controlling, controlled by or under common control with any company or business directly engaged in such Restricted Activities within the Restricted Area (any of the foregoing, a “Restricted Company”) or

21

(B) engage or participate as an employee, director, officer, manager, Executive, partner, independent contractor, consultant or technical or business advisor (or any foreign equivalents of the foregoing) with any Restricted Company in the Restricted Activities within the Restricted Area.

(ii)Restricted Activities/Restricted Area. For purposes of this Agreement, the term “Restricted Activities” means (1) the retail, commercial and/or wholesale sale, rental, and/or distribution of parts, accessories, supplies (including, but not limited to, paint), equipment and/or maintenance items for automobiles, light and heavy duty trucks ( both commercial and non-commercial), off-road equipment, buses, recreational vehicles, and/or agricultural equipment, and/or (2) the provision of any automotive-related service (including, but not limited to, shop management, inventory control, and/or vehicle repair software or marketing) to auto repair shops, garages, specialty-service providers (e.g. any business that specializes in automotive oil changes, painting, tires, mufflers, brakes, transmission, and/or body work) and/or service centers, including, but not limited to painting, collision or body service centers. The term “Restricted Area” means the United States of America and Canada, including their territories and possessions.

(iii)Association with Restricted Company. In the event that the Executive intends to associate (whether as an employee, consultant, independent contractor, officer, manager, advisor, partner, Executive, volunteer or director) with any Restricted Company during the Non-Compete Period, the Executive must provide information in writing to the Company relating to the activities proposed to be engaged in by the Executive for such Restricted Company. All such current associations are set forth on Exhibit B to this Agreement. In the event that the Company consents in writing to the Executive’s engagement in such activity, the engaging in such activity by the Executive shall be conclusively deemed not to be a violation of this Subsection 18(f). Such consent is not intended and shall not be deemed to be a waiver or nullification of the covenant of non-competition of the Executive or other similarly bound Executives.

(g)Non-Disparagement. Except as otherwise provided in Section 18(a)(iii) of this Agreement, the Executive agrees that while the Executive is employed by the Company and at all times following the termination of the Executive’s employment with the Company for any reason, the Executive will not take any action or make any statement which disparages the Company or its practices or which disrupts or impairs its normal operations, such that it causes a material adverse impact to the Company.

(h)Effect of Non-Payment of Benefits; Clawback. The Executive’s post-termination of employment obligations under this Paragraph 18 shall cease upon the Company’s failure to make any payments or benefits hereunder as a result of the termination of the Executive’s employment when due if within 15 days after written notice from the Executive to the Company of such failure, the Company does not make the required payment. In the event that the Executive materially violates Subsection 18(e) or 18(f), and does not cure such violation (if it can be cured) within five (5) days after written notice of such failure, the Executive agrees that calculation of the harm to the Company from such violation would be uncertain and not capable of being readily ascertained, and that as a reasonable estimation of the harm to the Company from such violation the Executive shall repay to the Company a portion of the Termination Payment paid to the Executive pursuant to Section 4(d)(i) equal to a fraction, the numerator of which is the number

22

of days left in the applicable period under Subsection 18(e) or 18(f), and the denominator of which is the total number of days in the applicable period under such Section. In the event that the Executive materially violates Subsection 18(a), 18(c) or 18(g), and does not cure such violation (if it can be cured) within five days after written notice of such failure, the Executive agrees that calculation of the harm to the Company from such violation would be uncertain and not capable of being readily ascertained, and that as a reasonable estimation of the harm to the Company from such violation the Executive shall repay to the Company a portion of the Termination Payment paid to the Executive pursuant to Section 4(d)(i) equal to a fraction, the numerator of which is the number of days left in the one (1) year period immediately following the termination and the denominator of which is 365. The Executive further agrees that in addition to Executive’s repayment obligations with respect to breaches of Subsection 18(a), 18(c), 18(e), 18(f), or 18(g), the Company shall have the right to seek equitable relief pursuant to Subsection 18(i) hereunder.

(i)Specific Enforcement; Remedies Cumulative. The Executive acknowledges that the Company and Related Entities, as the case may be, will be irreparably injured if the provisions of Subsections 18(a), 18(b), 18(c), 18(e), 18(f) and 18(g) hereof are not specifically enforced and the Executive agrees that the terms of such provisions (including without limitation the periods set forth in Subsections 18(e), 18(f) and 18(g)) are reasonable and appropriate. If the Executive commits, or the Company has evidence based on which it reasonably believes the Executive threatens to commit, a material breach of any of the provisions of Subsections 18(a), 18(b), 18(c), 18(e), 18(f) or 18(g) hereof, the Company and/or Related Entities, as the case may be, shall have the right and remedy, in addition to and not in limitation of any other remedy that may be available at law or in equity, to have the provisions of Subsections 18(a), 18(b), 18(c), 18(e), 18(f) or 18(g) hereof specifically enforced by any court having jurisdiction through immediate injunctive and other equitable relief, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and/or Related Entities and that money damages will not provide an adequate remedy therefore. Such injunction shall be available without the posting of any bond or other security, and the Executive hereby consents to the issuance of such injunction.

(j)Re-Set of Period for Non-Competition and Non-Interference. In the event that a legal or equitable action is commenced with respect to any of the provisions of Subsections 18(e) or 18(f) hereof and the Executive has not complied, in all material respects, with the provisions in such subsections with respect to which such action has been commenced, then the one-year period, as described in such subsections not so complied with by the Executive, shall be extended from its original expiration date, day-for-day, for each day that the Executive is found to have not complied, in all material respects, with such subsections.

23

(k)Jurisdiction and Venue.WITH RESPECT TO THE ENFORCEMENT OF ANY AND ALL LOYALTY OBLIGATIONS ARISING UNDER PARAGRAPH 18, THE SUBSECTIONS 18(k) AND 18(l) OF THIS AGREEMENT SHALL APPLY. THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE FOLLOWING COURTS IN MATTERS RELATED TO THIS PARAGRAPH 18 AND AGREE NOT TO COMMENCE ANY SUIT, ACTION OR PROCEEDING RELATING THERETO EXCEPT IN ANY OF SUCH COURTS: THE STATE COURTS OF THE STATE OF NORTH CAROLINA, THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE CITY OF RALEIGH, NORTH CAROLINA.

(l)Waiver of Jury Trial.EXECUTIVE AGREES TO WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY LOYALTY OBLIGATIONS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY EXECUTIVE, AND EXECUTIVE ACKNOWLEDGES THAT, EXCEPT FOR THE COMPANY’S AGREEMENT TO LIKEWISE WAIVE ITS RIGHTS TO A TRIAL BY JURY (WHICH THE COMPANY HEREBY MAKES), THE COMPANY HAS NOT MADE ANY REPRESENTATIONS OF FACTS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF EXECUTIVE’S OWN FREE WILL, AND THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER AND AS EVIDENCE OF THIS FACT SIGNS THIS AGREEMENT BELOW.

20.Adherence to Company Policies. The Executive agrees to adhere diligently to all established Company policies and procedures, including but not limited to the Company’s Guidelines on Significant Governance Issues, Code of Ethics and Business Conduct and, if applicable, the Code of Ethics for Financial Professionals. The Executive agrees that if the Executive does not adhere to any of the provisions of such Guidelines and Codes, the Executive will be in breach of the provisions hereof.

21.Representations. The Executive agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. The Executive represents that Executive’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to the Executive’s employment by the Company. The Executive has not entered into, and the Executive agrees the Executive will not enter into, any oral or written agreement in conflict herewith and the Executive’s employment by the Company and the Executive’s services to the Company will not violate the terms of any oral or written agreement to which the Executive is a party.

24

22.Binding Effect of Execution. The Company and the Executive agree that this Agreement shall not bind or be enforceable by or against either party until this Agreement has been duly executed by both the Executive and the Company.

[SIGNATURE PAGE FOLLOWS]

25

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first written above.

Advance Auto Parts, Inc.

By:_________________________________(SEAL)

Print Name:__________________________

Title:________________________________

Address: 5008 Airport Road

               Roanoke, VA 24012

Executive

Name: Thomas Okray

Signature: /s/ Thomas Okray

Address:

26

EXHIBIT A

TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any material devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to the Company.

I further certify that I have, to the best of my knowledge, complied in all material respects with all the terms of my Employment Agreement with the Company.

Date:________________________________

____________________________________

Executive’s Signature

____________________________________

Executive’s Name (Print)

EXHIBIT B

LIST OF ASSOCIATIONS WITH RESTRICTED COMPANIES

____ None

____ Additional Sheets Attached

Signature of the Executive: _________________________________

Print Name of the Executive: ________________________________

Date:

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas R. Greco, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Advance Auto Parts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 15, 2016

/s/ Thomas R. Greco

Thomas R. Greco

President and Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas B. Okray, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Advance Auto Parts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 15, 2016

/s/ Thomas B. Okray

Thomas B. Okray

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas R. Greco, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Advance Auto Parts, Inc. for the quarterly period ended October 8, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Advance Auto Parts, Inc. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the accompanying report on Form 10-Q. A signed original of this statement has been provided to Advance Auto Parts, Inc. and will be retained by Advance Auto Parts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	November 15, 2016	By:	/s/ Thomas R. Greco
		Name: Thomas R. Greco    Title: President and Chief Executive Officer and Director

I, Thomas B. Okray, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Advance Auto Parts, Inc. for the quarterly period ended October 8, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Advance Auto Parts, Inc. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the accompanying report on Form 10-Q. A signed original of this statement has been provided to Advance Auto Parts, Inc. and will be retained by Advance Auto Parts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	November 15, 2016	By:	/s/ Thomas B. Okray
		Name: Thomas B. Okray    Title: Executive Vice President and Chief Financial Officer

XML

Document and Entity Information Document Document - USD ($)	9 Months Ended
	Oct. 08, 2016	Nov. 10, 2016	Jul. 17, 2015
Document Information [Line Items]
Entity Registrant Name	Advance Auto Parts Inc
Entity Central Index Key	0001158449
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 08, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		73,653,625
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Public Float			$ 12,380,794,585

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 08, 2016	Jan. 02, 2016
Current assets:
Cash and cash equivalents	$ 119,494	$ 90,782
Receivables, net	686,947	597,788
Inventories, net	4,357,013	4,174,768
Other current assets	98,672	77,408
Total current assets	5,262,126	4,940,746
Property and equipment, net of accumulated depreciation of $1,628,756 and $1,489,766	1,442,173	1,434,577
Goodwill	991,392	989,484
Intangible assets, net	652,361	687,125
Other assets, net	66,593	75,769
Assets, Total	8,414,645	8,127,701
Current liabilities:
Current portion of long-term debt	372	598
Accounts payable	3,197,075	3,203,922
Accrued expenses	590,325	553,163
Other current liabilities	49,579	39,794
Total current liabilities	3,837,351	3,797,477
Long-term debt	1,042,633	1,206,297
Deferred income taxes	455,348	433,925
Other long-term liabilities	223,592	229,354
Commitments and Contingencies
Stockholders' equity:
Preferred stock, nonvoting, $0.0001 par value	0	0
Common stock, voting, $0.0001 par value	8	7
Additional paid-in capital	620,220	603,332
Treasury stock, at cost	(132,009)	(119,709)
Accumulated other comprehensive loss	(37,496)	(44,059)
Retained earnings	2,404,998	2,021,077
Total stockholders' equity	2,855,721	2,460,648
Liabilities and Stockholders' Equity, Total	$ 8,414,645	$ 8,127,701

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Oct. 08, 2016	Jan. 02, 2016
Accumulated Depreciation, Property and Equipment	$ 1,628,756	$ 1,489,766
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Net sales	$ 2,248,855	$ 2,295,203	$ 7,484,788	$ 7,703,473
Cost of sales, including purchasing and warehousing costs	1,260,650	1,262,816	4,136,437	4,189,873
Gross profit	988,205	1,032,387	3,348,351	3,513,600
Selling, general and administrative expenses	794,437	826,862	2,666,900	2,788,498
Operating income	193,768	205,525	681,451	725,102
Other, net:
Interest expense	(13,581)	(14,384)	(46,545)	(51,599)
Other (expense) income, net	(2,349)	1,276	7,018	(4,440)
Total other, net	(15,930)	(13,108)	(39,527)	(56,039)
Income before provision for income taxes	177,838	192,417	641,924	669,063
Provision for income taxes	63,994	71,948	244,667	250,484
Net income	$ 113,844	$ 120,469	$ 397,257	$ 418,579
Basic earnings per common share	$ 1.54	$ 1.64	$ 5.38	$ 5.70
Diluted earnings per common share	1.53	1.63	5.36	5.66
Dividends declared per common share	$ 0.06	$ 0.06	$ 0.18	$ 0.18
Weighted average common shares outstanding	73,638	73,215	73,524	73,168
Weighted average common shares outstanding - assuming dilution	73,860	73,763	73,847	73,695

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Net income	$ 113,844	$ 120,469	$ 397,257	$ 418,579
Changes in net unrecognized other postretirement benefit costs, net of $88, $86, $295 and $288 tax	(136)	(134)	(455)	(446)
Currency translation adjustments	(4,939)	811	7,018	(19,270)
Total other comprehensive (loss) income	(5,075)	677	6,563	(19,716)
Comprehensive income	$ 108,769	$ 121,146	$ 403,820	$ 398,863

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Changes in net unrecognized postretirement benefit costs, Tax	$ 88	$ 86	$ 295	$ 288

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Oct. 08, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock, at cost [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]
Balance at Jan. 02, 2016	$ 2,460,648	$ 0	$ 7	$ 603,332	$ (119,709)	$ (44,059)	$ 2,021,077
Balance (in shares) at Jan. 02, 2016		0	74,775		1,461
Net income	397,257						397,257
Total other comprehensive income	6,563					6,563
Issuance of shares upon the exercise of stock appreciation rights	1		$ 1	0
Issuance of shares upon the exercise of stock appreciation rights (in shares)			119
Tax withholdings related to the exercise of stock appreciation rights	(15,764)			(15,764)
Tax benefit from share-based compensation, net	17,582			17,582
Restricted stock and restricted stock units vested	0
Restricted stock and restricted stock units vested (in shares)			278
Share-based compensation	11,633			11,633
Stock issued under employee stock purchase plan	3,290			3,290
Stock issued under employee stock purchase plan (in shares)			23
Repurchase of common stock	(12,300)				$ (12,300)
Repurchase of common stock (in shares)					81
Cash dividends declared ($0.18 per common share)	(13,336)						(13,336)
Other	147			147
Balance at Oct. 08, 2016	$ 2,855,721	$ 0	$ 8	$ 620,220	$ (132,009)	$ (37,496)	$ 2,404,998
Balance (in shares) at Oct. 08, 2016		0	75,195		1,542

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Statement of Stockholders' Equity (Parenthetical) [Abstract]
Dividends declared per common share	$ 0.06	$ 0.06	$ 0.18	$ 0.18

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015
Cash flows from operating activities:
Net income	$ 397,257	$ 418,579
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	199,262	207,496
Share-based compensation	11,664	25,941
Loss on property and equipment, net	4,602	9,737
Other	(2,657)	2,045
Provision (benefit) for deferred income taxes	21,130	(13,486)
Excess tax benefit from share-based compensation	(17,615)	(10,291)
Net increase decrease in:
Receivables, net	(87,488)	(86,610)
Inventories, net	(175,678)	(202,901)
Other assets	(15,804)	(16,522)
Accounts payable	(9,222)	91,590
Accrued expenses	84,897	93,101
Other liabilities	(931)	1,409
Net cash provided by operating activities	409,417	520,088
Cash flows from investing activities:
Purchases of property and equipment	(204,213)	(161,232)
Business acquisitions, net of cash acquired	(2,672)	(18,893)
Proceeds from sales of property and equipment	1,483	178
Net cash used in investing activities	(205,402)	(179,947)
Cash flows from financing activities:
Increase in bank overdrafts	8,765	23,455
Borrowings under credit facilities	686,100	509,200
Payments on credit facilities	(846,100)	(852,600)
Dividends paid	(17,734)	(17,642)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	3,438	3,870
Tax withholdings related to the exercise of stock appreciation rights	(15,764)	(11,713)
Excess tax benefit from share-based compensation	17,615	10,291
Repurchase of common stock	(12,300)	(1,820)
Other	(323)	(294)
Net cash used in financing activities	(176,303)	(337,253)
Effect of exchange rate changes on cash	1,000	(2,213)
Net increase in cash and cash equivalents	28,712	675
Cash and cash equivalents, beginning of period	90,782	104,671
Cash and cash equivalents, end of period	119,494	105,346
Supplemental cash flow information:
Interest paid	36,286	42,477
Income tax payments	171,975	185,085
Non-cash transactions:
Accrued purchases of property and equipment	20,300	17,350
Changes in other comprehensive income from post retirement benefits	$ (455)	$ (446)

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Basis of Presentation

9 Months Ended

Oct. 08, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation:

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company and include the accounts of Advance Auto Parts, Inc. ("Advance"), its wholly owned subsidiary, Advance Stores Company, Incorporated ("Advance Stores"), and its subsidiaries (collectively, the "Company"). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company, the results of its operations and cash flows have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted based upon the Securities and Exchange Commission ("SEC") interim reporting guidance. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for Fiscal 2015 (filed with the SEC on March 1, 2016).

The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. These policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report.

The results of operations for the interim periods are not necessarily indicative of the operating results to be expected for the full fiscal year. The first quarter of each of the Company's fiscal years contains 16 weeks. The Company's remaining three quarters consist of 12 weeks.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Segment and Related Information

Effective in the second quarter of 2016, the Company realigned its five geographic areas which included the operations of the stores operating under the Advance Auto Parts, Carquest and Autopart International trade names into three geographic divisions. As a result of this realignment the Company has reduced its number of operating segments from six to four. Each of the Advance Auto Parts geographic divisions, in addition to Worldpac, are individually considered operating segments which continue to be aggregated into one reportable segment.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update ("ASU") 2015-3 "Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs" effective January 3, 2016, or the beginning of fiscal 2016. ASU 2015-3 simplifies the presentation of debt issuance costs by requiring such costs be presented as a deduction from the corresponding debt liability. Concurrently, the Company also adopted ASU 2015-15 "Interest - Imputed Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" which clarifies that entities may continue to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize the deferred costs ratably over the term of the arrangement. The adoption of these ASU's have been retrospectively applied and resulted in a reclassification of $6,864 of debt issuance costs from Other assets, net to Long-term debt in the accompanying consolidated balance sheets as of January 2, 2016.

The Company adopted ASU 2014-12 “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" effective the beginning of fiscal 2016. The amendments in this ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The adoption of this standard did not impact the Company's consolidated financial statements as the Company's policies were already consistent with the new guidance.

Recently Issued Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. The ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires businesses to present financial assets, measured at an amortized cost basis, at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis, such as trade receivables. The measurement of expected credit loss will be based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and requires a modified retrospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" aimed at simplifying certain aspects of accounting for share-based payment transactions. The areas for simplification include the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company will adopt ASU 2016-09 in the first quarter of fiscal 2017. The standard will be applied both prospectively and retrospectively depending on the provision. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This ASU is a comprehensive new lease standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets, and lease liabilities by lessees, for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. Practical expedients are available for election as a package and if applied consistently to all leases. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows but believes the adoption of this guidance will have a significant impact on the consolidated balance sheets.

In January 2016, the FASB issued ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." Although the ASU retains many of the current requirements for financial instruments, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In July 2015, the FASB issued ASU 2015-11 "Inventory (Topic 330): Simplifying the Measurement of Inventory." ASU 2015-11 requires entities to measure most inventory at the lower of cost or net realizable value, simplifying the current requirement that inventories be measured at the lower of cost or market. The ASU will not apply to inventories that are measured using the last-in, first-out method or retail inventory method. The guidance will be effective prospectively for annual periods, and interim periods within those annual periods, that begin after December 15, 2016; earlier adoption is permitted. As the majority of the Company's inventory is accounted for under the last-in, first-out method, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. This ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers." This ASU, along with subsequent ASU's issued to clarify certain provisions of ASU 2014-09, provides a comprehensive new revenue recognition model that expands disclosure requirements and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 will become effective during annual reporting periods beginning after December 15, 2017 and interim reporting periods during the year of adoption with public entities permitted to early adopt for reporting periods beginning after December 15, 2016. Entities may choose from two transition methods, with certain practical expedients, a full retrospective method or the modified retrospective method. The Company is in the process of evaluating the potential future impact, if any, of this standard on its consolidated financial position, results of operations and cash flows, and which method of adoption is most appropriate for the Company.

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Inventories, net

9 Months Ended

Oct. 08, 2016

Inventory, Net [Abstract]

Inventories, net

Inventories, net:

Inventories are stated at the lower of cost or market. The Company used the LIFO method of accounting for approximately 88% and 89% of inventories at October 8, 2016 and January 2, 2016, respectively. Under LIFO, the Company’s cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs for inventories purchased in Fiscal 2016 and prior years. As a result of changes in the LIFO reserve, the Company recorded a reduction to cost of sales of $48,675 and $46,356 for the forty weeks ended October 8, 2016 and October 10, 2015, respectively. The Company's overall costs to acquire inventory for the same or similar products have generally decreased historically as the Company has been able to leverage its continued growth and execution of merchandising strategies.

An actual valuation of inventory under the LIFO method is performed by the Company at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected fiscal year-end inventory levels and costs.

Inventory balances at October 8, 2016 and January 2, 2016 were as follows:

	October 8, 2016		January 2, 2016
Inventories at FIFO, net	$	4,143,211	$	4,009,641
Adjustments to state inventories at LIFO	213,802		165,127
Inventories at LIFO, net	$	4,357,013	$	4,174,768

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Exit Activities

9 Months Ended

Oct. 08, 2016

Restructuring and Related Activities [Abstract]

Exit Activities

Exit Activities:

Integration of Carquest stores

The Company approved plans in June 2014 to begin consolidating its Carquest stores acquired with General Parts International, Inc. (“GPI”) on January 2, 2014 as part of a multi-year integration plan. As of October 8, 2016, 316 Carquest stores acquired with GPI had been consolidated into existing Advance Auto Parts stores and 266 stores had been converted to the Advance Auto Parts format. In addition, as of October 8, 2016 the Company had completed the consolidation and conversion of the stores that were acquired with B.W.P. Distributors, Inc. ("BWP") on December 31, 2012 (which also operated under the Carquest trade name). During the twelve weeks ended October 8, 2016 a total of 22 Carquest stores were consolidated and 35 Carquest stores were converted. During the forty weeks ended October 8, 2016 a total of 139 Carquest stores were consolidated and 107 Carquest stores were converted. Plans are in place to consolidate or convert the remaining Carquest stores over the next few years. As of October 8, 2016, the Company had 640 stores still operating under the Carquest name. The Company incurred $2,192 and $2,193 of exit costs related to the consolidations and conversions during the twelve weeks ended October 8, 2016 and October 10, 2015, respectively, and $17,621 and $7,202 during the forty weeks ended October 8, 2016 and October 10, 2015, respectively.

Contract termination costs, such as those associated with leases on closed stores, are recognized at the cease-use date. Closed lease liabilities include the present value of the remaining lease obligations and management’s estimate of future costs of insurance, property tax and common area maintenance (reduced by the present value of estimated revenues from subleases and lease buyouts).

Office Consolidations

In June 2014, the Company approved plans to relocate operations from its Minneapolis, Minnesota and Campbell, California offices to other existing offices of the Company, including its offices in Newark, California, Roanoke, Virginia and Raleigh, North Carolina, and to close its Minneapolis and Campbell offices. The Company also relocated various functions between its existing offices in Roanoke and Raleigh. The relocations and office closings were substantially complete by the end of 2015. The Company incurred restructuring costs of approximately $22,100 under these plans through the end of 2015. Substantially all of these costs were cash expenditures. During the twelve and forty weeks ended October 10, 2015, the Company recognized $431 and $3,459, respectively, of severance/outplacement benefits under these restructuring plans and other severance related to the acquisition of GPI. During the twelve and forty weeks ended October 10, 2015, the Company recognized $928 and $3,699 of relocation costs, respectively.

Other Exit Activities

As of October 10, 2015 the Company had completed its plans approved in August 2014 to consolidate and covert its 40 Autopart International ("AI") stores located in Florida into Advance Auto Parts stores. The Company incurred $2,700 of exit costs associated with this plan during the forty weeks ended October 10, 2015, consisting primarily of closed facility lease obligations.

Total Restructuring Liabilities

A summary of the Company’s restructuring liabilities, which are recorded in accrued expenses (current portion) and other long-term liabilities (long-term portion) in the accompanying condensed consolidated balance sheet, are presented in the following table:

	Closed Facility Lease Obligations			Severance			Relocation and Other Exit Costs			Total
Balance, July 16, 2016	$	47,582		$	1,339		$	159		$	49,080
Reserves established	2,234			298			48			2,580
Change in estimates	(95		)	—			—			(95		)
Cash payments	(4,444		)	(382		)	(53		)	(4,879		)
Balance, October 8, 2016	$	45,277		$	1,255		$	154		$	46,686
Balance, January 2, 2016	42,490			6,255			351			49,096
Reserves established	20,280			908			238			21,426
Change in estimates	(2,066		)	(397		)	—			(2,463		)
Cash payments	(15,427		)	(5,511		)	(435		)	(21,373		)
Balance, October 8, 2016	45,277			1,255			154			46,686

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Goodwill and Intangible Assets

9 Months Ended

Oct. 08, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets:

Goodwill

The following table reflects the carrying amount of goodwill and the changes in goodwill carrying amounts.

	October 8, 2016		January 2, 2016
	(40 weeks ended)		(52 weeks ended)
Goodwill, beginning of period	$	989,484	$	995,426
Acquisitions	—		1,995
Changes in foreign currency exchange rates	1,908		(7,937		)
Goodwill, end of period	$	991,392	$	989,484

During 2015, the Company added $1,995 of goodwill associated with the acquisition of 23 stores.

Intangible Assets Other Than Goodwill

Amortization expense was $11,313 and $12,382 for the twelve weeks ended October 8, 2016 and October 10, 2015, respectively, and $37,089 and $40,595 for the forty weeks ended October 8, 2016 and October 10, 2015, respectively. The gross carrying amounts and accumulated amortization of acquired intangible assets as of October 8, 2016 and January 2, 2016 are comprised of the following:

	October 8, 2016							January 2, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets:
Customer relationships	$	349,764	$	(82,747	)	$	267,017	$	358,655	$	(70,367	)	$	288,288
Acquired technology	—		—			—		8,850		(8,850		)	—
Favorable leases	56,092		(30,388		)	25,704		56,040		(23,984		)	32,056
Non-compete and other	54,285		(30,383		)	23,902		57,430		(25,368		)	32,062
	460,141		(143,518		)	316,623		480,975		(128,569		)	352,406
Unamortized intangible assets:
Brands, trademark and tradenames	335,738		—			335,738		334,719		—			334,719
Total intangible assets	$	795,879	$	(143,518	)	$	652,361	$	815,694	$	(128,569	)	$	687,125

During the forty weeks ended October 8, 2016, the Company retired $21,950 of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

Future Amortization Expense

The table below shows expected amortization expense for the next five years for acquired intangible assets recorded as of October 8, 2016:

Fiscal Year	Amount
Remainder of 2016	$	11,778
2017	46,360
2018	43,477
2019	32,386
2020	32,242
Thereafter	150,380

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Receivables, net

9 Months Ended

Oct. 08, 2016

Receivables [Abstract]

Receivables, net

Receivables, net:

Receivables consist of the following:

	October 8, 2016			January 2, 2016
Trade	$	463,260		$	379,832
Vendor	233,012			229,496
Other	20,984			14,218
Total receivables	717,256			623,546
Less: Allowance for doubtful accounts	(30,309		)	(25,758		)
Receivables, net	$	686,947		$	597,788

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Long-term Debt

9 Months Ended

Oct. 08, 2016

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt:

Long-term debt consists of the following:

	October 8, 2016			January 2, 2016
Revolving facility at variable interest rates (3.60% and 2.05% at October 8, 2016 and January 2, 2016, respectively) due December 5, 2018	$	—		$	80,000
Term loan at variable interest rates (1.69% at January 2, 2016)	—			80,000
5.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $2,129 and $2,577 at October 8, 2016 and January 2, 2016, respectively) due May 1, 2020	297,871			297,423
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $1,448 and $1,660 at October 8, 2016 and January 2, 2016, respectively) due January 15, 2022	298,552			298,340
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $3,790 and $4,179 at October 8, 2016 and January 2, 2016) due December 1, 2023	446,210			445,821
Other	372			5,311
	1,043,005			1,206,895
Less: Current portion of long-term debt	(372		)	(598		)
Long-term debt, excluding current portion	$	1,042,633		$	1,206,297

Adoption of new accounting pronouncement

The Company adopted ASU 2015-3 and ASU 2015-15 effective the beginning of fiscal 2016. ASU 2015-3 simplifies the presentation of debt issuance costs by requiring such costs be presented as a deduction from the corresponding debt liability. ASU 2015-15 clarifies that entities may continue to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize the deferred costs ratably over the term of the arrangement. The adoption of these ASU's has been retrospectively applied and resulted in a reclassification of $6,864 of debt issuance costs from Other assets to Long-term debt as of January 2, 2016.

Bank Debt

The Company has a credit agreement (the “2013 Credit Agreement”) which provides a $1,000,000 unsecured revolving credit facility with Advance Stores, as Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. The revolving credit facility also provides for the issuance of letters of credit with a sub-limit of $300,000 and swingline loans in an amount not to exceed $50,000. The Company may request, subject to agreement by one or more lenders, that the total revolving commitment be increased by an amount not to exceed $250,000 by those respective lenders (up to a total commitment of $1,250,000) during the term of the 2013 Credit Agreement. Voluntary prepayments and voluntary reductions of the revolving balance are permitted in whole or in part, at the Company’s option, in minimum principal amounts as specified in the 2013 Credit Agreement. Under the terms of the 2013 Credit Agreement the revolving credit facility terminates in December 2018. The 2013 Credit Agreement previously included a term loan, which was repaid in full as of October 8, 2016.

As of October 8, 2016, under the 2013 Credit Agreement, the Company had no outstanding borrowings under the revolver. As of October 8, 2016, the Company had letters of credit outstanding of $100,719, which reduced the availability under the revolver to $899,281. The letters of credit generally have a term of one year or less and primarily serve as collateral for the Company’s self-insurance policies.

The interest rate on borrowings under the revolving credit facility is based, at the Company’s option, on adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. The current margin is 1.10% and 0.10% per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. A facility fee is charged on the total amount of the revolving credit facility, payable in arrears. The current facility fee rate is 0.15% per annum. Under the terms of the 2013 Credit Agreement, the interest rate and facility fee are subject to change based on the Company’s credit rating.

The 2013 Credit Agreement contains customary covenants restricting the ability of: (a) subsidiaries of Advance Stores to, among other things, create, incur or assume additional debt; (b) Advance Stores and its subsidiaries to, among other things, (i) incur liens, (ii) make loans and investments, (iii) guarantee obligations, and (iv) change the nature of its business conducted by itself and its subsidiaries; (c) Advance, Advance Stores and their subsidiaries to, among other things (i) engage in certain mergers, acquisitions, asset sales and liquidations, (ii) enter into certain hedging arrangements, (iii) enter into restrictive agreements limiting its ability to incur liens on any of its property or assets, pay distributions, repay loans, or guarantee indebtedness of its subsidiaries, and (iv) engage in sale-leaseback transactions; and (d) Advance, among other things, to change its holding company status. Advance and Advance Stores are required to comply with financial covenants with respect to a maximum leverage ratio and a minimum consolidated coverage ratio. The 2013 Credit Agreement also provides for customary events of default, including non-payment defaults, covenant defaults and cross-defaults to Advance Stores’ other material indebtedness. The Company was in compliance with its covenants with respect to the 2013 Credit Agreement as of October 8, 2016.

Senior Unsecured Notes

The Company's 4.50% senior unsecured notes were issued in December 2013 at 99.69% of the principal amount of $450,000 and are due December 1, 2023 (the “2023 Notes”). The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year. The Company's 4.50% senior unsecured notes were issued in January 2012 at 99.968% of the principal amount of $300,000 and are due January 15, 2022 (the “2022 Notes”). The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year. The Company’s 5.75% senior unsecured notes were issued in April 2010 at 99.587% of the principal amount of $300,000 and are due May 1, 2020 (the “2020 Notes” or collectively with the 2023 Notes and the 2022 Notes, “the Notes”). The 2020 Notes bear interest at a rate of 5.75% per year payable semi-annually in arrears on May 1 and November 1 of each year. Advance served as the issuer of the Notes with certain of Advance's domestic subsidiaries currently serving as subsidiary guarantors. The terms of the Notes are governed by an indenture (as amended, supplemented, waived or otherwise modified, the “Indenture”) among the Company, the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee.

The Company may redeem some or all of the Notes at any time or from time to time, at the redemption price described in the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in the Indenture for the Notes), the Company will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. The Notes are currently fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. The Company will be permitted to release guarantees without the consent of holders of the Notes under the circumstances described in the Indenture: (i) upon the release of the guarantee of the Company’s other debt that resulted in the affected subsidiary becoming a guarantor of this debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii) upon the Company’s exercise of its legal or covenant defeasance option.

The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by the Company or any of its subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25,000 without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by the Company of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting the Company and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains covenants limiting the ability of the Company and its subsidiaries to incur debt secured by liens and to enter into sale and lease-back transactions.

Debt Guarantees

The Company is a guarantor of loans made by banks to various independently-owned Carquest stores that are customers of the Company ("Independents") totaling $27,258 as of October 8, 2016. The Company has concluded that some of these guarantees meet the definition of a variable interest in a variable interest entity. However, the Company does not have the power to direct the activities that most significantly affect the economic performance of the Independents and therefore is not the primary beneficiary of these stores. Upon entering into a relationship with certain Independents, the Company guaranteed the debt of those stores to aid in the procurement of business loans. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized in these agreements is $71,741 as of October 8, 2016. The Company believes that the likelihood of performance under these guarantees is remote, and any fair value attributable to these guarantees would be very minimal.

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Fair Value Measurements

9 Months Ended

Oct. 08, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements:

The Company’s financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of these assets or liabilities. These levels are:

• Level 1 – Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date.

• Level 2 – Inputs other than quoted prices that are observable for assets and liabilities at the measurement date, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are less active, and inputs other than quoted prices that are observable for the asset or liability or corroborated by other observable market data.

• Level 3 – Unobservable inputs for assets or liabilities that are not able to be corroborated by observable market data and reflect the use of a reporting entity’s own assumptions. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The fair value hierarchy requires the use of observable market data when available. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been categorized based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a 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

During the forty weeks ended October 8, 2016, the Company had no significant assets or liabilities that were measured at fair value on a recurring basis.

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 the forty weeks ended October 8, 2016, the Company had no significant fair value measurements of non-financial assets or liabilities.

Fair Value of Financial Assets and Liabilities

The carrying amounts 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 October 8, 2016 and January 2, 2016, respectively, are as follows:

	October 8, 2016		January 2, 2016
Carrying Value	$	1,042,633	$	1,206,297
Fair Value	$	1,135,000	$	1,262,000

The adoption of ASU 2015-3 resulted in a reclassification of $6,864 of debt issuance costs from Other assets, net to Long-term debt decreasing the carrying value as of January 2, 2016.

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Stock Repurchases

9 Months Ended

Oct. 08, 2016

Stock Repurchases: [Abstract]

Stock Repurchases

Stock Repurchases:

The Company’s stock repurchase program allows it to repurchase its common stock on the open market or in privately negotiated transactions from time to time in accordance with the requirements of the SEC. The Company's $500,000 stock repurchase program in place as of October 8, 2016 was authorized by its Board of Directors on May 14, 2012.

During the twelve and forty week periods ended October 8, 2016 the Company repurchased no shares of its common stock under its stock repurchase program. The Company had $415,092 remaining under its stock repurchase program as of October 8, 2016.

The Company repurchased 1 share of its common stock at an aggregate cost of $121, or an average price of $159.16 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units during the twelve weeks ended October 8, 2016. The Company repurchased 81 shares of its common stock at an aggregate cost of $12,300, or an average price of $152.65 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units during the forty weeks ended October 8, 2016.

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Earnings per Share

9 Months Ended

Oct. 08, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings per Share:

Certain of the Company’s shares granted to Team Members in the form of restricted stock and restricted stock units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. For the twelve week periods ended October 8, 2016 and October 10, 2015, earnings of $520 and $425, respectively, were allocated to the participating securities. For the forty week periods ended October 8, 2016 and October 10, 2015, earnings of $1,712 and $1,503, respectively, were allocated to the participating securities.

Diluted earnings per share are calculated by including the effect of dilutive securities. Share-based awards to purchase approximately 22 and 1 shares of common stock that had an exercise price in excess of the average market price of the common stock during the twelve week periods ended October 8, 2016 and October 10, 2015, respectively, were not included in the calculation of diluted earnings per share because they were anti-dilutive. Share-based awards to purchase approximately 22 and 1 shares of common stock that had an exercise price in excess of the average market price of the common stock during the forty week periods ended October 8, 2016 and October 10, 2015, respectively, were not included in the calculation of diluted earnings per share because they were anti-dilutive.

The following table illustrates the computation of basic and diluted earnings per share for the twelve and forty week periods ended October 8, 2016 and October 10, 2015:

	Twelve Weeks Ended						Forty Weeks Ended
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Numerator
Net income	$	113,844		$	120,469		$	397,257		$	418,579
Participating securities' share in earnings	(520		)	(425		)	(1,712		)	(1,503		)
Net income applicable to common shares	$	113,324		$	120,044		$	395,545		$	417,076
Denominator
Basic weighted average common shares	73,638			73,215			73,524			73,168
Dilutive impact of share-based awards	222			548			323			527
Diluted weighted average common shares	73,860			73,763			73,847			73,695
Basic earnings per common share
Net income applicable to common stockholders	$	1.54		$	1.64		$	5.38		$	5.70
Diluted earnings per common share
Net income applicable to common stockholders	$	1.53		$	1.63		$	5.36		$	5.66

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Share-Based Compensation

9 Months Ended

Oct. 08, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation:

The Company grants share-based compensation awards to its Team Members and members of its Board of Directors as provided for under the Company’s 2014 Long-Term Incentive Plan, or 2014 LTIP, which was approved by the Company's shareholders on May 14, 2014. Currently, the grants are in the form of stock appreciation rights (“SARs”), restricted stock units ("RSUs") and deferred stock units (“DSUs”).

The Company granted 52 performance-based RSUs, 57 time-based RSUs, 81 performance-based SARs and 69 time-based SARs during the forty week period ended October 8, 2016. The majority of these grants represent an off-cycle award granted in accordance with the employment agreement reached with the Company’s new CEO hired in April 2016. The weighted average fair values of the performance-based and time-based RSUs granted during the forty week period ended October 8, 2016 were $160.99 and $156.63 per share, respectively. The fair value of each RSU was determined based on the market price of the Company’s stock on the date of grant. The weighted average fair values of the performance-based and time-based SARs granted during the forty week period ended October 8, 2016 were $36.58 and $43.64 per share, respectively.

The Company also granted a broad-based incentive award to store and field team members of 364 performance-based RSUs during the twelve-week period ended October 8, 2016, which vests based on the achievement of performance metrics during the Company's third and fourth fiscal quarters of 2016, subject to a continued one-year service period. The Company expects only 71 of the performance-based RSUs to be earned based on performance. The weighted-average fair value of the performance-based RSUs granted was $164.36. The fair value of each performance-based RSU was determined based on the market price of the Company’s stock on the date of grant.

The fair value of each SAR was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Black-Scholes Option Valuation Assumptions	October 8, 2016
Risk-free interest rate (1)	1.2	%
Expected dividend yield	0.2	%
Expected stock price volatility (2)	27.7	%
Expected life of awards (in months) (3)	55

⁽¹⁾  The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having a term consistent with the expected life of the award.

⁽²⁾  Expected volatility is determined using a blend of historical and implied volatility.

⁽³⁾  The expected life of the Company's awards represents the estimated period of time until exercise and is based on historical experience of previously granted awards.

See the Company's Annual Report on Form 10-K for the year ended January 2, 2016, for a more detailed discussion regarding the terms of the Company’s share-based compensation awards.

The Company recognizes share-based compensation expense on a straight-line basis net of estimated forfeitures. Forfeitures are estimated based on historical experience. Total share-based compensation expense included in the Company’s consolidated statements of operations was $2,522 for the twelve week period ended October 8, 2016 and the related income tax benefit recognized was $951. Total share-based compensation expense included in the Company’s consolidated statements of operations was $11,664 for the forty week period ended October 8, 2016 and the related income tax benefit recognized was $4,252. As of October 8, 2016, there was $33,263 of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted average period of 1.5 years.

The aggregate intrinsic value for outstanding awards at October 8, 2016 was approximately $88,885 based on the Company's closing stock price of $148.13 as of the last trading day of the first fiscal quarter ending October 8, 2016. For the forty weeks ended October 8, 2016, the aggregate intrinsic value for awards exercised was $68,810.

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Warranty Liabilities

9 Months Ended

Oct. 08, 2016

Product Warranties Disclosures [Abstract]

Warranty Liabilities

Warranty Liabilities:

The following table presents changes in the Company’s warranty reserves:

	October 8, 2016			January 2, 2016
	(40 weeks ended)			(52 weeks ended)
Warranty reserve, beginning of period	$	44,479		$	47,972
Additions to warranty reserves	32,439			44,367
Reserves utilized	(32,187		)	(47,860		)
Warranty reserve, end of period	$	44,731		$	44,479

The Company’s warranty liabilities are included in Accrued expenses in its condensed consolidated balance sheets.

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Condensed Consolidating Financial Statements

9 Months Ended

Oct. 08, 2016

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 2013 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 and 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, do not serve as guarantors of Advance's senior unsecured notes ("Non-Guarantor Subsidiaries"). The Non-Guarantor Subsidiaries do not qualify as minor as defined by SEC regulations. Accordingly, the Company presents below the condensed consolidating financial information for the Guarantor Subsidiaries and Non-Guarantor Subsidiaries. Investments in subsidiaries of the Company are required to be presented under the equity method, even though all such subsidiaries meet the requirements to be consolidated under GAAP.

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 the Company. 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 as of October 8, 2016 and January 2, 2016, condensed consolidating statements of operations and comprehensive income for the twelve and forty weeks ended October 8, 2016 and October 10, 2015, and condensed consolidating statements of cash flows for the forty weeks ended October 8, 2016 and October 10, 2015 and should be read in conjunction with the condensed consolidated financial statements herein.

Condensed Consolidating Balance Sheets

As of October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	22	$	82,857	$	36,637	$	(22	)	$	119,494
Receivables, net	—		653,750		33,197		—			686,947
Inventories, net	—		4,162,779		194,234		—			4,357,013
Other current assets	—		97,366		1,447		(141		)	98,672
Total current assets	22		4,996,752		265,515		(163		)	5,262,126
Property and equipment, net of accumulated depreciation	134		1,432,328		9,711		—			1,442,173
Goodwill	—		943,359		48,033		—			991,392
Intangible assets, net	—		605,961		46,400		—			652,361
Other assets, net	7,429		65,941		652		(7,429		)	66,593
Investment in subsidiaries	2,941,307		355,513		—		(3,296,820		)	—
Intercompany note receivable	1,048,362		—		—		(1,048,362		)	—
Due from intercompany, net	—		—		325,159		(325,159		)	—
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	372	$	—	$	—		$	372
Accounts payable	335		2,903,985		292,755		—			3,197,075
Accrued expenses	2,859		563,876		23,731		(141		)	590,325
Other current liabilities	—		47,296		2,305		(22		)	49,579
Total current liabilities	3,194		3,515,529		318,791		(163		)	3,837,351
Long-term debt	1,042,633		—		—		—			1,042,633
Deferred income taxes	—		443,796		18,981		(7,429		)	455,348
Other long-term liabilities	—		221,407		2,185		—			223,592
Intercompany note payable	—		1,048,362		—		(1,048,362		)	—
Due to intercompany, net	95,706		229,453		—		(325,159		)	—
Commitments and contingencies
Stockholders' equity	2,855,721		2,941,307		355,513		(3,296,820		)	2,855,721
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645

Condensed Consolidating Balance Sheets

As of January 2, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	8	$	63,458	$	27,324	$	(8	)	$	90,782
Receivables, net	—		568,106		29,682		—			597,788
Inventories, net	—		4,009,335		165,433		—			4,174,768
Other current assets	178		78,904		1,376		(3,050		)	77,408
Total current assets	186		4,719,803		223,815		(3,058		)	4,940,746
Property and equipment, net of accumulated depreciation	154		1,425,319		9,104		—			1,434,577
Goodwill	—		943,319		46,165		—			989,484
Intangible assets, net	—		640,583		46,542		—			687,125
Other assets, net	9,500		75,025		745		(9,501		)	75,769
Investment in subsidiaries	2,523,076		302,495		—		(2,825,571		)	—
Intercompany note receivable	1,048,161		—		—		(1,048,161		)	—
Due from intercompany, net	—		—		325,077		(325,077		)	—
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	598	$	—	$	—		$	598
Accounts payable	103		2,903,287		300,532		—			3,203,922
Accrued expenses	2,378		529,076		24,759		(3,050		)	553,163
Other current liabilities	—		36,270		3,532		(8		)	39,794
Total current liabilities	2,481		3,469,231		328,823		(3,058		)	3,797,477
Long-term debt	1,041,584		164,713		—		—			1,206,297
Deferred income taxes	—		425,094		18,332		(9,501		)	433,925
Other long-term liabilities	—		227,556		1,798		—			229,354
Intercompany note payable	—		1,048,161		—		(1,048,161		)	—
Due to intercompany, net	76,364		248,713		—		(325,077		)	—
Commitments and contingencies
Stockholders' equity	2,460,648		2,523,076		302,495		(2,825,571		)	2,460,648
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,174,483		$	112,072		$	(37,700	)	$	2,248,855
Cost of sales, including purchasing and warehousing costs	—			1,219,636			78,714			(37,700		)	1,260,650
Gross profit	—			954,847			33,358			—			988,205
Selling, general and administrative expenses	6,665			778,643			20,807			(11,678		)	794,437
Operating (loss) income	(6,665		)	176,204			12,551			11,678			193,768
Other, net:
Interest (expense) income	(11,932		)	(1,669		)	20			—			(13,581		)
Other income (expense), net	18,809			(4,791		)	(4,689		)	(11,678		)	(2,349		)
Total other, net	6,877			(6,460		)	(4,669		)	(11,678		)	(15,930		)
Income before provision for income taxes	212			169,744			7,882			—			177,838
Provision for income taxes	361			62,252			1,381			—			63,994
(Loss) income before equity in earnings of subsidiaries	(149		)	107,492			6,501			—			113,844
Equity in earnings of subsidiaries	113,993			6,501			—			(120,494		)	—
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	2,223,582		$	132,404	$	(60,783	)	$	2,295,203
Cost of sales, including purchasing and warehousing costs	—			1,226,663			96,936		(60,783		)	1,262,816
Gross profit	—			996,919			35,468		—			1,032,387
Selling, general and administrative expenses	4,269			814,492			21,017		(12,916		)	826,862
Operating (loss) income	(4,269		)	182,427			14,451		12,916			205,525
Other, net:
Interest (expense) income	(11,929		)	(2,478		)	23		—			(14,384		)
Other income (expense), net	16,243			(3,843		)	1,792		(12,916		)	1,276
Total other, net	4,314			(6,321		)	1,815		(12,916		)	(13,108		)
Income before provision for income taxes	45			176,106			16,266		—			192,417
Provision for income taxes	110			68,435			3,403		—			71,948
(Loss) income before equity in earnings of subsidiaries	(65		)	107,671			12,863		—			120,469
Equity in earnings of subsidiaries	120,534			12,863			—		(133,397		)	—
Net income	$	120,469		$	120,534		$	12,863	$	(133,397	)	$	120,469

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,240,681		$	432,170		$	(188,063	)	$	7,484,788
Cost of sales, including purchasing and warehousing costs	—			4,023,979			300,521			(188,063		)	4,136,437
Gross profit	—			3,216,702			131,649			—			3,348,351
Selling, general and administrative expenses	17,965			2,620,217			72,028			(43,310		)	2,666,900
Operating (loss) income	(17,965		)	596,485			59,621			43,310			681,451
Other, net:
Interest (expense) income	(40,148		)	(6,457		)	60			—			(46,545		)
Other income (expense), net	58,524			(6,315		)	(1,881		)	(43,310		)	7,018
Total other, net	18,376			(12,772		)	(1,821		)	(43,310		)	(39,527		)
Income before provision for income taxes	411			583,713			57,800			—			641,924
Provision for income taxes	1,008			231,664			11,995			—			244,667
(Loss) income before equity in earnings of subsidiaries	(597		)	352,049			45,805			—			397,257
Equity in earnings of subsidiaries	397,854			45,805			—			(443,659		)	—
Net income	$	397,257		$	397,854		$	45,805		$	(443,659	)	$	397,257

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,466,695		$	465,035		$	(228,257	)	$	7,703,473
Cost of sales, including purchasing and warehousing costs	—			4,081,261			336,869			(228,257		)	4,189,873
Gross profit	—			3,385,434			128,166			—			3,513,600
Selling, general and administrative expenses	15,377			2,744,555			72,981			(44,415		)	2,788,498
Operating (loss) income	(15,377		)	640,879			55,185			44,415			725,102
Other, net:
Interest (expense) income	(40,280		)	(11,481		)	162			—			(51,599		)
Other income (expense), net	55,886			(11,077		)	(4,834		)	(44,415		)	(4,440		)
Total other, net	15,606			(22,558		)	(4,672		)	(44,415		)	(56,039		)
Income before provision for income taxes	229			618,321			50,513			—			669,063
Provision for income taxes	564			241,885			8,035			—			250,484
(Loss) income before equity in earnings of subsidiaries	(335		)	376,436			42,478			—			418,579
Equity in earnings of subsidiaries	418,914			42,478			—			(461,392		)	—
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(136		)	—			—			(136		)
Currency translation adjustments	—			—			(4,939		)	—			(4,939		)
Equity in other comprehensive loss of subsidiaries	(5,075		)	(4,939		)	—			10,014			—
Other comprehensive loss	(5,075		)	(5,075		)	(4,939		)	10,014			(5,075		)
Comprehensive income	$	108,769		$	108,918		$	1,562		$	(110,480	)	$	108,769

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	120,469	$	120,534		$	12,863	$	(133,397	)	$	120,469
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(134		)	—		—			(134		)
Currency translation adjustments	—		—			811		—			811
Equity in other comprehensive income of subsidiaries	677		811			—		(1,488		)	—
Other comprehensive income	677		677			811		(1,488		)	677
Comprehensive income	$	121,146	$	121,211		$	13,674	$	(134,885	)	$	121,146

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	397,257	$	397,854		$	45,805	$	(443,659	)	$	397,257
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(455		)	—		—			(455		)
Currency translation adjustments	—		—			7,018		—			7,018
Equity in other comprehensive income of subsidiaries	6,563		7,018			—		(13,581		)	—
Other comprehensive income	6,563		6,563			7,018		(13,581		)	6,563
Comprehensive income	$	403,820	$	404,417		$	52,823	$	(457,240	)	$	403,820

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(446		)	—			—			(446		)
Currency translation adjustments	—			—			(19,270		)	—			(19,270		)
Equity in other comprehensive loss of subsidiaries	(19,716		)	(19,270		)	—			38,986			—
Other comprehensive loss	(19,716		)	(19,716		)	(19,270		)	38,986			(19,716		)
Comprehensive income	$	398,863		$	399,198		$	23,208		$	(422,406	)	$	398,863

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	14	$	398,034		$	11,369		$	—		$	409,417
Cash flows from investing activities:
Purchases of property and equipment	—		(202,382		)	(1,831		)	—			(204,213		)
Business acquisitions, net of cash acquired	—		(2,672		)	—			—			(2,672		)
Proceeds from sales of property and equipment	—		1,481			2			—			1,483
Net cash used in investing activities	—		(203,573		)	(1,829		)	—			(205,402		)
Cash flows from financing activities:
Increase (decrease) in bank overdrafts	—		10,006			(1,227		)	(14		)	8,765
Borrowings under credit facilities	—		686,100			—			—			686,100
Payments on credit facilities	—		(846,100		)	—			—			(846,100		)
Dividends paid	—		(17,734		)	—			—			(17,734		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,438			—			—			3,438
Tax withholdings related to the exercise of stock appreciation rights	—		(15,764		)	—			—			(15,764		)
Excess tax benefit from share-based compensation	—		17,615			—			—			17,615
Repurchase of common stock	—		(12,300		)	—			—			(12,300		)
Other	—		(323		)	—			—			(323		)
Net cash used in financing activities	—		(175,062		)	(1,227		)	(14		)	(176,303		)
Effect of exchange rate changes on cash	—		—			1,000			—			1,000
Net increase in cash and cash equivalents	14		19,399			9,313			(14		)	28,712
Cash and cash equivalents, beginning of period	8		63,458			27,324			(8		)	90,782
Cash and cash equivalents, end of period	$	22	$	82,857		$	36,637		$	(22	)	$	119,494

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	526,749		$	(6,661	)	$	—		$	520,088
Cash flows from investing activities:
Purchases of property and equipment	—		(159,442		)	(1,790		)	—			(161,232		)
Business acquisitions, net of cash acquired	—		(18,583		)	(310		)	—			(18,893		)
Proceeds from sales of property and equipment	—		174			4			—			178
Net cash used in investing activities	—		(177,851		)	(2,096		)	—			(179,947		)
Cash flows from financing activities:
Increase in bank overdrafts	—		18,535			4,920			—			23,455
Borrowings under credit facilities	—		509,200			—			—			509,200
Payments on credit facilities	—		(852,600		)	—			—			(852,600		)
Dividends paid	—		(17,642		)	—			—			(17,642		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,870			—			—			3,870
Tax withholdings related to the exercise of stock appreciation rights	—		(11,713		)	—			—			(11,713		)
Excess tax benefit from share-based compensation	—		10,291			—			—			10,291
Repurchase of common stock	—		(1,820		)	—			—			(1,820		)
Other	—		(294		)	—			—			(294		)
Net cash (used in) provided by financing activities	—		(342,173		)	4,920			—			(337,253		)
Effect of exchange rate changes on cash	—		—			(2,213		)	—			(2,213		)
Net increase (decrease) in cash and cash equivalents	—		6,725			(6,050		)	—			675
Cash and cash equivalents, beginning of period	9		65,345			39,326			(9		)	104,671
Cash and cash equivalents, end of period	$	9	$	72,070		$	33,276		$	(9	)	$	105,346

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Inventories, net (Tables)

9 Months Ended

Oct. 08, 2016

Inventory, Net [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventory balances at October 8, 2016 and January 2, 2016 were as follows:

	October 8, 2016		January 2, 2016
Inventories at FIFO, net	$	4,143,211	$	4,009,641
Adjustments to state inventories at LIFO	213,802		165,127
Inventories at LIFO, net	$	4,357,013	$	4,174,768

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Exit Activities (Tables)

9 Months Ended

Oct. 08, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

Total Restructuring Liabilities

A summary of the Company’s restructuring liabilities, which are recorded in accrued expenses (current portion) and other long-term liabilities (long-term portion) in the accompanying condensed consolidated balance sheet, are presented in the following table:

	Closed Facility Lease Obligations			Severance			Relocation and Other Exit Costs			Total
Balance, July 16, 2016	$	47,582		$	1,339		$	159		$	49,080
Reserves established	2,234			298			48			2,580
Change in estimates	(95		)	—			—			(95		)
Cash payments	(4,444		)	(382		)	(53		)	(4,879		)
Balance, October 8, 2016	$	45,277		$	1,255		$	154		$	46,686
Balance, January 2, 2016	42,490			6,255			351			49,096
Reserves established	20,280			908			238			21,426
Change in estimates	(2,066		)	(397		)	—			(2,463		)
Cash payments	(15,427		)	(5,511		)	(435		)	(21,373		)
Balance, October 8, 2016	45,277			1,255			154			46,686

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Oct. 08, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The following table reflects the carrying amount of goodwill and the changes in goodwill carrying amounts.

	October 8, 2016		January 2, 2016
	(40 weeks ended)		(52 weeks ended)
Goodwill, beginning of period	$	989,484	$	995,426
Acquisitions	—		1,995
Changes in foreign currency exchange rates	1,908		(7,937		)
Goodwill, end of period	$	991,392	$	989,484

Schedule of Indefinite-Lived Intangible Assets [Table Text Block]

The gross carrying amounts and accumulated amortization of acquired intangible assets as of October 8, 2016 and January 2, 2016 are comprised of the following:

	October 8, 2016							January 2, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets:
Customer relationships	$	349,764	$	(82,747	)	$	267,017	$	358,655	$	(70,367	)	$	288,288
Acquired technology	—		—			—		8,850		(8,850		)	—
Favorable leases	56,092		(30,388		)	25,704		56,040		(23,984		)	32,056
Non-compete and other	54,285		(30,383		)	23,902		57,430		(25,368		)	32,062
	460,141		(143,518		)	316,623		480,975		(128,569		)	352,406
Unamortized intangible assets:
Brands, trademark and tradenames	335,738		—			335,738		334,719		—			334,719
Total intangible assets	$	795,879	$	(143,518	)	$	652,361	$	815,694	$	(128,569	)	$	687,125

Schedule of Expected Amortization Expense [Table Text Block]

The table below shows expected amortization expense for the next five years for acquired intangible assets recorded as of October 8, 2016:

Fiscal Year	Amount
Remainder of 2016	$	11,778
2017	46,360
2018	43,477
2019	32,386
2020	32,242
Thereafter	150,380

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Receivables, net (Tables)

9 Months Ended

Oct. 08, 2016

Receivables [Abstract]

Schedule of Accounts Receivable [Table Text Block]

Receivables consist of the following:

	October 8, 2016			January 2, 2016
Trade	$	463,260		$	379,832
Vendor	233,012			229,496
Other	20,984			14,218
Total receivables	717,256			623,546
Less: Allowance for doubtful accounts	(30,309		)	(25,758		)
Receivables, net	$	686,947		$	597,788

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Long-term Debt (Tables)

9 Months Ended

Oct. 08, 2016

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Long-term debt consists of the following:

	October 8, 2016			January 2, 2016
Revolving facility at variable interest rates (3.60% and 2.05% at October 8, 2016 and January 2, 2016, respectively) due December 5, 2018	$	—		$	80,000
Term loan at variable interest rates (1.69% at January 2, 2016)	—			80,000
5.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $2,129 and $2,577 at October 8, 2016 and January 2, 2016, respectively) due May 1, 2020	297,871			297,423
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $1,448 and $1,660 at October 8, 2016 and January 2, 2016, respectively) due January 15, 2022	298,552			298,340
4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $3,790 and $4,179 at October 8, 2016 and January 2, 2016) due December 1, 2023	446,210			445,821
Other	372			5,311
	1,043,005			1,206,895
Less: Current portion of long-term debt	(372		)	(598		)
Long-term debt, excluding current portion	$	1,042,633		$	1,206,297

Debt Instrument Redemption [Table Text Block]

The Company may redeem some or all of the Notes at any time or from time to time, at the redemption price described in the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in the Indenture for the Notes), the Company will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. The Notes are currently fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. The Company will be permitted to release guarantees without the consent of holders of the Notes under the circumstances described in the Indenture: (i) upon the release of the guarantee of the Company’s other debt that resulted in the affected subsidiary becoming a guarantor of this debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii) upon the Company’s exercise of its legal or covenant defeasance option.

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Fair Value Measurements (Tables)

9 Months Ended

Oct. 08, 2016

Fair Value Disclosures [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The carrying value and fair value of the Company's long-term debt as of October 8, 2016 and January 2, 2016, respectively, are as follows:

	October 8, 2016		January 2, 2016
Carrying Value	$	1,042,633	$	1,206,297
Fair Value	$	1,135,000	$	1,262,000

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Earnings per Share (Tables)

9 Months Ended

Oct. 08, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table illustrates the computation of basic and diluted earnings per share for the twelve and forty week periods ended October 8, 2016 and October 10, 2015:

	Twelve Weeks Ended						Forty Weeks Ended
	October 8, 2016			October 10, 2015			October 8, 2016			October 10, 2015
Numerator
Net income	$	113,844		$	120,469		$	397,257		$	418,579
Participating securities' share in earnings	(520		)	(425		)	(1,712		)	(1,503		)
Net income applicable to common shares	$	113,324		$	120,044		$	395,545		$	417,076
Denominator
Basic weighted average common shares	73,638			73,215			73,524			73,168
Dilutive impact of share-based awards	222			548			323			527
Diluted weighted average common shares	73,860			73,763			73,847			73,695
Basic earnings per common share
Net income applicable to common stockholders	$	1.54		$	1.64		$	5.38		$	5.70
Diluted earnings per common share
Net income applicable to common stockholders	$	1.53		$	1.63		$	5.36		$	5.66

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Share-Based Compensation (Tables)

9 Months Ended

Oct. 08, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The fair value of each SAR was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Black-Scholes Option Valuation Assumptions	October 8, 2016
Risk-free interest rate (1)	1.2	%
Expected dividend yield	0.2	%
Expected stock price volatility (2)	27.7	%
Expected life of awards (in months) (3)	55

⁽¹⁾  The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having a term consistent with the expected life of the award.

⁽²⁾  Expected volatility is determined using a blend of historical and implied volatility.

⁽³⁾  The expected life of the Company's awards represents the estimated period of time until exercise and is based on historical experience of previously granted awards.

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Warranty Liabilities (Tables)

9 Months Ended

Oct. 08, 2016

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

The following table presents changes in the Company’s warranty reserves:

	October 8, 2016			January 2, 2016
	(40 weeks ended)			(52 weeks ended)
Warranty reserve, beginning of period	$	44,479		$	47,972
Additions to warranty reserves	32,439			44,367
Reserves utilized	(32,187		)	(47,860		)
Warranty reserve, end of period	$	44,731		$	44,479

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Oct. 08, 2016

Condensed Consolidating Financial Statements [Abstract]

Condensed Balance Sheet [Table Text Block]

Condensed Consolidating Balance Sheets

As of October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	22	$	82,857	$	36,637	$	(22	)	$	119,494
Receivables, net	—		653,750		33,197		—			686,947
Inventories, net	—		4,162,779		194,234		—			4,357,013
Other current assets	—		97,366		1,447		(141		)	98,672
Total current assets	22		4,996,752		265,515		(163		)	5,262,126
Property and equipment, net of accumulated depreciation	134		1,432,328		9,711		—			1,442,173
Goodwill	—		943,359		48,033		—			991,392
Intangible assets, net	—		605,961		46,400		—			652,361
Other assets, net	7,429		65,941		652		(7,429		)	66,593
Investment in subsidiaries	2,941,307		355,513		—		(3,296,820		)	—
Intercompany note receivable	1,048,362		—		—		(1,048,362		)	—
Due from intercompany, net	—		—		325,159		(325,159		)	—
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	372	$	—	$	—		$	372
Accounts payable	335		2,903,985		292,755		—			3,197,075
Accrued expenses	2,859		563,876		23,731		(141		)	590,325
Other current liabilities	—		47,296		2,305		(22		)	49,579
Total current liabilities	3,194		3,515,529		318,791		(163		)	3,837,351
Long-term debt	1,042,633		—		—		—			1,042,633
Deferred income taxes	—		443,796		18,981		(7,429		)	455,348
Other long-term liabilities	—		221,407		2,185		—			223,592
Intercompany note payable	—		1,048,362		—		(1,048,362		)	—
Due to intercompany, net	95,706		229,453		—		(325,159		)	—
Commitments and contingencies
Stockholders' equity	2,855,721		2,941,307		355,513		(3,296,820		)	2,855,721
	$	3,997,254	$	8,399,854	$	695,470	$	(4,677,933	)	$	8,414,645

Condensed Consolidating Balance Sheets

As of January 2, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	8	$	63,458	$	27,324	$	(8	)	$	90,782
Receivables, net	—		568,106		29,682		—			597,788
Inventories, net	—		4,009,335		165,433		—			4,174,768
Other current assets	178		78,904		1,376		(3,050		)	77,408
Total current assets	186		4,719,803		223,815		(3,058		)	4,940,746
Property and equipment, net of accumulated depreciation	154		1,425,319		9,104		—			1,434,577
Goodwill	—		943,319		46,165		—			989,484
Intangible assets, net	—		640,583		46,542		—			687,125
Other assets, net	9,500		75,025		745		(9,501		)	75,769
Investment in subsidiaries	2,523,076		302,495		—		(2,825,571		)	—
Intercompany note receivable	1,048,161		—		—		(1,048,161		)	—
Due from intercompany, net	—		—		325,077		(325,077		)	—
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—	$	598	$	—	$	—		$	598
Accounts payable	103		2,903,287		300,532		—			3,203,922
Accrued expenses	2,378		529,076		24,759		(3,050		)	553,163
Other current liabilities	—		36,270		3,532		(8		)	39,794
Total current liabilities	2,481		3,469,231		328,823		(3,058		)	3,797,477
Long-term debt	1,041,584		164,713		—		—			1,206,297
Deferred income taxes	—		425,094		18,332		(9,501		)	433,925
Other long-term liabilities	—		227,556		1,798		—			229,354
Intercompany note payable	—		1,048,161		—		(1,048,161		)	—
Due to intercompany, net	76,364		248,713		—		(325,077		)	—
Commitments and contingencies
Stockholders' equity	2,460,648		2,523,076		302,495		(2,825,571		)	2,460,648
	$	3,581,077	$	8,106,544	$	651,448	$	(4,211,368	)	$	8,127,701

Condensed Income Statement [Table Text Block]

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,174,483		$	112,072		$	(37,700	)	$	2,248,855
Cost of sales, including purchasing and warehousing costs	—			1,219,636			78,714			(37,700		)	1,260,650
Gross profit	—			954,847			33,358			—			988,205
Selling, general and administrative expenses	6,665			778,643			20,807			(11,678		)	794,437
Operating (loss) income	(6,665		)	176,204			12,551			11,678			193,768
Other, net:
Interest (expense) income	(11,932		)	(1,669		)	20			—			(13,581		)
Other income (expense), net	18,809			(4,791		)	(4,689		)	(11,678		)	(2,349		)
Total other, net	6,877			(6,460		)	(4,669		)	(11,678		)	(15,930		)
Income before provision for income taxes	212			169,744			7,882			—			177,838
Provision for income taxes	361			62,252			1,381			—			63,994
(Loss) income before equity in earnings of subsidiaries	(149		)	107,492			6,501			—			113,844
Equity in earnings of subsidiaries	113,993			6,501			—			(120,494		)	—
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844

Condensed Consolidating Statements of Operations

For the Twelve weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	2,223,582		$	132,404	$	(60,783	)	$	2,295,203
Cost of sales, including purchasing and warehousing costs	—			1,226,663			96,936		(60,783		)	1,262,816
Gross profit	—			996,919			35,468		—			1,032,387
Selling, general and administrative expenses	4,269			814,492			21,017		(12,916		)	826,862
Operating (loss) income	(4,269		)	182,427			14,451		12,916			205,525
Other, net:
Interest (expense) income	(11,929		)	(2,478		)	23		—			(14,384		)
Other income (expense), net	16,243			(3,843		)	1,792		(12,916		)	1,276
Total other, net	4,314			(6,321		)	1,815		(12,916		)	(13,108		)
Income before provision for income taxes	45			176,106			16,266		—			192,417
Provision for income taxes	110			68,435			3,403		—			71,948
(Loss) income before equity in earnings of subsidiaries	(65		)	107,671			12,863		—			120,469
Equity in earnings of subsidiaries	120,534			12,863			—		(133,397		)	—
Net income	$	120,469		$	120,534		$	12,863	$	(133,397	)	$	120,469

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,240,681		$	432,170		$	(188,063	)	$	7,484,788
Cost of sales, including purchasing and warehousing costs	—			4,023,979			300,521			(188,063		)	4,136,437
Gross profit	—			3,216,702			131,649			—			3,348,351
Selling, general and administrative expenses	17,965			2,620,217			72,028			(43,310		)	2,666,900
Operating (loss) income	(17,965		)	596,485			59,621			43,310			681,451
Other, net:
Interest (expense) income	(40,148		)	(6,457		)	60			—			(46,545		)
Other income (expense), net	58,524			(6,315		)	(1,881		)	(43,310		)	7,018
Total other, net	18,376			(12,772		)	(1,821		)	(43,310		)	(39,527		)
Income before provision for income taxes	411			583,713			57,800			—			641,924
Provision for income taxes	1,008			231,664			11,995			—			244,667
(Loss) income before equity in earnings of subsidiaries	(597		)	352,049			45,805			—			397,257
Equity in earnings of subsidiaries	397,854			45,805			—			(443,659		)	—
Net income	$	397,257		$	397,854		$	45,805		$	(443,659	)	$	397,257

Condensed Consolidating Statements of Operations

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	7,466,695		$	465,035		$	(228,257	)	$	7,703,473
Cost of sales, including purchasing and warehousing costs	—			4,081,261			336,869			(228,257		)	4,189,873
Gross profit	—			3,385,434			128,166			—			3,513,600
Selling, general and administrative expenses	15,377			2,744,555			72,981			(44,415		)	2,788,498
Operating (loss) income	(15,377		)	640,879			55,185			44,415			725,102
Other, net:
Interest (expense) income	(40,280		)	(11,481		)	162			—			(51,599		)
Other income (expense), net	55,886			(11,077		)	(4,834		)	(44,415		)	(4,440		)
Total other, net	15,606			(22,558		)	(4,672		)	(44,415		)	(56,039		)
Income before provision for income taxes	229			618,321			50,513			—			669,063
Provision for income taxes	564			241,885			8,035			—			250,484
(Loss) income before equity in earnings of subsidiaries	(335		)	376,436			42,478			—			418,579
Equity in earnings of subsidiaries	418,914			42,478			—			(461,392		)	—
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579

Condensed Comprehensive Income [Table Text Block]

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 8, 2016

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	113,844		$	113,993		$	6,501		$	(120,494	)	$	113,844
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(136		)	—			—			(136		)
Currency translation adjustments	—			—			(4,939		)	—			(4,939		)
Equity in other comprehensive loss of subsidiaries	(5,075		)	(4,939		)	—			10,014			—
Other comprehensive loss	(5,075		)	(5,075		)	(4,939		)	10,014			(5,075		)
Comprehensive income	$	108,769		$	108,918		$	1,562		$	(110,480	)	$	108,769

Condensed Consolidating Statements of Comprehensive Income

For the Twelve Weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	120,469	$	120,534		$	12,863	$	(133,397	)	$	120,469
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(134		)	—		—			(134		)
Currency translation adjustments	—		—			811		—			811
Equity in other comprehensive income of subsidiaries	677		811			—		(1,488		)	—
Other comprehensive income	677		677			811		(1,488		)	677
Comprehensive income	$	121,146	$	121,211		$	13,674	$	(134,885	)	$	121,146

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	397,257	$	397,854		$	45,805	$	(443,659	)	$	397,257
Other comprehensive income:
Changes in net unrecognized other postretirement benefit costs	—		(455		)	—		—			(455		)
Currency translation adjustments	—		—			7,018		—			7,018
Equity in other comprehensive income of subsidiaries	6,563		7,018			—		(13,581		)	—
Other comprehensive income	6,563		6,563			7,018		(13,581		)	6,563
Comprehensive income	$	403,820	$	404,417		$	52,823	$	(457,240	)	$	403,820

Condensed Consolidating Statements of Comprehensive Income

For the Forty Weeks ended October 10, 2015

	Advance Auto Parts, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	418,579		$	418,914		$	42,478		$	(461,392	)	$	418,579
Other comprehensive loss:
Changes in net unrecognized other postretirement benefit costs	—			(446		)	—			—			(446		)
Currency translation adjustments	—			—			(19,270		)	—			(19,270		)
Equity in other comprehensive loss of subsidiaries	(19,716		)	(19,270		)	—			38,986			—
Other comprehensive loss	(19,716		)	(19,716		)	(19,270		)	38,986			(19,716		)
Comprehensive income	$	398,863		$	399,198		$	23,208		$	(422,406	)	$	398,863

Condensed Cash Flow Statement [Table Text Block]

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 8, 2016

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	14	$	398,034		$	11,369		$	—		$	409,417
Cash flows from investing activities:
Purchases of property and equipment	—		(202,382		)	(1,831		)	—			(204,213		)
Business acquisitions, net of cash acquired	—		(2,672		)	—			—			(2,672		)
Proceeds from sales of property and equipment	—		1,481			2			—			1,483
Net cash used in investing activities	—		(203,573		)	(1,829		)	—			(205,402		)
Cash flows from financing activities:
Increase (decrease) in bank overdrafts	—		10,006			(1,227		)	(14		)	8,765
Borrowings under credit facilities	—		686,100			—			—			686,100
Payments on credit facilities	—		(846,100		)	—			—			(846,100		)
Dividends paid	—		(17,734		)	—			—			(17,734		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,438			—			—			3,438
Tax withholdings related to the exercise of stock appreciation rights	—		(15,764		)	—			—			(15,764		)
Excess tax benefit from share-based compensation	—		17,615			—			—			17,615
Repurchase of common stock	—		(12,300		)	—			—			(12,300		)
Other	—		(323		)	—			—			(323		)
Net cash used in financing activities	—		(175,062		)	(1,227		)	(14		)	(176,303		)
Effect of exchange rate changes on cash	—		—			1,000			—			1,000
Net increase in cash and cash equivalents	14		19,399			9,313			(14		)	28,712
Cash and cash equivalents, beginning of period	8		63,458			27,324			(8		)	90,782
Cash and cash equivalents, end of period	$	22	$	82,857		$	36,637		$	(22	)	$	119,494

Condensed Consolidating Statements of Cash Flows

For the Forty weeks ended October 10, 2015

	Advance Auto Parts, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	526,749		$	(6,661	)	$	—		$	520,088
Cash flows from investing activities:
Purchases of property and equipment	—		(159,442		)	(1,790		)	—			(161,232		)
Business acquisitions, net of cash acquired	—		(18,583		)	(310		)	—			(18,893		)
Proceeds from sales of property and equipment	—		174			4			—			178
Net cash used in investing activities	—		(177,851		)	(2,096		)	—			(179,947		)
Cash flows from financing activities:
Increase in bank overdrafts	—		18,535			4,920			—			23,455
Borrowings under credit facilities	—		509,200			—			—			509,200
Payments on credit facilities	—		(852,600		)	—			—			(852,600		)
Dividends paid	—		(17,642		)	—			—			(17,642		)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	—		3,870			—			—			3,870
Tax withholdings related to the exercise of stock appreciation rights	—		(11,713		)	—			—			(11,713		)
Excess tax benefit from share-based compensation	—		10,291			—			—			10,291
Repurchase of common stock	—		(1,820		)	—			—			(1,820		)
Other	—		(294		)	—			—			(294		)
Net cash (used in) provided by financing activities	—		(342,173		)	4,920			—			(337,253		)
Effect of exchange rate changes on cash	—		—			(2,213		)	—			(2,213		)
Net increase (decrease) in cash and cash equivalents	—		6,725			(6,050		)	—			675
Cash and cash equivalents, beginning of period	9		65,345			39,326			(9		)	104,671
Cash and cash equivalents, end of period	$	9	$	72,070		$	33,276		$	(9	)	$	105,346

XML

Basis of Presentation (Details) $ in Thousands	12 Months Ended
	Jan. 02, 2016 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prior Period Reclassification Adjustment	$ 6,864

XML

Inventories, net (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Jan. 02, 2016
Inventory [Line Items]
Percentage of LIFO Inventory	88.00%		89.00%
Inventory, LIFO Reserve, Effect on Income, Net	$ 48,675	$ 46,356
Inventories at FIFO, net	4,143,211		$ 4,009,641
Adjustments to state inventories at LIFO	213,802		165,127
Inventories at LIFO, net	$ 4,357,013		$ 4,174,768

XML

Exit Activities (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 08, 2016 USD ($)	Oct. 10, 2015 USD ($)	Oct. 08, 2016 USD ($)	Oct. 10, 2015 USD ($)	Jan. 02, 2016 USD ($)
Restructuring Reserve [Roll Forward]
Restructuring Reserve, beginning of period	$ 49,080		$ 49,096
Reserves established	2,580		21,426
Change in estimates	(95)		(2,463)
Cash payments	(4,879)		(21,373)
Restructuring Reserve, end of period	$ 46,686		$ 46,686		$ 49,096
Office Consolidation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost					22,100
Carquest consolidations completed to date [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	316		316
Carquest consolidations completed during the current year [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	139		139
Carquest conversions completed to date [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	266		266
Carquest consolidations completed during the quarter [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	22		22
Carquest conversions completed this fiscal quarter [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	35		35
AI stores approved to consolidate by 2015 [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores		40		40
Carquest conversions completed this fiscal year [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	107		107
GPI stores remaining to be consolidated [Member]
Restructuring Cost and Reserve [Line Items]
Number of Stores	640		640
Closed Facility Lease Obligations [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, beginning of period	$ 47,582		$ 42,490
Reserves established	2,234		20,280
Change in estimates	(95)		(2,066)
Cash payments	(4,444)		(15,427)
Restructuring Reserve, end of period	45,277		45,277		42,490
Closed Facility Lease Obligations [Member] | Carquest consolidations completed during the current year [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	2,192	$ 2,193	17,621	$ 7,202
Closed Facility Lease Obligations [Member] | AI stores approved to consolidate by 2015 [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost				2,700
Severance [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, beginning of period	1,339		6,255
Reserves established	298		908
Change in estimates	0		(397)
Cash payments	(382)		(5,511)
Restructuring Reserve, end of period	1,255		1,255		6,255
Severance [Member] | Office Consolidation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost		431		3,459
Relocation and Other Exit Costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, beginning of period	159		351
Reserves established	48		238
Change in estimates	0		0
Cash payments	(53)		(435)
Restructuring Reserve, end of period	$ 154		$ 154		$ 351
Relocation and Other Exit Costs [Member] | Office Consolidation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost		$ 928		$ 3,699

XML

Goodwill and Intangible Assets (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Oct. 08, 2016 USD ($)	Jan. 02, 2016 USD ($)
Goodwill [Line Items]
Goodwill, acquisitions	$ 0	$ 1,995
Goodwill [Roll Forward]
Goodwill, beginning of period	989,484	995,426
Goodwill, acquisitions	0	1,995
Goodwill, changes in foreign currency exchange rates	1,908	(7,937)
Goodwill, end of period	991,392	$ 989,484
Remainder of 2016	11,778
2017	46,360
2018	43,477
2019	32,386
2020	32,242
Thereafter	$ 150,380
Other acquisitions [Member]
Goodwill [Line Items]
Number of Stores		23
Goodwill, acquisitions		$ 1,995
Goodwill [Roll Forward]
Goodwill, acquisitions		$ 1,995

XML

Goodwill and Intangible Asset Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015	Jan. 02, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Expense	$ 11,313	$ 12,382	$ 37,089	$ 40,595
Gross Carrying Amount	460,141		460,141		$ 480,975
Accumulated Amortization	(143,518)		(143,518)		(128,569)
Net	316,623		316,623		352,406
Indefinite-Lived Trademarks	335,738		335,738		334,719
Intangible Assets, gross (excluding goodwill)	795,879		795,879		815,694
Intangible Assets, Net (Excluding Goodwill)	652,361		652,361		687,125
Retirement of fully amortized intangible assets			21,950
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	349,764		349,764		358,655
Accumulated Amortization	(82,747)		(82,747)		(70,367)
Net	267,017		267,017		288,288
Acquired Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	0		0		8,850
Accumulated Amortization	0		0		(8,850)
Net	0		0		0
Favorable Leases [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	56,092		56,092		56,040
Accumulated Amortization	(30,388)		(30,388)		(23,984)
Net	25,704		25,704		32,056
Non-Compete and Other [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	54,285		54,285		57,430
Accumulated Amortization	(30,383)		(30,383)		(25,368)
Net	23,902		23,902		32,062
Brands, Trademark and Tradenames [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Accumulated Amortization	$ 0		$ 0		$ 0

XML

Receivables, net (Details) - USD ($) $ in Thousands	Oct. 08, 2016	Jan. 02, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total receivables	$ 717,256	$ 623,546
Less: Allowance for doubtful accounts	(30,309)	(25,758)
Receivables, net	686,947	597,788
Trade Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total receivables	463,260	379,832
Accounts Receivable, Vendor [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total receivables	233,012	229,496
Accounts Receivable, Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total receivables	$ 20,984	$ 14,218

XML

Long-term Debt (Details) - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Oct. 08, 2016

Jan. 02, 2016

Dec. 03, 2013

Jan. 11, 2012

Apr. 26, 2010

Debt Instrument [Line Items]

Prior Period Reclassification Adjustment

$ 6,864

Long-term Debt, Gross

$ 1,043,005

1,206,895

Long-term Debt, Current Maturities

(372)

(598)

Long-term Debt, Excluding Current Maturities

1,042,633

1,206,297

Letters of Credit Outstanding, Amount

100,719

Line of Credit Facility, Remaining Borrowing Capacity

$ 899,281

Line of Credit Facility, Commitment Fee Percentage

0.15%

Guarantor Obligations, Maximum Exposure

$ 27,258

Guarantor Obligation, Collateral Amount

$ 71,741

Indenture provisions for events of default

The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by the Company or any of its subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25,000 without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by the Company of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting the Company and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains covenants limiting the ability of the Company and its subsidiaries to incur debt secured by liens and to enter into sale and lease-back transactions.

5.75% senior unsecured notes (2020 Notes) [Member]

Debt Instrument [Line Items]

Debt Instrument, Face Amount

$ 300,000

Debt Instrument, Interest Rate, Stated Percentage

5.75%

Debt issuance, percentage of principal

99.587%

4.50% senior unsecured notes (2022 Notes) [Member]

Debt Instrument [Line Items]

Debt Instrument, Face Amount

$ 300,000

Debt Instrument, Interest Rate, Stated Percentage

4.50%

Debt issuance, percentage of principal

99.968%

4.50% senior unsecured notes (2023 Notes) [Member]

Debt Instrument [Line Items]

Debt Instrument, Face Amount

$ 450,000

Debt Instrument, Interest Rate, Stated Percentage

4.50%

Debt issuance, percentage of principal

99.69%

Revolving Credit Facility [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

$ 0

$ 80,000

Debt Instrument, Interest Rate, Effective Percentage

3.60%

2.05%

Line of Credit Facility, Maximum Borrowing Capacity

$ 1,000,000

Line of credit facility increase increment limit

250,000

Total line of credit commitment allowed

$ 1,250,000

Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]

Debt Instrument [Line Items]

Debt Instrument, Basis Spread on Variable Rate

1.10%

Revolving Credit Facility [Member] | Base Rate [Member]

Debt Instrument [Line Items]

Debt Instrument, Basis Spread on Variable Rate

0.10%

Revolving Credit Facility [Member] | letters of credit sublimit [Member]

Debt Instrument [Line Items]

Line of Credit Facility, Maximum Borrowing Capacity

$ 300,000

Revolving Credit Facility [Member] | swingline sublimit [Member]

Debt Instrument [Line Items]

Line of Credit Facility, Maximum Borrowing Capacity

50,000

Term Loan [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

0

$ 80,000

Debt Instrument, Interest Rate, Effective Percentage

1.69%

Senior Notes [Member] | 5.75% senior unsecured notes (2020 Notes) [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

297,871

$ 297,423

Debt Instrument Unamortized Discount Premium And Debt Issuance Costs, Net

2,129

2,577

Senior Notes [Member] | 4.50% senior unsecured notes (2022 Notes) [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

298,552

298,340

Debt Instrument Unamortized Discount Premium And Debt Issuance Costs, Net

1,448

1,660

Senior Notes [Member] | 4.50% senior unsecured notes (2023 Notes) [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

446,210

445,821

Debt Instrument Unamortized Discount Premium And Debt Issuance Costs, Net

3,790

4,179

Notes Payable, Other Payables [Member]

Debt Instrument [Line Items]

Long-term Debt, Gross

$ 372

$ 5,311

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Oct. 08, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	$ 1,206,297	$ 1,042,633
Prior Period Reclassification Adjustment	6,864
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value	$ 1,262,000	$ 1,135,000

XML

Stock Repurchases (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Oct. 08, 2016 USD ($) $ / shares shares	Oct. 08, 2016 USD ($) $ / shares shares
Class of Stock [Line Items]
Treasury Stock, Value, Acquired, Cost Method		$ 12,300
Stock Repurchase Plan (current year shares) [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount	$ 500,000	$ 500,000
Treasury Stock, Shares, Acquired | shares	0	0
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 415,092	$ 415,092
Net Settlement of Shares Issued as a Result of the Vesting of Restricted Stock [Member]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired | shares	1	81
Treasury Stock, Value, Acquired, Cost Method	$ 121	$ 12,300
Treasury Stock Acquired, Average Cost Per Share | $ / shares	$ 159.16	$ 152.65

XML

Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income	$ 113,844	$ 120,469	$ 397,257	$ 418,579
Participating securities' share in earnings	(520)	(425)	(1,712)	(1,503)
Net income applicable to common shares	$ 113,324	$ 120,044	$ 395,545	$ 417,076
Basic weighted average common shares	73,638	73,215	73,524	73,168
Dilutive impact of share-based awards	222	548	323	527
Diluted weighted average common shares	73,860	73,763	73,847	73,695
Basic earnings per common share - Net income applicable to common stockholders	$ 1.54	$ 1.64	$ 5.38	$ 5.70
Diluted earnings per common share - Net income applicable to common stockholders	$ 1.53	$ 1.63	$ 5.36	$ 5.66
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	22	1	22	1

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Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Oct. 08, 2016	Oct. 08, 2016	Oct. 10, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk Free Interest Rate		1.20%
Expected Dividend Yield		0.20%
Expected Stock Price Volatility		27.70%
Expected life of awards (in months)		55 months
Share-based Compensation	$ 2,522	$ 11,664	$ 25,941
Deferred income tax benefit on share based compensation expense	951	4,252
Share-based Compensation, Cost Not yet Recognized	33,263	$ 33,263
Share-based Compensation, Cost Not yet Recognized, Period for Recognition		1 year 6 months 1 day
Share-based Compensation Aggregate Intrinsic Value, Outstanding	$ 88,885	$ 88,885
Share Price	$ 148.13	$ 148.13
Equity Instruments Other than Options, Exercises in Period, Total Intrinisic Value		$ 68,810
Performance Shares [Member] | Performance shares excluding broad-based incentive award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in Period		52
Weighted Average Grant Date Fair Value		$ 160.99
Performance Shares [Member] | Broad-based incentive award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in Period		364
Broad based incentive award - expected to vest		71
Weighted Average Grant Date Fair Value		$ 164.36
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in Period		57
Weighted Average Grant Date Fair Value		$ 156.63
Performance-based SAR Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in Period		81
Weighted Average Grant Date Fair Value		$ 36.58
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in Period		69
Weighted Average Grant Date Fair Value		$ 43.64

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Warranty Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Oct. 08, 2016	Jan. 02, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty reserve, beginning of period	$ 44,479	$ 47,972
Additions to warranty reserves	32,439	44,367
Reserves utilized	(32,187)	(47,860)
Warranty reserve, end of period	$ 44,731	$ 44,479

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Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Oct. 08, 2016	Jan. 02, 2016	Oct. 10, 2015	Jan. 03, 2015
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 119,494	$ 90,782	$ 105,346	$ 104,671
Receivables, net	686,947	597,788
Inventories, net	4,357,013	4,174,768
Other current assets	98,672	77,408
Total current assets	5,262,126	4,940,746
Property and equipment, net of accumulated depreciation	1,442,173	1,434,577
Goodwill	991,392	989,484		995,426
Intangible assets, net	652,361	687,125
Other assets, net	66,593	75,769
Investment in subsidiaries	0	0
Intercompany note receivable	0	0
Due from intercompany, net	0	0
Assets, Total	8,414,645	8,127,701
Current portion of long-term debt	372	598
Accounts payable	3,197,075	3,203,922
Accrued expenses	590,325	553,163
Other current liabilities	49,579	39,794
Total current liabilities	3,837,351	3,797,477
Long-term debt	1,042,633	1,206,297
Deferred income taxes	455,348	433,925
Other long-term liabilities	223,592	229,354
Intercompany note payable	0	0
Due to intercompany, net	0	0
Commitments and contingencies
Total stockholders' equity	2,855,721	2,460,648
Liabilities and Stockholders' Equity, Total	8,414,645	8,127,701
Parent Company [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	22	8	9	9
Receivables, net	0	0
Inventories, net	0	0
Other current assets	0	178
Total current assets	22	186
Property and equipment, net of accumulated depreciation	134	154
Goodwill	0	0
Intangible assets, net	0	0
Other assets, net	7,429	9,500
Investment in subsidiaries	2,941,307	2,523,076
Intercompany note receivable	1,048,362	1,048,161
Due from intercompany, net	0	0
Assets, Total	3,997,254	3,581,077
Current portion of long-term debt	0	0
Accounts payable	335	103
Accrued expenses	2,859	2,378
Other current liabilities	0	0
Total current liabilities	3,194	2,481
Long-term debt	1,042,633	1,041,584
Deferred income taxes	0	0
Other long-term liabilities	0	0
Intercompany note payable	0	0
Due to intercompany, net	95,706	76,364
Commitments and contingencies
Total stockholders' equity	2,855,721	2,460,648
Liabilities and Stockholders' Equity, Total	3,997,254	3,581,077
Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	82,857	63,458	72,070	65,345
Receivables, net	653,750	568,106
Inventories, net	4,162,779	4,009,335
Other current assets	97,366	78,904
Total current assets	4,996,752	4,719,803
Property and equipment, net of accumulated depreciation	1,432,328	1,425,319
Goodwill	943,359	943,319
Intangible assets, net	605,961	640,583
Other assets, net	65,941	75,025
Investment in subsidiaries	355,513	302,495
Intercompany note receivable	0	0
Due from intercompany, net	0	0
Assets, Total	8,399,854	8,106,544
Current portion of long-term debt	372	598
Accounts payable	2,903,985	2,903,287
Accrued expenses	563,876	529,076
Other current liabilities	47,296	36,270
Total current liabilities	3,515,529	3,469,231
Long-term debt	0	164,713
Deferred income taxes	443,796	425,094
Other long-term liabilities	221,407	227,556
Intercompany note payable	1,048,362	1,048,161
Due to intercompany, net	229,453	248,713
Commitments and contingencies
Total stockholders' equity	2,941,307	2,523,076
Liabilities and Stockholders' Equity, Total	8,399,854	8,106,544
Non-Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	36,637	27,324	33,276	39,326
Receivables, net	33,197	29,682
Inventories, net	194,234	165,433
Other current assets	1,447	1,376
Total current assets	265,515	223,815
Property and equipment, net of accumulated depreciation	9,711	9,104
Goodwill	48,033	46,165
Intangible assets, net	46,400	46,542
Other assets, net	652	745
Investment in subsidiaries	0	0
Intercompany note receivable	0	0
Due from intercompany, net	325,159	325,077
Assets, Total	695,470	651,448
Current portion of long-term debt	0	0
Accounts payable	292,755	300,532
Accrued expenses	23,731	24,759
Other current liabilities	2,305	3,532
Total current liabilities	318,791	328,823
Long-term debt	0	0
Deferred income taxes	18,981	18,332
Other long-term liabilities	2,185	1,798
Intercompany note payable	0	0
Due to intercompany, net	0	0
Commitments and contingencies
Total stockholders' equity	355,513	302,495
Liabilities and Stockholders' Equity, Total	695,470	651,448
Consolidation, Eliminations [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	(22)	(8)	$ (9)	$ (9)
Receivables, net	0	0
Inventories, net	0	0
Other current assets	(141)	(3,050)
Total current assets	(163)	(3,058)
Property and equipment, net of accumulated depreciation	0	0
Goodwill	0	0
Intangible assets, net	0	0
Other assets, net	(7,429)	(9,501)
Investment in subsidiaries	(3,296,820)	(2,825,571)
Intercompany note receivable	(1,048,362)	(1,048,161)
Due from intercompany, net	(325,159)	(325,077)
Assets, Total	(4,677,933)	(4,211,368)
Current portion of long-term debt	0	0
Accounts payable	0	0
Accrued expenses	(141)	(3,050)
Other current liabilities	(22)	(8)
Total current liabilities	(163)	(3,058)
Long-term debt	0	0
Deferred income taxes	(7,429)	(9,501)
Other long-term liabilities	0	0
Intercompany note payable	(1,048,362)	(1,048,161)
Due to intercompany, net	(325,159)	(325,077)
Commitments and contingencies
Total stockholders' equity	(3,296,820)	(2,825,571)
Liabilities and Stockholders' Equity, Total	$ (4,677,933)	$ (4,211,368)

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Condensed Consolidated Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Condensed Income Statements, Captions [Line Items]
Net sales	$ 2,248,855	$ 2,295,203	$ 7,484,788	$ 7,703,473
Cost of sales, including purchasing and warehousing costs	1,260,650	1,262,816	4,136,437	4,189,873
Gross profit	988,205	1,032,387	3,348,351	3,513,600
Selling, general and administrative expenses	794,437	826,862	2,666,900	2,788,498
Operating income (loss)	193,768	205,525	681,451	725,102
Interest (expense) income	(13,581)	(14,384)	(46,545)	(51,599)
Other income (expense), net	(2,349)	1,276	7,018	(4,440)
Total other, net	(15,930)	(13,108)	(39,527)	(56,039)
Income before provision for income taxes	177,838	192,417	641,924	669,063
Provision for income taxes	63,994	71,948	244,667	250,484
Income (loss) before equity in earnings of subsidiaries	113,844	120,469	397,257	418,579
Equity in earnings of subsidiaries	0	0	0	0
Net income	113,844	120,469	397,257	418,579
Parent Company [Member]
Condensed Income Statements, Captions [Line Items]
Net sales	0	0	0	0
Cost of sales, including purchasing and warehousing costs	0	0	0	0
Gross profit	0	0	0	0
Selling, general and administrative expenses	6,665	4,269	17,965	15,377
Operating income (loss)	(6,665)	(4,269)	(17,965)	(15,377)
Interest (expense) income	(11,932)	(11,929)	(40,148)	(40,280)
Other income (expense), net	18,809	16,243	58,524	55,886
Total other, net	6,877	4,314	18,376	15,606
Income before provision for income taxes	212	45	411	229
Provision for income taxes	361	110	1,008	564
Income (loss) before equity in earnings of subsidiaries	(149)	(65)	(597)	(335)
Equity in earnings of subsidiaries	113,993	120,534	397,854	418,914
Net income	113,844	120,469	397,257	418,579
Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Net sales	2,174,483	2,223,582	7,240,681	7,466,695
Cost of sales, including purchasing and warehousing costs	1,219,636	1,226,663	4,023,979	4,081,261
Gross profit	954,847	996,919	3,216,702	3,385,434
Selling, general and administrative expenses	778,643	814,492	2,620,217	2,744,555
Operating income (loss)	176,204	182,427	596,485	640,879
Interest (expense) income	(1,669)	(2,478)	(6,457)	(11,481)
Other income (expense), net	(4,791)	(3,843)	(6,315)	(11,077)
Total other, net	(6,460)	(6,321)	(12,772)	(22,558)
Income before provision for income taxes	169,744	176,106	583,713	618,321
Provision for income taxes	62,252	68,435	231,664	241,885
Income (loss) before equity in earnings of subsidiaries	107,492	107,671	352,049	376,436
Equity in earnings of subsidiaries	6,501	12,863	45,805	42,478
Net income	113,993	120,534	397,854	418,914
Non-Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Net sales	112,072	132,404	432,170	465,035
Cost of sales, including purchasing and warehousing costs	78,714	96,936	300,521	336,869
Gross profit	33,358	35,468	131,649	128,166
Selling, general and administrative expenses	20,807	21,017	72,028	72,981
Operating income (loss)	12,551	14,451	59,621	55,185
Interest (expense) income	20	23	60	162
Other income (expense), net	(4,689)	1,792	(1,881)	(4,834)
Total other, net	(4,669)	1,815	(1,821)	(4,672)
Income before provision for income taxes	7,882	16,266	57,800	50,513
Provision for income taxes	1,381	3,403	11,995	8,035
Income (loss) before equity in earnings of subsidiaries	6,501	12,863	45,805	42,478
Equity in earnings of subsidiaries	0	0	0	0
Net income	6,501	12,863	45,805	42,478
Consolidation, Eliminations [Member]
Condensed Income Statements, Captions [Line Items]
Net sales	(37,700)	(60,783)	(188,063)	(228,257)
Cost of sales, including purchasing and warehousing costs	(37,700)	(60,783)	(188,063)	(228,257)
Gross profit	0	0	0	0
Selling, general and administrative expenses	(11,678)	(12,916)	(43,310)	(44,415)
Operating income (loss)	11,678	12,916	43,310	44,415
Interest (expense) income	0	0	0	0
Other income (expense), net	(11,678)	(12,916)	(43,310)	(44,415)
Total other, net	(11,678)	(12,916)	(43,310)	(44,415)
Income before provision for income taxes	0	0	0	0
Provision for income taxes	0	0	0	0
Income (loss) before equity in earnings of subsidiaries	0	0	0	0
Equity in earnings of subsidiaries	(120,494)	(133,397)	(443,659)	(461,392)
Net income	$ (120,494)	$ (133,397)	$ (443,659)	$ (461,392)

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Condensed Consolidated Comprehensive Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015	Oct. 08, 2016	Oct. 10, 2015
Condensed Consolidating Comprehensive Income Statement [Line Items]
Net income	$ 113,844	$ 120,469	$ 397,257	$ 418,579
Changes in net unrecognized other postretirement benefit costs, net of tax	(136)	(134)	(455)	(446)
Currency translation adjustments	(4,939)	811	7,018	(19,270)
Equity in other comprehensive (loss) income of subsidiaries	0	0	0	0
Total other comprehensive income (loss)	(5,075)	677	6,563	(19,716)
Comprehensive income	108,769	121,146	403,820	398,863
Parent Company [Member]
Condensed Consolidating Comprehensive Income Statement [Line Items]
Net income	113,844	120,469	397,257	418,579
Changes in net unrecognized other postretirement benefit costs, net of tax	0	0	0	0
Currency translation adjustments	0	0	0	0
Equity in other comprehensive (loss) income of subsidiaries	(5,075)	677	6,563	(19,716)
Total other comprehensive income (loss)	(5,075)	677	6,563	(19,716)
Comprehensive income	108,769	121,146	403,820	398,863
Guarantor Subsidiaries [Member]
Condensed Consolidating Comprehensive Income Statement [Line Items]
Net income	113,993	120,534	397,854	418,914
Changes in net unrecognized other postretirement benefit costs, net of tax	(136)	(134)	(455)	(446)
Currency translation adjustments	0	0	0	0
Equity in other comprehensive (loss) income of subsidiaries	(4,939)	811	7,018	(19,270)
Total other comprehensive income (loss)	(5,075)	677	6,563	(19,716)
Comprehensive income	108,918	121,211	404,417	399,198
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Comprehensive Income Statement [Line Items]
Net income	6,501	12,863	45,805	42,478
Changes in net unrecognized other postretirement benefit costs, net of tax	0	0	0	0
Currency translation adjustments	(4,939)	811	7,018	(19,270)
Equity in other comprehensive (loss) income of subsidiaries	0	0	0	0
Total other comprehensive income (loss)	(4,939)	811	7,018	(19,270)
Comprehensive income	1,562	13,674	52,823	23,208
Consolidation, Eliminations [Member]
Condensed Consolidating Comprehensive Income Statement [Line Items]
Net income	(120,494)	(133,397)	(443,659)	(461,392)
Changes in net unrecognized other postretirement benefit costs, net of tax	0	0	0	0
Currency translation adjustments	0	0	0	0
Equity in other comprehensive (loss) income of subsidiaries	10,014	(1,488)	(13,581)	38,986
Total other comprehensive income (loss)	10,014	(1,488)	(13,581)	38,986
Comprehensive income	$ (110,480)	$ (134,885)	$ (457,240)	$ (422,406)

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Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 08, 2016	Oct. 10, 2015
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 409,417	$ 520,088
Purchases of property and equipment	(204,213)	(161,232)
Business acquisitions, net of cash acquired	(2,672)	(18,893)
Proceeds from sales of property and equipment	1,483	178
Net cash used in investing activities	(205,402)	(179,947)
Increase in bank overdrafts	8,765	23,455
Borrowings under credit facilities	686,100	509,200
Payments on credit facilities	(846,100)	(852,600)
Dividends paid	(17,734)	(17,642)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	3,438	3,870
Tax withholdings related to the exercise of stock appreciation rights	(15,764)	(11,713)
Excess tax benefit from share-based compensation	17,615	10,291
Repurchase of common stock	(12,300)	(1,820)
Other	(323)	(294)
Net cash (used in) provided by financing activities	(176,303)	(337,253)
Effect of exchange rate changes on cash	1,000	(2,213)
Net increase (decrease) in cash and cash equivalents	28,712	675
Cash and cash equivalents, beginning of period	90,782	104,671
Cash and cash equivalents, end of period	119,494	105,346
Parent Company [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	14	0
Purchases of property and equipment	0	0
Business acquisitions, net of cash acquired	0	0
Proceeds from sales of property and equipment	0	0
Net cash used in investing activities	0	0
Increase in bank overdrafts	0	0
Borrowings under credit facilities	0	0
Payments on credit facilities	0	0
Dividends paid	0	0
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	0	0
Tax withholdings related to the exercise of stock appreciation rights	0	0
Excess tax benefit from share-based compensation	0	0
Repurchase of common stock	0	0
Other	0	0
Net cash (used in) provided by financing activities	0	0
Effect of exchange rate changes on cash	0	0
Net increase (decrease) in cash and cash equivalents	14	0
Cash and cash equivalents, beginning of period	8	9
Cash and cash equivalents, end of period	22	9
Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	398,034	526,749
Purchases of property and equipment	(202,382)	(159,442)
Business acquisitions, net of cash acquired	(2,672)	(18,583)
Proceeds from sales of property and equipment	1,481	174
Net cash used in investing activities	(203,573)	(177,851)
Increase in bank overdrafts	10,006	18,535
Borrowings under credit facilities	686,100	509,200
Payments on credit facilities	(846,100)	(852,600)
Dividends paid	(17,734)	(17,642)
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	3,438	3,870
Tax withholdings related to the exercise of stock appreciation rights	(15,764)	(11,713)
Excess tax benefit from share-based compensation	17,615	10,291
Repurchase of common stock	(12,300)	(1,820)
Other	(323)	(294)
Net cash (used in) provided by financing activities	(175,062)	(342,173)
Effect of exchange rate changes on cash	0	0
Net increase (decrease) in cash and cash equivalents	19,399	6,725
Cash and cash equivalents, beginning of period	63,458	65,345
Cash and cash equivalents, end of period	82,857	72,070
Non-Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	11,369	(6,661)
Purchases of property and equipment	(1,831)	(1,790)
Business acquisitions, net of cash acquired	0	(310)
Proceeds from sales of property and equipment	2	4
Net cash used in investing activities	(1,829)	(2,096)
Increase in bank overdrafts	(1,227)	4,920
Borrowings under credit facilities	0	0
Payments on credit facilities	0	0
Dividends paid	0	0
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	0	0
Tax withholdings related to the exercise of stock appreciation rights	0	0
Excess tax benefit from share-based compensation	0	0
Repurchase of common stock	0	0
Other	0	0
Net cash (used in) provided by financing activities	(1,227)	4,920
Effect of exchange rate changes on cash	1,000	(2,213)
Net increase (decrease) in cash and cash equivalents	9,313	(6,050)
Cash and cash equivalents, beginning of period	27,324	39,326
Cash and cash equivalents, end of period	36,637	33,276
Consolidation, Eliminations [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Purchases of property and equipment	0	0
Business acquisitions, net of cash acquired	0	0
Proceeds from sales of property and equipment	0	0
Net cash used in investing activities	0	0
Increase in bank overdrafts	(14)	0
Borrowings under credit facilities	0	0
Payments on credit facilities	0	0
Dividends paid	0	0
Proceeds from the issuance of common stock, primarily for employee stock purchase plan	0	0
Tax withholdings related to the exercise of stock appreciation rights	0	0
Excess tax benefit from share-based compensation	0	0
Repurchase of common stock	0	0
Other	0	0
Net cash (used in) provided by financing activities	(14)	0
Effect of exchange rate changes on cash	0	0
Net increase (decrease) in cash and cash equivalents	(14)	0
Cash and cash equivalents, beginning of period	(8)	(9)
Cash and cash equivalents, end of period	$ (22)	$ (9)