2018 Annual Report Executive Team Letter to Shareholders 10-K Sustainability

Company Profile

Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 29, 2018, Advance operated 4,966 stores and 143 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. The Company also serves 1,231 independently owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos, British Virgin Islands and Pacific Islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.

Advance Auto Parts / Carquest Locations
Carquest Independently Owned Locations
Autopart International Locations
Worldpac Locations

Letter to Shareholders

2018 was an exciting year as efforts from Advance’s transformation plan began to take hold. President and CEO Tom Greco and Chairman of the Board Jeff Smith discuss the improving results over the past year and their confidence in the more than 70,000 Team Members across Advance to enable further progress in 2019 against the Company's long term strategic objectives.

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“There’s nothing more important than the people in our company. We say empower our people because they are our best part and we really are a people first culture.”

– Tom Greco
President and Chief Executive Officer
“In 2018, we saw meaningful financial improvement on both the top and bottom line…and ended 2018 with Record Free Cash Flow while executing against our capital allocation priorities.”

– Jeff Shepherd
Executive Vice President, Chief Financial Officer, Controller and Chief Accounting Officer

2018 Financial Summary

2017 $9.37
2017 $6.42
2017 $5.37
2017 $601
2017 $411

(1) Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in our “Consolidated Statements of Cash Flows” that can be found on page 35 in our 2018 Annual Report on Form 10-K. Free cash flow of $617 million can be reconciled to net cash provided by operating activities on a GAAP basis of $811 million by adding back purchases of property and equipment of $194 million. (2) Diluted earnings per share have been reported on an adjusted basis to exclude certain non-operational and non-cash expenses in 2018 and 2017, including General Parts International, Inc. (“GPI”) integration and store closure and consolidation expenses, GPI amortization of acquired intangible assets, transformation expenses and the net impact of the Tax Cuts and Jobs Act. A reconciliation of the adjusted financial results to the most comparable GAAP results for 2018 and 2017 can be found on pages 17 and 20 of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2018 Annual Report on Form 10-K.

Download 10-K

Executive Officers

Thomas R. Greco

Michael T. Broderick

Robert B. Cushing

Tammy M. Finley

Natalie S. Schechtman

Jeffrey W. Shepherd

Ruben E. Slone

Board of Directors*

From Left to Right:   Jeffrey Jones II   Adriana Karaboutis   Douglas Pertz   John Ferraro   Eugene Lee, Jr.   Jeffrey Smith   Fiona Dias   Thomas Greco   Brad Buss   Nigel Travis   Sharon McCollam   John Bergstrom

* As of February 11, 2019

Company Culture

Through championing diversity and inclusion in our workforce, providing development and growth opportunities for our Team Members, ensuring safe working conditions, reducing our environmental impacts , and importantly, participating in and contributing to the communities where we live and serve, we are proud of the culture we are creating at Advance.

In line with our commitment to provide our stakeholders further transparency to all that we are doing at Advance to deliver Our Vision: Advancing a World in Motion, we published our inaugural Corporate Sustainability and Social Report in December 2018, focusing on our people, our planet and our community.  We are proud of the work we have done in these areas, but recognize that we still have work to do and are committed to our corporate sustainability and social responsibility goals. Download The Report