Advance Auto Parts, Inc. Company Highlights

2017

ADVANCE AUTO PARTS, INC. COMPANY HIGHLIGHTS

2017 $9.37 2016 $9.57 2015 $9.74 2017 $9.37 $9.37 2016 TOTAL NET SALES $9.57 (IN BILLIONS)

2017 $601 2016 $523 2015 $690

2017 $601 $601 2016 $523 OPERATING CASH FLOW (IN MILLIONS) 2017 $411 2016 $264 2015 $455

2017 $411 $411 2016 1 $264 2017 $6.42 FREE CASH FLOW 2016 $6.20 (IN MILLIONS) 2015 $6.40

2017 $6.42 2017 $5.37 $6.422016 $7.15 2016 2015 $7.82 $6.20 DILUTED EARNINGS PER SHARE

2017 $5.37 $5.37 2016 ADJUSTED EARNINGS $7.15 PER SHARE2

(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 F-6 in our 2017 Form 10-K included in this annual report. Free cash flow of $411 million can be reconciled to net cash provided by operating activities on a GAAP basis of $601 million by adding back purchases of property and equipment of $190 million. (2) Diluted earnings per share have been reported on an adjusted basis to exclude certain non-operational and non-cash expenses in 2017 and 2016, including General Parts International, Inc. (“GPI”) integration and store consolidation costs, amortization of GPI 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 2017 and 2016 can be found on pages 17 and 21 of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2017 Form 10-K included in this annual report. DEAR FELLOW SHAREHOLDERS

In 2017, we embarked on the first full year of Financial Highlights for 2017 include: our five-year transformation plan focused on long- term growth and increasing shareholder value. In 2017 2016 this critical first year, we significantly narrowed Total Net Sales $9.37 $9.57 the comparable sales growth gap versus our (in billions) peers, and drove a 56 percent increase in free Diluted EPS $6.42 $6.20 cash flow. The entire team across all banners of Advance Auto Parts, Inc., as well as our Adjusted EPS $5.37 $7.15 network of Carquest Independents, performed Free Cash Flow $411 $264 with unrelenting focus throughout the year to (in millions) ensure Customers remained our primary focus.

While the competitive landscape is evolving, PASSION FOR CUSTOMERS... we have an existing asset base that has been PASSION FOR YES! underutilized. Our goal is to dramatically improve execution across our base business while building competitive advantages in growth areas Throughout 2017, we remained steadfast in such as rapid delivery of parts to professional our mission to improve our Customer Value shops and ease of online ordering for both Do- Proposition. We recognize that winning long It-Yourself (DIY) and Professional Customers. term requires an unwavering commitment to delivering what matters most to our DIY and Professional INVESTING IN Customers. More importantly, LONG-TERM GROWTH understanding the demand drivers for different Customers enables us to prioritize key Throughout 2017, we made investments in our initiatives within our long-term Customers, Team Members and technology strategic plan. to solidify our Value Proposition and build the foundation for long-term growth for the business We will be uncompromising in improving and shareholders. This will remain our highest the experience for both Professional and priority as we transform Advance. DIY Customers. Investments in online and e-commerce capabilities along with new tools We are committed to the long-term opportunity and training for our Team Members are important ahead for our business and believe these elements of this plan. investments are integral to our transformation efforts as we provide the best brands for our The increasing use of online search and ordering Customers and deliver on our Mission: required necessary improvements across our Passion for Customers…Passion for Yes! digital footprint. To better serve our Customers and capture the growing online demand, we launched our improved website in mid-2017, providing a

— continued faster and more frictionless experience while Our supply chain strategy is about differentiation, increasing the number of SKUs available for online improving the customer experience and structural shoppers. Third-party reviews of industry websites cost reduction. have noted our improved online capabilities. In order to improve cash flow, we implemented We’ve also improved the in-store customer dramatic enhancements to our working capital experience from the moment DIYers come through processes, focused on receivables, payables, the doors. Independent mystery shoppers have and inventory. This is already yielding significant reported progress throughout the year resulting benefits, driving both free cash flow and return from our diligent efforts to improve the store on invested capital. experience in conjunction with the rollout of We’re confident about the progress we’ll make our new website. Our Team Members leveraged in each of these areas in 2018 and into the enhanced training, enabling better execution. future. Without question, our productivity and In 2017, we began the roll-out of Cross Banner cash agenda is well underway and critical to long- Visibility which enables all Professional term growth. Customers, as well as all Advance, Carquest, and WorldPac Team Members, to see our entire catalog, regardless of banner. This capability HIRING AND DEVELOPING benefits both DIY and Professional Customers THE BEST...THROUGHOUT ADVANCE and was completed in the first quarter of 2018.

Further, we introduced AdvancePro, our e-commerce engine for Professional Customers. This digital Our Team Members are critical to our success platform provides full access to our common both in the field and in our Customer Support catalog across all four banners, extending our Center. We need the best parts people in the enterprise-wide assortment to all Customers. business in our stores and are excited about the substantial reductions in turnover we achieved in These are major steps forward that reinforce the 2017. In corporate roles, we are hiring terrific new importance of our outstanding assortment of leaders while promoting and empowering others brands, fast and consistent delivery and the best from within to strengthen our entire organization. parts people in the industry. Most importantly, People are at the core of all our initiatives, these initiatives enable us to say “YES” more often! and ultimately, our Team Members’ knowledge, dedication, and focus will set Advance apart from both retail DRIVING CASH FLOW... and online competitors. ACTING LIKE OWNERS As a result, we have invested, and will continue to invest, in our Team Members. In 2016, Given the substantial margin gap we have with we launched Fuel the Frontline, industry peers, we’ve embraced frugality as a tenet which rewards high-performing of our corporate culture. In 2017, we made progress store and field Team Members with shares of in productivity improvements, reducing material Advance stock for meeting or exceeding their goals. costs and implementing zero based budgeting. We In 2017, we continued to grow Fuel the Frontline expect this agenda to continue to advance into with literally thousands of Team Members earning 2018 and beyond. We’re strengthening, optimizing shares of Advance stock throughout the year. We and streamlining our supply chain from end to end. also launched Be An Owner in 2017 to recognize top performers in our Customer Support Center

— continued and Supply Chain teams. Similar to Fuel the Frontline, Be An Owner enables Team Members to earn Advance stock based on outstanding, differentiated performance. Over time, this important initiative drives ownership and will help reduce turnover.

Building on the evolution of our Cultural Beliefs that began in 2016, we continued to focus on Inclusion and Diversity throughout 2017. In line with this emphasis across Advance, I am honored to be a part of the CEO Action collective. With more than 400 participating organizations, we are taking an active role to partner with like-minded These nine networks embody the Cultural Beliefs of individuals and companies to improve inclusion Advance and are an important outlet for leveraging and diversity while sharing and leveraging best the skills that our Team Members have to offer. practices, and ultimately strengthening our focus on our people. GIVING BACK

During the ﬁrst full year of focus on the critical Inclusion TO OUR COMMUNITIES and Diversity initiative, we made substantial progress. In 2017, the representation of females and minorities in leadership roles increased by As a company committed to corporate citizenship, 40 percent. This includes an increase in our we understand the important role we play in the Executive Committee from 25 percent to nearly 55 lives of people and the communities where we percent as well as an increase among our field- live and serve. During 2017, our Team Members based store operations leadership to nearly 42 dedicated their time and talent to help those percent. I am extremely proud of the growth in the in the areas of need as North America was first year, but remain committed to further evolution impacted by some of the most severe natural as we continue to advance our cultural beliefs. disasters seen in recent memory.

Our Team Member Networks (TMNs) expanded We also continued our corporate level to nine official groups to further increase our partnerships with several national charitable collective focus on inclusion and diversity across organizations, including JDRF and its fight to our entire organization. TMNs are open to anyone improve the lives of those living with type 1 who has an interest and enable Team Members diabetes. We’re also proud of our continued with similar backgrounds, experiences, and/ support of Building Homes for Heroes and the or interests to come together to create a high- brave servicemen and servicewomen they assist performance and inclusive culture. TMNs enable who have sacrificed so much. With more than networking with others across the organization, 6,000 military veterans as fellow Team Members participation in leadership opportunities, and a commitment to hire 10,000 additional engagement with local communities in impactful veterans over the next five years, supporting our ways, and create a collective voice to express veterans is something very important to all of us ideas and concerns. In addition, TMNs inspire at Advance. innovation and build capabilities we believe — continued increase our competitive advantage. ENVIRONMENTAL COMMITMENT industry. In addition, we are confident the transformational steps we have taken to date have resulted in a stronger Advance and will In addition to supporting the communities improve our competitiveness going forward. where we live and operate, we are acutely Notably, our ability to provide Professional aware of the environmental responsibility Customers access to a robust assortment we have as a leader in our industry. As an of brands from both aftermarket and Original organization, we are committed to working with Equipment Manufacturers (OEM) is an important our Customers and suppliers to implement differentiator. We’re ensuring that working with us environmental and socially responsible initiatives. is easy and efficient so that Customers get the parts As part of these ongoing efforts in 2017, we they need, at the right time, and at a fair price. recycled approximately 130,000 tons of lead acid No matter what DIY Customers desire, we’ve got batteries and nearly six million gallons of motor them covered with high-quality products. Whether oil, both of which increased as compared to the in-store or online, we will provide them with the previous year. In addition to increased recycling products, service, support and information they efforts, we continue to focus on overall energy need and trust. efficiency and are pleased with the progress we have made during the last five years. This includes We are still early in our transformation and remain a 30 percent reduction in energy usage realized laser focused on solidifying and expanding our at our more than 5,000 stores through a variety Customer base. We’re also strengthening our of initiatives such as LED lighting systems and value proposition across the entire Customer signage, centralized energy management systems, Demand Journey in both physical and digital and installation of high efficiency HVAC systems. assets. We’re investing in technology, improved customer service and in our people to ensure a differentiated experience. We continue to remove unnecessary costs from our system and maintain a relentless focus on cash.

In summary, 2017 was an integral first step in LED LIGHTING ENERGY HIGH SYSTEM MANAGEMENT EFFICIENCY our transformation. We move forward into 2018 IMPLEMENTATIONS SOLUTIONS HVAC SYSTEMS with increased determination to achieve our short- While we’re proud of our accomplishments to date, and long-term goals, and our team is talented, we have an obligation to do more. We take this focused and ready to win. responsibility extremely seriously and are looking Thank you for your continuing support, trust at ways to reduce and improve our environmental and confidence. impact across our entire organization. We are committed to continuing our efforts in this area and look forward to sharing additional improvements in the future. Thomas R. Greco President & Chief Executive Officer ADVANCING IN 2018

We’re excited about our plans for 2018 and Jeffrey C. Smith optimistic about the long-term outlook for the Chairman of the Board UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549 Form10-K

(MarkOne) x ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIES EXCHANGEACTOF1934 ForthefiscalyearendedDecember30,2017 OR o TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIES EXCHANGEACTOF1934 Forthetransitionperiodfrom______to______.

Commissionfilenumber001-16797 ______

ADVANCEAUTOPARTS,INC. (Exactnameofregistrantasspecifiedinitscharter) ______

Delaware 54-2049910 (Stateorotherjurisdictionof (I.R.S.Employer incorporationororganization) IdentificationNo.)

5008AirportRoad 24012 Roanoke,VA (ZipCode) (AddressofPrincipalExecutiveOffices)

(540)362-4911 (Registrantstelephonenumber,includingareacode) SecuritiesRegisteredPursuanttoSection12(b)oftheAct Titleofeachclass Nameofeachexchangeonwhichregistered CommonStock($0.0001parvalue) NewYorkStockExchange

SecuritiesRegisteredPursuanttoSection12(g)oftheAct:None

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.Yes x No o

IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct. Yes oNo x Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)ofthe SecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredto filesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes xNo o

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,every InteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegistrationS-T(232.405ofthischapter) duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).Yes x No o

IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegistrationS-K(229.405ofthischapter) isnotcontainedherein,andwillnotbecontained,tothebestofregistrantsknowledge,indefinitiveproxyorinformationstatements incorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttotheForm10-K. o

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmaller reportingcompanyoranemerginggrowthcompany.Seethedefinitionsoflargeacceleratedfiler,acceleratedfiler,smaller reportingcompanyandemerginggrowthcompanyinRule12b-2oftheExchangeAct.

Largeacceleratedfiler x Acceleratedfiler o Non-acceleratedfiler o(Donotcheckifasmallerreportingcompany) Smallerreportingcompany o Emerginggrowthcompany o

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransition periodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)ofthe ExchangeAct. o

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct). Yes oNo x

Asofthelastbusinessdayoftheregistrantsmostrecentlycompletedsecondfiscalquarter,July14,2017,theaggregate marketvalueofcommonstockheldbynon-affiliatesoftheregistrantwas$7,204,158,912,basedonthelastsalespriceon July14,2017,asreportedbytheNewYorkStockExchange.

AsofFebruary16,2018,thenumberofsharesoftheregistrantscommonstockoutstandingwas73,978,120shares.

DocumentsIncorporatedbyReference:

Portionsoftheregistrantsdefinitiveproxystatementforits2018AnnualMeetingofStockholders,tobeheldonMay16, 2018,areincorporatedbyreferenceintoPartIIIofthisForm10-K. TABLEOFCONTENTS Page PartI.

Item1. Business ...... 2

Item1A. RiskFactors ...... 6

Item1B. UnresolvedStaffComments ...... 12

Item2. Properties ...... 12

Item3. LegalProceedings ...... 13

Item4. MineSafetyDisclosures ...... 13

PartII.

Item5. MarketfortheRegistrant'sCommonEquity,RelatedStockholderMattersandIssuer PurchasesofEquitySecurities ...... 14

Item6. SelectedConsolidatedFinancialData ...... 16

Item7. Management'sDiscussionandAnalysisofFinancialConditionandResultsof Operations ...... 17

Item7A. QuantitativeandQualitativeDisclosuresAboutMarketRisks ...... 26

Item8. FinancialStatementsandSupplementaryData ...... 27

Item9. ChangesinandDisagreementswithAccountantsonAccountingandFinancial Disclosure ...... 27

Item9A. ControlsandProcedures ...... 27

Item9B. OtherInformation ...... 28

PartIII.

Item10. Directors,ExecutiveOfficersandCorporateGovernance ...... 29

Item11. ExecutiveCompensation ...... 29

Item12. SecurityOwnershipofCertainBeneficialOwnersandManagementandRelated StockholderMatters ...... 29

Item13. CertainRelationshipsandRelatedTransactions,andDirectorIndependence ...... 29

Item14. PrincipalAccountantFeesandServices ...... 29

PartIV.

Item15. Exhibits,FinancialStatementSchedules ...... 30 FORWARD-LOOKINGSTATEMENTS

ThisAnnualReportonForm10-Kcontainsforward-lookingstatementswithinthemeaningofSection27Aofthe SecuritiesActof1933(theSecuritiesAct)andSection21EoftheSecuritiesExchangeActof1934(theExchangeAct). TheSecuritiesandExchangeCommission(SEC)encouragescompaniestodiscloseforward-lookinginformationsothat investorscanbetterunderstandacompanysfutureprospectsandmakeinformedinvestmentdecisions.Forward-looking statementsareusuallyidentifiedbytheuseofwordssuchasanticipate,believe,could,estimate,expect,forecast, intend,likely,may,plan,position,possible,potential,probable,project,projection,should,strategy, will,orsimilarexpressions.Thesestatementsarebaseduponassessmentsandassumptionsofmanagementinlightof historicalresultsandtrends,currentconditionsandpotentialfuturedevelopmentsthatofteninvolvejudgment,estimates, assumptionsandprojections.Forward-lookingstatementsreflectcurrentviewsaboutourplans,strategiesandprospects,which arebasedoninformationcurrentlyavailableasofthedateofthisreport.Exceptasrequiredbylaw,weundertakenoobligation toupdateanyforward-lookingstatementstoreflecteventsorcircumstancesafterthedateofsuchstatements.Forward-looking statementsaresubjecttorisksanduncertainties,manyofwhichareoutsideourcontrol,whichcouldcauseactualresultsto differmateriallyfromthesestatements.Therefore,youshouldnotplaceunduerelianceonthosestatements.Weintendforany forward-lookingstatementstobecoveredby,andweclaimtheprotectionunder,thesafeharborprovisionsforforward-looking statementscontainedinthePrivateSecuritiesLitigationReformActof1995.

1 PARTI

Item1. Business.

Unlessthecontextotherwiserequires,Advance,we,us,our,andsimilartermsrefertoAdvanceAutoParts,Inc.,its subsidiariesandtheirrespectiveoperations.Ourfiscalyearconsistsof52or53weeksendingontheSaturdayclosesttoDecember 31stofeachyear.Our2017,2016and2015fiscalyearsincluded52weeksofoperations.

Overview

WearealeadingautomotiveaftermarketpartsproviderinNorthAmerica,servingbothprofessionalinstallers (Professional),anddo-it-yourself(DIY),customersaswellasindependentlyownedoperators.Ourstoresandbranches offerabroadselectionofbrandname,originalequipmentmanufacturer(OEM)andprivatelabelautomotivereplacement parts,accessories,batteriesandmaintenanceitemsfordomesticandimportedcars,vans,sportutilityvehiclesandlightand heavydutytrucks.AsofDecember30,2017,theendofour2017fiscalyear(2017),weoperated5,054totalstoresand129 branchesprimarilyunderthetradenamesAdvanceAutoParts,AutopartInternational,CarquestandWorldpac.

Wewerefoundedin1929asAdvanceStoresCompany,Incorporatedandoperatedasaretailerofgeneralmerchandise untilthe1980s.Duringthe1980s,webegantargetingthesaleofautomotivepartsandaccessoriestoDIYcustomers.Webegan ourProfessionaldeliveryprogramin1996andhavesteadilyincreasedoursalestoProfessionalcustomerssince2000.Wehave grownsignificantlyasaresultofcomparablestoresalesgrowth,newstoreopeningsandstrategicacquisitions.AdvanceAuto Parts,Inc.,aDelawarecorporation,wasincorporatedin2001inconjunctionwiththeacquisitionofDiscountAutoParts,Inc.In 2014,weacquiredGeneralPartsInternational,Inc.(GPI),aprivatelyheldcompanythatwasaleadingdistributorand supplieroforiginalequipmentandaftermarketautomotivereplacementproductsforProfessionalmarketsoperatingunderthe CarquestandWorldpacnames.

SegmentandRelatedInformation

During2017and2016weaggregatedouroperatingsegmentsintoasinglereportablesegmentcomprisedofourstoreand branchoperations.AdiscussionofoursegmentstructureisavailableinNote2,SignificantAccountingPolicies,oftheNotesto theConsolidatedFinancialStatementsincludedherein.

StoresandBranches

Throughourintegratedoperatingapproach,weserveourProfessionalandDIYcustomersthroughavarietyofchannels rangingfromtraditionalbrickandmortarstorelocationstoself-servicee-commercesites.Webelievewearebetterableto meetourcustomersneedsbyoperatingunderseveralstorenames,whichareasfollows:

AdvanceAutoParts-Consistsof4,432storesasofDecember30,2017generallylocatedinfreestandingbuildingswitha heavyfocusonbothProfessionalandDIYcustomers.TheaveragesizeofanAdvanceAutoPartsstoreisapproximately 7,500squarefeetwiththesizeofourtypicalnewstoresrangingfromapproximately6,200to15,000squarefeet.These storescarryawidevarietyofproductsservingaftermarketautopartneedsforbothdomesticandimportvehicles.Our AdvanceAutoPartsstorescarryaproductofferingofapproximately22,000stockkeepingunits(SKUs),generally consistingofacustommixofproductbasedoneachstoresrespectivemarket.Supplementingtheinventoryon-handatour stores,additionallesscommonSKUsareavailableinmanyofourlargerstores(knownasHUBstores).Theseadditional SKUsareavailableonasame-dayornext-daybasis.

AutopartInternational(AI)-Consistsof185storesasofDecember30,2017operatingprimarilyintheNortheastern andMid-AtlanticregionsoftheUnitedStatesfocusingontheProfessionalcustomer.Thesestoresspecializeinimported aftermarketandprivatelabelbrandedautoparts.TheAIstoresofferapproximately41,000SKUsthroughroutine replenishmentfromtheirsupplychain.

Carquest-Consistsof437storesasofDecember30,2017,including138storesinCanada.OurCarqueststoresare generallylocatedinfreestandingbuildingswithaheavyfocusonProfessionalcustomers,butalsoservingDIYcustomers. TheaveragesizeofaCarqueststoreisapproximately7,600squarefeet.Thesestorescarryawidevarietyofproducts servingtheaftermarketautopartneedsforbothdomesticandimportvehicleswithaproductofferingofapproximately 23,000SKUs.WecontinuetoconvertorconsolidatetheU.S.CarqueststoreswithourAdvanceAutoPartsstoresaspartof ourmulti-yearintegrationplan.AsofDecember30,2017,Carquestalsoserved1,218independentlyownedstoresthat operateundertheCarquestname.

2 Worldpac-Consistsof129branchesasofDecember30,2017thatprincipallyserveProfessionalcustomersutilizingan efficientandsophisticatedon-lineorderingandfulfillmentsystem.TheWorldpacbranchesaregenerallylargerthanour otherstorelocationsaveragingapproximately28,000squarefeetinsize.Worldpacspecializesinimported,OEMparts. Worldpacscompleteproductofferingincludesover120,000SKUsforover40importanddomesticvehiclecarlines.

OurProducts

Thefollowingtableshowssomeofthetypesofproductsthatwesellbymajorcategoryofitems:

Parts&Batteries Accessories&Chemicals EngineMaintenance Batteriesandbatteryaccessories Airconditioningchemicalsandaccessories Airfilters Beltsandhoses Airfresheners Fuelandoiladditives Brakesandbrakepads Antifreezeandwasherfluid Fuelfilters Chassisparts Electricalwireandfuses Greaseandlubricants Climatecontrolparts Electronics Motoroil Clutchesanddriveshafts Floormats,seatcoversandinterioraccessories Oilfilters Enginesandengineparts Handandspecialtytools Partcleanersandtreatments Exhaustsystemsandparts Lighting Transmissionfluid Hubassemblies Performanceparts Ignitioncomponentsandwire Sealants,adhesivesandcompounds Radiatorsandcoolingparts Tirerepairaccessories Startersandalternators Ventshades,mirrorsandexterioraccessories Steeringandalignmentparts Washes,waxesandcleaningsupplies Wiperblades

Weprovideourcustomersqualityproducts,whichmanyareofferedatagood,betterorbestrecommendationdifferentiated bypriceandquality.

OurCustomers

OurProfessionalcustomersconsistprimarilyofcustomersforwhomwedeliverproductfromourstoreorbranchlocations totheirplacesofbusiness,includinggarages,servicestationsandautodealers.OurProfessionalsalesrepresented approximately58%,58%and57%ofoursalesin2017,2016and2015.Wealsoserve1,218independentlyownedCarquest storeswithshipmentsdirectlyfromourdistributioncenters.OurDIYcustomersareprimarilyservedthroughourstoresandcan alsoorderonlinetopickupmerchandiseataconvenientlylocatedstoreorhavetheirpurchasesshippeddirectlytothem. Exceptwhereprohibited,wealsoprovideavarietyofservicesatourstoresfreeofchargetoourcustomers,including:

Batteryandwiperinstallation; Batterycharging; Checkenginelightreading; Electricalsystemtesting,includingbatteries,starters,alternatorsandsensors; How-Tovideoclinics; Oilandbatteryrecycling;and Loanertoolprograms.

Wealsoserveourcustomersonlineatwww.AdvanceAutoParts.com.OurProfessionalcustomerscanconvenientlyplace theirorderselectronically,overthephoneorin-storeandwedeliverproductfromourstoreorbranchlocationstotheirplaces ofbusiness.OuronlinewebsitesalsoallowourDIYcustomerstopickupmerchandiseataconvenientlylocatedstoreorhave theirpurchasesshippeddirectlytothem.

3 StoreDevelopment

Keyfactorsinselectingsitesandmarketlocationsinwhichweoperateincludepopulation,demographics,trafficcount, vehicleprofile,numberandstrengthofcompetitorsstoresandthecostofrealestate.Our5,183storesandbrancheswere locatedinthefollowingstates,territoriesandinternationallocationsasofDecember30,2017:

Numberof Numberof Numberof Location Stores Location Stores Location Stores U.S.States: Alabama 135 Maine 39 Ohio 265 Alaska 11 Maryland 136 Oklahoma 29 Arizona 20 Massachusetts 124 Oregon 28 Arkansas 24 Michigan 146 Pennsylvania 269 California 95 Minnesota 44 RhodeIsland 22 Colorado 88 Mississippi 64 SouthCarolina 148 Connecticut 75 Missouri 64 SouthDakota 10 Delaware 19 Montana 26 Tennessee 156 Florida 535 Nebraska 30 Texas 279 Georgia 272 Nevada 14 Utah 23 Idaho 9 NewHampshire 29 Vermont 12 Illinois 176 NewJersey 134 Virginia 244 Indiana 119 NewMexico 15 Washington 32 Iowa 40 NewYork 260 WestVirginia 80 Kansas 39 NorthCarolina 310 Wisconsin 106 Kentucky 112 NorthDakota 5 Wyoming 13 Louisiana 71

U.S.Territories: PuertoRico 27 VirginIslands 1

CanadianProvinces: Alberta 3 NewBrunswick 11 Ontario 60 BritishColumbia 4 NewfoundlandandLabrador 3 PrinceEdwardIsland 1 Manitoba 1 NovaScotia 13 Quebec 63

WeserveourAdvanceAutoPartsandCarqueststoresprimarilyfromourstoresupportcentersinRoanoke,VAand Raleigh,NC.WealsomaintainastoresupportcenterinNewark,CAtosupportourWorldpacande-commerceoperationsand inNorton,MAtosupportourAutopartInternationalstores.

SupplyChain

Oursupplychainconsistsofanetworkofdistributioncenters,HUBs,storesandbranchesthatenableustoprovidesame- dayornext-dayavailabilitytoourcustomers.AsofDecember30,2017,weoperated54distributioncenters,ranginginsize fromapproximately51,000to943,000squarefeetwithtotalsquarefootageofapproximately12.0million.Currently,our smallerdistributioncentersprimarilyserviceourCarqueststores,includingthosethathaveconvertedtotheAdvanceAuto Partsformat,whileourlargerdistributioncentersprimarilyserviceAdvanceAutoParts,AutopartInternationalandWorldpac locations.In2017,weopenednewdistributioncentersinHouston,TXandinthegreaterNashville,TNarea.

4 Merchandise,MarketingandAdvertising

In2017,wepurchasedmerchandisefromover600vendors,withnosinglevendoraccountingformorethan9%of purchases.Ourpurchasingstrategyinvolvesnegotiatingagreementswithmostofourvendorstopurchasemerchandiseovera specifiedperiodoftimealongwithotherprovisions,includingpricing,volumeandpaymentterms.

Ourmerchandisingstrategyistocarryabroadselectionofhighqualityandreputablebrandnameautomotivepartsand accessoriesthatwebelievewillappealtoourProfessionalcustomersandalsogenerateDIYcustomertraffic.Someofour brandsincludeBosch,Castrol,Dayco,Denso,Gates,Moog,Monroe,NGK,Prestone,Purolator,Tricoand Wagner.Inadditiontothesebrandedproducts,westockawideselectionofhighqualityprivatelabelproductsthatappealto value-consciouscustomers.Theselinesofmerchandiseincludechemicals,interiorautomotiveaccessories,batteriesandparts undervariousprivatelabelnamessuchasAutocraft,AutopartInternational,Driveworks,ToughOneandWeareveraswell astheCarquestbrand.

Ourmarketingandadvertisingprogramisdesignedtodrivebrandawareness,considerationandomni-channeltrafficby positioningAdvanceAutoPartsastheleaderinpartsavailability,in-storepartsandprojectexpertisewithintheaftermarket autopartscategory.Westrivetoexceedourcustomersexpectationsend-to-endthroughacomprehensiveonlineandpickupin- storeexperience,extensivepartsassortment,experiencedpartsprofessionals,Professionalprogramsthataredesignedtobuild loyaltywithourcustomersandourDIYcustomerloyaltyprogram,SpeedPerks.OurDIYcampaignwasdevelopedarounda multi-channelcommunicationsplanthatbringstogetherradio,television,directmarketing,socialmedia,sponsorships,store eventsandSpeedPerks.

Seasonality

Ourbusinessissomewhatseasonalinnature,withthehighestsalesusuallyoccurringinthespringandsummermonths.In addition,ourbusinesscanbeaffectedbyweatherconditions.Whileunusuallyheavyprecipitationtendstosoftensalesas electivemaintenanceisdeferredduringsuchperiods,extremelyhotorcoldweathertendstoenhancesalesbycausing automotivepartstofailatanacceleratedrate.Ourfourthquarterisgenerallyourmostvolatileasweatherandspendingtrade- offstypicallyinfluenceourProfessionalandDIYsales.

TeamMembers

AsofDecember30,2017,weemployedapproximately40,000full-timeTeamMembersandapproximately31,000part- timeTeamMembers.Ourworkforceconsistedof86%ofourTeamMembersemployedinstore-leveloperations,10% employedindistributionand4%employedinourcorporateoffices.AsofDecember30,2017,lessthan1%ofourTeam Memberswererepresentedbylaborunions.Wehaveneverexperiencedanylabordisruption.

IntellectualProperty

Weownanumberoftradenames,servicemarksandtrademarks,includingAdvanceAutoParts,Autopart International,Carquest,CARQUESTTechnicalInstitute,DriverSide,MotoLogic,MotoShop,Worldpac, speedDIALandTECH-NETProfessionalAutoServiceforuseinconnectionwiththeautomotivepartsbusiness.In addition,weownandhaveregisteredanumberoftrademarksforourprivatelabelbrands.Webelievethatthesetradenames, servicemarksandtrademarksareimportanttoourmerchandisingstrategy.Wedonotknowofanyinfringingusesthatwould materiallyaffecttheuseofthesetradenamesandmarksandweactivelydefendandenforcethem.

Competition

WeoperateinboththeProfessionalandDIYmarketsoftheautomotiveaftermarketindustry.Ourprimarycompetitorsare (i)bothnationalandregionalchainsofautomotivepartsstores,includingAutoZone,Inc.,NAPA,OReillyAutomotive,Inc., ThePepBoys-Manny,Moe&JackandAutoPlus(formerlyUni-SelectUSA,Inc.),(ii)discountstoresandmassmerchandisers thatcarryautomotiveproducts,(iii)wholesalersorjobberstores,includingthoseassociatedwithnationalpartsdistributorsor associations,(iv)independentlyownedstores,(v)automobiledealersthatsupplypartsand(vi)internet-basedretailers.We believethatchainsofautomotivepartsstoresthat,likeus,havemultiplelocationsinoneormoremarkets,havecompetitive advantagesincustomerservice,marketing,inventoryselection,purchasinganddistributionascomparedtoindependent retailersandjobbersthatarenotpartofachainorassociatedwithotherretailersorjobbers.Theprincipalmethodsof competitioninourbusinessincludecustomerservice,productofferings,availability,quality,priceandstorelocation.

5 EnvironmentalMatters

Wearesubjecttovariousfederal,stateandlocallawsandgovernmentalregulationsrelatingtotheoperationofour business,includingthosegoverningcollection,transportationandrecyclingofautomotivelead-acidbatteries,usedautomotive oilandotherrecyclableitems,andownershipandoperationofrealproperty.Wesellproductscontaininghazardousmaterialsas partofourbusiness.Inaddition,ourcustomersmaybringautomotivelead-acidbatteries,usedautomotiveoilorother recyclableitemsontoourproperties.Wecurrentlyprovidecollectionandrecyclingprogramsforusedlead-acidbatteries,used oilandotherrecyclableitemsatamajorityofourstoresasaservicetoourcustomers.Pursuanttoagreementswiththirdparty vendors,lead-acidbatteries,usedoilandotherrecyclableitemsarecollectedbyourTeamMembers,depositedontopalletsor intovendorsuppliedcontainersandstoredbyusuntilcollectedbythethirdpartyvendorsforrecyclingorproperdisposal.The termsofourcontractswiththirdpartyvendorsrequirethattheyareincompliancewithallapplicablelawsandregulations.Our thirdpartyvendorswhoarrangefortheremoval,disposal,treatmentorotherhandlingofhazardousortoxicsubstancesmaybe liableforthecostsofremovalorremediationatanyaffecteddisposal,treatmentorothersiteaffectedbysuchsubstances. Basedonourexperience,wedonotbelievethatthereareanymaterialenvironmentalcostsassociatedwiththecurrentbusiness practiceofacceptinglead-acidbatteries,usedoilandotherrecyclableitemsasthesecostsarebornebytherespectivethird partyvendors.

Weownandleaserealproperty.Undervariousenvironmentallawsandregulations,acurrentorpreviousowneroroperator ofrealpropertymaybeliableforthecostofremovalorremediationofhazardousortoxicsubstanceson,underorinsuch property.Theselawsoftenimposejointandseveralliabilityandmaybeimposedwithoutregardtowhethertheowneror operatorknewof,orwasresponsiblefor,thereleaseofsuchhazardousortoxicsubstances.Otherenvironmentallawsand commonlawprinciplesalsocouldbeusedtoimposeliabilityforreleasesofhazardousmaterialsintotheenvironmentorwork place,andthirdpartiesmayseekrecoveryfromownersoroperatorsofrealpropertiesforpersonalinjuryorpropertydamage associatedwithexposuretoreleasedhazardoussubstances.Fromtimetotime,wereceivenoticesfromtheEnvironmental ProtectionAgencyandstateenvironmentalauthoritiesindicatingthattheremaybecontaminationonpropertiesweown,lease oroperateormayhaveowned,leasedoroperatedinthepastoronadjacentpropertiesforwhichwemayberesponsible. Compliancewiththeselawsandregulationsandclean-upofreleasedhazardoussubstanceshavenothadamaterialimpacton ouroperationstodate.

AvailableInformation

OurInternetaddressiswww.AdvanceAutoParts.com.TheinformationonourwebsiteisnotpartofthisAnnualReporton Form10-Kfor2017.WemakeavailablefreeofchargethroughourInternetwebsiteourannualreportsonForm10-K,quarterly reportsonForm10-Q,currentreportsonForm8-Kandamendmentstothosereportsfiledorfurnishedpursuanttothe ExchangeActassoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwith,orfurnishthemtotheSEC.The SECmaintainsawebsitethatcontainsreports,proxystatementsandotherinformationregardingissuersthatfileelectronically withtheSEC.ThesematerialsmaybeobtainedelectronicallybyaccessingtheSECswebsiteatwww.sec.gov.

Item1A.RiskFactors.

Ourbusinessissubjecttoavarietyofrisks.Ourbusiness,financialcondition,resultsofoperationsandcashflowscouldbe negativelyimpactedbythefollowingriskfactors.Theserisksarenottheonlyrisksthatmayimpactourbusiness.

Ifoveralldemandfortheproductswesellslowsordeclines,ourbusiness,financialcondition,resultsofoperationsand cashflowswillsuffer.Decreaseddemandcouldalsonegativelyimpactourstockprice.

Overalldemandforproductssoldbyourstoresdependsonmanyfactorsandmayslowordecreaseduetoanynumberof reasons,including:

adecreaseinthenumberofvehiclesorinthenumberofannualmilesdrivenorsignificantincreaseintheuseof mobileservices,becausefewervehiclesmeanslessmaintenanceandrepairs,andlowervehiclemileage,which decreasestheneedformaintenanceandrepair; theeconomy,becauseduringperiodsofdecliningeconomicconditions,consumersmayreducetheirdiscretionary spendingbydeferringvehiclemaintenanceorrepairandnewcarpurchases,whichmayimpactthenumberofcars requiringrepairinthefuture; theweather,becausemilderweatherconditionsmaylowerthefailureratesofautomobilepartswhileextendedperiods ofrainandwinterprecipitationmaycauseourcustomerstodeferelectivemaintenanceandrepairoftheirvehicles;

6 theaveragedurationofvehiclemanufacturerwarrantiesandaverageageofvehiclesbeingdriven,becausenewer carstypicallyrequirefewerrepairsandwillberepairedbythemanufacturersdealernetworksusingdealerparts pursuanttowarranties(whichhavegraduallyincreasedindurationand/ormileageexpirationovertherecentpast), whilevehiclesthataresevenyearsoldandolderaregenerallynolongercoveredundermanufacturerswarrantiesand tendtoneedmoremaintenanceandrepairthannewervehicles; anincreaseininternet-basedretailers,becausepotentiallyfavorablepricesandeaseofuseofpurchasingpartsviathe internetmaydecreasetheneedforcustomerstovisitandpurchasetheiraftermarketpartsfromourphysicalstores; technologicaladvances,suchasbatteryelectricvehicles,andtheincreaseinqualityofvehiclesmanufactured, becausevehiclesthatneedlessfrequentmaintenanceandhavelowpartfailurerateswillrequirelessfrequentrepairs usingaftermarketparts;and therefusalofvehiclemanufacturerstomakeavailablediagnostic,repairandmaintenanceinformationtothe automotiveaftermarketindustrythatourProfessionalandDIYcustomersrequiretodiagnose,repairandmaintain theirvehicles,becausethismayforceconsumerstohaveamajorityofdiagnosticwork,repairsandmaintenance performedbythevehiclemanufacturersdealernetworks.

Ifweareunabletocompetesuccessfullyagainstothercompaniesintheautomotiveaftermarketindustrywemaylose customers,ourrevenuesmaydecline,andwemaybelessprofitableorpotentiallyunprofitable.

Thesaleofautomotiveparts,accessoriesandmaintenanceitemsishighlycompetitiveinmanyways,includingname recognition,location,price,quality,productavailabilityandcustomerservice.WecompeteinboththeProfessionalandDIY categoriesoftheautomotiveaftermarketindustry,primarilywith:(i)nationalandregionalchainsofautomotivepartsstores, (ii)discountstoresandmassmerchandisersthatcarryautomotiveproducts,(iii)wholesalersorjobbersstores,includingthose associatedwithnationalpartsdistributorsorassociations(iv)independentlyownedstores,(v)automobiledealersthatsupply partsand(vi)internet-basedretailers.Thesecompetitorsandthelevelofcompetitionvarybymarket.Someofourcompetitors maypossessadvantagesoverusincertainmarketsweshare,includingwithrespecttothelevelofmarketingactivities,number ofstores,storelocations,storelayouts,operatinghistories,namerecognition,establishedcustomerbases,vendorrelationships, pricesandproductwarranties.Internet-basedretailersmaypossesscostadvantagesoverusduetolessoverheadcosts,timeand travelsavingsandabilitytopricecompetitively.Consolidationamongourcompetitorscouldenhancetheirmarketshareand financialposition,providethemwiththeabilitytoachievebetterpurchasingtermsandallowthemtoprovidemorecompetitive pricestocustomersforwhomwecompete.

Inaddition,ourreputationiscriticaltoourcontinuedsuccess.Ifwefailtomaintainhighstandardsfor,orreceivenegative publicity(whetherthroughsocialmediaortraditionalmediachannels)relatingto,productsafetyandqualityorourintegrity andreputation,wecouldlosecustomerstoourcompetition.Theproductwesellisbrandedbothinbrandsofourvendorsand inourownprivatelabelbrands.Iftheperceivedqualityorvalueofthebrandsweselldeclinesintheeyesofourcustomers,our resultsofoperationscouldbenegativelyaffected.

Competitionmayrequireustoreduceourpricesbelowournormalsellingpricesorincreaseourpromotionalspending, whichcouldlowerourrevenueandprofitability.Competitivedisadvantagesmayalsopreventusfromintroducingnewproduct lines,requireustodiscontinuecurrentproductofferings,orchangesomeofourcurrentoperatingstrategies.Ifwedonothave theresources,expertiseandconsistentexecution,orotherwisefailtodevelopsuccessfulstrategies,toaddressthesepotential competitivedisadvantages,wemaylosecustomers,ourrevenuesandprofitmarginsmaydeclineandwemaybelessprofitable orpotentiallyunprofitable.

Ifweareunabletosuccessfullyimplementourbusinessstrategy,includingincreasingsalestoProfessionalandDIY customers,expandingourmarginsandincreasingourreturnoninvestedcapital,ourbusiness,financialcondition, resultsofoperationsandcashflowscouldbeadverselyaffected.

WehaveidentifiednumerousinitiativesaspartofourbusinessstrategytoincreasesalestobothProfessionalandDIY customersandexpandourmarginsinordertoincreaseourearningsandcashflows.Ifweareunabletoimplementthese initiativesefficientlyandeffectively,oriftheseinitiativesareunsuccessful,ourbusiness,financialcondition,resultsof operationsandcashflowscouldbeadverselyaffected.Successfulimplementationofourbusinessstrategyalsodependson factorsspecifictotheautomotiveaftermarketindustryandnumerousotherfactorsthatmaybebeyondourcontrol.

7 Ourinventoryandabilitytomeetcustomerexpectationsmaybeadverselyimpactedbyfactorsoutorourcontrol.

Forthatportionofourinventorymanufacturedand/orsourcedoutsidetheUnitedStates,geopoliticalchanges,changesin traderegulations,currencyfluctuations,shippingrelatedissues,naturaldisasters,pandemicsandotherfactorsbeyondour controlmayincreasethecostofitemswepurchaseorcreateshortagesthatcouldhaveamaterialadverseeffectonoursales andprofitability.Inaddition,unanticipatedchangesinconsumerpreferencesand/oranyunforeseenhurdlestomeetingour customersneedsforautomotiveproducts(particularlypartsavailability)inatimelymannercouldundermineourbusiness strategy.

Ifweareunabletosuccessfullyimplementourgrowthstrategy,keepexistingstorelocationsoropennewlocationsin desirableplacesonfavorableterms,itcouldadverselyaffectourbusiness,financialcondition,resultsofoperationsand cashflows.

Weintendtocontinuetoexpandthemarketsweserveaspartofourgrowthstrategy,whichmayincludeopeningnew storesorbranches,aswellasexpansionofouronlinebusiness.Wemayalsogrowourbusinessthroughstrategicacquisitions. Wedonotknowwhethertheimplementationofourgrowthstrategywillbesuccessful.Asweexpandourmarketpresence throughvariousmeans,itbecomesmorecriticalthatwehaveconsistentandeffectiveexecutionacrossourentireCompanys locationsandbrands.Weareunsurewhetherwewillbeabletoopenandoperatenewlocationsonatimelyorsufficiently profitablebasis,orthatopeningnewlocationsinmarketswealreadyservewillnotharmtheprofitabilityorcomparablestore salesofexistinglocations.Thenewlyopenedandexistinglocationsprofitabilitywilldependonthecompetitionwefaceas wellasourabilitytoproperlystock,marketandpricetheproductsdesiredbycustomersinthesemarkets.Theactualnumber andformatofanynewlocationstobeopenedandthesuccessofourgrowthstrategywilldependonanumberoffactors, including,amongotherthings:

theavailabilityofdesirablelocations; thenegotiationofacceptableleaseorpurchasetermsfornewlocations; theavailabilityoffinancialresources,includingaccesstocapitalatcost-effectiveinterestrates; ourabilitytoexpandouron-lineofferingsandsales;and ourabilitytomanagetheexpansionandtohire,trainandretainqualifiedTeamMembers.

Wecompetewithotherretailersandbusinessesforsuitablelocationsforourstores.Locallanduseandzoningregulations, environmentalregulationsandotherregulatoryrequirementsmayimpactourabilitytofindsuitablelocationsandinfluencethe costofconstructing,renovatingandoperatingourstores.Inaddition,realestate,zoning,constructionandotherdelaysmay adverselyaffectstoreopeningsandrenovationsandincreaseourcosts.Further,changinglocaldemographicsatexistingstore locationsmayadverselyaffectrevenueandprofitabilitylevelsatthosestores.Theterminationorexpirationofleasesatexisting storelocationsmayadverselyaffectusiftherenewaltermsofthoseleasesareunacceptabletousandweareforcedtocloseor relocatestores.Ifwedeterminetocloseorrelocateastoresubjecttoalease,wemayremainobligatedundertheapplicable leaseforthebalanceoftheleaseterm.

Wealsoexpecttocontinuetomakestrategicacquisitionsanelementofourgrowthstrategy.Acquisitionsinvolvecertain risksthatcouldcauseourgrowthandprofitabilitytodifferfromourexpectations.Thesuccessofouracquisitionsdependsona numberoffactors,includingamongotherthings:

ourabilitytocontinuetoidentifyandacquiresuitabletargetsortoacquireadditionalcompaniesatfavorableprices andonotherfavorableterms; ourabilitytoobtainthefullbenefitsenvisionedbystrategicrelationships; theriskthatmanagementsattentionmaybedistracted; ourabilitytoretainkeypersonnelfromacquiredbusinesses; ourabilitytosuccessfullyintegratetheoperationsandsystemsoftheacquiredcompaniesandachievethestrategic, operational,financialorotheranticipatedsynergiesoftheacquisition; wemayincursignificanttransactionandintegrationcostsinconnectionwithacquisitionsthatmaynotbeoffsetbythe synergiesachievedfromtheacquisitioninthenearterm,oratall;and wemayassumeorbecomesubjecttolosscontingencies,knownorunknown,oftheacquiredcompanies,whichcould relatetopast,presentorfuturefacts,events,circumstancesoroccurrences.

8 Ifweareunabletomaintainadequatesupplychaincapacityandimprovesupplychainefficiency,wewillnotbeableto expandourbusiness,whichcouldadverselyaffectourbusiness,financialcondition,resultsofoperationsandcashflows.

Ourstoreinventoriesareprimarilyreplenishedbyshipmentsfromournetworkofdistributioncenters,warehousesand HUBstores.Asweexpandourmarketpresence,wewillneedtoincreasetheefficiencyandmaintainadequatecapacityofour supplychainnetworkinordertoachievethebusinessgoalofreducinginventorycostswhileimprovingavailabilityand movementofgoodsthroughoutoursupplychaintomeetconsumerproductneedsandchannelpreferences.Wecontinueto streamlineandoptimizeoursupplychainnetworkandsystemsandcannotbeassuredofourabilitytoincreasetheproductivity andefficiencyofouroverallsupplychainnetworktodesiredlevels.Ifwefailtoeffectivelyutilizeourexistingsupplychainor ifourinvestmentsinoursupplychaindonotprovidetheanticipatedbenefits,wecouldexperiencesub-optimalinventorylevels orincreasesinourcosts,whichcouldadverselyaffectourbusiness,financialcondition,resultsofoperationsandcashflows.

Wearedependentonoursupplierstosupplyuswithproductsthatcomplywithsafetyandqualitystandardsat competitiveprices.

Wearedependentonourvendorscontinuingtosupplyusqualityproductsontermsthatarefavorabletous.Ifour merchandiseofferingsdonotmeetourcustomersexpectationsregardingsafetyandquality,wecouldexperiencelostsales, increasedcostsandexposuretolegalandreputationalrisk.Allofoursuppliersmustcomplywithapplicableproductsafety laws,andwearedependentonthemtoensurethattheproductswebuycomplywithallsafetyandqualitystandards.Events thatgiverisetoactual,potentialorperceivedproductsafetyconcernscouldexposeustogovernmentenforcementactionand/ orprivatelitigationandresultincostlyproductrecallsandotherliabilities.Totheextentoursuppliersaresubjecttoadditional governmentregulationoftheirproductdesignand/ormanufacturingprocesses,thecostofthemerchandisewepurchasemay rise.Inaddition,negativecustomerperceptionsregardingthesafetyorqualityoftheproductswesellcouldcauseour customerstoseekalternativesourcesfortheirneeds,resultinginlostsales.Inthosecircumstances,itmaybedifficultand costlyforustoregaintheconfidenceofourcustomers.

WedependontheservicesofmanyqualifiedexecutivesandotherTeamMembers,whomwemaynotbeabletoattract, developandretain.

OursuccessdependstoasignificantextentonthecontinuedservicesandexperienceofourexecutivesandotherTeam Members.WemaynotbeabletoretainourcurrentexecutivesandotherkeyTeamMembersorattractandretainadditional qualifiedexecutivesandTeamMemberswhomaybeneededinthefuture.Wemustalsocontinuetomotivateemployeesand keepthemfocusedonourstrategiesandgoals.Ourabilitytomaintainanadequatenumberofexecutiveandotherqualified TeamMembersishighlydependentonanattractiveandcompetitivecompensationandbenefitspackage.Inaddition,lessthan onepercentofourteammembersarerepresentedbyunions.Iftheseteammembersweretoengageinastrike,workstoppage, orotherslowdown,orifthetermsandconditionsinlaboragreementswererenegotiated,wecouldexperienceadisruptionin ouroperationsandhigherongoinglaborcosts.Ifwefailorareunabletomaintaincompetitivecompensation,ourcustomer serviceandexecutionlevelscouldsufferbyreasonofadecliningqualityofourworkforce,whichcouldadverselyaffectour business,financialcondition,resultsofoperationsandcashflows.

Themarketpriceofourcommonstockmaybevolatileandcouldexposeustosecuritiesclassactionlitigation.

Thestockmarketandthepriceofourcommonstockmaybesubjecttowidefluctuationsbasedupongeneraleconomicand marketconditions.Downturnsinthestockmarketmaycausethepriceofourcommonstocktodecline.Themarketpriceofour stockmayalsobeaffectedbyourabilitytomeetanalystsexpectations.Failuretomeetsuchexpectations,evenslightly,could haveanadverseeffectonthepriceofourcommonstock.Inthepast,followingperiodsofvolatilityinthemarketpriceofa companyssecurities,securitiesclassactionlitigationhasoftenbeeninstitutedagainstsuchacompany.Ifsimilarlitigation wereinstitutedagainstus,itcouldresultinsubstantialcostsandadiversionofourattentionandresources,whichcouldhavean adverseeffectonourbusiness.

9 Ourlevelofindebtedness,adowngradeinourcreditratingsoradeteriorationinglobalcreditmarketscouldlimitthe cashflowavailableforoperationsandcouldadverselyaffectourabilitytoserviceourdebtorobtainadditional financing.

Ourlevelofindebtednesscouldrestrictouroperationsandmakeitmoredifficultforustosatisfyourdebtobligations.For example,ourlevelofindebtednesscould,amongotherthings:

affectourliquiditybylimitingourabilitytoobtainadditionalfinancingforworkingcapital; limitourabilitytoobtainfinancingforcapitalexpendituresandacquisitionsormakeanyavailablefinancingmore costly; requireustodedicateallorasubstantialportionofourcashflowtoserviceourdebt,whichwouldreducefunds availableforotherbusinesspurposes,suchascapitalexpenditures,dividendsoracquisitions; limitourflexibilityinplanningfororreactingtochangesinthemarketsinwhichwecompete; placeusatacompetitivedisadvantagerelativetoourcompetitorswhomayhavelessindebtedness; renderusmorevulnerabletogeneraladverseeconomicandindustryconditions;and makeitmoredifficultforustosatisfyourfinancialobligations.

Theindenturegoverningournotesandcreditagreementgoverningourcreditfacilitiescontainfinancialandother restrictivecovenants.Ourfailuretocomplywiththosecovenantscouldresultinaneventofdefaultwhich,ifnotcuredor waived,couldresultintheaccelerationofallofourdebt,includingsuchnotes.

Inaddition,ouroverallcreditratingmaybenegativelyimpactedbydeterioratinganduncertaincreditmarketsorother factorsthatmayormaynotbewithinourcontrol.Theinterestratesonourpubliclyissueddebtandrevolvingcreditfacilityare linkeddirectlytoourcreditratings.Accordingly,anynegativeimpactonourcreditratingswouldlikelyresultinhigherinterest ratesandinterestexpenseonanyborrowingsunderourrevolvingcreditfacilityorfutureissuancesofpublicdebtandless favorabletermsonotheroperatingandfinancingarrangements.Inaddition,itcouldreducetheattractivenessofcertainvendor paymentprogramswherebythird-partyinstitutionsfinancearrangementstoourvendorsbasedonourcreditrating,whichcould resultinincreasedworkingcapitalrequirements.

Conditionsandeventsintheglobalcreditmarketcouldhaveamaterialadverseeffectonouraccesstoshortandlong-term borrowingstofinanceouroperationsandthetermsandcostofthatdebt.Itispossiblethatoneormoreofthebanksthat provideuswithfinancingunderourrevolvingcreditfacilitymayfailtohonorthetermsofourexistingcreditfacilityorbe financiallyunabletoprovidetheunusedcreditasaresultofsignificantdeteriorationinsuchbanksfinancialcondition.An inabilitytoobtainsufficientfinancingatcost-effectiveratescouldhaveamaterialadverseeffectonourbusiness,financial condition,resultsofoperationsandcashflows.

Deteriorationofgeneralmacro-economicconditions,includingunemployment,inflationordeflation,consumerdebt levels,highfuelandenergycosts,couldhaveanegativeimpactonourbusiness,financialcondition,resultsofoperations andcashflowsduetoimpactsonoursuppliers,customersandoperatingcosts.

Ourbusinessdependsondevelopingandmaintainingcloserelationshipswithoursuppliersandonoursuppliersability andwillingnesstosellqualityproductstousatfavorablepricesandterms.Manyfactorsoutsideourcontrolmayharmthese relationshipsandtheabilityorwillingnessofthesesupplierstosellusproductsonfavorableterms.Suchfactorsincludea generaldeclineintheeconomyandeconomicconditionsandprolongedrecessionaryconditions.Theseeventscouldnegatively affectoursuppliersoperationsandmakeitdifficultforthemtoobtainthecreditlinesorloansnecessarytofinancetheir operationsintheshort-termorlong-termandmeetourproductrequirements.Financialoroperationaldifficultiesthatsomeof oursuppliersmayfacecouldalsoincreasethecostoftheproductswepurchasefromthemorourabilitytosourceproductfrom them.Wemightnotbeabletopassourincreasedcostsontoourcustomers.Ifoursuppliersfailtodevelopnewproductswe maynotbeabletomeetthedemandsofourcustomersandourresultsofoperationscouldbenegativelyaffected.

Inaddition,thetrendtowardsconsolidationamongautomotivepartssuppliersaswellastheoff-shoringofmanufacturing capacitytoforeigncountriesmaydisruptorendourrelationshipwithsomesuppliers,andcouldleadtolesscompetitionand resultinhigherprices.Wecouldalsobenegativelyimpactedbysupplierswhomightexperiencebankruptcies,workstoppages, laborstrikes,changesinforeignordomestictradepolicies,orotherinterruptionstoordifficultiesinthemanufactureorsupply oftheproductswepurchasefromthem.

10 Deteriorationinmacro-economicconditionsoranincreaseinfuelcostsmayhaveanegativeimpactonourcustomersnet worth,financialresourcesanddisposableincome.Thisimpactcouldreduceourcustomerswillingnessorabilitytopayfor accessories,maintenanceorrepairfortheirvehicles,whichresultsinlowersalesinourstores.Anincreaseinfuelcostsmay alsoreducetheoverallnumberofmilesdrivenbyourcustomersresultinginfewerpartsfailuresandareducedneedfor electivemaintenance.

Risingenergypricescoulddirectlyimpactouroperatingandproductcosts,includingourstore,supplychain,Professional delivery,utilityandproductacquisitioncosts.

Becauseweareinvolvedinlitigationfromtimetotime,andaresubjecttonumerouslawsandgovernmental regulations,wecouldincursubstantialjudgments,fines,legalfeesandothercosts.

Wearesometimesthesubjectofcomplaintsorlitigation,whichmayincludeclassactionlitigationfromcustomers,Team Membersorothersforvariousactions.Fromtimetotime,weareinvolvedinlitigationinvolvingclaimsrelatedto,among otherthings,breachofcontract,tortiousconduct,employment,labordiscrimination,breachoflawsorregulations(including TheAmericansWithDisabilitiesAct),paymentofwages,exposuretoasbestosorpotentiallyhazardousproduct,realestateand productdefects.Thedamagessoughtagainstusinsomeoftheselitigationproceedingsaresubstantial.Althoughwemaintain liabilityinsuranceforsomelitigationclaims,ifoneormoreoftheclaimsweretogreatlyexceedourinsurancecoveragelimits orifourinsurancepoliciesdonotcoveraclaim,thiscouldhaveamaterialadverseeffectonourbusiness,financialcondition, resultsofoperationsandcashflows.

Wearesubjecttonumerousfederal,stateandlocallawsandgovernmentalregulationsrelatingto,amongotherthings, environmentalprotection,productqualityandsafetystandards,buildingandzoningrequirements,laborandemployment, discriminationandincometaxes.Compliancewithexistingandfuturelawsandregulationscouldincreasethecostofdoing businessandadverselyaffectourresultsofoperations.Ifwefailtocomplywithexistingorfuturelawsorregulations,wemay besubjecttogovernmentalorjudicialfinesorsanctions,whileincurringsubstantiallegalfeesandcosts,aswellasreputational risk.Inaddition,ourcapitalandoperatingexpensescouldincreaseduetoremediationmeasuresthatmayberequiredifweare foundtobenoncompliantwithanyexistingorfuturelawsorregulations.

Weworkdiligentlytomaintaintheprivacyandsecurityofourcustomer,supplier,TeamMemberandbusiness informationandthefunctioningofourcomputersystems,websiteandotheron-lineofferings.Intheeventofasecurity breachorothercybersecurityincident,wecouldexperienceadverseoperationaleffectsorinterruptionsand/orbecome subjecttolegalorregulatoryproceedings,anyofwhichcouldleadtodamagetoourreputationinthemarketplaceand substantialcosts.

Thenatureofourbusinessrequiresustoreceive,retainandtransmitcertainpersonallyidentifiableinformationaboutour customers,suppliersandTeamMembers,someofwhichisentrustedtothird-partyserviceproviders.Whilewehavetakenand continuetoundertakesignificantstepstoprotectsuchpersonallyidentifiableinformationandotherconfidentialinformation andtoprotectthefunctioningofourcomputersystems,websiteandotheronlineofferings,acompromiseofourdatasecurity systemsorthoseofbusinessesweinteractwithcouldresultininformationrelatedtoourcustomers,suppliers,TeamMembers orbusinessbeingobtainedbyunauthorizedpersonsoradverseoperationaleffectsorinterruptions,whichcouldhaveamaterial adverseeffectonourbusiness,financialcondition,resultsofoperationsandcashflows.Wedevelop,maintainandupdate processesandsystemsinanefforttotrytopreventthisfromoccurring,buttheseactionsarecostlyandrequireconstant, ongoingattentionastechnologieschange,privacyandinformationsecurityregulationschange,andeffortstoovercome securitymeasuresbybadactorscontinuetobecomeevermoresophisticated.

Despiteourefforts,oursecuritymeasuresmaybebreachedinthefutureduetoacyber-attack,computermalwareand/or viruses,exploitationofhardwareandsoftwarevulnerabilities,TeamMembererror,malfeasance,fraudulentinducement (includingso-calledsocialengineeringattacksandphishingscams)orotheracts.Unauthorizedpartiesmayinthefuture obtainaccesstoourdataorthedataofourcustomers,suppliersorTeamMembersormayotherwisecausedamagetoor interferewithourequipmentand/ornetwork.Anybreach,damagetoorinterferencewithourequipmentornetwork,or unauthorizedaccessinthefuturecouldresultinsignificantlegalandfinancialexposureanddamagetoourreputationthat couldpotentiallyhaveanadverseeffectonourbusiness.Whilewealsoseektoobtainassurancesthatothersweinteractwith willprotectconfidentialinformation,thereisalwaystheriskthattheconfidentialityoraccessibilityofdataheldorutilizedby othersmaybecompromised.Ifacompromiseofourdatasecurityorfunctionofourcomputersystemsorwebsitewereto occur,itcouldhaveamaterialadverseeffectonouroperatingresultsandfinancialconditionandpossiblysubjectusto additionallegal,regulatoryandoperatingcostsanddamageourreputationinthemarketplace.

11 Businessinterruptionsmaynegativelyimpactourstorehours,operabilityofourcomputersystemsandtheavailability andcostofmerchandise,whichmayadverselyimpactoursalesandprofitability.

Hurricanes,tornadoes,earthquakesorothernaturaldisasters,waroractsofterrorism,orthethreatofanyofthese calamitiesorothers,mayhaveanegativeimpactonourabilitytoobtainmerchandisetosellinourstores,resultincertainof ourstoresbeingclosedforanextendedperiodoftime,negativelyaffectthelivesofourcustomersorTeamMembers,or otherwisenegativelyimpactouroperations.Someofourmerchandiseisimportedfromothercountries.Ifimportedgoods becomedifficultorimpossibletoimportintotheUnitedStatesduetobusinessinterruption(includingregulationofexporting orimporting),andifwecannotobtainsuchmerchandisefromothersourcesatsimilarcostsandwithoutanadversedelay,our salesandprofitmarginsmaybenegativelyaffected.

Intheeventthatcommercialtransportation,includingtheglobalshippingindustry,iscurtailedorsubstantiallydelayed,our businessmaybeadverselyimpactedaswemayhavedifficultyreceivingmerchandisefromoursuppliersand/ortransportingit toourstores.

Terroristattacks,warintheMiddleEast,orinsurrectioninvolvinganyoilproducingcountrycouldresultinanabrupt increaseinthepriceofcrudeoil,gasolineanddieselfuel.Suchpriceincreaseswouldincreasethecostofdoingbusinessforus andoursuppliers,andalsonegativelyimpactourcustomersdisposableincome,causinganadverseimpactonourbusiness, sales,profitmarginsandresultsofoperations.

Werelyextensivelyonourcomputersystemsandthesystemsofourbusinesspartnerstomanageinventory,process transactionsandreportresults.Thesesystemsaresubjecttodamageorinterruptionfrompoweroutages,telecommunication failures,computerviruses,securitybreachesandcatastrophiceventsoroccasionalsystembreakdownsrelatedtoordinaryuse orwearandtear.Ifourcomputersystemsorthoseofourbusinesspartnersfailwemayexperiencelossofcriticaldataand interruptionsordelaysinourabilitytoprocesstransactionsandmanageinventory.Anysuchfailure,includingplansfor disasterrecovery,ifwidespreadorextended,couldadverselyaffecttheoperationofourbusinessandourresultsofoperations.

Wemaybeaffectedbyglobalclimatechangeorbylegal,regulatory,ormarketresponsestosuchchange.

Theconcernoverclimatechangehasledtolegislativeandregulatoryinitiativesaimedatreducinggreenhousegas emissions(GHG).Forexample,proposalsthatwouldimposemandatoryrequirementsrelatedtoGHGcontinuetobe consideredbypolicymakersintheUnitedStatesandelsewhere.LawsenactedtoreduceGHGthatdirectlyorindirectlyaffect oursuppliers(throughanincreaseintheircostofproduction)orourbusiness(throughanimpactonourinventoryavailability, costofsales,operationsordemandfortheproductswesell)couldadverselyaffectourbusiness,financialcondition,resultsof operationsandcashflows.Changesinautomotivetechnologyandcompliancewithanynewormorestringentlawsor regulations,orstricterinterpretationsofexistinglaws,couldrequireadditionalexpendituresbyusoroursuppliersallofwhich couldadverselyimpactthedemandforourproductsandourbusiness,financialcondition,resultsofoperationsorcashflows.

Item1B.UnresolvedStaffComments.

None.

Item2.Properties.

Thefollowingtablesummarizesthelocation,ownershipstatusandtotalsquarefootageofspaceutilizedfordistribution centers,principalcorporateofficesandretailstoresandbranchesattheendof2017:

SquareFootage(in thousands) Location Leased Owned DistributionCenters 54locationsin34statesand4 7,408 4,589 Canadianprovinces StoreSupportCenters: Roanoke,VA Roanoke,VA 328 Raleigh,NC Raleigh,NC 251 Storesandbranches 5,183storesin49states,2U.S. 36,042 6,231 territoriesand9Canadianprovinces

12 Item3.LegalProceedings.

RefertodiscussioninNote14,Contingencies,oftheNotestotheConsolidatedFinancialStatementsincludedhereinfor informationrelatingtolegalproceedings.

Item4.MineSafetyDisclosures.

Notapplicable.

13 PARTII

Item5. MarketforRegistrantsCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities.

OurcommonstockislistedontheNewYorkStockExchange,orNYSE,underthesymbolAAP.Thetablebelowsets forththehighandlowsalepricespershareforourcommonstock,asreportedbytheNYSE,fortheperiodsindicated:

YearEnded December30,2017 December31,2016 High Low High Low FirstQuarter $ 177.50 $ 140.15 $ 165.99 $ 131.59 SecondQuarter $ 151.72 $ 99.13 $ 166.32 $ 132.98 ThirdQuarter $ 115.40 $ 82.21 $ 172.87 $ 145.15 FourthQuarter $ 107.79 $ 78.81 $ 177.83 $ 134.08

AtFebruary16,2018,therewere378holdersofrecordofourcommonstock,whichdoesnotincludethenumberof beneficialownerswhoseshareswererepresentedbysecuritypositionlistings.

OurBoardofDirectorshasdeclareda$0.06persharequarterlycashdividendsince2006.Anypaymentsofdividendsin thefuturewillbeatthediscretionofourBoardofDirectorsandwilldependuponourresultsofoperations,cashflows,capital requirementsandotherfactorsdeemedrelevantbyourBoardofDirectors.OnFebruary6,2018,ourBoardofDirectors declaredaquarterlydividendof$0.06persharetobepaidonApril6,2018toallcommonstockholdersofrecordasof March23,2018.

Thefollowingtablesetsforthinformationwithrespecttorepurchasesofourcommonstockforthefourthquarterended December30,2017:

MaximumDollar TotalNumberof ValuethatMayYet SharesPurchasedas BePurchased TotalNumber Average PartofPublicly UnderthePlansor ofShares PricePaid AnnouncedPlansor Programs(2) Period Purchased(1) perShare(1) Programs(2) (Inthousands) October8,2017toNovember4,2017 13,601 $ 81.85 $ 415,092 November5,2017toDecember2,2017 12,972 95.91 415,092 December3,2017toDecember30,2017 7,584 100.31 415,092 Total 34,157 $ 91.29 $ 415,092 (1) Theaggregatecostofrepurchasingsharesinconnectionwiththenetsettlementofsharesissuedasaresultofthevesting ofrestrictedstockunitswas$3.1millionduringthefourthquarterendedDecember30,2017. (2) Ourstockrepurchaseprogramauthorizingtherepurchaseofupto$500.0millionincommonstockwasauthorizedby ourBoardofDirectorsandpubliclyannouncedonMay14,2012.

14 StockPricePerformance

Thefollowinggraphshowsacomparisonofthecumulativetotalreturnonourcommonstock,theStandard&Poors500 IndexandtheStandard&PoorsRetailIndex.Thegraphassumesthatthevalueofaninvestmentinourcommonstockandin eachsuchindexwas$100onDecember29,2012,andthatanydividendshavebeenreinvested.Thecomparisoninthegraph belowisbasedsolelyonhistoricaldataandisnotintendedtoforecastthepossiblefutureperformanceofourcommonstock.

COMPARISONOFCUMULATIVETOTALRETURNAMONG ADVANCEAUTOPARTS,INC.,S&P500INDEX ANDS&PRETAILINDEX

$300.00

$250.00

$200.00

$150.00

$100.00

$50.00

$0.00 /15 /16 /16 /17 /28/13 /03 /02 1 0 12/29/12 12 01 01 12/3 12/3

Advance Auto Parts S&P 500 Index S&P Retail Index

December29, December28, January3, January2, December31, December30, Company/Index 2012 2013 2015 2016 2016 2017 AdvanceAutoParts $ 100.00 $ 154.04 $ 222.51 $ 211.44 $ 237.85 $ 140.40 S&P500Index $ 100.00 $ 134.11 $ 153.03 $ 155.18 $ 173.74 $ 211.67 S&PRetailIndex $ 100.00 $ 146.08 $ 160.40 $ 200.69 $ 210.00 $ 271.10

15 Item6. SelectedConsolidatedFinancialData.

Thefollowingtablesetsforthourselectedhistoricalconsolidatedstatementsofoperations,balancesheetsandother operatingdata.Includedinthistablearekeymetricsandoperatingresultsusedtomeasureourfinancialprogress.Theselected historicalconsolidatedfinancialandotherdata(excludingtheSelectedStoreDataandPerformanceMeasures)asof December30,2017andDecember31,2016andforthethreeyearsendedDecember30,2017,December31,2016and January2,2016havebeenderivedfromourauditedconsolidatedfinancialstatementsandtherelatednotesincludedelsewhere inthisreport.ThehistoricalconsolidatedfinancialandotherdataasofJanuary2,2016,January3,2015andDecember28, 2013andfortheyearsendedJanuary3,2015andDecember28,2013havebeenderivedfromourauditedconsolidated financialstatementsandtherelatednotesthathavenotbeenincludedinthisreport.Youshouldreadthisdataalongwith ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsandourconsolidatedfinancial statementsandtherelatednotesincludedelsewhereinthisreport.

(1) (inthousands,exceptpersharedata, Year storedataandratios) 2017 2016 2015 2014(2) 2013 StatementofOperationsData: Netsales $ 9,373,784 $ 9,567,679 $ 9,737,018 $ 9,843,861 $ 6,493,814 Grossprofit $ 4,085,049 $ 4,255,915 $ 4,422,772 $ 4,453,613 $ 3,252,146 Operatingincome $ 570,212 $ 787,598 $ 825,780 $ 851,710 $ 660,318 Netincome(3) $ 475,505 $ 459,622 $ 473,398 $ 493,825 $ 391,758 Basicearningspercommonshare $ 6.44 $ 6.22 $ 6.45 $ 6.75 $ 5.36 Dilutedearningspercommonshare $ 6.42 $ 6.20 $ 6.40 $ 6.71 $ 5.32 Cashdividendsdeclaredperbasicshare $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24

BalanceSheetandOtherFinancialData: Totalassets $ 8,482,301 $ 8,315,033 $ 8,127,701 $ 7,954,392 $ 5,556,054 Totaldebt $ 1,044,677 $ 1,043,255 $ 1,206,895 $ 1,628,927 $ 1,044,864 Totalstockholdersequity $ 3,415,196 $ 2,916,192 $ 2,460,648 $ 2,002,912 $ 1,516,205

SelectedStoreDataandPerformance Measures: Comparablestoresalesgrowth(4) (2.0%) (1.4%) 0.0% 2.0% (1.5%) Numberofstores,beginningofyear 5,189 5,293 5,372 4,049 3,794 Newstores(5) 60 78 121 1,487 296 Closedstores (66) (182) (200) (164) (41) Numberofstores,endofyear 5,183 5,189 5,293 5,372 4,049

(1) Allfiscalyearspresentedare52weeks,withtheexceptionof2014,whichconsistedof53weeks.Theimpactofweek53 includedinsales,grossprofitandselling,generalandadministrativeexpensesfor2014was$150.4million,$67.8millionand $46.7million. (2) WehaveincludedthefinancialresultsofGPIinourconsolidatedfinancialstatementscommencingwithitsacquisitionin 2014. (3) Netincomefor2017includesa$143.8millionnetbenefitrelatedtotheTaxCutsandJobsActthatthePresidentsignedinto lawonDecember22,2017.RefertodiscussioninNote12,IncomeTaxes,oftheNotestotheConsolidatedFinancial Statementsincludedhereinforfurtherinformation. (4) Comparablestoresalesincludenetsalesfromourstores,branchesande-commercewebsites.Salestoindependentlyowned Carquestbrandedstoresareexcludedfromourcomparablestoresales.Thechangeinstoresalesiscalculatedbasedonthe changeinnetsalesstartingonceastoreorbranchhasbeenopenfor13completeaccountingperiods(eachperiodrepresents fourweeks).Relocationsareincludedincomparablestoresalesfromtheoriginaldateofopening.Acquiredstoresare includedinourcomparablestoresalesoncethestoreshavecompleted13completeaccountingperiodsfollowingthe acquisitiondate(approximatelyoneyear).Comparablestoresalesgrowthfor2014and2015excludessalesfromthe53rd weekof2014. (5) Includes1,336storesresultingfromouracquisitionofGPIduring2014and124storesresultingfromouracquisitionof B.W.P.Distributors,Inc.during2013.

16 Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations.

Thefollowingdiscussionandanalysisoffinancialconditionandresultsofoperationsshouldbereadinconjunctionwith ourconsolidatedhistoricalfinancialstatementsandthenotestothosestatementsthatappearelsewhereinthisreport.Our discussioncontainsforward-lookingstatementsbaseduponcurrentexpectationsthatinvolverisksanduncertainties,suchas ourplans,objectives,expectationsandintentions.Actualresultsandthetimingofeventscoulddiffermateriallyfromthose anticipatedintheseforward-lookingstatementsasaresultofanumberoffactors,includingthosesetforthunderthesection entitledRiskFactorselsewhereinthisreport.

ManagementOverview

Wegenerateddilutedearningspershare(dilutedEPS)of$6.42during2017comparedto$6.20for2016.Comparable storesalesweredown2.0%in2017.Thelowerthanexpectedsalesperformancewasdrivenbythefollowingfactors:

Short-termdisruptionsresultingfromourtransformationactionstakenin2017; Macroeconomicpressuresontheautomotiveaftermarketindustry;and Weather-relatedimpactsinourNortheast,Mid-Atlantic,MidwestandNorthCentralmarkets.

Thesoftnessintheindustryoverthelastyearresultedfromhighergaspricesandasignificantlylowernumberofnewcars soldduring2008and2009resultinginanabnormaltroughofvehiclesofthatageandtheirtypicalparts,maintenanceitems andaccessoriesneeds.Ouranalysisshowsthatshort-termvolatilityisnotunusualintheindustry.Wehavecompletedanumber oftransformationactionsin2017,includingtherestructuringandreductioninthenumberofAdvanceAutoParts(AAP)and CarquestUS(CQUS)storeregions,implementationofimprovedpricingdisciplineinourstoresandreductionininventory. Whilewebelievetheseactionsareneededforthelongterm,thereweresomeshort-termdisruptionimpactsduringthethird andfourthquartersof2017.DespitestrongerperformanceinourWesternandSouthernmarkets,weexperiencedsoftnessin ourcoolingpartsandchemicalscategorysalesacrossmanyofourothermarketsasaresultofthemildersummerweather. PartiallyoffsettingthesoftnessinourAAP/CQUSbusinesswastheperformanceofcertainaspectsofourProfessionaland Canadianbusinesses,whichgrewtheirsalesduringtheyear,aswellasanincreaseddemandinthefourthquarterof2017 resultingfrommorefavorablewinterweather.

Ouroperatingprofitmarginreflectsdeliberatechoicestoinvestinourbusinessandimproveproductivityoverthelong termdespitethesalessoftness.Webelievetheseinvestmentsarenecessaryaswebuildafoundationforsustainable,long-term performanceimprovement.

Whenadjustedforthefollowingnon-operationalitems,ouradjusteddilutedearningspershare(AdjustedEPS)in2017 was$5.37comparedto$7.15during2016: YearEnded December30, December31, 2017 2016 GPIintegrationandstoreconsolidationcosts $ 0.22 $ 0.61 GPIamortizationofacquiredintangible $ 0.33 $ 0.34 Transformationexpenses $ 0.41 $ Otherincomeadjustment $ (0.07) $ ImpactoftheAct,net $ (1.94) $

RefertoReconciliationofNon-GAAPFinancialMeasuresforfurtherdetailsofourcomparableadjustmentsandthe usefulnessofsuchmeasurestoinvestors.

Summary of 2017 Financial Results

Ahigh-levelsummaryofourfinancialresultsandotherhighlightsfrom2017includes:

Totalsalesduring2017were$9,373.8million,adecreaseof2.0%ascomparedto2016,whichprimarilyrelatedtoa comparablestoresalesdeclineof2.0%.

17 Operatingincomefor2017was$570.2million,adecreaseof$217.4millionfrom2016.Asapercentageoftotalsales, operatingincomewas6.1%,adecreaseof215basispointsascomparedto2016,duetoadecreaseincomparablestore salesandanincreaseinselling,generalandadministrativeexpenses(SG&A). InventoriesasofDecember30,2017decreased$157.4million,or3.6%,frominventoriesasofDecember31,2016. Thisdecreasewasdrivenbyourinventoryoptimizationefforts. Wegeneratedoperatingcashflowof$600.8millionduring2017,anincreaseof14.8%comparedto2016, primarily due to a decrease in invento ry levels gen erated by the foc uson inventory optimization across the Company. Provisionforincometaxesdecreased$234.5millionto$44.8millionin2017ascomparedto$279.2millionin2016 primarilyduetoanet$143.8millionofone-timebenefitsassociatedwiththeTaxCutsandJobsAct(theAct)that wassignedintolawonDecember22,2017.

RefertoResultsofOperationsandLiquidityandCapitalResourcesforfurtherdetailsofourincomestatementand cashflowresults.

Business Update

Wecontinuetomakeprogressonthevariouselementsofourstrategicbusinessplan,whichisfocusedonimprovingthe customerexperienceanddrivingconsistentexecutionforbothProfessionalandDIYcustomers.Toachievethese improvements,wehaveundertakenplannedtransformationactionstohelpbuildafoundationforlong-termsuccessacrossthe entirecompany.Thesetransformationactionsinitiatedduring2017include:

Acontinuedroll-outofourcommoncatalogacrossallfourbanners-AdvanceAutoParts,Carquest,Worldpacand AutopartInternational.Thisexpandedcatalogleveragesourenterprise-wideassortmenttoallofourcustomersand willbefullyenabledthrougheachbannerspoint-of-salesystem.Thiscapabilityalsoprovidesthecustomermore flexibilityinoriginatingordersacrossbanners. Developmentofademand-drivenassortment,leveragingpurchasehistoryandlook-upsfromthecommoncatalog, versusourexistingpush-downsupplyapproach.Thistechnologyisafirststepinmovingfromasupply-driventoa demand-drivenassortment. Progressionintheearlydevelopmentofamoreefficientend-to-endsupplychaintodeliverourbroadassortment. ExpandeduseofTelematics,afleetmanagementandtrackingplatform,thatiscriticalforreal-timefleetmanagement andaccuratemeasurementandmanagementofcustomerorderanddeliverycommitments. CreationofnewDIYomni-channelcapabilitiestoreachourcustomersinthemannerthatismostdesirableforthem, includingthelaunchofourenhancedwebsiteduringthethirdquarterandeventuallaunchofamobileapp. EnteredintoastrategicpartnershipwithInterstateBatterieswhereAdvanceAutoPartsandCarqueststoreswillbethe onlyretailerinthenationtocarryacompleterangeofInterstateBatteriesinstoreandonline. AccelerationofWorldpacbranchopeningstodriveProfessionalgrowthwhileinvestinginonlineanddigitaltodrive DIYimprovements.

Industry Update

Operatingwithintheautomotiveaftermarketindustry,weareinfluencedbyanumberofgeneralmacroeconomicfactors, manyofwhicharesimilartothoseaffectingtheoverallretailindustry.Thesefactorsinclude,butarenotlimitedto:

Fuelcosts Unemploymentrates Consumerconfidence Competition Reductioninnewcarsalesin2008and2009 Milesdriven Vehiclemanufacturerwarranties Increasingnumberofvehicles11yearsandolder Economicandpoliticaluncertainty Deferralofelectiveautomotivemaintenanceandimprovementsinnewcarquality

Whilethesefactorstendtofluctuate,weremainconfidentinthelong-termgrowthprospectsfortheautomotiveparts industry.

18 ResultsofOperations

Thefollowingtablesetsforthcertainofouroperatingdataexpressedasapercentageofnetsalesfortheperiodsindicated.

YearEnded 2017vs. 2016vs. 2016 Basis 2015 Basis (inmillions) December30,2017 December31,2016 January2,2016 $Change Points $Change Points Netsales $ 9,373.8 100.0% $ 9,567.7 100.0% $ 9,737.0 100.0% $ (193.9) $ (169.3) Costofsales 5,288.7 56.4 5,311.8 55.5 5,314.2 54.6 (23.0) 90 (2.5) 94 Grossprofit 4,085.1 43.6 4,255.9 44.5 4,422.8 45.4 (170.9) (90) (166.9) (94) SG&A 3,514.8 37.5 3,468.3 36.3 3,597.0 36.9 46.5 125 (128.7) (69) Operatingincome 570.3 6.1 787.6 8.2 825.8 8.5 (217.4) (215) (38.2) (25) Interestexpense (58.8) (0.6) (59.9) (0.6) (65.4) (0.7) 1.1 5.5 5 Otherincome,net 8.8 0.1 11.1 0.1 (7.5) (0.1) (2.3) (2) 18.6 19 Provisionforincometaxes 44.8 0.5 279.2 2.9 279.5 2.9 (234.5) (244) (0.3) 5 Netincome $ 475.6 5.1% $ 459.6 4.8% $ 473.4 4.9% $ 15.9 27 $ (13.8) (6)

2017Comparedto2016

Net Sales

Netsalesfor2017were$9,373.8million,adeclineof$193.9million,or2.0%,fromnetsalesin2016.Thisdecreasewas primarilyduetoourcomparablestoresalesdeclineof2.0%.During2017,weconsolidated16storesandclosed50stores, whichwaspartiallyoffsetbytheopeningof60newstores.Ourdeclineincomparablestoresaleswasdrivenbyadecreasein overalltransactionsin2017andmildsummerweatherconditions,whichwaspartiallyoffsetbyanincreaseintheaverage transactionvalueandfavorableweatherinthefourthquarteroftheyearthatdroveastrongerdemandacrossthebusiness.

Gross Profit

Grossprofitfor2017was$4,085.0million,or43.6%ofnetsales,ascomparedto$4,255.9million,or44.5%ofnetsales, in2016,adecreaseof90basispoints.Thedecreaseingrossprofitasapercentageofnetsaleswasprimarilytheresultof highersupplychaincostsdrivenbyunfavorablecommoditypricesandthenegativeimpactrelatedtothecontinuedinventory optimizationefforts,partiallyoffsetbycontinuedmaterialcostimprovement.

SG&A

SG&Afor2017were$3,514.8million,or37.5%ofnetsales,ascomparedto$3,468.3million,or36.3%ofnetsales,for 2016,anincreaseof125basispoints.Thisincreaseasapercentageofnetsaleswasprimarilyduetocostsincurredin connectionwiththecontinuedtransformationplanandhighercustomerfacingcostsincludingstorelaborandincentivesand highermedicalcosts.PartiallyoffsettingthesecostswerelowerGPIintegration,storeclosureandconsolidationcostsand expensesin2017comparedtotheprioryearandcontinuedfocusonexpensemanagementthroughouttheyear.

Interest Expense

Interestexpensefor2017was$58.8million,ascomparedto$59.9millionin2016.Thedecreaseininterestexpensewas duetoloweroutstandingbalancesofourcreditfacilitiesduring2017,ascomparedto2016.

Income Taxes

Incometaxexpensefor2017was$44.8million,ascomparedto$279.2millionfor2016.Oureffectiveincometaxrate was8.6%and37.8%for2017and2016.Thedecreaseinoureffectivetaxratefor2017comparedto2016isprimarilyduetoa net$143.8millionbenefitrelatedtotheAct.RefertodiscussioninNote12,IncomeTaxes,oftheNotestotheConsolidated FinancialStatementsincludedhereinforfurtherinformationrelatingtoimpactoftheActin2017.

19 2016Comparedto2015

Net Sales

Netsalesfor2016were$9,567.7million,adeclineof$169.3million,or1.7%,overnetsalesfor2015.Thisdecreasewas primarilyduetoourcomparablestoresalesdeclineof1.4%andtheportionofsalesthatdidnottransferfromstoresthatwere consolidated.During2016,weconsolidated159storesandclosed23stores,whichwaspartiallyoffsetbytheopeningof78 newstores.Ourdeclineincomparablestoresaleswasdrivenbyadeclineinoveralltransactions,partiallyoffsetbyanincrease intheaveragetransactionvalue.Whilethenumberofcomparablestoretransactionsdecreasedfromthecomparableperiodin allfourquartersof2016,wesawimprovingtrendsinthesecondhalfoftheyear.

Ourcomparablestoresalesfortheyearwerenegativelyimpactedbychallengeswithproductavailabilityandservice levels,particularlyinourNortheastandGreatLakesmarkets.Onaquarterlybasisourcomparablestoresalesdecreased1.9%, 4.1%and1.0%inthefirst,secondandthirdquartersof2016andincreased3.1%inthefourthquarterof2016.Weattributethe improvementinourcomparablestoresalesinthelasthalfoftheyeartooureffortstoimproveourfocusonthecustomer, includingsustainedinvestmentsinavailability,customerserviceandincentivesforfrontlineemployees,aswellasimproved levelsofexecutionthroughoutoursupplychain.Wealsobenefitedinthefourthquarterof2016fromthetimingofthe ChristmasandNewYearsholidays.

Gross Profit

Grossprofitfor2016was$4,255.9million,or44.5%ofnetsales,ascomparedto$4,422.8million,or45.4%ofnetsales, in2015,adecreaseof94basispoints.Thedecreaseingrossprofitasapercentageofnetsaleswasprimarilytheresultof highersupplychaincostsdrivenbysignificantlyhigherinventorylevelsinthefirsthalfof2016anddisruptioninour distributionscenterslocatedinourNortheastandGreatLakesmarketsresultingfromchangesindeliveryfrequency.

SG&A

SG&Afor2016was$3,468.3million,or36.3%ofnetsales,ascomparedto$3,597.0million,or36.9%ofnetsales,for 2015,adecreaseof69basispoints.ThisdecreaseasapercentageofnetsaleswasprimarilyduetolowerGPIintegration,store closureandconsolidationandsupportcenterrestructuringcostsin2016comparedtotheprioryear.Excludingthesecosts, SG&Adecreased14basispointsasapercentageofsalescomparedtotheprioryeardrivenbyloweradministrativecosts partiallyoffsetbyhighercustomerfacingcosts,includingstorelaborandincentivesandinventoryavailabilitysupportcosts.

Operating Income

Operatingincomefor2016was$787.6million,representing8.2%ofnetsales,ascomparedto$825.8million,or8.5%of netsales,for2015,adecreaseof25basispoints.Thisdecreasewasduetoalowergrossprofitrate,partiallyoffsetbya decreaseinourSG&Arate.ThesechangesonaratebasiswereduetothegrossprofitandSG&Adriverspreviouslydiscussed.

Interest Expense

Interestexpensefor2016was$59.9million,ascomparedto$65.4millionin2015.Thedecreaseininterestexpensewas duetorepaymentsmadeonourcreditfacilityoverthelastyear.

Income Taxes

Incometaxexpensefor2016was$279.2million,ascomparedto$279.5millionfor2015.Oureffectiveincometaxrate was37.8%and37.1%for2016and2015.Ourincometaxrateinboth2016and2015reflectfavorableincometaxsettlements andstatuteoflimitationexpirations.Theincreaseinoureffectivetaxratefor2016comparedto2015isprimarilydueto$7.8 millionofsettlementsrecordedin2016relatedtoincometaxauditsofGPIfortimeperiodspriortoouracquisitionofGPI. ThesesettlementswerelargelyrecoverableundertheescrowforindemnificationclaimsinourpurchaseagreementwithGPI andthereforerecordedcorrespondingincomeof$7.3millioninOtherIncome,net.

20 Net Income

Netincomewas$459.6million,or$6.20perdilutedshare,for2016ascomparedto$473.4million,or$6.40perdiluted share,for2015.Asapercentageofnetsales,netincomefor2016was4.8%,ascomparedto4.9%for2015.Thedecreasein dilutedEPSwasdrivenprimarilybythedecreaseinnetincome.

ReconciliationofNon-GAAPFinancialMeasures

ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsincludescertainfinancial measuresnotderivedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica (GAAP).Non-GAAPfinancialmeasuresshouldnotbeusedasasubstituteforGAAPfinancialmeasures,orconsideredin isolation,forthepurposeofanalyzingouroperatingperformance,financialpositionorcashflows.Wehavepresentedthese non-GAAPfinancialmeasuresaswebelievethatthepresentationofourfinancialresultsthatexclude(1)non-operational expensesassociatedwiththeintegrationofGPIandstoreclosureandconsolidationcosts;(2)non-cashchargesrelatedtothe acquiredGPIintangibles;(3)transformationexpensesunderourstrategicbusinessplan;and(4)nonrecurringimpactofthe Act,isusefulandindicativeofourbaseoperationsbecausetheexpensesvaryfromperiodtoperiodintermsofsize,natureand significanceand/orrelatetotheintegrationofGPIandstoreclosureandconsolidationactivityinexcessofhistoricallevels. Thesemeasuresassistincomparingourcurrentoperatingresultswithpastperiodsandwiththeoperationalperformanceof othercompaniesinourindustry.Thedisclosureofthesemeasuresallowsinvestorstoevaluateourperformanceusingthesame measuresmanagementusesindevelopinginternalbudgetsandforecastsandinevaluatingmanagementscompensation. Includedbelowisadescriptionoftheexpenseswehavedeterminedarenotnormal,recurringcashoperatingexpenses necessarytooperateourbusinessandtherationaleforwhyprovidingthesemeasuresisusefultoinvestorsasasupplementto theGAAPmeasures.

GPIIntegrationExpenses WeacquiredGPIfor$2.08billionin2014andareinthemidstofamulti-yearplantointegrate theoperationsofGPIwithAAP.Thisincludestheintegrationofproductbrandsandassortments,supplychainandinformation technology.Theintegrationisbeingcompletedinphasesandthenatureandtimingofexpenseswillvaryfromquarterto quarteroverseveralyears.Theintegrationofproductbrandsandassortmentswasprimarilycompletedin2015,whichour focusthenshiftedtointegratingthesupplychainandinformationtechnologysystems.Duetothesizeoftheacquisition,we considertheseexpensestobeoutsideofourbasebusiness.Therefore,webelieveprovidingadditionalinformationintheform ofnon-GAAPmeasuresthatexcludethesecostsisbeneficialtotheusersofourfinancialstatementsinevaluatingtheoperating performanceofourbasebusinessandoursustainabilityoncetheintegrationiscomplete.

StoreClosureandConsolidationExpenses Storeclosureandconsolidationexpensesconsistofexpensesassociatedwith ourplanstoconvertandconsolidatetheCarqueststoresacquiredfromGPI.TheconversionandconsolidationoftheCarquest storesisamulti-yearprocessthatbeganin2014.AsofDecember30,2017,346CarqueststoresacquiredfromGPIhadbeen consolidatedintoexistingAAPstoresand422storeshadbeenconvertedtotheAAPformat.Whileperiodicstoreclosuresare common,theseclosuresrepresentamajorprogramoutsideofourtypicalmarketevaluationprocess.Webelieveitisusefulto provideadditionalnon-GAAPmeasuresthatexcludethesecoststoprovideinvestorsgreatercomparabilityofourbasebusiness andcoreoperatingperformance.Wealsocontinuetohavestoreclosuresthatoccuraspartofournormalmarketevaluation processandhavenotexcludedtheexpensesassociatedwiththesestoreclosuresincomputingournon-GAAPmeasures.

TransformationExpenses Weexpecttorecognizeasignificantamountoftransformationexpensesoverthenextseveral yearsaswetransitionfromintegrationofourAAP/CQUSbusinessestoaplanthatinvolvesamoreholisticandintegrated transformationoftheentireCompanyacrossallfourbanners,includingWorldpacandAI.Theseexpenseswillinclude,butnot belimitedto,restructuringcosts,third-partyprofessionalservicesandothersignificantcoststointegrateandstreamlineour operatingstructureacrosstheenterprise.WefocusedourinitialtransformationeffortsonourAAP/CQUSfieldstructureinthe secondquarterandarereviewingotherareasthroughouttheCompany,suchassupplychainandinformationtechnology.

U.S.TaxReform OnDecember22,2017,theActwassignedintolaw.TheActamendstheInternalRevenueCodeby, amongotherthings,permanentlyloweringthecorporatetaxrateto21%fromtheexistingmaximumrateof35%, implementingaterritorialtaxsystemandimposingaone-timerepatriationtaxondeemedrepatriatedearningsofforeign subsidiaries.Asaresultofthereductiontothecorporatetaxrate,whichiseffectiveonJanuary1,2018,theCompanyis requiredtore-valuedeferredincometaxassetsandliabilitiesinthereportingperiodofenactment.TheCompanyalsorecorded anestimatedchargetoincometaxexpenseforthenonrecurringrepatriationtaxonaccumulatedearningsofforeignsubsidiaries anditistheCompanysintentiontobringbacktheaccumulatedforeignearningsheldascashinthenearterm.

21 WehaveincludedareconciliationofthisinformationtothemostcomparableGAAPmeasuresinthefollowingtable. YearEnded December30, December31, (inthousands,exceptpersharedata) 2017 2016 Netincome(GAAP) $ 475,505 $ 459,622 SG&Aadjustments: GPIintegrationandstoreconsolidationcosts 26,207 72,828 GPIamortizationofacquiredintangibleassets 39,477 40,940 Transformationexpenses 50,425 Otherincomeadjustment(1) (8,878) Provisionforincometaxesonadjustments(2) (40,748) (43,232) ImpactoftheAct,net (143,756) Adjustednetincome(Non-GAAP) $ 398,232 $ 530,158

Dilutedearningspershare(GAAP) $ 6.42 $ 6.20 Adjustments,netoftax (1.05) 0.95 AdjustedEPS(Non-GAAP) $ 5.37 $ 7.15

(1) TheadjustmenttoOtherincomefor2017relatestoincomerecognizedfromanindemnificationagreementassociated withtheacquisitionofGPI. (2) Theincometaximpactofnon-GAAPadjustmentsiscalculatedusingtheestimatedtaxrateineffectfortherespective non-GAAPadjustments.

LiquidityandCapitalResources

Overview

Ourprimarycashrequirementsnecessarytomaintainourcurrentoperationsincludepayrollandbenefits,inventory purchases,contractualobligations,capitalexpenditures,paymentofincometaxesandfundingofinitiativesunderourstrategic businessplan.Inaddition,wemayuseavailablefundsforacquisitions,torepayborrowingsunderourcreditagreement,to periodicallyrepurchasesharesofourcommonstockunderourstockrepurchaseprogramsandforthepaymentofquarterly cashdividends.Historically,wehavefundedtheserequirementsprimarilythroughcashgeneratedfromoperations, supplementedbyborrowingsunderourcreditfacilitiesandnotesofferingsasneeded.Webelievefundsgeneratedfromour expectedresultsofoperations,availablecashandcashequivalents,andavailableborrowingsunderourcreditfacilitywillbe sufficienttofundourprimaryobligationsforthenextyear.

Capital Expenditures

Ourprimarycapitalrequirementshavebeenthefundingofournewstoredevelopment(leasedandownedlocations), maintenanceofexistingstores,andinvestmentsinsupplychainandinformationtechnology.Weleaseapproximately84%of ourstores.Ourcapitalexpenditureswere$189.8millionin2017,adecreaseof$69.8millionfrom2016.Thisdecreasein capitalexpenditureswasduetodisciplinedcapitalspendingbytheCompanytofocusonpriorityprojectsinaneffortto optimizecashflowfor2017.

Ourfuturecapitalrequirementswilldependinlargepartonthenumberandtimingofnewstoredevelopment(leasedand ownedlocations)withinagivenyearandtheinvestmentswemakeinexistingstores,informationtechnologyandsupplychain network.In2018,weanticipatethatourcapitalexpendituresrelatedtosuchinvestmentswillbeupto$250million,butmay varywithbusinessconditions.

22 Analysis of Cash Flows

Thefollowingtablesummarizesourcashflowsfromoperating,investingandfinancingactivities:

YearEnded December30, December31, January2, (inmillions) 2017 2016 2016 Cashflowsfromoperatingactivities $ 600.8 $ 523.3 $ 702.6 Cashflowsfrominvestingactivities (178.6) (262.0) (253.4) Cashflowsfromfinancingactivities (14.9) (217.1) (459.0) Effectofexchangeratechangesoncash 4.5 0.3 (4.2) Netincrease(decrease)incashandcashequivalents $ 411.8 $ 44.4 $ (13.9)

OperatingActivities

For2017,netcashprovidedbyoperatingactivitiesincreased$77.5millionto$600.8million.Thisnetincreasein operatingcashflowwasprimarilydrivenbythetimingofpaymentswithinworkingcapital.Ourinventorybalanceasof December30,2017decreased$157.4million,or3.6%,overtheprioryearprimarilydrivenbythefocusoninventory optimizationacrosstheCompany.

For2016,netcashprovidedbyoperatingactivitiesdecreased$179.3millionto$523.3million.Thisnetdecreasein operatingcashflowwasprimarilydrivenbyadecreaseinaccountspayable,lowernetincomeandthetimingofpayments withinworkingcapital,partiallyoffsetbythetimingofincometaxdeductions.OurinventorybalanceasofDecember31,2016 increased$151.1million,or3.6%,overtheprioryeardrivenmainlybythebuild-upoftransitionalinventoryassociatedwith ourCarquestproductandstoreintegrationandtheopeningofnewlocations,includinganewWorldpacdistributioncenter.

InvestingActivities

For2017,netcashusedininvestingactivitiesdecreasedby$83.4millionto$178.6millioncomparedto2016.The decreaseincashusedininvestingactivitieswasprimarilydrivenbythedecreaseincashusedforpurchasesofpropertyand equipment.

For2016,netcashusedininvestingactivitiesincreasedby$8.7millionto$262.0millioncomparedto2015.Theincrease incashusedininvestingactivitieswasprimarilydrivenbycashusedforpurchasesofpropertyandequipment.

FinancingActivities

For2017,netcashusedinfinancingactivitiesdecreasedby$202.2millionto$14.9million.Thisdecreasewasprimarilya resultoflowernetrepaymentsontherevolvingcreditfacilityandtermloanthanintheprioryear.

For2016,netcashusedinfinancingactivitiesdecreasedby$241.9millionto$217.1million.Thisdecreasewasprimarily aresultoflowernetrepaymentsontherevolvingcreditfacilityandtermloanthanintheprioryear.

Long-Term Debt

FordetailedinformationrefertoNote7,Long-termDebtandFairValueofFinancialInstruments,oftheNotestothe ConsolidatedFinancialStatementsincludedherein.

AsofDecember30,2017,wehadacreditratingfromStandard&PoorsofBBB-andfromMoodysInvestorServiceof Baa2.ThecurrentoutlooksbyStandard&PoorsandMoodysarebothstable.Thecurrentpricinggridusedtodetermineour borrowingrateunderourrevolvingcreditfacilityisbasedonourcreditratings.Ifthesecreditratingsdecline,ourinterestrate onoutstandingbalancesmayincreaseandouraccesstoadditionalfinancingonfavorabletermsmaybecomemorelimited.In addition,itcouldreducetheattractivenessofcertainvendorpaymentprogramswherebythird-partyinstitutionsfinance arrangementstoourvendorsbasedonourcreditrating,whichcouldresultinincreasedworkingcapitalrequirements. Conversely,ifthesecreditratingsimprove,ourinterestratemaydecrease.

23 Off-Balance-Sheet Arrangements

AsofDecember30,2017,otherthanasdisclosedinNote7,Long-termDebtandFairValueofFinancialInstruments,of theNotestotheConsolidatedFinancialStatementsincludedherein,wehadnootheroff-balance-sheetarrangements.We includeotheroff-balance-sheetarrangementsinourContractualObligationstableincludingoperatingleasepaymentsand interestpaymentsonourNotes,revolvingcreditfacilityandlettersofcreditoutstanding.

Contractual Obligations

InadditiontoourNotesandrevolvingcreditfacility,weutilizeoperatingleasesasanothersourceoffinancing.The amountspayableundertheseoperatingleasesareincludedinourContractualObligationstable.Ourfuturecontractual obligationsrelatedtolong-termdebt,operatingleasesandothercontractualobligationsasofDecember30,2017wereas follows:

(inthousands) PaymentsDuebyPeriod Lessthan1 Morethan5 ContractualObligations Total Year 1-3Years 3-5Years Years Long-termdebt(1) $ 1,050,350 $ 350 $ 300,000 $ 300,000 $ 450,000 Interestpayments 227,769 51,000 96,029 61,269 19,471 Operatingleases(2) 2,959,853 484,427 846,829 620,090 1,008,507 Otherlong-termliabilities(3) 542,681 Purchaseobligations(4) 25,809 10,948 9,086 3,600 2,175 $ 4,806,462 $ 546,725 $ 1,251,944 $ 984,959 $ 1,480,153

Note:ForadditionalinformationrefertoNote7,Long-termDebtandFairValueofFinancialInstruments;Note12, IncomeTaxes;Note13,LeaseCommitments;Note14,Contingencies;andNote15,BenefitPlans,oftheNotestothe ConsolidatedFinancialStatementsincludedherein.

(1) Long-termdebtrepresentstheprincipalamountofour2020Notes,2022Notesand2023Notes,whichbecomeduein 2020,2022and2023. (2) Weleasecertainstorelocations,distributioncenters,officespace,equipmentandvehicles.Ourpropertyleases generallycontainrenewalandescalationclausesandotherconcessions.Theseprovisionsareconsideredinour calculationofourminimumleasepaymentsthatarerecognizedasexpenseonastraight-linebasisovertheapplicable leaseterm.Anyleasepaymentsthatarebaseduponanexistingindexorrateareincludedinourminimumlease paymentcalculations. (3) Includesthelong-termportionofdeferredincometaxesandotherliabilities,includingself-insurancereservesfor whichnocontractualpaymentscheduleexists.Asweexpectthepaymentstooccurbeyond12monthsfrom December30,2017,therelatedbalanceshavenotbeenreflectedinthePaymentsDuebyPeriodsectionofthetable. (4) Purchaseobligationsincludeagreementstopurchasegoodsorservicesthatareenforceable,legallybindingand specifyallsignificantterms,includingfixedorminimumquantitiestobepurchased;fixed,minimumorvariableprice provisions;andtheapproximatetimingofthetransaction.Includedinthetableaboveisthelesseroftheremaining obligationorthecancellationpenaltyundertheagreement.

CriticalAccountingPolicies

OurfinancialstatementshavebeenpreparedinaccordancewithGAAP.Ourdiscussionandanalysisofthefinancial conditionandresultsofoperationsarebasedonthesefinancialstatements.Thepreparationofthesefinancialstatements requirestheapplicationofaccountingpoliciesinadditiontocertainestimatesandjudgmentsbyourmanagement.Our estimatesandjudgmentsarebasedoncurrentlyavailableinformation,historicalresultsandotherassumptionswebelieveare reasonable.Actualresultscoulddiffermateriallyfromtheseestimates.

Thepreparationofourfinancialstatementsincludedthefollowingsignificantestimatesandexerciseofjudgment.

24 GoodwillandIndefinite-LivedIntangibleAssets

Weevaluategoodwillandindefinite-livedintangiblesforimpairmentannuallyasofthefirstdayofourfourthquarteror whenevereventsorchangesincircumstancesindicatethecarryingvalueofthegoodwillorotherintangibleassetmaynotbe recoverable.Wetestgoodwillforimpairmentatthereportingunitlevel.Effectiveinthethirdquarterof2017,theCompany realigneditsthreegeographicdivisions,whichincludedtheoperationsofthestoresoperatingundertheAdvanceAutoParts, CarquestandAutopartInternationaltradenames,intotwoU.S.geographicdivisions.Asaresultofthisrealignmentandchange intheoperatingstructureofitsCarquestIndependentandCarquestCanadabusinesses,theCompanyhasincreaseditsnumber ofoperatingsegmentsfromfourtofive.Aseachoperatingsegmentrepresentsareportingunit,goodwillwasreassignedtothe affectedreportingunitsusingarelativefairvalueapproach.

Ourdetailedimpairmenttestinginvolvescomparingthefairvalueofeachreportingunittoitscarryingvalue,including goodwill.Ifareportingunitsfairvaluehashistoricallysignificantlyexceededitscarryingvalue,thenarisk-basedmarket approachofdeterminingthereportingunitsfairvalueisutilized.TheCompanyusesavaluationspecialisttodeterminethefair valuefortheremainingreportingunits.Ifthefairvalueexceedscarryingvalue,weconcludethatnogoodwillimpairmenthas occurred.Ifthecarryingvalueofthereportingunitexceedsitsfairvalue,asecondstepisrequiredtomeasurepossible goodwillimpairmentloss.

Ourindefinite-livedintangibleassetsprimarilyconsistoftheCarquestandWorldpacbrandsacquiredintheacquisitionof GPIin2014andaretestedforimpairmentattheassetgrouplevel.Indefinite-livedintangiblesareevaluatedbycomparingthe carryingamountoftheassettothefuturediscountedcashflowsthattheassetisexpectedtogenerate.Ifthefairvaluebasedon thefuturediscountedcashflowsexceedsthecarryingvalue,weconcludethatnointangibleassetimpairmenthasoccurred.If thecarryingvalueoftheindefinite-livedintangibleassetexceedsthefairvalue,werecognizeanimpairmentloss.

Wecompleteourimpairmentevaluationsbycombininginformationfromourinternalvaluationanalyses,consideringother publiclyavailablemarketinformationandusinganindependentvaluationfirm.Wedeterminefairvalueusingwidelyaccepted valuationtechniques,includingdiscountedcashflowsandmarketmultipleanalyses.Thesetypesofanalysesrequire managementtomakeassumptionsasamarketplaceparticipantwouldandtoapplyjudgmenttoestimateindustryeconomic factorsandtheprofitabilityoffuturebusinessstrategiesofourCompanyandourreportingunits.Theseassumptionsand estimatesareamajorcomponentofthederivedfairvalueofourreportingunits.Criticalassumptionsincludeprojectedsales growth,grossprofitrates,SG&Arates,workingcapitalfluctuations,capitalexpenditures,discountrates,royaltyratesand terminalgrowthrates.Ifactualresultsarenotconsistentwithourestimatesorassumptions,wemaybeexposedtoan impairmentchargethatcouldbematerial.

InventoryReserves

Ourinventoryconsistsprimarilyofparts,batteries,accessoriesandotherproductsusedonvehiclesthathavereasonably longshelflives.Althoughtheriskofobsolescenceisminimal,weconsiderwhetherwemayhaveexcessinventorybasedon ourcurrentapproachformanagingslowermovinginventory.Weestablishreserveswhentheexpectednetproceedsareless thancarryingvalue.

Futurechangesbyvendorsintheirpoliciesorwillingnesstoacceptreturnsofexcessinventory,changesinourinventory managementapproachforexcessandobsoleteinventoryorfailurebyustoeffectivelymanagethelifecycleofourinventory couldrequireustoreviseourestimatesofrequiredreservesandresultinanegativeimpactonourconsolidatedstatementof operations.A10%differenceinactualinventoryreservesatDecember30,2017wouldresultinachangeinexpenseof approximately$11.1millionfor2017.

Self-InsuranceReserves

Ourself-insurancereservesconsistoftheestimatedexposureforclaimsfiled,claimsincurredbutnotyetreportedand projectedfutureclaims,andareestablishedusingactuarialmethodsfollowedintheinsuranceindustryandourhistoricalclaims experience.Specificfactorsinclude,butarenotlimitedto,assumptionsabouthealthcarecosts,theseverityofaccidentsand theincidenceofillnessandtheaveragesizeofclaims.Generally,claimsforautomobileandgeneralliabilityandworkers compensationtakeseveralyearstosettle.Weclassifytheportionofourself-insurancereservesthatisnotexpectedtobesettled withinoneyearinlong-termliabilities.

25 Whilewedonotexpecttheamountsultimatelypaidtodiffersignificantlyfromourestimates,ourself-insurancereserves andcorrespondingSG&Acouldbeaffectediffutureclaimexperiencedifferssignificantlyfromhistoricaltrendsandactuarial assumptions.A10%changeinourself-insuranceliabilitiesatDecember30,2017wouldresultinachangeinexpenseof approximately$15.3millionfor2017.

VendorIncentives

Wereceiveincentivesintheformofreductionstoamountsowedand/orpaymentsfromvendorsrelatedtovolumerebates andotherpromotionalconsiderations.Manyoftheseincentivesareunderagreementswithtermsinexcessofoneyear,while othersarenegotiatedonanannualbasisorless.VolumerebatesandvendorpromotionalallowancesnotoffsettinginSG&Aare earnedbasedoninventorypurchasesandinitiallyrecordedasareductiontoinventory.Thesedeferredamountsareincludedas areductiontocostofsalesastheinventoryissold.

Vendorpromotionalallowancesprovidedasareimbursementofspecific,incrementalandidentifiablecostsincurredto promoteavendorsproductsareincludedasanoffsettoSG&Awhenthecostisincurredifthefairvalueofthatbenefitcanbe reasonablyestimated.Certainofourvendoragreementscontainpurchasevolumeincentivesthatprovideforincreasedfunding whengraduatedpurchasevolumesaremet.Amountsaccruedthroughouttheyearcouldbeimpactedifactualpurchasevolumes differfromprojectedannualpurchasevolumes.

Similarly,werecognizeotherpromotionalincentivesearnedunderlong-termagreementsasareductiontocostofsales. However,theseincentivesarerecognizedbasedonthecumulativenetpurchasesasapercentageoftotalestimatednet purchasesoverthelifeoftheagreement.Short-termincentiveswithtermslessthanoneyeararegenerallyrecognizedasa reductiontocostofsalesoverthedurationoftheagreements.

Amountsreceivedorreceivablefromvendorsthatarenotyetearnedarereflectedasdeferredrevenue.Managements estimateoftheportionofdeferredrevenuethatwillberealizedwithinoneyearofthebalancesheetdateisincludedinOther currentliabilities.EarnedamountsthatarereceivablefromvendorsareincludedinReceivables,netexceptforthatportion expectedtobereceivedafteroneyear,whichisincludedinOtherassets,net.Weregularlyreviewthereceivablesfromvendors toensuretheyareabletomeettheirobligations.Historically,thechangeinourreserveforreceivablesrelatedtovendor fundinghasnotbeensignificant.A10%differenceinourvendorincentivesdeferredininventoryatDecember30,2017would resultinachangeindeferredincentivesofapproximately$17.9millionfor2017.

NewAccountingPronouncements

Foradescriptionofrecentlyadoptedandissuedaccountingstandards,includingtheexpecteddatesofadoptionand estimatedeffects,ifany,onourconsolidatedfinancialstatements,seeRecentlyIssuedAccountingPronouncementsinNote 2,SignificantAccountingPolicies,oftheNotestotheConsolidatedFinancialStatementsincludedherein.

Item7A.QuantitativeandQualitativeDisclosuresaboutMarketRisks.

Wearesubjecttointerestraterisktotheextentweborrowagainstourrevolvingcreditfacilityasitisbased,atouroption, onadjustedLIBOR,plusamargin,oranalternatebaserate,plusamargin.AsofDecember30,2017andDecember31,2016, wehadnoborrowingsoutstandingunderourrevolvingcreditfacility.

Ourfinancialassetsthatareexposedtocreditriskconsistprimarilyoftradeaccountsreceivableandvendorreceivables. Weareexposedtonormalcreditriskfromcustomers.Ourconcentrationofcreditriskislimitedbecauseourcustomerbase consistsofalargenumberofcustomerswithrelativelysmallbalances,whichallowsthecreditrisktobespreadacrossabroad base.Wehavenothistoricallyhadsignificantcreditlosses.

WeareexposedtoforeigncurrencyexchangeratefluctuationsfortheportionoftheCompanysinventorypurchases denominatedinforeigncurrencies.Webelievethatthepricevolatilityrelatingtoforeigncurrencyexchangeratesispartially mitigatedbyourabilitytoadjustsellingprices.During2017and2016,foreigncurrencytransactionsdidnotsignificantly impactnetincome.

26 Item8.FinancialStatementsandSupplementaryData.

SeefinancialstatementsincludedinItem15Exhibits,FinancialStatementSchedulesofthisannualreport.

Item9.ChangesinandDisagreementswithAccountantsonAccountingandFinancialDisclosure.

None.

Item9A.ControlsandProcedures.

DisclosureControlsandProcedures

Disclosurecontrolsandproceduresareourcontrolsandotherproceduresthataredesignedtoensurethatinformation requiredtobedisclosedbyusinourreportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarized andreportedwithinthetimeperiodsspecifiedintheSECsrulesandforms.Disclosurecontrolsandproceduresinclude, withoutlimitation,controlsandproceduresdesignedtoensurethatinformationrequiredtobedisclosedbyusinourreports thatwefileorsubmitundertheSecuritiesExchangeActof1934isaccumulatedandcommunicatedtoourmanagement, includingourprincipalexecutiveofficerandprincipalfinancialofficer,asappropriatetoallowtimelydecisionsregarding requireddisclosure.Internalcontrolsoverfinancialreporting,nomatterhowwelldesigned,haveinherentlimitations,including thepossibilityofhumanerrorandtheoverrideofcontrols.Therefore,eventhosesystemsdeterminedtobeeffectivecan provideonlyreasonableassurancewithrespecttothereliabilityoffinancialreportingandfinancialstatementpreparationand presentation.Further,becauseofchangesinconditions,theeffectivenessmayvaryovertime.

EvaluationofDisclosureControlsandProcedures

Ourmanagementevaluated,withtheparticipationofourprincipalexecutiveofficerandprincipalfinancialofficer,the effectivenessofourdisclosurecontrolsandproceduresasofDecember30,2017inaccordancewithRule13a-15(b)underthe ExchangeAct.Basedonthisevaluation,ourprincipalexecutiveofficerandourprincipalfinancialofficerhaveconcludedthat, asoftheendoftheperiodcoveredbythisreport,ourdisclosurecontrolsandprocedureswereeffective.

ManagementsReportonInternalControloverFinancialReporting

Ourmanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreportingas definedinRule13(a)-15(f)undertheExchangeAct.TheCompanysinternalcontroloverfinancialreportingisaprocess designedunderthesupervisionoftheCompanysprincipalexecutiveofficerandprincipalfinancialofficer,andeffectedbythe CompanysBoardofDirectors,managementandotherpersonnel,toprovidereasonableassuranceregardingthereliabilityof financialreportingandthepreparationoftheCompanysfinancialstatementsforexternalpurposesinaccordancewithGAAP. Ourinternalcontroloverfinancialreportingincludespoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat, inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsoftheCompany;(2)provide reasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordance withGAAP,andthatreceiptsandexpendituresoftheCompanyarebeingmadeonlyinaccordancewithauthorizationsof managementanddirectorsoftheCompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionof unauthorizedacquisition,use,ordispositionoftheCompanysassetsthatcouldhaveamaterialeffectonthefinancial statements.

AsofDecember30,2017,management,includingtheCompanysprincipalexecutiveofficerandprincipalfinancial officer,assessedtheeffectivenessoftheCompanysinternalcontroloverfinancialreportingbasedonthecriteriaestablishedin InternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadway Commission(COSO).Basedonthisassessment,managementhasdeterminedthattheCompanysinternalcontrolover financialreportingasofDecember30,2017iseffective.

ChangesinInternalControlOverFinancialReporting

TherewerenochangesinourinternalcontroloverfinancialreportingthatoccurredduringthequarterendedDecember30, 2017thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

27 AttestationReportofRegisteredPublicAccountingFirm

OurinternalcontroloverfinancialreportingasofDecember30,2017hasbeenauditedbyDeloitte&ToucheLLP,an independentregisteredpublicaccountingfirm,whichalsoauditedourConsolidatedFinancialStatementsfortheyearended December30,2017,asstatedintheirreportincludedherein,whichexpressesanunqualifiedopinionontheeffectivenessofour internalcontroloverfinancialreportingasofDecember30,2017.

Item9B.OtherInformation.

RefertodiscussioninNote4,ExitActivitiesandOtherInitiatives,oftheNotestotheConsolidatedFinancialStatements includedherein.

28 PARTIII

Item10. Directors,ExecutiveOfficersandCorporateGovernance.

Foradiscussionofourdirectors,executiveofficersandcorporategovernance,seetheinformationsetforthinthesections entitledProposalNo.1-ElectionofDirectors,CorporateGovernance,MeetingsandCommitteesoftheBoard, InformationConcerningOurExecutiveOfficers,AuditCommitteeReport,andSection16(a)BeneficialOwnership ReportingComplianceinourproxystatementforthe2018annualmeetingofstockholderstobefiledwiththeSECwithin120 daysaftertheendoftheyearendedDecember30,2017(the2018ProxyStatement),whichisincorporatedhereinby reference.

Item11.ExecutiveCompensation.

SeetheinformationsetforthinthesectionsentitledMeetingsandCommitteesoftheBoard,CompensationCommittee Report,CompensationDiscussionandAnalysis,AdditionalInformationRegardingExecutiveCompensationand DirectorCompensationinthe2018ProxyStatement,whichisincorporatedhereinbyreference.

Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters.

SeetheinformationsetforthinthesectionsentitledEquityCompensationPlanInformationTableandSecurity OwnershipofCertainBeneficialOwnersandManagementinthe2018ProxyStatement,whichisincorporatedhereinby reference.

Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence.

SeetheinformationsetforthinthesectionsentitledCorporateGovernanceandMeetingsandCommitteesofthe Boardinthe2018ProxyStatement,whichisincorporatedhereinbyreference.

Item14.PrincipalAccountantFeesandServices.

Seetheinformationsetforthinthesectionentitled2017and2016AuditFeesinthe2018ProxyStatement,whichis incorporatedhereinbyreference.

29 PARTIV

Item15.Exhibits,FinancialStatementSchedules.

(a)(1)FinancialStatements

AuditedConsolidatedFinancialStatementsofAdvanceAutoParts,Inc.andSubsidiariesfor theyearsendedDecember30,2017,December31,2016andJanuary2,2016: ReportsofIndependentRegisteredPublicAccountingFirm...... F-1 ConsolidatedBalanceSheets ...... F-3 ConsolidatedStatementsofOperations ...... F-4 ConsolidatedStatementsofComprehensiveIncome...... F-4 ConsolidatedStatementsofChangesinStockholders'Equity...... F-5 ConsolidatedStatementsofCashFlows ...... F-6 NotestotheConsolidatedFinancialStatements...... F-7

(2)FinancialStatementSchedule

ScheduleII-ValuationandQualifyingAccounts...... F-39

(3)Exhibits

TheExhibitIndexprecedingthesignaturesforthisreportisincorporatedhereinbyreference.

30 This page intentionally left blank. REPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

TotheshareholdersandtheBoardofDirectorsofAdvanceAutoParts,Inc.

OpinionontheFinancialStatements WehaveauditedtheaccompanyingconsolidatedbalancesheetsofAdvanceAutoParts,Inc.andsubsidiaries(theCompany) asofDecember30,2017andDecember31,2016,therelatedconsolidatedstatementsofoperations,comprehensiveincome, changesinstockholdersequity,andcashflowsforeachofthethreeyearsintheperiodendedDecember30,2017,andthe relatednotesandtheschedulelistedintheIndexatItem15(collectivelyreferredtoasthefinancialstatements).Inour opinion,thefinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasof December30,2017andDecember31,2016,andtheresultsofitsoperationsanditscashflowsforeachofthethreeyearsin theperiodendedDecember30,2017,inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesof America.

Wehavealsoaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates) (PCAOB),theCompanysinternalcontroloverfinancialreportingasofDecember30,2017,basedoncriteriaestablishedin InternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadway CommissionandourreportdatedFebruary21,2018,expressedanunqualifiedopinionontheCompanysinternalcontrolover financialreporting.

BasisforOpinion ThesefinancialstatementsaretheresponsibilityoftheCompanysmanagement.Ourresponsibilityistoexpressanopinionon theCompanysfinancialstatementsbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePCAOBandare requiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicable rulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperform theaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement,whetherdue toerrororfraud.Ourauditsincludedperformingprocedurestoassesstherisksofmaterialmisstatementofthefinancial statements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincluded examining,onatestbasis,evidenceregardingtheamountsanddisclosuresinthefinancialstatements.Ourauditsalso includedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingthe overallpresentationofthefinancialstatements.Webelievethatourauditsprovideareasonablebasisforouropinion.

Charlotte,NorthCarolina February21,2018

WehaveservedastheCompanysauditorsince2002.

F-1 REPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

TotheshareholdersandtheBoardofDirectorsofAdvanceAutoParts,Inc.

OpiniononInternalControloverFinancialReporting

WehaveauditedtheinternalcontroloverfinancialreportingofAdvanceAutoParts,Inc.andsubsidiaries(theCompany)as ofDecember30,2017,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbythe CommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).Inouropinion,theCompanymaintained,in allmaterialrespects,effectiveinternalcontroloverfinancialreportingasofDecember30,2017,basedoncriteriaestablished inInternalControl-IntegratedFramework(2013)issuedbyCOSO.

Wehavealsoaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates) (PCAOB),theconsolidatedfinancialstatementsandfinancialstatementscheduleasofandfortheyearendedDecember30, 2017,oftheCompanyandourreportdatedFebruary21,2018,expressedanunqualifiedopiniononthoseconsolidated financialstatementsandfinancialstatementschedule.

BasisforOpinion

TheCompanysmanagementisresponsibleformaintainingeffectiveinternalcontroloverfinancialreportingandforits assessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedintheaccompanyingManagements ReportonInternalControloverFinancialReporting.OurresponsibilityistoexpressanopinionontheCompanysinternal controloverfinancialreportingbasedonouraudit.WeareapublicaccountingfirmregisteredwiththePCAOBandare requiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicable rulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformthe audittoobtainreasonableassuranceaboutwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinall materialrespects.Ourauditincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtherisk thatamaterialweaknessexists,testingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedonthe assessedrisk,andperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatour auditprovidesareasonablebasisforouropinion.

DefinitionandLimitationsofInternalControloverFinancialReporting

Acompanysinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthe reliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerally acceptedaccountingprinciples.Acompanysinternalcontroloverfinancialreportingincludesthosepoliciesandprocedures that(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsand dispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessaryto permitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsand expendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthe company;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,or dispositionofthecompanysassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also, projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequate becauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Charlotte,NorthCarolina February21,2018

F-2 AdvanceAutoParts,Inc.andSubsidiaries ConsolidatedBalanceSheets (inthousands,exceptpersharedata)

December30, December31, Assets 2017 2016 Currentassets: Cashandcashequivalents $ 546,937 $ 135,178 Receivables,net 606,357 641,252 Inventories 4,168,492 4,325,868 Othercurrentassets 105,106 70,466 Totalcurrentassets 5,426,892 5,172,764 Propertyandequipment,netofaccumulateddepreciationof$1,783,383 and$1,660,648 1,394,138 1,446,340 Goodwill 994,293 990,877 Intangibleassets,net 597,674 640,903 Otherassets,net 69,304 64,149 $ 8,482,301 $ 8,315,033 LiabilitiesandStockholdersEquity Currentliabilities: Accountspayable $ 2,894,582 $ 3,086,177 Accruedexpenses 533,548 554,397 Othercurrentliabilities 51,967 35,472 Totalcurrentliabilities 3,480,097 3,676,046 Long-termdebt 1,044,327 1,042,949 Deferredincometaxes 303,620 454,282 Otherlong-termliabilities 239,061 225,564 Commitmentsandcontingencies Stockholdersequity: Preferredstock,nonvoting,$0.0001parvalue, 10,000sharesauthorized;nosharesissuedoroutstanding Commonstock,voting,$0.0001parvalue,200,000sharesauthorized; 75,569sharesissuedand73,936outstandingatDecember30,2017 75,326sharesissuedand73,749outstandingatDecember31,2016 8 8 Additionalpaid-incapital 664,646 631,052 Treasurystock,atcost,1,633and1,577shares (144,600) (138,102) Accumulatedothercomprehensiveloss (24,954) (39,701) Retainedearnings 2,920,096 2,462,935 Totalstockholdersequity 3,415,196 2,916,192 $ 8,482,301 $ 8,315,033

Theaccompanyingnotestotheconsolidatedfinancialstatements areanintegralpartofthesestatements.

F-3 AdvanceAutoParts,Inc.andSubsidiaries ConsolidatedStatementsofOperations (inthousands,exceptpersharedata)

YearEnded December30, December31, January2, 2017 2016 2016 Netsales $ 9,373,784 $ 9,567,679 $ 9,737,018 Costofsales,includingpurchasingandwarehousingcosts 5,288,735 5,311,764 5,314,246 Grossprofit 4,085,049 4,255,915 4,422,772 Selling,generalandadministrativeexpenses 3,514,837 3,468,317 3,596,992 Operatingincome 570,212 787,598 825,780 Other,net: Interestexpense (58,801) (59,910) (65,408) Otherincome(expense),net 8,848 11,147 (7,484) Totalother,net (49,953) (48,763) (72,892) Incomebeforeprovisionforincometaxes 520,259 738,835 752,888 Provisionforincometaxes 44,754 279,213 279,490 Netincome $ 475,505 $ 459,622 $ 473,398

Basicearningspercommonshare $ 6.44 $ 6.22 $ 6.45 Weightedaveragecommonsharesoutstanding 73,846 73,562 73,190

Dilutedearningspercommonshare $ 6.42 $ 6.20 $ 6.40 Weightedaveragecommonsharesoutstanding 74,110 73,856 73,733

Dividendsdeclaredpercommonshare $ 0.24 $ 0.24 $ 0.24

ConsolidatedStatementsofComprehensiveIncome (inthousands)

YearEnded December30, December31, January2, 2017 2016 2016 Netincome $ 475,505 $ 459,622 $ 473,398 Othercomprehensiveincome(loss): Changesinnetunrecognizedotherpostretirementbenefitcosts, netoftaxof$126,$346and$289 (194) (534) (445) Currencytranslationadjustments 14,941 4,892 (31,277) Totalothercomprehensiveincome(loss) 14,747 4,358 (31,722) Comprehensiveincome $ 490,252 $ 463,980 $ 441,676

Theaccompanyingnotestotheconsolidatedfinancialstatements areanintegralpartofthesestatements.

F-4 AdvanceAutoParts,Inc.andSubsidiaries ConsolidatedStatementsofChangesinStockholdersEquity (inthousands)

Accumulated CommonStock Additional Treasury Other Total Paid-in Stock,at Comprehensive Retained Stockholders Shares Amount Capital cost Loss Earnings Equity Balance,January3,2015 73,074 $ 7 $ 562,945 $ (113,044) $ (12,337) $ 1,565,341 $ 2,002,912 Netincome 473,398 473,398 Totalothercomprehensiveloss (31,722) (31,722) Issuanceofsharesupontheexerciseofstock optionsandstockappreciationrights 138 Taxwithholdingsrelatedtotheexerciseofstock appreciationrights (13,112) (13,112) Taxbenefitfromshare-basedcompensation,net 12,989 12,989 Restrictedstockandrestrictedstockunitsvested 109 Share-basedcompensation 35,336 35,336 Stockissuedunderemployeestockpurchaseplan 35 5,139 5,139 Repurchaseofcommonstock (42) (6,665) (6,665) Cashdividendsdeclared($0.24percommonshare) (17,662) (17,662) Other 35 35 Balance,January2,2016 73,314 7 603,332 (119,709) (44,059) 2,021,077 2,460,648 Netincome 459,622 459,622 Totalothercomprehensiveloss 4,358 4,358 Issuanceofsharesupontheexerciseofstock appreciationrights 149 1 1 Taxwithholdingsrelatedtotheexerciseofstock appreciationrights (19,558) (19,558) Taxbenefitfromshare-basedcompensation,net 22,325 22,325 Restrictedstockandrestrictedstockunitsvested 372 Share-basedcompensation 20,422 20,422 Stockissuedunderemployeestockpurchaseplan 30 4,369 4,369 Repurchaseofcommonstock (116) (18,393) (18,393) Cashdividendsdeclared($0.24percommonshare) (17,764) (17,764) Other 162 162 Balance,December31,2016 73,749 8 631,052 (138,102) (39,701) 2,462,935 2,916,192 Netincome 475,505 475,505 Cumulativeeffectofaccountingchangefrom adoptionofASU2016-09 782 (490) 292 Totalothercomprehensiveincome 14,747 14,747 Issuanceofsharesupontheexerciseofstock appreciationrights 67 Taxwithholdingsrelatedtotheexerciseofstock appreciationrights (6,531) (6,531) Restrictedstockunitsvested 147 Share-basedcompensation 35,267 35,267 Stockissuedunderemployeestockpurchaseplan 29 4,053 4,053 Repurchaseofcommonstock (56) (6,498) (6,498) Cashdividendsdeclared($0.24percommonshare) (17,854) (17,854) Other 23 23 Balance,December30,2017 73,936 $ 8 $ 664,646 $ (144,600) $ (24,954) $ 2,920,096 $ 3,415,196

Theaccompanyingnotestotheconsolidatedfinancialstatements areanintegralpartofthesestatements.

F-5 AdvanceAutoParts,Inc.andSubsidiaries ConsolidatedStatementsofCashFlows (inthousands)

YearEnded December30, December31, January2, 2017 2016 2016 Cashflowsfromoperatingactivities: Netincome $ 475,505 $ 459,622 $ 473,398 Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities: Depreciationandamortization 249,260 258,387 269,476 Share-basedcompensation 35,267 20,452 36,929 Lossandimpairmentofpropertyandequipment 17,106 5,999 12,882 Other,net 3,123 (2,039) 2,660 (Benefit)provisionfordeferredincometaxes (151,263) 20,213 (9,219) Netchangein: Receivables,net 36,047 (41,642) (21,476) Inventories 167,548 (144,603) (244,096) Accountspayable (197,168) (119,325) 119,164 Accruedexpenses (13,295) 49,341 35,103 Otherassetsandliabilities,net (21,325) 16,898 27,823 Netcashprovidedbyoperatingactivities 600,805 523,303 702,644 Cashflowsfrominvestingactivities: Purchasesofpropertyandequipment (189,758) (259,559) (234,747) Proceedsfromsalesofpropertyandequipment 11,099 2,212 270 Other,net 20 (4,697) (18,889) Netcashusedininvestingactivities (178,639) (262,044) (253,366) Cashflowsfromfinancingactivities: Increase(decrease)inbankoverdrafts 14,004 (5,573) (2,922) Borrowingsundercreditfacilities 534,400 799,600 618,300 Paymentsoncreditfacilities (534,400) (959,600) (1,041,700) Dividendspaid (17,854) (17,738) (17,649) Proceedsfromtheissuanceofcommonstock 4,076 4,532 5,174 Taxwithholdingsrelatedtotheexerciseofstockappreciationrights (6,531) (19,558) (13,112) Repurchaseofcommonstock (6,498) (18,393) (6,665) Other,net (2,069) (390) (380) Netcashusedinfinancingactivities (14,872) (217,120) (458,954) Effectofexchangeratechangesoncash 4,465 257 (4,213) Netincrease(decrease)incashandcashequivalents 411,759 44,396 (13,889) Cashandcashequivalents,beginningofperiod 135,178 90,782 104,671 Cashandcashequivalents,endofperiod $ 546,937 $ 135,178 $ 90,782

Supplementalcashflowinformation: Interestpaid $ 53,509 $ 55,457 $ 62,371 Incometaxpayments $ 192,116 $ 225,327 $ 254,408 Non-cashtransactions: Accruedpurchasesofpropertyandequipment $ 14,335 $ 21,176 $ 44,038

Theaccompanyingnotestotheconsolidatedfinancialstatements areanintegralpartofthesestatements.

F-6 1. NatureofOperationsandBasisofPresentation:

DescriptionofBusiness

AdvanceAutoParts,Inc.andsubsidiariesisaleadingautomotiveaftermarketpartsproviderinNorthAmerica,serving bothdo-it-for-me,orProfessional,anddo-it-yourself,orDIYcustomers.Theaccompanyingconsolidatedfinancial statementshavebeenpreparedbytheCompanyandincludetheaccountsofAdvanceAutoParts,Inc.(Advance),itswholly ownedsubsidiary,AdvanceStoresCompany,Incorporated(AdvanceStores),anditssubsidiaries(collectivelyreferredtoas Advance,we,us,ourortheCompany).

AsofDecember30,2017,theCompanysoperationsarecomprisedof5,054storesand129distributionbranchesprimarily withintheUnitedStates,withadditionallocationsinCanada,PuertoRicoandtheU.S.VirginIslands.TheCompanysstores operateprimarilyunderthetradenamesAdvanceAutoParts,CarquestandAutopartInternational,andourdistribution branchesoperateundertheWorldpactradename.Inaddition,weserved1,218independentlyownedCarquestbrandedstores (independentstores)acrossthesamegeographiclocationsservedbytheCompanysstoresinadditiontoMexico,the Bahamas,TurksandCaicos,theBritishVirginIslandsandthePacificIslands.

AccountingPeriod

TheCompanysfiscalyearendsontheSaturdaynearesttheendofDecember.Allreferenceshereinfortheyears2017, 2016and2015representthefiscalyearsendedDecember30,2017,December31,2016andJanuary2,2016,whichwereall52 weeks.

BasisofPresentation

TheconsolidatedfinancialstatementsincludetheaccountsofAdvanceanditswhollyownedsubsidiariespreparedin accordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica(GAAP).Allintercompany balancesandtransactionshavebeeneliminatedinconsolidation.CertainamountsintheprioryearsConsolidatedBalance SheetsandStatementsofChangesinStockholdersEquityhavebeenreclassifiedtoconformtothecurrentyearpresentation.

UseofEstimates

ThepreparationoffinancialstatementsinconformitywithGAAPrequiresmanagementtomakeestimatesandassumptions thataffectthereportedamountsofassetsandliabilitiesandthedisclosureofcontingentassetsandliabilitiesatthedateofthe financialstatementsandthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddiffer materiallyfromthoseestimates.

2. SignificantAccountingPolicies:

CashandCashEquivalents

Cashandcashequivalentsconsistofcashinbanksandmoneymarketfundswithoriginalmaturitiesofthreemonthsor less.Alsoincludedincashequivalentsarecreditcardanddebitcardreceivablesfrombanks,whichgenerallysettleinlessthan fourbusinessdays.

Inventory

TheCompanysinventoryconsistsprimarilyofparts,batteries,accessoriesandotherproductsusedonvehiclesthathave reasonablylongshelflivesandisstatedatthelowerofcostormarket.ThecostoftheCompanysmerchandiseinventoryis primarilydeterminedusingthelast-in,first-out(LIFO)method.UndertheLIFOmethod,theCompanyscostofsalesreflects thecostsofthemostrecentlypurchasedinventories,whiletheinventorycarryingbalancerepresentsthecostsrelatingtoprices paidin2017andprioryears.TheCompanyregularlyreviewsinventoryquantitieson-hand,considerswhetheritmayhave excessinventorybasedontheCompanyscurrentapproachformanagingslowermovinginventoryandadjuststhecarrying valueasnecessary.

F-7 VendorIncentives

TheCompanyreceivesincentivesintheformofreductionstoamountsowedtoand/orpaymentsfromvendorsrelatedto volumerebatesandotherpromotionalconsiderations.Manyoftheseincentivesareunderlong-termagreementsinexcessof oneyear,whileothersarenegotiatedonanannualbasisorshorter.Advertisingallowancesprovidedasareimbursementof specific,incrementalandidentifiablecostsincurredtopromoteavendorsproductsareincludedasanoffsettoselling,general andadministrativeexpenses(SG&A)whenthecostisincurred.Volumerebatesandallowancesthatdonotmeetthe requirementsforoffsettinginSG&Aarerecordedasareductiontoinventoryastheyareearnedbasedoninventorypurchases. TotaldeferredvendorincentivesincludedasareductionofInventorywere$179.2millionand$211.1millionasof December30,2017andDecember31,2016.

TheCompanyrecognizesotherpromotionalincentivesearnedunderlong-termagreementsnotspecificallyrelatedto volumeofpurchasesasareductiontocostofsales.However,theseincentivesarenotdeferredasareductionofinventoryand arerecognizedbasedonthecumulativenetpurchasesasapercentageoftotalestimatednetpurchasesoverthelifeofthe agreement.Short-termincentiveswithtermslessthanoneyeararegenerallyrecognizedasareductiontocostofsalesoverthe durationoftheagreements.Amountsreceivedorreceivablefromvendorsthatarenotyetearnedarereflectedasdeferred revenueintheaccompanyingconsolidatedbalancesheets.

PropertyandEquipment

Propertyandequipmentarestatedatcostlessaccumulateddepreciation.Expendituresformaintenanceandrepairsare chargeddirectlytoexpensewhenincurred;majorimprovementsarecapitalized.Whenitemsaresoldorretired,therelatedcost andaccumulateddepreciationareremovedfromtheaccountbalances,withanygainorlossreflectedintheconsolidated statementsofoperations.

Depreciationoflandimprovements,buildings,furniture,fixturesandequipment,andvehiclesisprovidedoverthe estimatedusefullivesoftherespectiveassetsusingthestraight-linemethod.Depreciationofbuildingandleasehold improvementsisprovidedovertheshorteroftheoriginalusefullivesoftherespectiveassetsorthetermoftheleaseusingthe straight-linemethod.

GoodwillandIndefinite-LivedIntangibleAssets

TheCompanyperformsitsevaluationfortheimpairmentofgoodwillandindefinite-livedintangibleassetsforitsreporting unitsannuallyasofthefirstdayofthefourthquarter,orwhenindicationsofpotentialimpairmentexist.Theseindicatorswould includeasignificantchangeinoperatingperformance,thebusinessclimate,legalfactors,competition,oraplannedsaleor dispositionofasignificantportionofthebusiness,amongotherfactors.TheCompanyassessesqualitativefactorssuchas currentcompanyperformanceandoveralleconomicfactorstodetermineifitismore-likely-than-notthatthegoodwillmightbe impairedandwhetheritisnecessarytoperformthesteponequantitativegoodwillimpairmenttest.Inthequantitativegoodwill test,theCompanycomparesthecarryingvalueofareportingunittoitsfairvalue.Ifthecarryingvalueofthereportingunit exceedstheestimatedfairvalue,asecondstepisperformed,whichcomparestheimpliedfairvalueofgoodwilltothecarrying value,todeterminetheamountofimpairment.TheCompanysindefinite-livedintangibleassetsaretestedforimpairmentatthe assetgrouplevel.Indefinite-livedintangiblesareevaluatedbycomparingthecarryingamountoftheassettothefuture discountedcashflowsthattheassetisexpectedtogenerate.Ifthefairvaluebasedonthefuturediscountedcashflowsexceeds thecarryingvalue,weconcludethatnointangibleassetimpairmenthasoccurred.Ifthecarryingvalueoftheindefinite-lived intangibleassetexceedsthefairvalue,werecognizeanimpairmentloss.

Effectiveinthethirdquarterof2017,theCompanyrealigneditsthreegeographicdivisions,whichincludedtheoperations ofthestoresoperatingundertheAdvanceAutoParts,CarquestandAutopartInternationaltradenames,intotwoU.S. geographicdivisions.AsaresultofthisrealignmentandchangeintheoperatingstructureofitsCarquestIndependentand CarquestCanadabusinesses,theCompanyhasincreaseditsnumberofoperatingsegmentsfromfourtofive,anddefinedthem asNorthernDivision,SouthernDivision,CarquestCanada,IndependentsandWorldpac.Aseachoperatingsegment representsareportingunit,goodwillwasreassignedtotheaffectedreportingunitsusingarelativefairvalueapproach.

F-8 ValuationofLong-LivedAssets

TheCompanyevaluatestherecoverabilityofitslong-livedassets,includingfinite-livedintangibleassets,wheneverevents orchangesincircumstancesindicatethatthecarryingamountofanassetmightnotberecoverableandexceedsitsfairvalue. Whensuchaneventoccurs,theCompanyestimatestheundiscountedfuturecashflowsexpectedtoresultfromtheuseofthe long-livedassetorassetgroupanditseventualdisposition.Theseimpairmentevaluationsinvolveestimatesofassetusefullives andfuturecashflows.Iftheundiscountedexpectedfuturecashflowsarelessthanthecarryingamountoftheassetandthe carryingamountoftheassetexceedsitsfairvalue,animpairmentlossisrecognized.Whenanimpairmentlossisrecognized, thecarryingamountoftheassetisreducedtoitsestimatedfairvaluebasedonquotedmarketpricesorothervaluation techniques(e.g.,discountedcashflowanalysis).

Self-Insurance

TheCompanyisself-insuredforgeneralandautomobileliability,workerscompensationandhealthcareclaimsofits employees,orTeamMembers,whilemaintainingstop-losscoveragewiththird-partyinsurerstolimititstotalliability exposure.Expensesassociatedwiththeseliabilitiesarecalculatedfor(i)claimsfiled,(ii)claimsincurredbutnotyetreported and(iii)projectedfutureclaimsusingactuarialmethodsfollowedintheinsuranceindustryaswellastheCompanyshistorical claimsexperience.TheCompanyincludesthecurrentandlong-termportionsofitsself-insurancereservesinAccruedexpenses andOtherlong-termliabilities.

WarrantyLiabilities

ThewarrantyobligationonthemajorityofmerchandisesoldbytheCompanywithamanufacturerswarrantyisthe responsibilityoftheCompanysvendors.However,theCompanyhasanobligationtoprovidecustomersreplacementofcertain merchandiseatnocostormerchandiseataproratedcostifunderawarrantyandnotcoveredbythemanufacturer.Merchandise soldwithwarrantycoveragebytheCompanyprimarilyincludesbatteries,butmayalsoincludeotherpartssuchasbrakesand shocks.TheCompanyestimatesitswarrantyobligationatthetimeofsalebasedonthehistoricalreturnexperience,saleslevel andcostoftherespectiveproductsold.Totheextentvendorsprovideupfrontallowancesinlieuofacceptingtheobligationfor warrantyclaimsandtheallowanceisinexcessoftherelatedwarrantyexpense,theexcessisrecordedasareductiontocostof sales.

Leases

TheCompanyleasescertainstorelocations,distributioncenters,officespaces,equipmentandvehicles.Thetotalamount ofminimumrentisexpensedonastraight-linebasisovertheinitialtermoftheleaseunlessexternaleconomicfactorsexist suchthatrenewalsarereasonablyassured.Inthoseinstances,therenewalperiodwouldbeincludedintheleasetermfor purposesofestablishinganamortizationperiodanddeterminingifsuchleasequalifiedasacapitaloroperatinglease. DifferencesbetweenthecalculatedrentexpenseandcashpaymentsarerecordedasaliabilitywithintheAccruedexpensesand Otherlong-termliabilitiescaptionsintheaccompanyingconsolidatedbalancesheets,basedonthetermsofthelease.Most leasesrequiretheCompanypaytaxes,maintenance,insuranceandcertainotherexpensesapplicabletotheleasedpremises. Managementexpectsthatinthenormalcourseofbusinessleasesthatexpirewillberenewedorreplacedbyotherleases.

FairValueMeasurements

Athree-levelvaluationhierarchy,baseduponobservableandunobservableinputs,isusedforfairvaluemeasurements. Observableinputsreflectmarketdataobtainedfromindependentsources,whileunobservableinputsreflectmarketassumptions basedonthebestevidenceavailable.Thesetwotypesofinputscreatethefollowingfairvaluehierarchy:Level1-Quoted pricesforidenticalinstrumentsinactivemarkets;Level2-Quotedpricesforsimilarinstrumentsinactivemarkets,quoted pricesforidenticalorsimilarinstrumentsinmarketsthatarenotactiveandmodel-derivedvaluationswhosesignificantinputs areobservable;andLevel3-Instrumentswhosesignificantinputsareunobservable.Financialinstrumentsaretransferredin and/oroutofLevel1,2or3atthebeginningoftheaccountingperiodinwhichthereisachangeinthevaluationinputs.

F-9 ClosedFacilityLiabilitiesandExitActivities

TheCompanycontinuallyreviewstheoperatingperformanceofitsexistingstorelocationsandclosesorrelocatescertain storesidentifiedasunderperforming.Inaddition,theCompanyisconsolidatingcertainlocationsaspartofitsplanned integrationofGeneralPartsInternational,Inc.(GPI).Expensesaccruedpertainingtoclosedfacilityexitactivitiesare includedintheCompanysclosedfacilityliabilities,withinAccruedexpensesandOtherlong-termliabilitiesinthe accompanyingconsolidatedbalancesheets,andrecognizedinSG&Aintheaccompanyingconsolidatedstatementsof operationsatthetimeoffacilityclosure.Closedfacilityliabilitiesincludethepresentvalueoftheremainingleaseobligations andmanagementsestimateoffuturecostsofinsurance,propertytaxandcommonareamaintenanceexpenses,reducedbythe presentvalueofestimatedrevenuesfromsubleasesandleasebuyouts.

Employeesreceivingseverancebenefitsastheresultofastoreclosingorotherrestructuringactivityarerequiredtorender serviceuntiltheyareterminatedinordertoreceivebenefits.Severancebenefitsarerecognizedovertherelatedserviceperiod. Otherrestructuringcosts,includingcoststorelocateemployees,arerecognizedintheperiodinwhichtheliabilityisincurred.

Share-BasedPayments

TheCompanyprovidesshare-basedcompensationtoitseligibleTeamMembersandBoardofDirectors.TheCompanyis requiredtoexercisejudgmentandmakeestimateswhendeterminingthe(i)fairvalueofeachawardgrantedand(ii)projected numberofawardsexpectedtovest.TheCompanycalculatesthefairvalueofallshare-basedawardsatthedateofgrantand usesthestraight-linemethodtoamortizethisfairvalueascompensationcostovertherequisiteserviceperiod.

RevenueRecognition

TheCompanyrecognizesrevenueatthetimethesaleismade,atwhichtimetheCompanyswalk-incustomerstake immediatepossessionofthemerchandiseorsame-daydeliveryismadetotheCompanysProfessionaldeliverycustomers, whichincludecertainindependentlyownedstorelocations.Fore-commercesales,revenueisrecognizedeitheratthetimeof pick-upatoneoftheCompanysstorelocationsoratthetimeofshipmentdependingonthecustomersorderdesignation.Sales arerecordednetofdiscounts,salesincentivesandrebates,salestaxesandestimatedreturnsandallowances.TheCompany estimatesthereductiontosalesandcostofsalesforreturnsbasedoncurrentsaleslevelsandtheCompanyshistoricalreturn experience.

ThefollowingtablesummarizesfinancialinformationforeachoftheCompanysproductgroups. YearEnded December30, December31, January2, 2017 2016 2016 PercentageofSales,byProductGroup PartsandBatteries 65% 66% 66% AccessoriesandChemicals 20% 19% 19% EngineMaintenance 14% 14% 14% Other 1% 1% 1% Total 100% 100% 100%

Receivables,netconsistprimarilyofreceivablesfromProfessionalcustomers.TheCompanygrantscredittocertain ProfessionalcustomerswhomeettheCompanyspre-establishedcreditrequirements.Accountsreceivableisstatedatnet realizablevalue.TheCompanyregularlyreviewsaccountsreceivablebalancesandmaintainsallowancesfordoubtfulaccounts forestimatedlosseswhenevereventsorcircumstancesindicatethecarryingvaluemaynotberecoverable.TheCompany considersthefollowingfactorswhendeterminingifcollectionisreasonablyassured:customercreditworthiness,past transactionhistorywiththecustomer,currenteconomicandindustrytrendsandchangesincustomerpaymentterms.The Companycontrolscreditriskthroughcreditapprovals,creditlimitsandaccountsreceivableandcreditmonitoringprocedures.

F-10 CostofSales

Costofsalesincludesactualproductcost,warrantycosts,vendorincentives,cashdiscountsonpaymentstovendors,costs associatedwithoperatingourdistributionnetwork,includingpayrollandbenefitscosts,occupancycostsanddepreciation,in- boundfreight-relatedcostsfromourvendorsandcostsassociatedwithmovingmerchandiseinventoriesfromourdistribution centerstostores,branchlocationsandcustomers. Selling,GeneralandAdministrativeExpenses SG&AincludespayrollandbenefitscostsforstoreandcorporateTeamMembers,occupancycostsofstoreandcorporate facilities,depreciationandamortizationrelatedtostoreandcorporateassets,share-basedcompensationexpense,advertising, self-insurance,costsofconsolidating,convertingorclosingfacilities,includingearlyterminationofleaseobligations, severanceandimpairmentcharges,professionalservicesandcostsassociatedwithourProfessionaldeliveryprogram,including payrollandbenefitcosts,andtransportationexpensesassociatedwithmovingmerchandiseinventoriesfromstoresand branchestocustomerlocations.

AdvertisingCosts

TheCompanyexpensesadvertisingcostsasincurred.Advertisingexpense,netofqualifyingvendorpromotionalfunds, was$102.8million,$97.0millionand$108.8millionin2017,2016and2015.Vendorpromotionalfunds,whichreduced advertisingexpense,amountedto$33.3millionand$29.3millionand$17.5millionin2017,2016and2015.

ForeignCurrencyTranslation

TheassetsandliabilitiesoftheCompanysforeignoperationsaretranslatedintoU.S.dollarsatcurrentexchangerates,and revenues,expensesandcashflowsaretranslatedataverageexchangeratesfortheyear.Resultingtranslationadjustmentsare reflectedasaseparatecomponentintheConsolidatedStatementsofComprehensiveIncome.Lossesfromforeigncurrency transactions,whichareincludedinOtherincome,net,were$4.0millionduring2017and$7.4millionduring2015.Gainsand lossesfromforeigncurrencytransactionswerenotsignificantin2016.

IncomeTaxes

TheCompanyaccountsforincometaxesundertheassetandliabilitymethod,whichrequirestherecognitionofdeferred taxassetsandliabilitiesfortheexpectedfuturetaxconsequencesofeventsthathavebeenincludedinthefinancialstatements. Undertheassetandliabilitymethod,deferredtaxassetsandliabilitiesaredeterminedbasedonthedifferencesbetweenthe financialstatementsandtaxbasisofassetsandliabilitiesusingenactedtaxratesineffectfortheyearinwhichthedifferences areexpectedtoreverse.Deferredincometaxesreflectthenetincometaxeffectoftemporarydifferencesbetweenthebasisof assetsandliabilitiesforfinancialreportingpurposesandforincometaxreportingpurposes.Theeffectofachangeintaxrates ondeferredtaxassetsandliabilitiesisrecognizedinincomeintheperiodoftheenactmentdate.

TheCompanyrecognizestaxbenefitsand/ortaxliabilitiesforuncertainincometaxpositionsbasedonatwo-stepprocess. Thefirststepistoevaluatethetaxpositionforrecognitionbydeterminingiftheweightofavailableevidenceindicatesthatitis morelikelythannotthatthepositionwillbesustainedonaudit,includingresolutionofrelatedappealsorlitigationprocesses,if any.ThesecondsteprequirestheCompanytoestimateandmeasurethetaxbenefitasthelargestamountthatismorethan50% likelytoberealizeduponultimatesettlement.ItisinherentlydifficultandsubjectivetoestimatesuchamountsastheCompany mustdeterminetheprobabilityofvariouspossibleoutcomes.

TheCompanyreevaluatestheseuncertaintaxpositionsonaquarterlybasisorwhennewinformationbecomesavailableto management.Thereevaluationsarebasedonmanyfactors,includingbutnotlimitedto,changesinfactsorcircumstances, changesintaxlaw,successfullysettledissuesunderaudit,expirationsduetostatutesoflimitationsandnewfederalorstate auditactivity.AnychangeineithertheCompanysrecognitionormeasurementcouldresultintherecognitionofataxbenefit oranincreasetothetaxaccrual.

F-11 EarningsperShare

Basicearningspershareofcommonstockhasbeencomputedbasedontheweighted-averagenumberofcommonshares outstandingduringtheperiod,whichisreducedbystockheldintreasuryandsharesofnonvestedrestrictedstockunits.Diluted earningspershareiscalculatedbyincludingtheeffectofdilutivesecurities.Dilutedearningspershareofcommonstock reflectstheweighted-averagenumberofsharesofcommonstockoutstanding,outstandingdeferredstockunitsandtheimpact ofoutstandingstockoptionsandstockappreciationrights(collectivelyshare-basedawards).Share-basedawardscontaining performanceconditionsareincludedinthedilutionimpactasthoseconditionsaremet.

SegmentInformation

Operatingsegmentsaredefinedascomponentsofanenterpriseforwhichdiscretefinancialinformationisavailablethatis evaluatedregularlybythechiefoperatingdecisionmaker(CODM)forpurposesofallocatingresourcesandevaluating financialperformance.TheCompanysCODM,theChiefExecutiveOfficer,reviewsfinancialinformationpresentedona consolidatedbasis,accompaniedbyinformationabouttheCompanysfiveoperatingsegments,forpurposesofallocating resourcesandevaluatingfinancialperformance.

For2017and2016,theCompanyhasonereportablesegmentasthefiveoperatingsegmentsareaggregateddueprimarily totheeconomicandoperationalsimilaritiesofeachoperatingsegmentasthestoresandbrancheshavesimilarcharacteristics, includingthenatureoftheproductsandservices,customerbaseandthemethodsusedtodistributeproductsandprovide servicetoitscustomers.

RecentlyIssuedAccountingPronouncements

InJanuary2017,theFinancialAccountingStandardsBoard(FASB)issuedASU2017-04,Intangibles-Goodwilland Other(Topic350):SimplifyingtheTestforGoodwillImpairmenttosimplifytheaccountingforgoodwillimpairment.The guidanceremovesStep2ofthegoodwillimpairmenttest,whichrequiredahypotheticalpurchasepriceallocation.Agoodwill impairmentwillnowbetheamountbywhichareportingunitscarryingvalueexceedsitsfairvalue,nottoexceedthecarrying amountofgoodwill.TheASUiseffectiveforfiscalyears,andforinterimperiodswithinthoseyears,beginningafterDecember 15,2019,withearlyadoptionpermittedafterJanuary1,2017.TheCompanyelectedtoearlyadoptASU2017-04in2017and appliedthenewguidanceincompletionofitsannualgoodwillimpairmenttestperformedinthefourthquarterof2017.

InMarch2016,theFASBissuedASU2016-09,Compensation StockCompensation(Topic718):Improvementsto EmployeeShare-BasedPaymentAccountingaimedatsimplifyingcertainaspectsofaccountingforshare-basedpayment transactions.Theareasforsimplificationincludetheaccountingforincometaxes,forfeitures,andstatutorytaxwithholding requirements,aswellasclassificationinthestatementofcashflows.TheCompanyadoptedASU2016-09inthefirstquarterof 2017andrecordedacumulativenetincreaseinstockholdersequityof$0.3millionrelatedtotheCompanyselectiontorecord forfeituresastheyoccur.Inaddition,theCompanyelectedtoretrospectivelyadopttheprovisionregardingthepresentationof excesstaxbenefitsinthestatementofcashflows,whichresultedinanincreaseinournetcashprovidedbyoperatingactivities andadecreaseinournetcashprovidedbyfinancingactivitiesof$22.4millionand$13.0millionfor2016and2015.The provisionrequiringtheinclusionofexcesstaxbenefits(deficits)asacomponentoftheProvisionforincometaxesinthe consolidatedresultsofoperationsisbeingappliedprospectively.TheCompanyrecordedexcesstaxbenefitsof$2.3millionasa reductioninProvisionforincometaxesduring2017.

F-12 InFebruary2016,theFASBissuedASU2016-02,Leases(Topic842).ThisASUisacomprehensivenewleasesstandard thatamendsvariousaspectsofexistingguidanceforleasesandrequiresadditionaldisclosuresaboutleasingarrangements.It willrequirelesseestorecognizeleaseassetsandleaseliabilitiesformostleases,includingthoseleasespreviouslyclassifiedas operatingleasesundercurrentGAAP.Topic842retainsadistinctionbetweenfinanceleasesandoperatingleases.The classificationcriteriafordistinguishingbetweenfinanceleasesandoperatingleasesaresubstantiallysimilartotheclassification criteriafordistinguishingbetweencapitalleasesandoperatingleasesinthepreviousleasesguidance.TheASUiseffectivefor annualperiodsbeginningafterDecember15,2018,includinginterimperiodswithinthoseyears;earlieradoptionispermitted. TheFASBissuedanexposuredrafttoamendTopic842toprovideentitieswithanadditionaltransitionmethodwithwhichto adoptTopic842.TheproposedtransitionmethodwouldenableentitiestoapplythetransitionrequirementsinTopic842atthe effectivedateofthatTopic(ratherthanatthebeginningoftheearliestcomparativeperiodpresentedascurrentlyrequired)with theeffectsofinitiallyapplyingTopic842recognizedasacumulative-effectadjustmenttoretainedearningsintheperiodof adoption.Consequently,anentitysreportingforthecomparativeperiodspresentedintheyearofadoptionwouldcontinueto beinaccordancewithTopic840,includingthedisclosurerequirementsofthatTopic.Practicalexpedientsareavailablefor electionasapackageandifappliedconsistentlytoallleases.

TheCompanyhasselecteditsleasingsoftwaresolutionandisintheprocessofidentifyingchangestoitsbusiness processes,systemsandcontrolstosupportadoptionofthenewstandardin2019.TheCompanyisevaluatingtheimpactthatthe newstandardwillhaveontheconsolidatedfinancialstatements.WhiletheCompanyisunabletoquantifytheimpactatthis time,itexpectstheadoptionofthenewstandardtoresultinamaterialincreaseintheassetsandliabilitiesintheconsolidated financialstatements.Atthistime,theCompanydoesnotexpectadoptionofASU2016-02tohaveamaterialimpactonits consolidatedstatementsofoperationsasthemajorityofitsleaseswillremainoperatinginnature.Assuch,theexpense recognitionwillbesimilartopreviouslyrequiredstraight-lineexpensetreatment.

InMay2014,theFASBissuedASUNo.2014-09,RevenuefromContractswithCustomers(Topic606)asmodifiedby subsequentlyissuedASUs2015-14,2016-08,2016-10,2016-12and2016-20(collectively,Topic606).Topic606superseded existingrevenuerecognitionstandardswithasinglemodel.TherevenuerecognitionprincipleinTopic606isthatanentity shouldrecognizerevenuetodepictthetransferofgoodsorservicestocustomersinanamountthatreflectstheconsiderationto whichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.TheCompanyplanstoadoptTopic606inthe firstquarterof2018byapplyingthemodifiedretrospectiveapproach.ResultsforreportingperiodsbeginningafterDecember 30,2017willbepresentedunderTopic606,whilepriorperiodamountsarenotadjustedandcontinuetobereportedunderthe accountingstandardsineffectforthepriorperiod.GenerallytheCompanysperformanceobligationsaresatisfiedthesameday contractswithcustomersareinitiated.Assuch,theadoptionofthenewstandardwillnothaveamaterialimpactonthe Companysconsolidatedfinancialcondition,resultsofoperations,cashflows,businessprocess,controlsorsystems. Additionally,weexpecttheimpactoftheadoptionofthenewstandardtobeimmaterialtoournetincomeonanongoingbasis. 3. Inventories:

TheCompanyusedtheLIFOmethodofaccountingforapproximately88%and89%ofinventoriesatDecember30,2017 andDecember31,2016.AsaresultofchangesintheLIFOreserve,theCompanyrecordedanincreasetocostofsalesof$2.7 millionin2017andareductiontocostofsalesof$40.7millionand$42.3millionin2016and2015.

PurchasingandwarehousingcostsincludedininventoryasofDecember30,2017andDecember31,2016,were$429.8 millionand$395.2million.

Inventorybalanceswereasfollows: December30, December31, (inthousands) 2017 2016 InventoriesatFIFO $ 3,965,370 $ 4,120,030 AdjustmentstostateinventoriesatLIFO 203,122 205,838 InventoriesatLIFO $ 4,168,492 $ 4,325,868

F-13 4. ExitActivitiesandOtherInitiatives:

IntegrationofCarqueststores

TheCompanyisintheprocessofamulti-yearintegration,whichincludestheconsolidationandconversionofitsCarquest storesacquiredwithGPIin2014.AsofDecember30,2017,346CarqueststoresacquiredwithGPIhadbeenconsolidatedinto existingAdvanceAutoPartsstoresand422storeshadbeenconvertedtotheAdvanceAutoPartsformat.During2017,atotalof 13Carqueststoreswereconsolidatedand140storeswereconverted.During2016,atotalof156Carqueststoreswere consolidatedand123storeswereconverted.WeexpecttoconsolidateorconverttheremainingU.S.Carqueststoresoverthe nextfewyears.AsofDecember30,2017,theCompanyhad437stores,including138storesinCanada,stilloperatingunder theCarquestname.

TheCompanyincurred$1.0million,$18.9millionand$7.3millionofexitcostsrelatedtotheconsolidationsand conversionsduring2017,2016and2015,primarilyrelatedtoclosedstoreleaseobligations.

2017FieldandSupportCenterRestructuring

InJune2017,theCompanyrestructureditsfieldorganizationandstreamlineditsoperatingstructure.Therestructuring activitywassubstantiallycompleteasofDecember30,2017andresultedintherecognitionof$7.9millionofseverance expense.

2017StoreandSupplyChainRationalization

Duringthefourthquarter2017,theBoardofDirectorsapprovedaplantoclosecertainunderperformingstoresandbegin torationalizetheCompany'ssupplychaincostsaspartoftheCompanysstrategytotransformtheenterprise.TheCompany expectstheseactionswillresultinestimatedchargesofupto$70millionin2018.Thesechargesconsistof$35millionrelated totheearlyterminationofleaseobligations,$15millionofinventoryandsupplychainassetimpairmentcharges,$15millionof otherfacilityclosurecosts,and$5millionofseverance.AtDecember30,2017,nostoresordistributioncentershadbeen closedinconnectionwiththisactivity;however,theCompanyrecordedanimpairmentchargeof$6.9millionaspartofthis plantoclosecertainunderperformingstores.

TotalExitLiabilities

TheCompanystotalexitliabilitiesincludeliabilitiesrecordedinconnectionwiththeconsolidationofCarqueststoresand restructuringactivitiesdescribedabove,alongwithliabilitiesassociatedwithfacilityclosuresthathaveoccurredaspartofour normalmarketevaluationprocess.Cashpaymentsontheclosedfacilityleaseobligationsareexpectedtobemadethrough2028 andtheremainingseverancepaymentsareexpectedtobemadein2018.OftheCompanystotalexitliabilitiesasof December30,2017,$19.8millionisincludedinOtherlong-termliabilitiesandtheremainderisincludedinAccruedexpenses intheaccompanyingcondensedconsolidatedbalancesheets.AsummaryoftheCompanysexitliabilitiesarepresentedinthe followingtable:

ClosedFacility Lease (inthousands) Obligations Severance Total Balance,January2,2016 $ 42,490 $ 6,255 $ 48,745 Reservesestablished 23,252 988 24,240 Changeinestimates (3,073) (410) (3,483) Cashpayments (18,404) (5,874) (24,278) Balance,December31,2016 44,265 959 45,224 Reservesestablished 7,940 7,927 15,867 Changeinestimates (1,116) (699) (1,815) Cashpayments (19,519) (6,542) (26,061) Balance,December30,2017 $ 31,570 $ 1,645 $ 33,215

F-14 5. GoodwillandIntangibleAssets:

Goodwill

AtDecember30,2017andDecember31,2016,thecarryingamountofgoodwillwas$994.3millionand$990.9million. Thechangeingoodwillduring2017and2016was$3.4millionand$1.4millionrelatedtoforeigncurrencytranslation.

IntangibleAssetsOtherThanGoodwill

Amortizationexpensewas$47.4million,$48.0millionand$53.1millionfor2017,2016and2015.Asummaryofthe compositionofthegrosscarryingamountsandaccumulatedamortizationofacquiredintangibleassetsarepresentedinthe followingtable: December30,2017 December31,2016 Gross Gross Carrying Accumulated Carrying Accumulated (inthousands) Amount Amortization Net Amount Amortization Net Amortizedintangibleassets: Customerrelationships $ 351,203 $ (116,909) $ 234,294 $ 349,615 $ (89,420) $ 260,195 Favorableleases 32,512 (14,959) 17,553 48,693 (24,864) 23,829 Non-competeandother 54,929 (46,389) 8,540 54,130 (32,708) 21,422 438,644 (178,257) 260,387 452,438 (146,992) 305,446

Indefinite-livedintangibleassets: Brands,trademarkandtradenames 337,287 337,287 335,457 335,457 Totalintangibleassets $ 775,931 $ (178,257) $ 597,674 $ 787,895 $ (146,992) $ 640,903

During2017,theCompanyretired$16.1millionoffullyamortizedintangibleassets,impactingboththegrosscarrying amountandaccumulatedamortizationbythisamount.

FutureAmortizationExpense

Thetablebelowshowsexpectedamortizationexpenseforthenextfiveyearsandthereafterforacquiredintangibleassets recordedasofDecember30,2017:

Year Amount (inthousands) 2018 $ 42,795 2019 32,358 2020 31,707 2021 31,066 2022 30,947 Thereafter 91,514 $ 260,387

F-15 6. Receivables,net:

Receivables,netconsistofthefollowing: December30, December31, (inthousands) 2017 2016 Trade $ 389,963 $ 407,301 Vendor 220,510 239,770 Other 14,103 23,345 Totalreceivables 624,576 670,416 Less:Allowancefordoubtfulaccounts (18,219) (29,164) Receivables,net $ 606,357 $ 641,252

7. Long-termDebtandFairValueofFinancialInstruments:

Long-termdebtconsistsofthefollowing: December30, December31, (inthousands) 2017 2016 5.75%SeniorUnsecuredNotes(netofunamortizeddiscountanddebtissuance costsof$1,403and$1,994atDecember30,2017andDecember31,2016)due May1,2020 $ 298,597 $ 298,006 4.50%SeniorUnsecuredNotes(netofunamortizeddiscountanddebtissuance costsof$1,108and$1,384atDecember30,2017andDecember31,2016)due January15,2022 298,892 298,616 4.50%SeniorUnsecuredNotes(netofunamortizeddiscountanddebtissuance costsof$3,162and$3,673atDecember30,2017andDecember31,2016)due December1,2023 446,838 446,327 Other 350 306 1,044,677 1,043,255 Less:Currentportionoflong-termdebt (350) (306) Long-termdebt,excludingcurrentportion $ 1,044,327 $ 1,042,949

Fairvalueoflong-termdebt $ 1,109,000 $ 1,118,000

FairValueofFinancialAssetsandLiabilities

ThefairvalueoftheCompanysseniorunsecurednoteswasdeterminedusingLevel2inputsbasedonquotedmarket prices.TheCompanybelievesthecarryingvalueofitsotherlong-termdebtapproximatesfairvalue.Thecarryingamountsof theCompanyscashandcashequivalents,receivables,accountspayableandaccruedexpensesapproximatetheirfairvalues duetotherelativelyshort-termnatureoftheseinstruments.

BankDebt

OnJanuary31,2017,theCompanyenteredintoanewcreditagreementthatprovidesa$1.0billionunsecuredrevolving creditfacility(the2017CreditAgreement)withAdvanceStores,asBorrower,thelenderspartythereto,andBankof America,N.A.,astheadministrativeagentandreplacesapriorcreditagreemententeredintoin2013.The2017Credit Agreementprovidesfortheissuanceoflettersofcreditwithasublimitof$200.0million.TheCompanymayrequestthatthe totalrevolvingcommitmentbeincreasedbyanamountnotexceeding$250.0millionduringthetermofthe2017Credit Agreement.Voluntaryprepaymentsandvoluntaryreductionsoftherevolvingloanbalance,ifany,arepermittedinwholeorin part,attheCompanysoption,inminimumprincipalamountsasspecifiedinthe2017CreditAgreement.The2017Credit AgreementterminatesinJanuary2022;however,theCompanymayrequestoneortwoone-yearextensionsofthetermination datepriortothefirstorsecondanniversaryoftheclosingdate.

F-16 AsofDecember30,2017,theCompanyhadnooutstandingborrowingsundertherevolverandborrowingavailabilitywas $517.6millionbasedontheCompanysleverageratio.AsofDecember30,2017,theCompanyhadlettersofcreditoutstanding of$111.7million,whichgenerallyhaveatermofoneyearorlessandprimarilyserveascollateralfortheCompanysself- insurancepolicies.

Interestonanyborrowingsontherevolverwillbebased,attheCompanysoption,onanadjustedLIBOR,plusamargin, oranalternatebaserate,plusamargin.Afteraninitialinterestperiod,theCompanymayelecttoconvertaparticularborrowing toadifferenttype.Theinitialmarginsperannumfortherevolvingloanare1.10%fortheadjustedLIBORand0.10%for alternatebaserateborrowings.Afacilityfeeof0.15%perannumischargedonthetotalrevolvingfacilitycommitment,payable quarterlyinarrears.Underthetermsofthe2017CreditAgreement,theinterestratespreadandfacilityfeearebasedonthe Companyscreditrating.Theinterestratespreadrangesfrom0.91%to1.50%foradjustedLIBORborrowingsand0.00%to 0.50%foralternatebaserateborrowings.

The2017CreditAgreementcontainscustomarycovenantsrestrictingtheabilityof:(a)AdvanceStoresanditssubsidiaries to,amongotherthings,(i)create,incurorassumeadditionaldebt(onlywithrespecttosubsidiariesofAdvanceStores),(ii) incurliens,(iii)guaranteeobligations,and(iv)changethenatureofitsbusinessconductedbyitselfanditssubsidiaries;(b) Advance,AdvanceStoresandtheirsubsidiariesto,amongotherthings(i)enterintocertainhedgingarrangements,(ii)enter intorestrictiveagreementslimitingtheirabilitytoincurliensonanyoftheirpropertyorassets,paydistributions,repayloans, orguaranteeindebtednessoftheirsubsidiaries;and(c)Advance,amongotherthings,tochangetheholdingcompanystatusof Advance.AdvanceStoresisrequiredtocomplywithfinancialcovenantswithrespecttoamaximumleverageratioanda minimumcoverageratio.The2017CreditAgreementalsoprovidesforcustomaryeventsofdefault,includingnon-payment defaults,covenantdefaultsandcross-defaultsofAdvanceStoresothermaterialindebtedness.TheCompanywasincompliance withitsfinancialcovenantswithrespecttothe2017CreditAgreementasofDecember30,2017.

OnJanuary31,2018,theCompany,enteredintoAmendmentNo.1totheCreditAgreementdatedasofJanuary31,2017 (theAmendment),amongAdvanceStores,asBorrower,thelenderspartythereto,andBankofAmerica,N.A.,Administrative Agent.TheAmendment:(i)providedforLIBORreplacementratesintheeventthatLIBORisunavailableinthefuture;(ii) modifiedthedefinitionsofthefinancialcovenants(andthetestinglevelrelatingthereto)withrespecttoamaximumleverage ratioandaminimumcoverageratiothattheCompanyisrequiredtocomplywith;and(iii)extendedtheterminationdateofthe 2017CreditAgreementfromJanuary31,2022untilJanuary31,2023.TheCompanyhastheoptiontomakeoneadditional writtenrequestofthelenderstoextendtheterminationdatethenineffectforoneadditionalyear.

SeniorUnsecuredNotes

TheCompanys4.50%seniorunsecurednoteswereissuedinDecember2013at99.69%oftheprincipalamountof$450.0 millionandaredueDecember1,2023(the2023Notes).The2023Notesbearinterestatarateof4.50%peryearpayable semi-annuallyinarrearsonJune1andDecember1ofeachyear.TheCompanys4.50%seniorunsecurednoteswereissuedin January2012at99.968%oftheprincipalamountof$300.0millionandaredueJanuary15,2022(the2022Notes).The2022 Notesbearinterestatarateof4.50%peryearpayablesemi-annuallyinarrearsonJanuary15andJuly15ofeachyear.The Companys5.75%seniorunsecurednoteswereissuedinApril2010at99.587%oftheprincipalamountof$300.0millionand aredueMay1,2020(the2020Notesorcollectivelywiththe2023Notesandthe2022Notes,theNotes).The2020Notes bearinterestatarateof5.75%peryearpayablesemi-annuallyinarrearsonMay1andNovember1ofeachyear.Advance servedastheissueroftheNoteswithcertainofAdvancesdomesticsubsidiariescurrentlyservingassubsidiaryguarantors.The termsoftheNotesaregovernedbyanindenture(asamended,supplemented,waivedorotherwisemodified,theIndenture) amongtheCompany,thesubsidiaryguarantorsfromtimetotimepartytheretoandWellsFargoBank,NationalAssociation,as Trustee.

TheCompanymayredeemsomeoralloftheNotesatanytimeorfromtimetotime,attheredemptionpricedescribedin theIndenture.Inaddition,intheeventofaChangeofControlTriggeringEvent(asdefinedintheIndenturefortheNotes),the CompanywillberequiredtooffertorepurchasetheNotesatapriceequalto101%oftheprincipalamountthereof,plus accruedandunpaidinteresttotherepurchasedate.TheNotesarecurrentlyfullyandunconditionallyguaranteed,jointlyand severally,onanunsubordinatedandunsecuredbasisbyeachofthesubsidiaryguarantors.TheCompanywillbepermittedto releaseguaranteeswithouttheconsentofholdersoftheNotesunderthecircumstancesdescribedintheIndenture:(i)uponthe releaseoftheguaranteeoftheCompanysotherdebtthatresultedintheaffectedsubsidiarybecomingaguarantorofthisdebt; (ii)uponthesaleorotherdispositionofallorsubstantiallyallofthestockorassetsofthesubsidiaryguarantor;or(iii)uponthe Companysexerciseofitslegalorcovenantdefeasanceoption.

F-17 TheIndenturecontainscustomaryprovisionsforeventsofdefaultincludingfor:(i)failuretopayprincipalorinterestwhen dueandpayable;(ii)failuretocomplywithcovenantsoragreementsintheIndentureortheNotesandfailuretocureorobtain awaiverofsuchdefaultuponnotice;(iii)adefaultunderanydebtformoneyborrowedbytheCompanyoranyofits subsidiariesthatresultsinaccelerationofthematurityofsuchdebt,orfailuretopayanysuchdebtwithinanyapplicablegrace periodafterfinalstatedmaturity,inanaggregateamountgreaterthan$25.0millionwithoutsuchdebthavingbeendischarged oraccelerationhavingbeenrescindedorannulledwithin10daysafterreceiptbytheCompanyofnoticeofthedefaultbythe Trusteeorholdersofnotlessthan25%inaggregateprincipalamountoftheNotesthenoutstanding;and(iv)eventsof bankruptcy,insolvencyorreorganizationaffectingtheCompanyandcertainofitssubsidiaries.Inthecaseofaneventof default,theprincipalamountoftheNotesplusaccruedandunpaidinterestmaybeaccelerated.TheIndenturealsocontains covenantslimitingtheabilityoftheCompanyanditssubsidiariestoincurdebtsecuredbyliensandtoenterintosaleandlease- backtransactions.

FuturePayments

AsofDecember30,2017,theaggregatefutureannualmaturitiesoflong-termdebtinstrumentsareasfollows:

Year Amount (inthousands) 2018 $ 350 2019 2020 300,000 2021 2022 300,000 Thereafter 450,000 $ 1,050,350

DebtGuarantees

TheCompanyisaguarantorofloansmadebybankstovariousindependentlyownedCarquest-brandedstoresthatare customersoftheCompanytotaling$24.8millionasofDecember30,2017.Theseloansarecollateralizedbysecurity agreementsonmerchandiseinventoryandotherassetsoftheborrowers.Theapproximatevalueoftheinventorycollateralized bytheseagreementsis$62.8millionasofDecember30,2017.TheCompanybelievesthatthelikelihoodofperformanceunder theseguaranteesisremote.

8. PropertyandEquipment: Propertyandequipmentconsistsofthefollowing: December30, December31, (inthousands) UsefulLives 2017 2016 Landandlandimprovements 0-10years $ 451,261 $ 444,262 Buildings 30-40years 478,235 471,740 Buildingandleaseholdimprovements 3-30years 490,635 451,979 Furniture,fixturesandequipment 3-20years 1,675,522 1,583,096 Vehicles 2-13years 16,587 35,133 Constructioninprogress 65,281 120,778 3,177,521 3,106,988 Less-Accumulateddepreciation (1,783,383) (1,660,648) Propertyandequipment,net $ 1,394,138 $ 1,446,340

F-18 Depreciationexpensewas$206.9million,$216.0millionand$223.7millionfor2017,2016and2015.TheCompany capitalized$11.2million,$13.0millionand$13.5millionincurredforthedevelopmentofinternalusecomputersoftware during2017,2016and2015.Thesecostsareincludedinthefurniture,fixturesandequipmentcategoryaboveandare depreciatedonthestraight-linemethodoverthreetotenyears.

In2017,2016and2015,theCompanyrecognizedimpairmentlossesof$13.3million,$2.8millionand$11.0million,on variousstoreandcorporateassets.

9. AccruedExpenses: Accruedexpensesconsistofthefollowing: December30, December31, (inthousands) 2017 2016 Payrollandrelatedbenefits $ 92,106 $ 97,496 Taxespayable 112,930 121,860 Self-insurancereserves 65,463 58,743 Warrantyreserves 49,024 47,243 Capitalexpenditures 14,335 21,176 Other 199,690 207,879 Totalaccruedexpenses $ 533,548 $ 554,397

ThefollowingtablepresentschangesintheCompanyswarrantyreserves: YearEnded December30, December31, January2, (inthousands) 2017 2016 2016 Warrantyreserves,beginningofperiod $ 47,243 $ 44,479 $ 47,972 Additionstowarrantyreserves 50,895 46,903 44,367 Reservesutilized (49,114) (44,139) (47,860) Warrantyreserves,endofperiod $ 49,024 $ 47,243 $ 44,479

10. StockRepurchases:

TheCompanysstockrepurchaseprogramallowsittorepurchaseitscommonstockontheopenmarketorinprivately negotiatedtransactionsfromtimetotime.TheCompanys$500millionstockrepurchaseprograminplaceasofDecember30, 2017wasauthorizedbyitsBoardofDirectorsonMay14,2012.During2017and2016,theCompanyrepurchasednosharesof itscommonstockunderitsstockrepurchaseprogram.TheCompanyhad$415.1millionremainingunderitsstockrepurchase programasofDecember30,2017.

TheCompanyrepurchased57thousandand116thousandsharesofitscommonstockatanaggregatecostof$6.5million and$18.4million,oranaveragepriceof$114.23and$158.84pershare,inconnectionwiththenetsettlementofsharesissued asaresultofthevestingofrestrictedstockunitsin2017and2016.

F-19 11. EarningsperShare: Thecomputationofbasicanddilutedearningspershareisasfollows: YearEnded December30, December31, January2, (inthousands,exceptpersharedata) 2017 2016 2016 Numerator Netincomeapplicabletocommonshares $ 475,505 $ 459,622 $ 473,398 Denominator Basicweightedaveragecommonshares 73,846 73,562 73,190 Dilutiveimpactofshare-basedawards 264 294 543 Dilutedweightedaveragecommonshares 74,110 73,856 73,733

Basicearningspercommonshare Netincomeapplicabletocommonstockholders $ 6.44 $ 6.22 $ 6.45 Dilutedearningspercommonshare Netincomeapplicabletocommonstockholders $ 6.42 $ 6.20 $ 6.40 12. IncomeTaxes: U.S.TaxReform

OnDecember22,2017,theTaxCutsandJobsAct(theAct)wassignedintolaw.TheActamendstheInternalRevenue Codeby,amongotherthings,permanentlyloweringthecorporatetaxrateto21%fromtheexistingmaximumrateof35%, implementingaterritorialtaxsystemandimposingatransitiontaxondeemedrepatriatedearningsofforeignsubsidiaries.The Companyisrequiredtoremeasuredeferredincometaxassetsandliabilitiesinthereportingperiodofenactment.The remeasurementoftheCompanysnetdeferredincometaxliabilityresultedina$155.1millionincometaxbenefitin2017.

TheCompanyrecordedanestimatedchargeof$11.3milliontoincometaxexpenseprimarilyforthenonrecurring repatriationtaxonaccumulatedearningsofforeignsubsidiariesanditistheCompanysintentiontobringbacktheaccumulated foreignearningsheldascashinthenearterm.Prospectively,anyfutureforeignearningswillbeutilizedtogrowandsupport theCompanysforeignoperationsandwillbetreatedasbeingindefinitelyreinvestedoutsidetheU.S.Theestimatedchargeand thebenefitfromtheremeasurementofthenetdeferredtaxliabilitywererecordedbasedontheCompany'sinitialevaluationof theimpactoftheActandaresubjecttochangein2018astheCompanycontinuestorefine,analyzeandupdatetheunderlying data,computationsandassumptionsusedtopreparetheseprovisionalamountsduringthemeasurementperiod.

F-20 ProvisionforIncomeTaxes

Provisionforincometaxesconsistsofthefollowing:

(inthousands) Current Deferred Total 2017 Federal $ 146,855 $ (146,741) $ 114 State 31,352 (3,437) 27,915 Foreign 17,810 (1,085) 16,725 $ 196,017 $ (151,263) $ 44,754 2016 Federal $ 209,499 $ 17,989 $ 227,488 State 29,345 1,366 30,711 Foreign 20,156 858 21,014 $ 259,000 $ 20,213 $ 279,213 2015 Federal $ 242,801 $ (6,564) $ 236,237 State 33,023 (1,797) 31,226 Foreign 12,885 (858) 12,027 $ 288,709 $ (9,219) $ 279,490

Theprovisionforincometaxesdifferedfromtheamountcomputedbyapplyingthefederalstatutoryincometaxratedue to: YearEnded December30, December31, January2, (inthousands) 2017 2016 2016 Incomebeforeprovisionforincometaxesatstatutory U.S.federalincometaxrate(35%) $ 182,091 $ 258,592 $ 263,511 Stateincometaxes,netoffederalincometaxbenefit 18,145 19,962 20,297 ImpactoftheAct,net (143,756) Other,net (11,726) 659 (4,318) $ 44,754 $ 279,213 $ 279,490

F-21 DeferredIncomeTaxAssets(Liabilities)

Temporarydifferencesthatgiverisetosignificantdeferredincometaxassets(liabilities)areasfollows: December30, December31, (inthousands) 2017 2016 Deferredincometaxassets: Accruedexpensesnotcurrentlydeductiblefortax $ 38,200 $ 63,992 Share-basedcompensation 9,556 11,752 Accruedmedicalandworkerscompensation 33,697 46,116 Netoperatinglosscarryforwards 6,701 5,093 Straight-linerent 21,733 31,631 Other,net 2,973 6,274 Totaldeferredincometaxassetsbeforevaluationallowances 112,860 164,858 Less:Valuationallowance (3,778) (2,437) Totaldeferredincometaxassets 109,082 162,421 Deferredincometaxliabilities: Propertyandequipment (98,186) (168,906) Inventories (169,478) (222,301) Intangibleassets (145,038) (225,496) Totaldeferredincometaxliabilities (412,702) (616,703) Netdeferredincometaxliabilities $ (303,620) $ (454,282)

AsofDecember30,2017andDecember31,2016,theCompanysnetoperatingloss(NOL)carryforwardsrelatedto stateNOLsof$177.8millionand$153.0million.TheseNOLsmaybeusedtoreducefuturetaxableincomeandexpire periodicallythrough2036.DuetouncertaintiesrelatedtotherealizationoftheseNOLsincertainjurisdictions,theCompany recordedavaluationallowanceof$3.8millionand$2.4millionasofDecember30,2017andDecember31,2016.Theamount ofdeferredincometaxassetsrealizable,however,couldchangeinthefutureifprojectionsoffuturetaxableincomechange.

UnrecognizedTaxBenefits

ThefollowingtablesummarizestheactivityoftheCompanysgrossunrecognizedtaxbenefits:

December30, December31, January2, (inthousands) 2017 2016 2016 Unrecognizedtaxbenefits,beginningofperiod $ 13,946 $ 13,841 $ 14,033 Increasesrelatedtopriorperiodtaxpositions 8,077 8,274 412 Decreasesrelatedtopriorperiodtaxpositions (2,331) (1,600) (2,120) Increasesrelatedtocurrentperiodtaxpositions 5,644 2,105 3,137 Settlements (1,496) (6,894) (582) Expirationofstatuteoflimitations (1,175) (1,780) (1,039) Unrecognizedtaxbenefits,endofperiod $ 22,665 $ 13,946 $ 13,841

F-22 AsofDecember30,2017,December31,2016andJanuary2,2016,theentireamountofunrecognizedtaxbenefits,if recognized,wouldreducetheCompanysannualeffectivetaxrate.During2017,2016and2015,theCompanyrecordedincome tax-relatedinterestandpenaltiesof$1.7million,$1.9millionand$0.1millionrelatedtouncertaintaxpositionsincludedin Provisionforincometaxesintheaccompanyingconsolidatedstatementsofoperations.AsofDecember30,2017and December31,2016,theCompanyhadrecordedaliabilityforpotentialinterestof$4.2millionand$2.7millionandfor potentialpenaltiesof$0.1millionand$0.2million.TheCompanyhasnotprovidedforanypenaltiesassociatedwithtax contingenciesunlessconsideredprobableofassessment.TheCompanydoesnotexpectitsunrecognizedtaxbenefitstochange significantlyoverthenext12months.Withfewexceptions,theCompanyisnolongersubjecttoU.S.federal,stateandlocalor non-U.S.incometaxexaminationsbytaxauthoritiesforyearsbefore2013.

13. LeaseCommitments: Initialtermsforfacilityleasesaretypically10to15years,withrenewaloptionsatfiveyearintervals,andmayincluderent escalationclauses.AsofDecember30,2017,futureminimumleasepaymentsdueundernon-cancelableoperatingleaseswith leasetermsextendingthroughtheyear2059areasfollows:

Year Amount (inthousands) 2018 $ 484,427 2019 445,143 2020 401,686 2021 340,356 2022 279,734 Thereafter 1,008,507 $ 2,959,853

NetRentExpense

Thefollowingtablesummarizesnetrentexpense: YearEnded December30, December31, January2, (inthousands) 2017 2016 2016 Minimumfacilityrentals $ 483,178 $ 473,596 $ 471,364 Equipmentrentals 24,786 26,897 24,860 Vehiclerentals 32,670 47,251 47,919 540,634 547,744 544,143 Less:Sub-leaseincome (7,144) (7,379) (7,569) $ 533,490 $ 540,365 $ 536,574

14. Contingencies:

TheCompanyiscurrentlyandfromtimetotimesubjecttolitigation,claimsandotherdisputes,includinglegaland regulatoryproceedings,arisinginthenormalcourseofbusiness.TheCompanyrecordsalosscontingencyliabilitywhenaloss isconsideredprobableandtheamountcanbereasonablyestimated.Althoughthefinaloutcomeoftheselegalmatterscannotbe determined,basedonthefactspresentlyknown,itismanagementsopinionthatthefinaloutcomeofanypendingmatterswill nothaveamaterialadverseeffectontheCompanysconsolidatedfinancialposition,resultsofoperationsorcashflows.

F-23 TheCompanysWesternAutosubsidiary,togetherwithotherdefendants(includingtheCompanyandotherofits subsidiaries),hasbeennamedasadefendantinlawsuitsalleginginjuryasaresultofexposuretoasbestos-containingproducts. Theplaintiffshaveallegedthatcertainproductscontainedasbestosandweremanufactured,distributedand/orsoldbythe variousdefendants.ManyofthecasespendingagainsttheCompanyareintheearlystagesoflitigation.Whilethedamages claimedagainstthedefendantsinsomeoftheseproceedingsaresubstantial,theCompanybelievesmanyoftheseclaimsareat leastpartiallycoveredbyinsuranceandhistoricallyasbestosclaimsagainsttheCompanyhavebeeninconsistentinfactpatterns allegedandimmaterial.TheCompanydoesnotbelievethecasescurrentlypendingwillhaveamaterialadverseeffectonthe Companysfinancialposition,resultsofoperationsorcashflows.

15. BenefitPlans:

401(k)Plan

TheCompanymaintainsadefinedcontributionbenefitplan,whichcoverssubstantiallyallTeamMembersafteroneyear ofserviceandwhohaveattainedtheageof21.TheplanallowsforTeamMembersalarydeferrals,whicharematchedatthe Companysdiscretion.Companycontributionstotheseplanswere$14.2million,$13.9millionand$14.6millionin2017,2016 and2015.

DeferredCompensation

TheCompanymaintainsanon-qualifieddeferredcompensationplanforcertainTeamMembers.Thisplanprovidesfora minimumandmaximumdeferralpercentageoftheTeamMembersbasesalaryandbonus,asdeterminedbytheRetirement PlanCommittee.TheCompanyestablishesandmaintainsadeferredcompensationliabilityforthisplan.AsofDecember30, 2017andDecember31,2016,theseliabilitieswere$16.8millionand$17.3million. 16. Share-BasedCompensation:

Overview

TheCompanygrantsshare-basedcompensationawardstoitsTeamMembersandmembersofitsBoardofDirectorsas providedforundertheCompanys2014Long-TermIncentivePlan(2014LTIP),whichwasapprovedbytheCompanys shareholdersonMay14,2014.TheCompanycurrentlygrantsshare-basedcompensationintheformofstockappreciation rights(SARs),restrictedstockunits(RSUs)anddeferredstockunits(DSUs).Allremainingrestrictedshares,whichwere grantedpriortothetransitiontoRSUsin2012,vestedduring2015.TheCompanysgrants,whichhavethreemethodsof measuringfairvalue,generallyincludeatime-basedserviceportion,aperformance-basedportionandamarket-basedportion, whichcollectivelyrepresentthetargetaward.

AtDecember30,2017,therewere5.0millionsharesofcommonstockavailableforfutureissuanceunderthe2014LTIP basedonmanagementscurrentestimateoftheprobablevestingoutcomeforperformance-basedawards.TheCompanyissues newsharesofcommonstockuponexerciseofstockoptionsandSARs.Sharesforfeitedandshareswithheldforpaymentof taxesduebecomeavailableforreissuanceandareincludedinavailability.Availabilityalsoincludessharesthatbecame availableforreissuanceinconnectionwiththeexerciseofSARs.

ThefairvalueofeachSARgrantedwasestimatedonthedateofgrantusingtheBlack-Scholesoption-pricingmodelwith thefollowingweightedaverageassumptions:

Black-ScholesOptionValuationAssumptions 2016 2015 Risk-freeinterestrate(1) 1.2% 1.3% Expecteddividendyield 0.2% 0.1% Expectedstockpricevolatility(2) 27.7% 27.3% Expectedlifeofawards(inmonths)(3) 55 44 (1) Therisk-freeinterestrateisbasedontheU.S.Treasuryconstantmaturityinterestrate havingtermconsistentwiththeexpectedlifeoftheaward. (2) Expectedvolatilityisdeterminedusingablendofhistoricalandimpliedvolatility.

F-24 (3) TheexpectedlifeoftheCompanysawardsrepresentstheestimatedperiodoftimeuntil exerciseandisbasedonhistoricalexperienceofpreviouslygrantedawards.

AsnoSARsweregrantedin2017,theBlack-Scholesmodelwasnotutilizedandnoassumptionswerecreated.

Fortime-basedandperformance-basedRSUs,thefairvalueofeachawardwasdeterminedbasedonthemarketpriceofthe Companysstockonthedateofgrantadjustedforexpecteddividendsduringthevestingperiod,asapplicable.

Thefairvalueofeachmarket-basedRSUwasdeterminedusingaMonteCarlosimulationmodel.Themodelusesmultiple inputvariablesthatdeterminedtheprobabilityofsatisfyingthemarketconditionrequirementsasfollows:

MonteCarloModelAssumptions 2017 Risk-freeinterestrate(1) 1.6% Expecteddividendyield 0.2% Expectedstockpricevolatility(2) 26.2% (1) Therisk-freeinterestrateisbasedontheU.S.Treasuryconstantmaturity interestratehavingtermconsistentwiththevestingperiodoftheaward. (2) Expectedvolatilityisdeterminedbasedonhistoricalvolatilityovera matchinglook-backperiodandisconsistentwiththecorrelation coefficientsbetweenthestockpricesoftheCompanyanditspeergroup.

Additionally,theCompanyestimatedaliquiditydiscountof9.29%usingtheChaffeProtectivePutMethodtoadjustthe fairvalueforthepost-vestrestrictions.

Time-BasedAwards

TheCompanysoutstandingtime-vestedawardsconsistofSARsandRSUs.TheSARsgenerallyvestoverathree-year periodinequalannualinstallmentsbeginningonthefirstanniversaryofthegrantdate.TheSARsgrantedarenon-qualified, terminateontheseventhanniversaryofthegrantdateandcontainnopost-vestingrestrictionsotherthannormaltradingblack- outperiodsprescribedbytheCompanyscorporategovernancepolicies.TheRSUsgenerallyvestoverathree-yearperiodin equalannualinstallmentsbeginningonthefirstanniversaryofthegrantdate.Duringthevestingperiod,holdersofRSUsare entitledtoreceivedividendequivalents,butarenotentitledtovotingrights.

Thefollowingtablesummarizesactivityfortime-vestedSARsandRSUsin2017: SARs RSUs Weighted- Average Weighted- Remaining Weighted- Average Contractual Aggregate Average Numberof Exercise Term(in Intrinsic Numberof GrantDate (inthousands,exceptpersharedata) Awards Price years) Value Awards FairValue OutstandingSARs/Nonvested RSUsatDecember31,2016 275 $ 93.89 211 $ 151.70 Granted 287 131.01 Exercised (157) 71.57 Vested (91) 149.26 Forfeited (5) 63.86 (61) 149.31 OutstandingSARs/Nonvested RSUsatDecember30,2017 113 $ 126.07 3.77 $ 1,222 346 $ 135.58

Vestedandexpectedtovest 113 $ 126.07 3.77 $

Outstandingandexercisable 45 $ 72.27 1.43 $ 1,222

F-25 Theaggregateintrinsicvalueoftime-vestedSARsreflectedinthetableaboveandperformance-basedSARsreflectedin thetablebelowisbasedontheCompanysclosingstockpriceof$99.69asofthelasttradingdayof2017.Thefairvalueof time-basedRSUsreflectedinthetableaboveandperformance-basedRSUsreflectedinthetablebelowisdeterminedbasedon themarketpriceoftheCompanyscommonstockonthedateofgrant.

Thefollowingtablesummarizescertaininformationconcerningactivityfortime-vestedSARs,RSUsandrestrictedshares: YearEnded December30, December31, January2, (inthousands,exceptpersharedata) 2017 2016 2016 SARs: Weightedaveragefairvalueofgrants $ $ 43.64 $ AggregateintrinsicvalueofSARsexercised $ 11,455 $ 31,450 $ 26,060

RSUsandrestrictedshares: Weightedaveragefairvalueofgrants $ 131.01 $ 155.51 $ 153.61 TotalgrantdatefairvalueofRSUsandrestrictedsharesvested $ 13,578 $ 16,089 $ 15,268

Therewerenotime-vestedSARsgrantedin2017or2015.

Performance-BasedAwards

TheCompanysoutstandingperformance-basedawardsconsistofSARsandRSUs.Performanceawardsgenerallymay vestfollowingathree-yearperiodsubjecttotheCompanysachievementofcertainfinancialgoalsasspecifiedinthegrant agreements.DependingontheCompanysresultsduringthethree-yearperformanceperiod,theactualnumberofawards vestingattheendoftheperiodgenerallyrangesfrom0%to200%oftheperformanceaward.TheperformanceRSUsgenerally donothavedividendequivalentrightsanddonothavevotingrightsuntilthesharesareearnedandissuedfollowingthe applicableperformanceperiod.During2016,theCompanyalsograntedbroad-basedincentiveawardstostoreandfieldteam membersthatwillvestoveraone-yearserviceperiodbasedontheachievementofperformancegoalsduring2016.

Thenumberofperformance-basedawardsoutstandingisreflectedinthefollowingtablesbasedonthenumberofawards thattheCompanybelievedwereprobableofvestingatDecember30,2017.Performance-basedSARsandperformance-based RSUsgrantedduring2017arepresentedasgrantsinthetableattheirrespectivetargetlevels.Thechangeinunitsbasedon performancerepresentsthechangeinthenumberofgrantedawardsexpectedtovestbasedontheCompanysupdated probabilityassessmentasofDecember30,2017.

Compensationexpenseforperformance-basedawardsof$13.6million,$0.8million,and$14.7millionin2017,2016and 2015,wasdeterminedbasedonmanagementsestimateoftheprobablevestingoutcome.

F-26 Thefollowingtablesummarizesactivityforperformance-basedSARsandRSUsin2017: SARs RSUs Weighted- Average Weighted- Remaining Weighted- Average Contractual Aggregate Average Number Exercise Term(in Intrinsic Number GrantDate (inthousands,exceptpersharedata) ofAwards Price years) Value ofAwards FairValue OutstandingSARs/Nonvested RSUsatDecember31,2016 114 $ 86.95 138 $ 162.71 Granted 53 146.42 Changeinunitsbasedon performance 5 108.36 Exercised (81) 85.14 Vested (48) 162.02 Forfeited (9) 101.63 (18) 160.79 OutstandingSARs/Nonvested RSUsatDecember30,2017 29 $ 90.90 2.16 $ 423 125 $ 156.36

Vestedandexpectedtovest 29 $ 90.90 2.16 $

Outstandingandexercisable 29 $ 90.90 2.16 $ 423

Thefollowingtablesummarizescertaininformationconcerningactivityforperformance-basedSARsandRSUs: YearEnded December30, December31, January2, (inthousands,exceptpersharedata) 2017 2016 2016 SARs: Weightedaveragefairvalueofgrants $ $ 36.78 $ 43.38 AggregateintrinsicvalueofSARsexercised $ 5,221 $ 11,556 $ 8,475

RSUs: Weightedaveragefairvalueofgrants $ 146.42 $ 163.76 $ TotalgrantdatefairvalueofRSUsvested $ 7,823 $ 13,512 $ 1,763

Therewerenoperformance-basedSARsgrantedin2017orperformancebasedRSUsgrantedin2015.AsofDecember30, 2017,themaximumpotentialpayoutundertheCompanyscurrentlyoutstandingperformance-basedSARsandRSUswas663 thousandand173thousandunits.

Market-BasedAwards

TheCompanysoutstandingmarket-basedawardsconsistofRSUs.Market-basedRSUsvestingdependsonthe Companysrelativetotalshareholderreturnamongadesignatedgroupofpeercompaniesduringathree-yearperiodandwillbe subjecttoaone-yearholdingperiodaftervesting.

Atthebeginningof2017,zeromarket-basedRSUswereoutstanding.During2017,atotalof27thousandmarket-based RSUsweregrantedataweightedaveragefairvalueof$139.33perunitand3thousandmarket-basedRSUswereforfeitedata weightedaveragefairvalueof$145.83.

F-27 OtherConsiderations

Totalincometaxbenefitrelatedtoshare-basedcompensationexpensefor2017,2016and2015was$15.3million,$7.5 millionand$13.6million.

AsofDecember30,2017,therewas$44.3millionofunrecognizedcompensationexpenserelatedtoallshare-based awardsthatwasexpectedtoberecognizedoveraweightedaverageperiodof1.8years.

TheCompanymodifiedselectedawardsforcertainterminatedemployeesduring2015suchthattheemployeeswouldvest inawardsthatwouldhaveotherwisebeenforfeited,whichresultedinincrementalexpenserecognizedin2015of$6.6million. AsfourofthesemodifiedawardswerecashsettledinMarch2016,theywereaccountedforasliabilityawardsasofJanuary2, 2016.ThevalueoftheliabilityawardswasinsignificantasofJanuary2,2016.Nosuchmodificationoccurredin2017or2016.

DeferredStockUnits

TheCompanygrantsshare-basedawardsannuallytoitsBoardofDirectorsinconnectionwithitsannualmeetingof stockholders.TheseawardsaregrantedintheformofDSUsasprovidedforintheAdvanceAutoParts,Inc.DeferredStock UnitPlanforNon-EmployeeDirectorsandSelectedExecutives(DSUPlan).EachDSUisequivalenttooneshareof commonstockoftheCompanyandwillbedistributedincommonsharesafterthedirectorsserviceontheBoardends.DSUs grantedin2017and2016vestoveraoneyearserviceperiod,whileDSUsgrantedin2015werefullyvestedonthegrant date.Additionally,theDSUPlanprovidesforthedeferralofcompensationearnedintheformof(i)anannualretainerfor directors,and(ii)wagesforcertainhighlycompensatedTeamMembersoftheCompany.TheseDSUsaresettledincommon stockwiththeparticipantsatafuturedate,oroveraspecifiedtimeperiod,aselectedbytheparticipantsinaccordancewiththe DSUPlan.

TheCompanygranted12thousandDSUsin2017.TheweightedaveragefairvalueofDSUsgrantedduring2017,2016 and2015was$125.34,$146.30,and$156.83.TheDSUsareawardedatapriceequaltothemarketpriceoftheCompanys underlyingstockonthedateofthegrant.For2017,2016and2015,theCompanyrecognized$1.5million,$0.9millionand $2.1millionofshare-basedcompensationexpensefortheseDSUgrants.

EmployeeStockPurchasePlan

TheCompanyalsooffersanemployeestockpurchaseplan(ESPP).UndertheESPP,eligibleTeamMembersmayelect salarydeferralstopurchasetheCompanyscommonstockatadiscountof10%fromitsfairmarketvalueonthedateof purchase.ThereareannuallimitationsontheamountsaTeamMembermayelectofeither$25thousandperTeamMemberor 10%ofcompensation,whicheverisless.AsofDecember30,2017,therewere1.0millionsharesavailabletobeissuedunder theESPP.

17. AccumulatedOtherComprehensiveLoss:

Accumulatedothercomprehensiveloss,netoftax,consistedofthefollowing: UnrealizedGain Accumulated (Loss) Other onPostretirement ForeignCurrency Comprehensive (inthousands) Plan Translation Income(Loss) Balance,January3,2015 $ 2,931 $ (15,268) $ (12,337) 2015activity (445) (31,277) (31,722) Balance,January2,2016 2,486 (46,545) (44,059) 2016activity (534) 4,892 4,358 Balance,December31,2016 1,952 (41,653) (39,701) 2017activity (194) 14,941 14,747 Balance,December30,2017 $ 1,758 $ (26,712) $ (24,954)

F-28 18. CondensedConsolidatingFinancialStatements:

Certain100%whollyowneddomesticsubsidiariesofAdvance,includingitsMaterialSubsidiaries(asdefinedinthe2017 CreditAgreement)serveasguarantorsofAdvancesseniorunsecurednotes(GuarantorSubsidiaries).Thesubsidiary guaranteesrelatedtoAdvancesseniorunsecurednotesarefullandunconditional,jointandseveralandtherearenorestrictions ontheabilityofAdvancetoobtainfundsfromitsGuarantorSubsidiaries.CertainofAdvanceswhollyownedsubsidiaries, includingallofitsforeignsubsidiaries,donotserveasguarantorsofAdvancesseniorunsecurednotes(Non-Guarantor Subsidiaries).

Setforthbelowarecondensedconsolidatingfinancialstatementspresentingthefinancialposition,resultsofoperations, andcashflowsof(i)Advance,(ii)theGuarantorSubsidiaries,(iii)theNon-GuarantorSubsidiaries,and(iv)theeliminations necessarytoarriveatconsolidatedinformationfortheCompany.InvestmentsinsubsidiariesoftheCompanyarepresented undertheequitymethod.ThestatementofoperationseliminationsrelateprimarilytothesaleofinventoryfromaNon- GuarantorSubsidiarytoaGuarantorSubsidiary.Thebalancesheeteliminationsrelateprimarilytotheeliminationof intercompanyreceivablesandpayablesandsubsidiaryinvestmentaccounts.

F-29 Thefollowingtablespresentcondensedconsolidatingbalancesheets,condensedconsolidatingstatementsofoperations, comprehensiveincomeandcashflows,andshouldbereadinconjunctionwiththeconsolidatedfinancialstatementsherein.

CondensedConsolidatingBalanceSheet AsofDecember30,2017 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Assets Currentassets: Cashandcashequivalents $ 23 $ 482,620 $ 64,317 $ (23) $ 546,937 Receivables,net 567,460 38,897 606,357 Inventories 3,986,724 181,768 4,168,492 Othercurrentassets 103,118 2,063 (75) 105,106 Totalcurrentassets 23 5,139,922 287,045 (98) 5,426,892 Propertyandequipment,netof accumulateddepreciation 103 1,384,115 9,920 1,394,138 Goodwill 943,359 50,934 994,293 Intangibleassets,net 551,781 45,893 597,674 Otherassets,net 3,224 68,749 554 (3,223) 69,304 Investmentinsubsidiaries 3,521,330 448,462 (3,969,792) Intercompanynotereceivable 1,048,700 (1,048,700) Duefromintercompany,net 332,467 (332,467) $ 4,573,380 $ 8,536,388 $ 726,813 $ (5,354,280) $ 8,482,301 LiabilitiesandStockholders'Equity Currentliabilities: Accountspayable $ $ 2,657,792 $ 236,790 $ $ 2,894,582 Accruedexpenses 1,134 511,841 20,648 (75) 533,548 Othercurrentliabilities 50,963 1,027 (23) 51,967 Totalcurrentliabilities 1,134 3,220,596 258,465 (98) 3,480,097 Long-termdebt 1,044,327 1,044,327 Deferredincometaxes 288,999 17,844 (3,223) 303,620 Otherlong-termliabilities 237,019 2,042 239,061 Intercompanynotepayable 1,048,700 (1,048,700) Duetointercompany,net 112,723 219,744 (332,467) Commitmentsandcontingencies Stockholders'equity 3,415,196 3,521,330 448,462 (3,969,792) 3,415,196 $ 4,573,380 $ 8,536,388 $ 726,813 $ (5,354,280) $ 8,482,301

F-30 CondensedConsolidatingBalanceSheet AsofDecember31,2016 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Assets Currentassets: Cashandcashequivalents $ 22 $ 78,543 $ 56,635 $ (22) $ 135,178 Receivables,net 619,229 22,023 641,252 Inventories 4,126,465 199,403 4,325,868 Othercurrentassets 69,385 1,153 (72) 70,466 Totalcurrentassets 22 4,893,622 279,214 (94) 5,172,764 Propertyandequipment,netof accumulateddepreciation 128 1,436,459 9,753 1,446,340 Goodwill 943,359 47,518 990,877 Intangibleassets,net 595,596 45,307 640,903 Otherassets,net 4,634 63,376 773 (4,634) 64,149 Investmentinsubsidiaries 3,008,856 375,420 (3,384,276) Intercompanynotereceivable 1,048,424 (1,048,424) Duefromintercompany,net 316,109 (316,109) $ 4,062,064 $ 8,307,832 $ 698,674 $ (4,753,537) $ 8,315,033 LiabilitiesandStockholders'Equity Currentliabilities: Accountspayable $ $ 2,813,937 $ 272,240 $ $ 3,086,177 Accruedexpenses 1,505 526,652 26,312 (72) 554,397 Othercurrentliabilities 32,508 2,986 (22) 35,472 Totalcurrentliabilities 1,505 3,373,097 301,538 (94) 3,676,046 Long-termdebt 1,042,949 1,042,949 Deferredincometaxes 439,283 19,633 (4,634) 454,282 Otherlong-termliabilities 223,481 2,083 225,564 Intercompanynotepayable 1,048,424 (1,048,424) Duetointercompany,net 101,418 214,691 (316,109) Commitmentsandcontingencies Stockholders'equity 2,916,192 3,008,856 375,420 (3,384,276) 2,916,192 $ 4,062,064 $ 8,307,832 $ 698,674 $ (4,753,537) $ 8,315,033

F-31 CondensedConsolidatingStatementofOperations FortheYearEndedDecember30,2017 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netsales $ $ 9,034,790 $ 550,450 $ (211,456) $ 9,373,784 Costofsales,includingpurchasingand warehousingcosts 5,107,063 393,128 (211,456) 5,288,735 Grossprofit 3,927,727 157,322 4,085,049 Selling,generalandadministrativeexpenses 30,478 3,453,406 82,155 (51,202) 3,514,837 Operating(loss)income (30,478) 474,321 75,167 51,202 570,212 Other,net: Interest(expense)income (52,305) (6,496) (58,801) Otherincome(expense),net 83,840 (17,729) (6,061) (51,202) 8,848 Totalother,net 31,535 (24,225) (6,061) (51,202) (49,953) Incomebeforeprovisionforincometaxes 1,057 450,096 69,106 520,259 Provisionforincometaxes 641 32,623 11,490 44,754 Incomebeforeequityinearningsof subsidiaries 416 417,473 57,616 475,505 Equityinearningsofsubsidiaries 475,089 57,616 (532,705) Netincome $ 475,505 $ 475,089 $ 57,616 $ (532,705) $ 475,505

CondensedConsolidatingStatementofOperations FortheYearEndedDecember31,2016 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netsales $ $ 9,254,477 $ 556,747 $ (243,545) $ 9,567,679 Costofsales,includingpurchasingand warehousingcosts 5,171,953 383,356 (243,545) 5,311,764 Grossprofit 4,082,524 173,391 4,255,915 Selling,generalandadministrativeexpenses 28,695 3,402,323 92,287 (54,988) 3,468,317 Operating(loss)income (28,695) 680,201 81,104 54,988 787,598 Other,net: Interest(expense)income (52,081) (7,897) 68 (59,910) Otherincome(expense),net 81,683 (19,558) 4,010 (54,988) 11,147 Totalother,net 29,602 (27,455) 4,078 (54,988) (48,763) Incomebeforeprovisionforincometaxes 907 652,746 85,182 738,835 Provisionforincometaxes 1,588 260,155 17,470 279,213 (Loss)incomebeforeequityinearningsof subsidiaries (681) 392,591 67,712 459,622 Equityinearningsofsubsidiaries 460,303 67,712 (528,015) Netincome $ 459,622 $ 460,303 $ 67,712 $ (528,015) $ 459,622

F-32 CondensedConsolidatingStatementofOperations FortheYearEndedJanuary2,2016 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netsales $ $ 9,432,116 $ 593,606 $ (288,704) $ 9,737,018 Costofsales,includingpurchasingand warehousingcosts 5,172,938 430,012 (288,704) 5,314,246 Grossprofit 4,259,178 163,594 4,422,772 Selling,generalandadministrativeexpenses 24,186 3,536,697 93,852 (57,743) 3,596,992 Operating(loss)income (24,186) 722,481 69,742 57,743 825,780 Other,net: Interestexpense (52,210) (13,378) 180 (65,408) Otherincome(expense),net 76,987 (19,699) (7,029) (57,743) (7,484) Totalother,net 24,777 (33,077) (6,849) (57,743) (72,892) Incomebeforeprovisionforincometaxes 591 689,404 62,893 752,888 Provisionforincometaxes 1,220 268,571 9,699 279,490 (Loss)incomebeforeequityinearningsof subsidiaries (629) 420,833 53,194 473,398 Equityinearningsofsubsidiaries 474,027 53,194 (527,221) Netincome $ 473,398 $ 474,027 $ 53,194 $ (527,221) $ 473,398

CondensedConsolidatingStatementofComprehensiveIncome FortheYearEndedDecember30,2017 Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netincome $ 475,505 $ 475,089 $ 57,616 $ (532,705) $ 475,505 Othercomprehensiveincome: Changesinnetunrecognizedother postretirementbenefitcosts (194) (194) Currencytranslationadjustments 14,941 14,941 Equityinothercomprehensiveincomeof subsidiaries 14,747 14,941 (29,688) Totalothercomprehensiveincome 14,747 14,747 14,941 (29,688) 14,747 Comprehensiveincome $ 490,252 $ 489,836 $ 72,557 $ (562,393) $ 490,252

F-33 CondensedConsolidatingStatementofComprehensiveIncome FortheYearEndedDecember31,2016

Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netincome $ 459,622 $ 460,303 $ 67,712 $ (528,015) $ 459,622 Othercomprehensiveincome: Changesinnetunrecognizedother postretirementbenefitcosts (534) (534) Currencytranslationadjustments 4,892 4,892 Equityinothercomprehensiveincomeof subsidiaries 4,358 4,892 (9,250) Totalothercomprehensiveincome 4,358 4,358 4,892 (9,250) 4,358 Comprehensiveincome $ 463,980 $ 464,661 $ 72,604 $ (537,265) $ 463,980

CondensedConsolidatingStatementofComprehensiveIncome FortheYearEndedJanuary2,2016

Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netincome $ 473,398 $ 474,027 $ 53,194 $ (527,221) $ 473,398 Othercomprehensiveloss: Changesinnetunrecognizedother postretirementbenefitcosts (445) (445) Currencytranslationadjustments (31,277) (31,277) Equityinothercomprehensivelossof subsidiaries (31,722) (31,277) 62,999 Othercomprehensiveloss (31,722) (31,722) (31,277) 62,999 (31,722) Comprehensiveincome $ 441,676 $ 442,305 $ 21,917 $ (464,222) $ 441,676

F-34 CondensedConsolidatingStatementofCashFlows FortheYearEndedDecember30,2017

Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netcashprovidedbyoperatingactivities $ $ 593,091 $ 7,714 $ $ 600,805 Cashflowsfrominvestingactivities: Purchasesofpropertyandequipment (187,993) (1,765) (189,758) Proceedsfromsalesofpropertyand equipment 11,085 14 11,099 Other,net 480 (460) 20 Netcashusedininvestingactivities (176,428) (2,211) (178,639) Cashflowsfromfinancingactivities: Increase(decrease)inbankoverdrafts 16,290 (2,286) 14,004 Borrowingsundercreditfacilities 534,400 534,400 Paymentsoncreditfacilities (534,400) (534,400) Dividendspaid (17,854) (17,854) Proceedsfromtheissuanceofcommon stock 4,076 4,076 Taxwithholdingsrelatedtotheexerciseof stockappreciationrights (6,531) (6,531) Repurchaseofcommonstock (6,498) (6,498) Other,net 1 (2,069) (1) (2,069) Netcashprovidedby(usedin) financingactivities 1 (12,586) (2,286) (1) (14,872) Effectofexchangeratechangesoncash 4,465 4,465 Netincreaseincashandcashequivalents 1 404,077 7,682 (1) 411,759 Cashandcashequivalents,beginningof period 22 78,543 56,635 (22) 135,178 Cashandcashequivalents,endofperiod $ 23 $ 482,620 $ 64,317 $ (23) $ 546,937

F-35 CondensedConsolidatingStatementofCashFlows FortheYearEndedDecember31,2016

Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netcashprovidedbyoperatingactivities $ 14 $ 491,180 $ 32,109 $ $ 523,303 Cashflowsfrominvestingactivities: Purchasesofpropertyandequipment (257,159) (2,400) (259,559) Proceedsfromsalesofpropertyand equipment 2,210 2 2,212 Other,net (4,697) (4,697) Netcashusedininvestingactivities (259,646) (2,398) (262,044) Cashflowsfromfinancingactivities: Decreaseinbankoverdrafts (4,902) (657) (14) (5,573) Borrowingsundercreditfacilities 799,600 799,600 Paymentsoncreditfacilities (959,600) (959,600) Dividendspaid (17,738) (17,738) Proceedsfromtheissuanceofcommon stock 4,532 4,532 Taxwithholdingsrelatedtotheexerciseof stockappreciationrights (19,558) (19,558) Repurchaseofcommonstock (18,393) (18,393) Other,net (390) (390) Netcashusedinfinancingactivities (216,449) (657) (14) (217,120) Effectofexchangeratechangesoncash 257 257 Netincreaseincashandcashequivalents 14 15,085 29,311 (14) 44,396 Cashandcashequivalents,beginningof period 8 63,458 27,324 (8) 90,782 Cashandcashequivalents,endofperiod $ 22 $ 78,543 $ 56,635 $ (22) $ 135,178

F-36 CondensedConsolidatingStatementofCashFlows FortheYearEndedJanuary2,2016

Advance Non- AutoParts, Guarantor Guarantor (inthousands) Inc. Subsidiaries Subsidiaries Eliminations Consolidated Netcash(usedin)providedbyoperating activities $ (1) $ 709,582 $ (6,937) $ $ 702,644 Cashflowsfrominvestingactivities: Purchasesofpropertyandequipment (232,591) (2,156) (234,747) Proceedsfromsalesofpropertyand equipment 266 4 270 Other,net (18,583) (306) (18,889) Netcashusedininvestingactivities (250,908) (2,458) (253,366) Cashflowsfromfinancingactivities: (Decrease)increaseinbankoverdrafts (4,529) 1,606 1 (2,922) Borrowingsundercreditfacilities 618,300 618,300 Paymentsoncreditfacilities (1,041,700) (1,041,700) Dividendspaid (17,649) (17,649) Proceedsfromtheissuanceofcommon stock 5,174 5,174 Taxwithholdingsrelatedtotheexerciseof stockappreciationrights (13,112) (13,112) Repurchaseofcommonstock (6,665) (6,665) Other,net (380) (380) Netcash(usedin)providedby financingactivities (460,561) 1,606 1 (458,954) Effectofexchangeratechangesoncash (4,213) (4,213)

Netdecreaseincashandcashequivalents (1) (1,887) (12,002) 1 (13,889) Cashandcashequivalents,beginningof period 9 65,345 39,326 (9) 104,671 Cashandcashequivalents,endofperiod $ 8 $ 63,458 $ 27,324 $ (8) $ 90,782

F-37 19. QuarterlyFinancialData(unaudited):

Thefollowingtablesummarizesquarterlyfinancialdatafor2017and2016:

2017 First Second Third Fourth (inthousands,exceptpersharedata) (16weeks) (12weeks) (12weeks) (12weeks) Netsales $ 2,890,838 $ 2,263,727 $ 2,182,233 $ 2,036,986 Grossprofit $ 1,270,684 $ 993,088 $ 947,708 $ 873,569 Netincome $ 107,960 $ 87,049 $ 95,996 $ 184,500

Basicearningspercommonshare $ 1.46 $ 1.18 $ 1.30 $ 2.50 Dilutedearningspercommonshare $ 1.46 $ 1.17 $ 1.30 $ 2.49

2016 First Second Third Fourth (inthousands,exceptpersharedata) (16weeks) (12weeks) (12weeks) (12weeks) Netsales $ 2,979,778 $ 2,256,155 $ 2,248,855 $ 2,082,891 Grossprofit $ 1,349,889 $ 1,010,257 $ 988,205 $ 907,564 Netincome $ 158,813 $ 124,600 $ 113,844 $ 62,365

Basicearningspercommonshare $ 2.16 $ 1.69 $ 1.54 $ 0.84 Dilutedearningspercommonshare $ 2.14 $ 1.68 $ 1.53 $ 0.84

Quarterlyandyear-to-datecomputationsofpershareamountsaremadeindependently.Therefore,thesumofpershare amountsforthequartersmaynotbeequaltothepershareamountfortheyear.

F-38 AdvanceAutoParts,Inc. ScheduleII-ValuationandQualifyingAccounts (inthousands)

Balanceat Balanceat Beginning Chargesto Endof Allowancefordoubtfulaccountsreceivable ofPeriod Expenses Deductions Period January2,2016 $ 16,152 $ 22,067 $ (12,461) (1) $ 25,758 December31,2016 $ 25,758 $ 24,597 $ (21,191) (1) $ 29,164 December30,2017 $ 29,164 $ 20,110 $ (31,055) (1) $ 18,219

(1) Accountswrittenoffduringtheperiod.TheseamountsdidnotimpacttheCompanysstatementofoperationsforany yearpresented.

Othervaluationandqualifyingaccountshavenotbeenreportedinthisschedulebecausetheyareeithernotapplicableor becausetheinformationhasbeenincludedelsewhereinthisreport.

F-39 EXHIBITSINDEX IncorporatedbyReference Filed ExhibitNo. ExhibitDescription Form Exhibit FilingDate Herewith 2.1 AgreementandPlanofMergerbyandamongAdvance 10-K 2.1 2/25/2014 AutoParts,Inc.,GeneratorPurchase,Inc.,GeneralParts International,Inc.andShareholderRepresentative ServicesLLC(astheShareholderRepresentative),Dated asofOctober15,2013 3.1 RestatedCertificateofIncorporationofAdvanceAuto 8-K 3.1 5/31/2017 Parts,Inc.(AdvanceAuto)(asamendedeffectiveasof May24,2017). 3.2 AmendedandRestatedBylawsofAdvanceAuto., 8-K 3.2 5/31/2017 effectiveMay24,2017 4.1 Indenture,datedasofApril29,2010,amongAdvance 8-K 4.1 4/29/2010 AutoParts,Inc.,eachoftheSubsidiaryGuarantorsfrom timetotimepartytheretoandWellsFargoBank,National Association,asTrustee. 4.2 FirstSupplementalIndenture,datedasofApril29,2010, 8-K 4.2 4/29/2010 amongAdvanceAutoParts,Inc.,eachoftheSubsidiary GuarantorsfromtimetotimepartytheretoandWells FargoBank,NationalAssociation,asTrustee. 4.3 SecondSupplementalIndenturedatedasofMay27,2011 8-K 10.45 6/3/2011 totheIndenturedatedasofApril29,2010amongAdvance AutoParts,Inc.asIssuer,eachoftheSubsidiary GuarantorsfromtimetotimepartytheretoandWells FargoBank,NationalAssociation,asTrustee. 4.4 ThirdSupplementalIndenturedatedasofJanuary17, 8-K 4.4 1/17/2012 2012amongAdvanceAutoParts,Inc.,eachofthe SubsidiaryGuarantorsfromtimetotimepartytheretoand WellsFargoBank,NationalAssociation,asTrustee. 4.5 FourthSupplementalIndenture,datedasofDecember21, 8-K 4.5 12/21/2012 2012amongAdvanceAutoParts,Inc.,eachofthe SubsidiaryGuarantorsfromtimetotimepartytheretoand WellsFargoBank,NationalAssociation,asTrustee. 4.6 FifthSupplementalIndenture,datedasofApril19,2013 8-K 4.6 4/19/2013 amongAdvanceAutoParts,Inc.,eachoftheSubsidiary GuarantorsfromtimetotimepartytheretoandWells FargoBank,NationalAssociation,asTrustee. 4.7 SixthSupplementalIndenture,datedasofDecember3, 8-K 4.7 12/9/2013 2013,amongAdvanceAutoParts,Inc.,eachofthe SubsidiaryGuarantorsfromtimetotimepartytheretoand WellsFargoBank,NationalAssociation,asTrustee.

4.8 Formof5.750%Notedue2020. 8-K 4.3 4/29/2010 4.9 Formof4.500%Notedue2022. 8-K 4.5 1/17/2012 4.10 Formof4.500%Notedue2023. 8-K 4.7 12/9/2013 4.11 SeventhSupplementalIndenture,datedasofFebruary28, 10-Q 4.11 5/28/2014 2014,amongAdvanceAutoParts,Inc.,eachofthe SubsidiaryGuarantorsfromtimetotimepartytheretoand WellsFargoBank,NationalAssociation,asTrustee. 10.1 FormofIndemnificationAgreementbetweenAdvance 8-K 10.19 5/20/2004 AutoPartsandeachofitsDirectors. 10.2 AdvanceAutoParts,Inc.2004Long-TermIncentivePlan 10-Q 10.19 5/29/2008 (amendedasofApril17,2008). IncorporatedbyReference Filed ExhibitNo. ExhibitDescription Form Exhibit FilingDate Herewith 10.3 AdvanceAutoParts,Inc.DeferredStockUnitPlanfor 10-K 10.17 3/1/2011 Non-EmployeeDirectorsandSelectedExecutives(as amendedJanuary1,2008),includingFirstAmendmentto theAdvanceAutoParts,Inc.DeferredStockUnitPlanfor Non-EmployeeDirectorsandSelectedExecutives(as amendedandrestatedeffectiveasofJanuary1,2009)and SecondAmendmenttotheAdvanceAutoParts,Inc. DeferredStockUnitPlanforNon-EmployeeDirectorsand SelectedExecutives(asamendedandrestatedeffectiveas ofJanuary1,2010). 10.4 AmendedandRestatedAdvanceAutoParts,Inc. DEF14A AppendixC 4/16/2012 EmployeeStockPurchasePlan. 10.5 AdvanceAutoParts,Inc.DeferredCompensationPlan(as 10-K 10.19 3/1/2011 amendedJanuary1,2008),includingFirstAmendmentto theAdvanceAutoParts,Inc.DeferredCompensationPlan (asamendedandrestatedeffectiveasofJanuary1,2009) andSecondAmendmenttotheAdvanceAutoParts,Inc. DeferredCompensationPlan(asamendedandrestated effectiveasofJanuary1,2010). 10.6 AdvanceAutoParts,Inc.ExecutiveIncentivePlan. DEF14A AppendixB 4/11/2007 10.7 EmploymentAgreementeffectiveJune4,2008between 8-K 10.33 6/4/2008 AdvanceAutoParts,Inc.andMichaelA.Norona. 10.8 AttachmentCtoEmploymentAgreementeffectiveJune4, 8-K 10.35 6/4/2008 2008betweenAdvanceAutoParts,Inc.andMichaelA. Norona. 10.9 FormofAdvanceAutoParts,Inc.RestrictedStockAward 8-K 10.39 11/21/2008 AgreementdatedNovember17,2008. 10.10 FirstAmendmenttoEmploymentAgreementeffective 10-Q 10.44 6/2/2010 January1,2010betweenAdvanceAutoParts,Inc.and MichaelA.Norona. 10.11 FormofAdvanceAutoParts,Inc.SARAwardAgreement 10-K 10.33 2/28/2012 under2004Long-TermIncentivePlan. 10.12 FormofAdvanceAutoParts,Inc.RestrictedStockAward 10-K 10.34 2/28/2012 Agreementunder2004Long-TermIncentivePlan. 10.13 SecondAmendmenttoEmploymentAgreementeffective 10-Q 10.37 11/13/2012 December31,2012betweenAdvanceAutoParts,Inc.and MichaelA.Norona. 10.14 SupplementNo.1toGuaranteeAgreement. 8-K 10.1 12/21/2012 10.15 ThirdAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.33 2/25/2013 DeferredCompensationPlan(EffectiveasofJanuary1, 2013). 10.16 ThirdAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.34 2/25/2013 DeferredStockUnitPlanforNon-EmployeeDirectorsand SelectedExecutives(EffectiveasofJanuary1,2013). 10.17 FormofAdvanceAutoParts,Inc.SARsAwardAgreement 10-K 10.36 2/25/2013 andRestrictedStockUnitAwardAgreementunder2004 Long-TermIncentivePlan. 10.18 FormofAdvanceAuto,Inc.RestrictedStockUnit 8-K 10.38 3/7/2013 AgreementdatedMarch1,2013. 10.19 FormofEmploymentAgreementeffectiveApril21,2013 8-K 10.39 4/30/2013 betweenAdvanceAutoParts,Inc.andGeorgeE.Sherman andCharlesE.Tyson. 10.20 ThirdAmendmenttoEmploymentAgreementbetween 8-K 10.40 6/6/2013 AdvanceAutoParts,Inc.andMichaelA.Norona,effective June4,2013. IncorporatedbyReference Filed ExhibitNo. ExhibitDescription Form Exhibit FilingDate Herewith 10.21 CreditAgreement,datedasofDecember5,2013,among 8-K 10.1 12/9/2013 AdvanceAutoParts,Inc.AdvanceStoresCompany, Incorporated,thelenderspartythereto,andJPMorgan ChaseBank,N.A.,asAdministrativeAgent. 10.22 GuaranteeAgreement,datedasofDecember5,2013, 8-K 10.2 12/9/2013 amongAdvanceAutoParts,Inc.AdvanceStores Company,Incorporated,theotherlendersfromtimeto timepartylenderspartytheretoandJPMorganChase Bank,N.A.,asAdministrativeAgentforthelenders. 10.23 SupplementNo.1toGuaranteeAgreement. 10-K 10.45 2/25/2014 10.24 FirstAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.46 2/25/2014 EmployeeStockPurchasePlan(AsamendedandRestated EffectiveasofMay15,2012). 10.25 FormofAdvanceAutoParts,Inc.SARsAwardAgreement 10-K 10.48 2/25/2014 andRestrictedStockUnitAwardAgreement. 10.26 FirstAmendmenttoEmploymentAgreementbetween 10-Q 10.51 11/12/2014 AdvanceAutoParts,Inc.andGeorgeE.Shermanand CharlesE.Tyson. 10.27 FourthAmendmenttoEmploymentAgreementbetween 10-Q 10.52 11/12/2014 AdvanceAutoParts,Inc.andMichaelA.Norona. 10.28 SecondAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.50 3/3/2015 EmployeeStockPurchasePlan(AsamendedandRestated EffectiveasofMay15,2012). 10.29 FourthAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.51 3/3/2015 DeferredCompensationPlan(AsAmendedandRestated EffectiveasofJanuary1,2008). 10.30 FourthAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.52 3/3/2015 DeferredStockUnitPlanforNon-EmployeeDirectorsand SelectedExecutives(AsAmendedandRestatedEffective asofJanuary1,2008). 10.31 FifthAmendmenttotheAdvanceAutoParts,Inc.Deferred 10-K 10.53 3/3/2015 CompensationPlan(AsAmendedandRestatedEffective asofJanuary1,2008). 10.32 FifthAmendmenttotheAdvanceAutoParts,Inc.Deferred 10-K 10.54 3/3/2015 StockUnitPlanforNon-EmployeeDirectorsandSelected Executives(AsAmendedandRestatedEffectiveasof January1,2008). 10.33 Agreement,datedasofNovember11,2015,byandamong 8-K 10.1 11/13/2015 AdvanceAutoParts,Inc.andStarboard. 10.34 RestrictedStockUnitAwardAgreementbetweenAdvance 10-K 10.58 3/1/2016 AutoParts,Inc.andJohnC.BrouillarddatedDecember1, 2015. 10.35 EmploymentAgreementeffectiveMarch28,2016 betweenAdvanceAutoParts,Inc.andThomasGreco. 10-Q 10.1 5/31/2016 10.36 FirstAmendmenttoEmploymentAgreementeffective April2,2016betweenAdvanceAutoParts,Inc.and ThomasR.Greco. 10-Q 10.2 5/31/2016 10.37 2016RestrictedStockUnitAwardAgreement(Sign-On Award-Performance-Based)betweenAdvanceAuto Parts,Inc.andThomasGrecodatedApril14,2016. 10-Q 10.3 5/31/2016 10.38 2016RestrictedStockUnitAwardAgreement(Sign-on Award-Time-Based)betweenAdvanceAutoParts,Inc. andThomasGrecodatedApril14,2016. 10-Q 10.4 5/31/2016 10.39 2016time-BasedSARsAwardAgreement(StockSettled- 10-Q 10.5 5/31/2016 InducementAward)betweenAdvanceAutoParts,Inc.and ThomasGrecodatedApril14,2016. IncorporatedbyReference Filed ExhibitNo. ExhibitDescription Form Exhibit FilingDate Herewith 10.40 FormofPerformance-BasedSARsAwardAgreement 10-Q 10.6 5/31/2016 betweenAdvanceAutoParts,Inc.andThomasGreco. 10.41 FormofRestrictedStockUnitAwardAgreementbetween 10-Q 10.7 5/31/2016 AdvanceAutoParts,Inc.andThomasGreco. 10.42 EmploymentAgreementeffectiveOctober3,2016 10-Q 10.1 11/15/2016 betweenAdvanceAutoParts,Inc.andThomasB.Okray. 10.43 CreditAgreement,datedasJanuary31,2017,among 8-K 10.1 2/6/2017 AdvanceAutoParts,Inc.,AdvanceStoresCompany, Incorporated,thelenderspartythereto,andBankof America,N.A.,asAdministrativeAgent. 10.44 GuaranteeAgreement,datedasofJanuary31,2017, 8-K 10.2 2/6/2017 amongAdvanceAutoParts,Inc.,AdvanceStores Company,Incorporated,theotherguarantorsfromtimeto timepartytheretoandBankofAmerica,N.A.,as administrativeagentforthelenders. 10.45 EmploymentAgreementeffectiveAugust21,2016 10-K 10.5 2/28/2017 betweenAdvanceAutoParts,Inc.andRobertB.Cushing. 10.46 FormofSeniorVicePresidentLoyaltyAgreement 10-K 10.51 2/28/2017 betweenNatalieSchechtmanandAdvanceAutoParts,Inc. 10.47 2016RestrictedStockUnitAwardAgreement(Time- 10-K 10.52 2/28/2017 Based)betweenAdvanceAutoParts,Inc.andThomasB. OkraydatedNovember21,2016. 10.48 2016RestrictedStockUnitAwardAgreement 10-K 10.53 2/28/2017 (Performance-Based)betweenAdvanceAutoParts,Inc. andRobertB.CushingdatedSeptember7,2016. 10.49 SixthAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.54 2/28/2017 DeferredCompensationPlan(AsAmendedandRestated EffectiveasofJanuary1,2008). 10.50 SixthAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.55 2/28/2017 DeferredStockUnitPlanforNon-EmployeeDirectorsand SelectedExecutives(AsAmendedandRestatedEffective asofJanuary1,2008). 10.51 SeventhAmendmenttotheAdvanceAutoParts,Inc. 10-K 10.56 2/28/2017 DeferredStockUnitPlanforNon-EmployeeDirectorsand SelectedExecutives(AsAmendedandRestatedEffective asofJanuary1,2008). 10.52 Formof2015AdvanceAutoParts,Inc.RestrictedStock 10-K 10.57 2/28/2017 UnitAwardAgreement. 10.53 Formof2015AdvanceAutoParts,Inc.SARsAward 10-K 10.58 2/28/2017 Agreement. 10.54 AdvanceAutoParts,Inc.2017AmendedandRestated DEF14A AppendixA 4/6/2017 ExecutiveIncentivePlan 10.55 Formof2017AdvanceAutoParts,Inc.Performance- 10-Q 10.1 5/24/2017 BasedRestrictedStockUnitAwardAgreement. 10.56 AmendmentNo.1toCreditAgreement,datedasof 8-K 10.1 2/6/2018 January31,2018,amongAdvanceAutoParts,Inc., AdvanceStoresCompany,Incorporated,thelendersparty thereto,andBankofAmerica,N.A.,asAdministrative Agent. 10.57 7thAmendmenttoAdvanceAutoParts,Inc.Deferred X CompensationPlan(AsAmendedandRestatedEffective asofJanuary1,2008). 10.58 8thAmendmenttoAdvanceAutoParts,Inc.Deferred X StockUnitPlanforNon-EmployeeDirectorsandSelected Executives(AsAmendedandRestatedEffectiveasof January1,2008). IncorporatedbyReference Filed ExhibitNo. ExhibitDescription Form Exhibit FilingDate Herewith 12.1 StatementRegardingComputationofRatioofEarningsto X FixedCharges. 21.1 SubsidiariesofAdvanceAuto. X 23.1 ConsentofDeloitte&ToucheLLP. X 31.1 CertificationofChiefExecutiveOfficerPursuantto X Section302oftheSarbanes-OxleyActof2002. 31.2 CertificationofChiefFinancialOfficerPursuantto X Section302oftheSarbanes-OxleyActof2002. 32.1 CertificationsofChiefExecutiveOfficerandChief X FinancialOfficerPursuanttoSection906oftheSarbanes- OxleyActof2002. 101.INS XBRLInstanceDocument 101.SCH XBRLTaxonomyExtensionSchemaDocument 101.CAL XBRLTaxonomyExtensionCalculationLinkbase Document 101.DEF XBRLTaxonomyExtensionDefinitionLinkbase Document 101.LAB XBRLTaxonomyExtensionLabelsLinkbaseDocument 101.PRE XBRLTaxonomyExtensionPresentationLinkbase Document Signatures

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycaused thisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

ADVANCEAUTOPARTS,INC. Dated: February21,2018 By: /s/ThomasB.Okray ThomasB.Okray ExecutiveVicePresidentandChiefFinancialOfficer

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowing personsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated.

Signature Title Date

/s/ThomasR.Greco PresidentandChiefExecutiveOfficerandDirector February21,2018 ThomasR.Greco (PrincipalExecutiveOfficer)

/s/ThomasB.Okray ExecutiveVicePresidentandChiefFinancialOfficer February21,2018 ThomasB.Okray (PrincipalFinancialOfficer)

/s/JeffreyW.Shepherd SeniorVicePresident,ControllerandChiefAccountingOfficer February21,2018 JeffreyW.Shepherd (PrincipalAccountingOfficer)

/s/JeffreyC.Smith ChairmanandDirector February21,2018 JeffreyC.Smith

/s/JohnF.Bergstrom Director February21,2018 JohnF.Bergstrom

/s/JohnC.Brouillard Director February21,2018 JohnC.Brouillard

/s/BradW.Buss Director February21,2018 BradW.Buss

/s/FionaP.Dias Director February21,2018 FionaP.Dias

/s/JohnF.Ferraro Director February21,2018 JohnF.Ferraro

/s/AdrianaKaraboutis Director February21,2018 AdrianaKaraboutis

/s/EugeneI.Lee,Jr. Director February21,2018 EugeneI.Lee,Jr.

/s/WilliamS.Oglesby Director February21,2018 WilliamS.Oglesby

/s/ReubenE.Slone Director February21,2018 ReubenE.Slone

S-1 SHAREHOLDER INFORMATION

Corporate Office: 5008 Airport Road Roanoke, Virginia 24012 877-238-2623

Internet Site: www.AdvanceAutoParts.com

Annual Meeting: May 16, 2018 at 8:30 a.m. ET Advance Auto Parts Customer Support Center University Building 4709 Hargrove Road Raleigh, North Carolina 27616

Registrar and Transfer Agent: Computershare P.O. Box 505000 Louisville, Kentucky 40233-5000 or 462 South 4th Street, Suite 1600 Louisville, Kentucky 40202 866-865-6327 Foreign Shareholders: 201-680-6578

TDD for Hearing Impaired: 800-490-1493

Internet Site: www.computershare.com/investor

Common Stock: Ticker Symbol: AAP Listing: New York Stock Exchange

Independent Registered Public Accounting Firm: Deloitte & Touche LLP Duke Energy Building 550 South Tryon Street, Suite 2500 Charlotte, North Carolina 28202

SEC FORM 10-K: Shareholders may obtain free of charge a copy of the Advance Auto Parts Annual Report on Form 10-K as filed with the Securities and Exchange Commission by writing to the Investor Relations Department, 2635 E. Millbrook Road, Raleigh, North Carolina 27604 or by accessing the Company’s website at www.AdvanceAutoParts.com.

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 at http://www.sec.gov. EXECUTIVE TEAM

SENIOR LEADERSHIP TEAM * Executive Officers

Thomas R. Greco* Natalie S. Schechtman* Sri Donthi President Executive Vice President, Executive Vice President, and Chief Executive Officer Human Resources Chief Technology Officer

Michael T. Broderick* Jeffrey W. Shepherd* Yogesh Jashnani Executive Vice President, Senior Vice President, Senior Vice President, Merchandising and Store Controller, Chief Accounting Marketing, Insights and Analytics Operations Officer, and Interim Chief Financial Officer** Leslie Starr Keating Robert B. Cushing* Executive Vice President, Executive Vice President, Maria R. Ayres Supply Chain, Strategy Professional Division President, and Transformation Southern Division Tammy M. Finley* David L. McCartney Executive Vice President, Michael C. Creedon, Jr. Division President, General Counsel and Division President, Carquest North America Corporate Secretary Northern Division

**Mr. Okray, who served as Chief Financial Officer through the end of 2017, departed the company and Mr. Shepherd assumed the role of Interim Chief Financial Officer, effective April 13, 2018.

BOARD OF DIRECTORS ‡Committee Chair

Jeffrey C. Smith Brad W. Buss (1‡, 3) Adriana Karaboutis (1, 4) Chair, Advance Auto Parts, Inc. Retired Chief Financial Officer, Chief Information and Digital Officer, Managing Member, Solar City Corporation National Grid plc Chief Executive Officer and Chief Investment Officer, Fiona P. Dias (2, 3) Eugene I. Lee, Jr. (2, 4) Starboard Value LP Principal Digital Partner, President and Ryan Retail Consulting Chief Executive Officer, John F. Bergstrom (2‡) Darden Restaurants, Inc. Chairman and John F. Ferraro (1, 4‡) Chief Executive Officer, Retired Global Chief Operating William S. Oglesby (2, 3‡) Bergstrom Corporation Officer, Ernst & Young Senior Advisor, PJT Partners John C. Brouillard (3) Thomas R. Greco Retired Chief Administration President and Reuben E. Slone (1, 3) and Financial Officer, Chief Executive Officer, Senior Vice President, H.E. Butt Grocery Company Advance Auto Parts, Inc. Supply Chain Management, Walgreen Co.

Committee Membership: 1 – Audit 2 – Compensation 3 – Finance 4 – Nominating and Corporate Governance 5008 AIRPORT ROAD | ROANOKE, VA 24012 | 877.238. 2623 | ADVANCEAUTOPARTS.COM