O'Reilly Auto Parts 2011 Annual Report Download - page 10

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continue to be disciplined in our
analysis and will remain a very
opportunistic buyer.
Free Cash Flow and
Share Repurchases
2011 was a transformational year for
our company in the area of capital
structure and deployment. In
January, we enacted our new
financing plans which included the
replacement of our asset based
revolver with an unsecured revolving
credit facility, the issuance of $500
million of unsecured 10 year senior
notes which carried an inaugural
investment grade credit rating, the
announcement of our targeted
leverage ratio of 2.00 to 2.25 times
adjusted debt to adjusted EBITDAR,
and the initiation of our Board
approved share repurchase program.
With the retirement of the secured
asset based facility, and fueled by our
investment grade credit ratings, we
were able to work with our banking
partners to reestablish a competitive
supplier financing program which
offers very attractive rates to
participants. Throughout 2011, we
were able to enroll many of our
suppliers in this program, allowing
us to significantly reduce our supply
chain costs and decrease our
working capital investment. We used
the free cash generated from this
working capital improvement and our
strong operating results, along with
an additional offering of $300 million
of senior notes in September, to
repurchase and retire almost $1 billion
of our common stock during the year.
We will continue to prudently utilize
share repurchases to return value to
our shareholders as a component of
our ongoing comprehensive capital
deployment plans, while also
remaining dedicated to maintaining
Greg Henslee
Chief Executive Officer
and Co-President
Thomas McFall
Chief Financial Officer and Executive
Vice President of Finance
Ted Wise
Chief Operating Officer
and Co-President
and improving our investment grade
credit ratings.
Looking Forward to 2012
Our focus on executing our proven
Dual Market Strategy and unwavering
commitment to maintaining and
living our Culture Values every day,
along with a disciplined approach to
the prudent use of capital, resulted in
a 25% increase in adjusted diluted
earnings per share in 2011. During
2012, we will invest in maintaining
our existing stores to ensure our
customers continue to have attractive,
clean and friendly stores to shop. We
will also expand our store base with
the opening of 180 net new stores
across the country, in both existing
and new markets, while also keeping
a close eye on the competitive
landscape for potential strategic
acquisition opportunities. As the U.S.
macro-economic environment
improves and unemployment returns
to more historic levels, we believe
the demand for auto parts will grow
with the related increase in consumer
confidence and commuter miles driven,
and we remain very well positioned
to capitalize on this opportunity.
We would like to thank all of
our shareholders for your continued
support. We remain dedicated to
generating profitable growth and
attractive returns. We will continue to
directly return value to you in the form
of share repurchases during 2012
after we have exhausted all profitable
growth opportunities. We would like
to once again thank our Team
Members whose contributions make
the Company’s success possible. We
are excited about the opportunities
that 2012 will bring, and we look
forward to discussing our results in
next year’s Annual Report.
O’Reilly Automotive 2011 Annual Report
8
Experienced Management Team
Standing: Tom McFall, Greg Henslee, David O’Reilly, Ted Wise
Seated: Mike Swearengin, Greg Johnson, Jeff Shaw, Randy Johnson