O'Reilly Auto Parts 2011 Annual Report Download - page 68

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58
The table below identifies the estimated fair value of the Company’s interest rate swap contracts, using the discounted net present
value of the swap using third party quotes (Level 2), as of December 31, 2010 (in thousands):
Quoted Prices in
Active Markets for
Identical
Instruments
Significant Other
Obs ervabl e Inputs
Significant
Unobs ervabl e Inputs
Total
(Level 1) (Level 2) (Level 3)
Derivative contracts $ - $ (4,845) $ -
$ (4,845)
December 31, 2010
Non-financial assets and liabilities measured at fair value on a nonrecurring basis:
Certain long-lived non-financial assets and liabilities may be required to be measured at fair value on a nonrecurring basis in certain
circumstances, including when there is evidence of impairment. These non-financial assets and liabilities may include assets acquired
in a business combination or property and equipment that are determined to be impaired. As of December 31, 2011 and 2010, the
Company did not have any non-financial assets or liabilities that had been measured at fair value subsequent to initial recognition.
Fair value of financial instruments:
The carrying amounts of the Company’s senior notes are included in ―Long-term debt, less current portion‖ on the accompanying
Consolidated Balance Sheets as of December 31, 2011.
The table below identifies the estimated fair value of the Company’s senior notes, using the market approach, as of December 31,
2011, which was determined by reference to quoted market prices (Level 1) (in thousands):
Quoted Prices in
Active Markets for
Identical
Instruments
Significant Other
Obs ervabl e Inputs
Significant
Unobs ervabl e Inputs
Total
(Level 1) (Level 2) (Level 3)
4.875% Senior Notes due 2021 $533,150 $ - $ -
$ 533,150
4.625% Senior Notes due 2021 $313,830 $ - $ -
$ 313,830
December 31, 2011
The carrying amount of the Company’s ABL Credit Facility as of December 31, 2010, was $356 million and was included in ―Long-
term debt, less current portion‖ on the accompanying Consolidated Balance Sheets at that time. The Company determined that the
estimated fair value of its ABL Credit Facility approximated the carrying amount. This valuation was determined by consulting
investment bankers (Level 2). All outstanding borrowings under the ABL Credit Facility were repaid on January 14, 2011, and the
facility was retired concurrent with the issuance of the Company’s 4.875% Senior Notes due 2021 as discussed in Note 5.
The accompanying Consolidated Balance Sheets include other financial instruments, including cash and cash equivalents, accounts
receivable, amounts receivable from vendors and accounts payable. Due to the short-term nature of these financial instruments, the
Company believes that the carrying values of these instruments approximate their fair values.
NOTE 4—GOODWILL AND OTHER INTANGIBLES
Goodwill:
Goodwill is reviewed annually on November 30 for impairment, or more frequently if events or changes in business conditions
indicate that impairment may exist. Goodwill is not amortizable for financial statement purposes. During the year ended December
31, 2011, the Company recorded a decrease in goodwill of less than $0.1 million, primarily due to adjustments to purchase price
allocations related to small acquisitions and the excess tax benefit related to exercises of stock options acquired in the acquisition of
CSK. The Company did not record any goodwill impairment during the year ended December 31, 2011.
FORM 10-K