O'Reilly Auto Parts 2015 Annual Report Download - page 19

FORM 10-K
11
Inflation and Seasonality
We have been successful, in many cases, in reducing the effects of merchandise cost increases principally by taking advantage of supplier
incentive programs, economies of scale resulting from increased volume of purchases and selective forward buying. To the extent our
acquisition costs increase due to base commodity price increases industry wide, we have typically been able to pass along these increased
costs through higher retail prices for the affected products. As a result, we do not believe our operations have been materially, adversely
affected by inflation.
To some extent our business is seasonal, primarily as a result of the impact of weather conditions on customer buying patterns. Store
sales, profits and inventory levels have historically been higher in the second and third quarters (April through September) than in the
first and fourth quarters (October through March) of the year.
Regulations
We are subject to federal, state and local laws and governmental regulations relating to our business, including those related to the handling,
storage and disposal of hazardous substances, the recycling of batteries and used lubricants, and the ownership and operation of real
property.
As part of our operations, we handle hazardous materials in the ordinary course of business and our customers may bring hazardous
materials onto our property in connection with, for example, our oil and battery recycling programs. We currently provide a recycling
program for batteries and the collection of used lubricants at certain stores as a service to our customers pursuant to agreements with
third-party suppliers. The batteries and used lubricants are collected by our Team Members, deposited into supplier-provided containers
and pallets, and then disposed of by the third-party suppliers. In general, our agreements with such suppliers contain provisions that are
designed to limit our potential liability under applicable environmental regulations for any damage or contamination, which may be
caused by the batteries and lubricants to off-site properties (including as a result of waste disposal) and to our properties, when caused
by the supplier.
Compliance with any such laws and regulations has not had a material adverse effect on our operations to date. However, we cannot
give any assurance that we will not incur significant expenses in the future in order to comply with any such laws or regulations.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following paragraphs discuss information about our executive officers, who are not also directors:
Greg L. Henslee, age 55, President and Chief Executive Officer, has been an O'Reilly Team Member for 31 years. Mr. Henslee's O'Reilly
career began as a Parts Specialist in a store and progressed through the roles of Assistant Store Manager, District Manager, Computer
Operations Manager, Director of Computer Operations and Loss Prevention, Vice President of Store Operations, Senior Vice President,
President of Merchandise, Distribution, Information Systems and Loss Prevention, and Chief Executive Officer and Co-President. Mr.
Henslee has held the position of Chief Executive Officer since 2005 and the position of President since 2013.
Thomas McFall, age 45, Executive Vice President of Finance and Chief Financial Officer, has been an O'Reilly Team Member for nine
years. Mr. McFall's primary areas of responsibility are Finance, Accounting, Information Systems, Risk Management, and Human
Resources. Mr. McFall's career began with Ernst & Young LLP in Detroit, Michigan, where he achieved the position of Audit Manager,
before accepting a position with Murray's Discount Auto Stores ("Murray's"). Mr. McFall served Murray's for eight years as Controller,
Vice President of Finance, and Chief Financial Officer, with direct responsibility for finance and accounting, distribution and logistics
operations, and after Murray's was acquired by CSK Auto Corporation ("CSK"), he held the position of Chief Financial Officer - Midwest
Operation for CSK. In May of 2006, Mr. McFall joined O'Reilly as Senior Vice President of Finance and Chief Financial Officer, and
has held the position as Executive Vice President of Finance and Chief Financial Officer since 2006.
Gregory D. Johnson, age 50, Executive Vice President of Supply Chain, has been an O'Reilly Team Member for 33 years. Mr. Johnson's
primary areas of responsibility are Distribution Operations, Logistics, Purchasing, Inventory Management, Merchandise, Pricing and
Advertising. Mr. Johnson's O'Reilly career began as a part-time distribution center team member and progressed through the roles of
Retail Systems Manager, WMS Systems Development Manager, Director of Distribution, Vice President of Distribution Operations, and
Senior Vice President of Distribution Operations. Mr. Johnson has held the position of Executive Vice President of Supply Chain since
2014.
Jeff M. Shaw, age 53, Executive Vice President of Store Operations and Sales, has been an O'Reilly Team Member for 27 years. Mr.
Shaw's primary areas of responsibility are Store Operations, Sales, Real Estate, Jobber Sales, and Acquisitions. Mr. Shaw's O'Reilly
career began as a Parts Specialist and progressed through the roles of Store Manager, District Manager, Regional Manager, Vice President