O'Reilly Auto Parts 2015 Annual Report Download - page 70

FORM 10-K
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on the Consolidated Balance Sheets. The Company expensed matching contributions under the Deferred Compensation Plan in the
amounts of $0.1 million, $0.2 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.
NOTE 10 – COMMITMENTS
Construction commitments:
As of December 31, 2015, the Company had construction commitments in the amount of $62.6 million.
Letter of credit commitments:
As of December 31, 2015, the Company had outstanding letters of credit, primarily to satisfy workers' compensation, general liability
and other insurance policies, in the amount of $37.5 million (see Note 5).
Debt financing commitments:
The Company's senior notes are redeemable in whole, at any time, or in part, from time to time, at the Company's option upon not less
than 30 nor more than 60 days notice at a redemption price, plus any accrued and unpaid interest to, but not including the redemption
date, equal to the greater of (i) 100% of the principal amount thereof or (ii) the sum of the present value of the remaining scheduled
payments of principal and interest thereon discounted to the redemption date on a semiannual basis at the applicable Treasury Yield plus
basis points identified in the indentures governing the notes. In addition, if at any time the Company undergoes a Change of Control
Triggering Event, as defined in the indentures governing the notes, the holders may require the Company to repurchase all or a portion
of their senior notes at a price equal to 101% of the principal amount of the notes being repurchased, plus accrued and unpaid interest,
if any, but not including the repurchase date (see Note 5).
Self-insurance reserves:
The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for Team Member
health care benefits, workers' compensation, vehicle liability, general liability and property loss. With the exception of certain Team
Member health care benefit liabilities, employment related claims and litigation, certain commercial litigation and certain regulatory
matters, the Company obtains third-party insurance coverage to limit its exposure to this obligation.
NOTE 11 – RELATED PARTIES
The Company leases certain land and buildings related to 75 of its O'Reilly Auto Parts stores and one of its bulk facilities under fifteen-
or twenty-year operating lease agreements with entities, in which certain of the Company's affiliated directors, or members of an affiliated
director's immediate family, and an executive officer of the Company are affiliated. Generally, these lease agreements provide for renewal
options for an additional five years at the option of the Company and the lease agreements are periodically modified to further extend
the lease term for specific stores under the agreements. Lease payments under these operating leases totaled $4.5 million, $4.6 million
and $4.4 million during the years ended December 31, 2015, 2014 and 2013, respectively. The Company believes that the lease agreements
with the affiliated entities are on terms comparable to those obtainable from third parties. See Note 6 for further information concerning
the Company's operating leases.
NOTE 12 – INCOME TAXES
Deferred income tax assets and liabilities:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and also include the tax effect of carryforwards.