O'Reilly Auto Parts 2001 Annual Report Download - page 29

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Principal maturities of long-term debt for each of the next five
years ending December 31 are as follows:
(amounts in thousands)
2002 $ 11,843
2003 65,510
2004 51
2005 19
2006 75,016
Thereafter 25,022
$177,461
Cash paid by the Company for interest during the years ended
December 31, 2001, 2000 and 1999, amounted to $9,092,000, $8,240,000
and $6,134,000, respectively.
NOTE 7—COMMITMENTS
Lease Commitments
During 1999, the Company entered into a Master Lease Agreement with
O’Reilly-Wooten 2000 LLC (an entity owned by certain shareholders of
the Company) related to the sale and leaseback of certain properties.
The transaction closed on January 4, 1999, with a purchase price of
approximately $5.5 million. The lease calls for an initial term of 15
years with two five-year renewal options.
On December 15, 2000, the Company entered into a $50 million
Synthetic Operating Lease Facility (“the Facility”) with a group of
financial institutions. Under the Facility, the Lessor acquires land to
be developed for O’Reilly Auto Parts stores and funds the development
thereof by the Company as the Construction Agent and Guarantor.
The Company subsequently leases the property from the Lessor for
an initial term of five years. The Company has the option of requesting
up to two additional successive renewal periods of five years each
from the lessor, although the lessor is not obligated to grant the
Company either renewal period. The Facility provides for a residual
value guarantee of $36.6 million and purchase options on the properties.
It also contains a provision for an event of default whereby the Lessor,
among other things, may require the Company to purchase any or
all of the properties. The Company is utilizing the Facility to finance
a portion of its store growth. Funding under the Facility at
December 31, 2001 and 2000, totaled approximately $43.0 million
and $1.0 million, respectively. Future minimum rental commitments
under the Facility have been included in the table of future minimum
annual rental commitments below.
On December 29, 2000, the Company completed a sale-leaseback
transaction. Under the terms of the transaction, the Company sold
90 properties, including land, buildings and improvements, for
$52.3 million. The lease, which is being accounted for as an operating
lease, provides for an initial lease term of 21 years and may be
extended for one initial ten-year period and two additional successive
periods of five years each. The resulting gain of $4.5 million has
been deferred and is being amortized over the initial lease term.
Net rent expense during the initial term is approximately $5.5 million
annually and is included in the table of future minimum annual rental
commitments below.
In August, 2001, the Company completed a sale-leaseback with
O’Reilly-Wooten 2000 LLC (an entity owned by certain shareholders
of the Company). The transaction closed on September 1, 2001,
with a purchase price of approximately $5.6 million for nine O’Reilly
Auto Parts stores and did not result in a material gain or loss. The
lease, which has been accounted for an operating lease, calls for
an initial term of 15 years with three five-year renewal options.
The Company also leases certain office space, retail stores,
property and equipment under long-term, non-cancelable operating
leases. Most of these leases include renewal options and some
include options to purchase and provisions for percentage rent
based on sales. At December 31, 2001, future minimum rental
payments under all of the Company’s operating leases for each
of the next five years and in the aggregate are as follows:
(amounts in thousands)
RELATED NON-RELATED
PARTIES PARTIES TOTAL
2002 $ 2,751 $ 22,087 $ 24,838
2003 1,710 19,787 21,497
2004 1,684 17,896 19,580
2005 1,455 15,354 16,809
2006 1,227 12,510 13,737
Thereafter 9,786 109,856 119,642
$18,613 $197,490 $216,103