O'Reilly Auto Parts 2003 Annual Report Download - page 47

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notes to consolidated financial statements (continued)
page 45
Additionally, the Company has various unsecured notes payable to individuals and banks, amounting to $81,000 and $172,000, at
December 31, 2003, and 2002, respectively. The weighted-average interest rate on these notes is 7.2% with monthly installments of
approximately $2,000 including interest.
Principal maturities of long-term debt for each of the next five years ending December 31, are as follows:
(amounts in thousands)
2004 $ 925
2005 20,650
2006 75,305
2007 17
2008 25,005
Thereafter –
$121,902
Cash paid by the Company for interest during the years ended December 31, 2003, 2002, and 2001, amounted to $6,864,000,
$9,248,000, and $9,092,000, respectively.
note 6 – commitments
Lease Commitments
On June 26, 2003, we completed an amended and restated master agreement to our $50 million Synthetic Operating Lease Facility
(the Facility or the Synthetic Lease) with a group of financial institutions. The terms of the Facility provide for an initial lease period of
five years, a residual value guarantee of approximately $44.2 million at December 31, 2003, and purchase options on the properties.
The Facility also contains a provision for an event of default whereby the lessor, among other things, may require us to purchase
any or all of the properties. One additional renewal period of five years may be requested from the lessor, although the lessor is not
obligated to grant such renewal. The amended and restated Facility has been accounted for as an operating lease under SFAS No. 13
and related interpretations, including Financial Interpretation No. 46. 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, which generated $52.3 million of additional cash. 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 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 involved the sale and leaseback of nine O’Reilly Auto Parts stores and resulted in approximately
$5.6 million of additional cash to the Company. The transaction did not result in a material gain or loss. The lease, which has been
accounted for as an operating lease, calls for an initial term of 15 years with three five-year renewal options.