O'Reilly Auto Parts 2009 Annual Report Download

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PROGRESS
IN MOTION
O’Reilly Automotive 2009 Annual Report

Table of contents

  • Page 1
    PROGRESS IN MOTION O'Reilly Automotive 2009 Annual Report

  • Page 2
    ... 1.45 113,385 1,470 7.5% Sales Operating Income Net Income Working Capital Total Assets Total Debt Shareholders' Equity Net Income Per Common Share (assuming dilution) Weight-Average Common Share (assuming dilution) Stores At Year-End Same-Store Sales Gain During 2009, we continued to convert our...

  • Page 3
    ...IS FOR A PROFESSIONAL INSTALLER OR A DO-IT-YOURSELF CUSTOMER, OUR OPERATION IS A DYNAMIC SERIES OF STEPS THAT WORK TOGETHER IN CONTINUAL MOTION, EACH FINELY-TUNED AND CONNECTED TO THE NEXT. THROUGH OUR EXISTING LOCATIONS, NEW STORE EXPANSION, AND MOST RECENTLY, THE ACQUISITION OF CSK AUTOMOTIVE, THE...

  • Page 4
    ... 2009 Annual Report STRATEGY IN MOTION 1 Dual Market Strategy Our ability to execute our dualmarket strategy is the result of our 52-year sustained commitment to building relationships and providing our customers with the best parts availability and service. 2 Strategic Distribution Centers...

  • Page 5
    ... for our Company. As part of our strategy to build our store base in contiguous geographic regions, our new store openings in 2009 were principally in the markets serviced by our newer distribution centers (DCs). In 2010, we again plan to open 150 stores. fhile new stores continue to offer an...

  • Page 6
    ...has a long history of strong leadership. Our current executive management team brings more than 195 years of combined automotive aftermarket industry experience to work for the company. Their goal this year has been the successful conversion of former CSK stores and the expansion of our distribution...

  • Page 7
    5 O'Reilly Automotive 2009 Annual Report SALES IN MOTION Sales (In billions) Superior inventory availability, a targeted promotional and advertising effort and continued improvements in our merchandising and store layouts led to more than $4 billion in sales. 4.8 .75 '99 '01 '03 '05 '07 '09

  • Page 8
    6 O'Reilly Automotive 2009 Annual Report Our mission is to be the dominate supplier of auto parts in the markets we serve. fe accomplish this by executing our dual-market strategy - serving the automotive needs of both do-it-yourselfer customers and professional installers. The acquisition of CSK ...

  • Page 9
    ... Automotive 2009 Annual Report "WE REMAIN CONFIDENT AND EXCITED ABOUT THE OPPORTUNITIES WE HAVE TO GROW MARKET SHARE ON BOTH SIDES OF THE BUSINESS IN THE WESTERN STATES." Greg Henslee Chief Executive Officer and Co-President Our store team members participate in extensive and ongoing training...

  • Page 10
    ...Reilly Automotive 2009 Annual Report SERVICE IN MOTION $ 142 BILLION Professional Installer Market Automotive Aftermarket Industry Overview Our intent is to be the dominant auto parts provider in all the markets we serve by providing significant value to both installers and DIY customers. $ 41...

  • Page 11
    ...to their auto parts needs. Our enhanced level of service ranges from installing wiper blades for our do-it-yourself customers to making special deliveries for our professional installers working on their customers' vehicles. In all instances, it means our stores, DCs and corporate team members never...

  • Page 12
    10 O'Reilly Automotive 2009 Annual Report 6.8 MILLION Square Feet of Operating space Daily Delivery Our network of 20 distribution centers across the country gives us the ability to make daily deliveries to our stores and multiple deliveries per day to our professional installer customers in many...

  • Page 13
    ...Reilly Automotive 2009 Annual Report An essential element to the O'Reilly business model and a key competitive advantage is our strategic commitment to a robust, regional distribution network. Our network currently operates 20 distribution centers across the country, with three more planned to open...

  • Page 14
    ...President of Information Systems Doug Ruble Vice President of Marketing/Advertising Ted Wise Chief Operating Officer and Co-President Greg Beck Vice President of Purchasing Larry Ellis Vice President of Distribution Western Division Randy Johnson Vice President of Store Inventories Barry Sabor...

  • Page 15
    ... Patterson Springfield, Missouri 65802 (Address of principal executive offices, zip code) (417) 862-6708 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on which Registered Common Stock, $0.01...

  • Page 16
    ... of the registrant's documents specified below are incorporated here by reference: Document Proxy Statement for 2010 Annual Meeting of Shareholders (to be filed pursuant to Regulation 14A within 120 days of the end of registrant's most recently completed fiscal year) Form 10-K Part Part III 2

  • Page 17
    ... as oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives and appearance products; accessories, such as floor mats, seat covers and truck accessories; and a complete line of auto body paint and related materials, automotive tools and professional service equipment. Business On...

  • Page 18
    ... is a key competitive advantage in satisfying customer demand and generating repeat business. We currently operate 21 distribution centers, including two acquired in the CSK acquisition and our newly opened Greensboro, North Carolina; Seattle, Washington; and Moreno Valley, California, distribution...

  • Page 19
    ... store sales results since becoming a public company in April of 1993. We have a strong senior management team comprised of 133 professionals who average 16 years of service. In addition, our 191 corporate managers average 13 years of service and our 311 district managers average 10 years of service...

  • Page 20
    ... corporate headquarters in Springfield, Missouri, which includes 40 hours of classroom training. Upon returning to the stores, managers are given continuous field training throughout their management tenure. We provide financial incentives to our district managers and all store team members through...

  • Page 21
    ... address is www.oreillyauto.com. Interested readers can access, free of charge, the Company's annual reports on Form 10K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange...

  • Page 22
    ... to profitably operate in both large, densely populated markets and small, less densely populated areas that would not otherwise support a national chain selling primarily to the retail automotive aftermarket. The following table sets forth the geographic distribution of our stores: 2009 CSK Net New...

  • Page 23
    ... I-Series computers located in each of our distribution centers. Our point-of-sale terminals provide immediate access to our electronic catalog to graphically display parts and pricing information by make, model and year of vehicle and use bar code scanning technology to price our merchandise. This...

  • Page 24
    ...of service to our customers. All of our stores have the ability to service professional installer customers. For this reason, select team members in each store complete extensive sales call training with their regional field sales manager. Afterward, these team members spend one day per week calling...

  • Page 25
    ... per day; same-day or overnight access to an average of 118,000 SKUs through five-night-a-week store inventory replenishments; a separate service counter and phone line in our stores dedicated exclusively to service professional installers; trade credit for qualified accounts; First Call Online...

  • Page 26
    ... established clusters of stores located in the regions surrounding each distribution center. We opened a new distribution center in Greensboro, North Carolina in the summer of 2009, to service existing stores in that area and to expand in the Mid-Atlantic States. We currently have a total growth...

  • Page 27
    ...President, has been an O'Reilly team member for 39 years. Mr. Wise's primary areas of responsibility are Sales, Operations and Real Estate. He began his O'Reilly career in sales in 1970, was promoted to store manager in 1973 and became our first district manager in 1977. He continued his progression...

  • Page 28
    ... proper planning and implementation, could significantly disrupt the Company's business. The challenges involved in this integration include the following implementing O'Reilly distribution, point of sale and inventory management systems; combining respective product offerings; preserving customer...

  • Page 29
    ... in light of uncertainty created by the acquisition of CSK, and failure to do so could seriously harm the Company. In order to be successful, we will need to retain and motivate executives and other key employees. Experienced management and technical personnel are in high demand and competition for...

  • Page 30
    ...relied on as an indication of future performance. If our quarterly operating results fail to meet the expectations of analysts, the trading price of our common stock could be negatively affected. We cannot be certain that our business strategy and our plans to integrate the operations of CSK will be...

  • Page 31
    ... could affect our operations, such as by increasing fuel prices, and therefore increase our operating costs. Initiatives to limit greenhouse gas emissions and bills related to climate change have been introduced in the U.S. Congress, which could adversely impact all industries. While it is...

  • Page 32
    ... (h) Oklahoma City, OK Distribution Center Phoenix, AZ Distribution Center 383,570 Leased (i) Distribution Center (to open in 2010) 294,932 Owned Salt Lake City, UT Seattle, WA Distribution Center 533,790 Owned Springfield, MO Distribution Center, Bulk and Return Facilities and Corporate Offices 310...

  • Page 33
    ... accounting practices remains ongoing, though one of those former employees died in January, 2010. The action filed by the SEC on July 22, 2009, against Maynard L. Jenkins, the former chief executive officer of CSK seeking reimbursement from Mr. Jenkins of certain bonuses and stock sale profits...

  • Page 34
    ..., in part, upon the results of operations or cash flow for such period. However, at this time, management believes that the ultimate outcome of all of such regulatory proceedings that are pending, after consideration of applicable reserves and potentially available insurance coverage benefits not...

  • Page 35
    ... the high and low sales price for O'Reilly Automotive, Inc. common stock as reported by The Nasdaq Global Select Market. During fiscal 2009, the Company made no purchases or repurchases of its common stock. 2009 First Quarter Second Quarter Third Quarter Fourth Quarter For the Year High $ 35...

  • Page 36
    For the Years Ended December 31, Company/Index O'Reilly Auto Parts Nasdaq Retail Trade Stocks Nasdaq US Standard and Poor's S&P 500 $ 2004 100 100 100 100 $ 2005 142 101 102 105 $ 2006 142 110 112 121 $ 2007 144 100 122 128 $ 2008 136 70 59 81 $ 2009 169 97 84 102 22

  • Page 37
    ... of accounting change (a) Net income per share Weighted-average common shares outstanding - adjusted PRO FORMA INCOME STATEMENT DATA: (b) Sales Cost of goods sold, including warehouse and distribution expenses Gross profit Selling, general and administrative expenses Operating income Other income...

  • Page 38
    ... share data) SELECTED OPERATING DATA: Number of stores at year-end (a) Total store square footage at year-end (in 000's)(a)(b) Sales per weighted-average store ( in 000's)(a)(b) Sales per weighted-average square foot (b) Percentage increase in same store sales (c)(d)(e) BALANCE SHEET DATA: Working...

  • Page 39
    ... a complete line of auto body paint and related materials, automotive tools and professional installer service equipment. As of December 31, 2009, we operated 3,421 stores in 38 states. Operating within the retail industry, we, along with other retail companies, are influenced by a number of general...

  • Page 40
    ...routine maintenance cycles requiring replacement parts such as brakes, belts, hoses, batteries and filters. The sales of these products are a key component of our business. As reported by the Automotive Aftermarket Industry Association ("AAIA") the average age of the United States vehicle population...

  • Page 41
    ...on the change in sales of stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, sales to team members and sales during the one to two week period certain CSK branded stores were closed for conversion. Comparable store sales for stores operating on...

  • Page 42
    ...of a full-year of borrowings under our asset-based revolving credit facility in 2009 that was used to fund the acquisition of CSK in 2008, the opening of new stores, ongoing capital expenditures related to the integration of the operations of CSK, the expansion of our distribution infrastructure and...

  • Page 43
    ... financial information. We believe that the presentation of adjusted net income and earnings per share excluding acquisition-related charges provides meaningful supplemental information to both management and investors that is indicative of the Company's ongoing core operations. Management excludes...

  • Page 44
    ... are converted to the O'Reilly dual market strategy. Comparable store sales are calculated based on the change in sales of stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to team members. Gross profit increased $508 million, or 45...

  • Page 45
    ...the amount of accounts payable to vendors. The increases in net inventory investment in 2008 and 2009 were the result of investments made to improve the inventory availability in the stores acquired in the acquisition of CSK. The average per-store inventory for core O'Reilly stores increased to $498...

  • Page 46
    .... In 2010, we plan to open 150 new stores and open three new distribution centers in our Western markets. We also plan to relocate an existing acquired CSK distribution center in Northern California to a larger facility and plan to convert our acquired Phoenix distribution center to O'Reilly systems...

  • Page 47
    ... only during that fiscal quarter) commencing after July 11, 2008, if the last reported sale price of our common stock is greater than or equal to 130% of the applicable exchange price of $36.17 for at least 20 trading days in the period of 30 consecutive trading days; if we have called the Notes for...

  • Page 48
    ... the sale and leaseback of nine O'Reilly Auto Parts stores and generated approximately $5.6 million of cash. 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...

  • Page 49
    ...under our ABL Credit Facility. CRITICAL ACCOUNTING ESTIMATES The preparation of our financial statements in accordance with accounting policies generally accepted in the United States ("GAAP") requires the application of certain estimates and judgments by management. Management bases its assumptions...

  • Page 50
    ...were changed 10% from our estimated reserves at December 31, 2009, the financial impact would have been approximately $9.1 million or 1.8% of pretax income for the year ended December 31, 2009. Accounts Receivable - We provide credit to our commercial customers in the ordinary course of business. We...

  • Page 51
    ...have changed and no further steps would have been required. • Closed Property Reserves - We maintain reserves for closed stores and other properties that are no longer utilized in current operations. We accrue for closed property operating lease liabilities using a credit-adjusted discount rate to...

  • Page 52
    ...unaudited operating data presented below should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this annual report, and the other financial information included therein. Fiscal 2009 Second Third Quarter Quarter (In thousands, except per share...

  • Page 53
    ... position, results of operations or cash flows. See Note 4 "Long-Term Debt" to the consolidated financial statements. In April 2009, the FASB issued the Financial Instruments Topic ("ASC 825") of the FASB ASC. This Topic requires quarterly disclosure of the methods and significant assumptions used...

  • Page 54
    ...Index Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm: Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm: Financial Statements Consolidated Balance Sheets Consolidated Statements...

  • Page 55
    ... on this assessment, management believes that as of December 31, 2009, the Company's internal control over financial reporting is effective based on those criteria. Ernst & Young LLP, Independent Registered Public Accounting Firm, has audited the Company's consolidated financial statements and has...

  • Page 56
    ... financial reporting as of December 31, 2009, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2009 and 2008, and the related consolidated statements...

  • Page 57
    ... the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence...

  • Page 58
    ... Balance Sheets (In thousands, except share data) December 31, 2009 Assets: Current assets: Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $6,795 in 2009 and $4,521 in 2008 Amounts receivable from vendors Inventory Deferred income taxes Other current...

  • Page 59
    ...723) 4,077 1,983 (2,337) 307,488 113,500 193,988 Sales Cost of goods sold, including warehouse and distribution expenses Gross profit Selling, general and administrative expenses Operating income Other income (expense), net: Debt prepayment costs Interim facility commitment fee Interest expense...

  • Page 60
    ... income Comprehensive income Issuance of common stock under employee benefit plans Issuance of common stock under stock option plans Tax benefit of stock options exercised Share based compensation Fair value of equity component of 6 ¾% Senior Exchangeable Notes Balance at December 31, 2009...

  • Page 61
    ... costs Deferred income taxes Share based compensation programs Other Changes in operating assets and liabilities: Accounts receivable Inventory Accounts payable Other Net cash provided by operating activities Investing activities Cash component of acquisition price of CSK Automotive, Inc., net...

  • Page 62
    ...SIGNIFICANT ACCOUNTING POLICIES Nature of Business O'Reilly Automotive, Inc. (the "Company") is a specialty retailer and supplier of automotive aftermarket parts, tools, supplies and accessories to both the do-it-yourself ("DIY") customer and the professional installer in 38 states. Reclassification...

  • Page 63
    ... earnings. The Company reviews goodwill and indefinite-lived intangible assets for impairment annually or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. The goodwill impairment test compares the fair value of a reporting...

  • Page 64
    ...-Insurance Reserves The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers' compensation, general liability, vehicle liability, property loss, and employee health care benefits. With the exception of employee health care benefit...

  • Page 65
    ... with the opening of new stores, which consist primarily of payroll and occupancy costs, are charged to operations as incurred. Share-Based Compensation Plans The Company currently sponsors share-based employee benefit plans and stock option plans. The Company recognizes compensation expense for...

  • Page 66
    ...controls credit risk through credit approvals, credit limits and monitoring procedures. Generally, the Company does not require security when credit is granted to customers. Credit losses are provided for in the Company's consolidated financial statements and consistently have been within management...

  • Page 67
    ...per week. All 238 Kragen stores are expected to be converted to the O'Reilly systems and be serviced from this new distribution center by the end of the first quarter of 2010. The Company has evaluated subsequent events and transactions that occurred after the balance sheet date of December 31, 2009...

  • Page 68
    ...brand names: Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts and Murray's Discount Auto Parts. As of December 31, 2009, the Company had converted 405 CSK stores to the O'Reilly systems, merged 41 CSK stores with existing O'Reilly locations, closed 13 CSK stores and opened five new stores...

  • Page 69
    ... liabilities related to CSK's existing closed stores for 127 locations that were closed prior to the Company's acquisition of CSK, $26,617,000 of employee separation costs, and $8,866,000 of exit costs associated with the planned closure of other administrative offices and certain distribution...

  • Page 70
    ...respective markets on a storeby-store basis. Along with the demographic reports, the Company evaluated historical store financial results, store lease obligations, store floor plans, and locations previously identified by former CSK management as projected closures. This detailed assessment resulted...

  • Page 71
    ... Balance Sheets. These leases have an estimated weighted-average useful life of approximately 7.7 years. During the years ended December 31, 2009 and 2008, the Company recognized an amortized benefit of $9,166,000 and $3,941,000, respectively, related to these unfavorable operating leases...

  • Page 72
    ... are also reduced by stand-by letters of credit issued by the Company primarily to satisfy the requirements of workers compensation, general liability and other insurance policies. As of December 31, 2009, the Company had stand-by letters of credit outstanding in the amount of $72 million and...

  • Page 73
    ... last reported sale price of the Company's common stock is greater than or equal to 130% of the applicable exchange price of $36.17 for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; If the Notes have been called...

  • Page 74
    ... Company leases certain land and buildings related to 48 of its O'Reilly Auto Parts stores under fifteen-year operating lease agreements with O'Reilly Investment Company and O'Reilly Real Estate Company, partnerships in which certain shareholders and directors of the Company are partners. Generally...

  • Page 75
    ... closed stores liabilities of $3,650,000 related to 127 locations that were closed prior to the Company's acquisition of CSK, recorded $8,866,000 of exit costs associated with the planned closure of CSK administrative office and certain distribution facilities and recorded $26,617,000 of employee...

  • Page 76
    ... accompanying Consolidated Balance Sheets at December 31, 2009 and 2008. Changes in fair market value are recorded in other comprehensive income (loss), and any changes resulting from ineffectiveness of the hedge transactions would be recorded in current earnings. The Company's hedging instruments...

  • Page 77
    ... - amount that would be required to replace the service capacity of an asset (replacement cost) c) Income approach - techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models) a) 63

  • Page 78
    ... and an analysis of the changes in credit spreads over the previous twelve months for comparable companies in the industry. NOTE 10 - ACCUMULATED OTHER COMPREHENSIVE LOSS Unrealized holding gains on available-for-sale securities, consisting of the Company's investment in CSK common stock prior to...

  • Page 79
    ...,000 shares were available for future grants under the employee stock option plan and director stock option plan, respectively. For the year ended December 31, 2009, the Company recognized stock option compensation expense related to these plans of $13,451,000 and a corresponding income tax benefit...

  • Page 80
    ... of $290,000. At December 31, 2009, approximately 1,453,000 shares were reserved for future issuance. Other Employee Benefit Plans The Company sponsors a contributory profit sharing and savings plan that covers substantially all employees who are at least 21 years of age and have at least six months...

  • Page 81
    ...are forfeited when an employee ceases employment. A total of 650,000 shares of common stock have been authorized for issuance under this plan. Shares awarded under this plan are valued based on the market price of the Company's common stock on the date of grant and compensation cost is recorded over...

  • Page 82
    ..., 2007. For the years ended December 31, 2009, 2008 and 2007, there were stock options outstanding, which were not included in the computation of diluted earnings per share as the impact of these options would have been antidilutive. The weighted-average exercise price per share for the options was...

  • Page 83
    ...Federal income taxes at statutory rate State income taxes, net of federal tax benefit Other items, net $ $ The excess tax benefit associated with the exercise of non-qualified stock options has been reflected as additional paid-in capital in the accompanying consolidated financial statements. 69

  • Page 84
    ... in income tax expense. As of the years ended December 31, 2009, 2008 and 2007, the Company had accrued approximately $4,030,000, $3,900,000 and $2,748,000, respectively, of interest related to uncertain tax positions before the benefit of the deduction for interest on state and federal returns...

  • Page 85
    ... Procedures Changes in and Disagreements With Accountants on Accounting and Financial Disclosure EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES As of the end of the period covered by this report, our management, under the supervision and with the participation of our Chief Executive Officer and...

  • Page 86
    ... Ernst & Young LLP, our independent registered public accounting firm, has audited management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2009, as stated in their report, which is included above. Item 9B. Other Information Not Applicable. 72

  • Page 87
    ...fiscal year. The information regarding executive officers called for by Item 401 of Regulation S-K is included in Part I, in accordance with General Instruction G (3) to Form 10-K, for our executive officers who are not also directors. Our Board of Directors has adopted a code of ethics that applies...

  • Page 88
    ... 8: Management's Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm - Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm - Financial Statements Consolidated Balance Sheets as of December 31, 2009...

  • Page 89
    ... to Charged to Other Costs and Accounts Expenses Describe Column D Column E Balance at End of Period Description (amounts in thousands) Year ended December 31, 2009: Deducted from asset account: Sales and returns allowances Allowance for doubtful accounts Year ended December 31, 2008: Deducted from...

  • Page 90
    ... undersigned, thereunto duly authorized. O'REILLY AUTOMOTIVE, INC. (Registrant) Date: February 26, 2010 By /s/ Greg Henslee Greg Henslee Chief Executive Officer and Co-President Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on...

  • Page 91
    EXHIBIT INDEX Exhibit No. 2.2 Description Agreement and Plan of Merger, dated April 1, 2008, between O'Reilly Automotive, Inc., OC Acquisition Company and CSK Auto Corporation, filed as Exhibit 2.1 to the Registrant's Current Report on Form 8-K dated April 7, 2008, is incorporated herein by this ...

  • Page 92
    .... First Supplemental Indenture, dated as of December 30, 2005, among CSK Auto, Inc., CSK Auto Corporation, CSKAUTO.COM, Inc., and The Bank of New York Trust Company, N.A., as Trustee, filed as Exhibit 10.3 to the Registrant's Current Report on Form 8-K dated July 11, 2008, is incorporated herein by...

  • Page 93
    ...Corporation, CSKAUTO.COM, Inc. and The Bank of New York Trust Company, N.A., as Trustee, filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated December 31, 2008, is incorporated herein by this reference. 10.43 10.44 10.45 (a) O'Reilly Automotive, Inc. 2009 Stock Purchase Plan...

  • Page 94
    ... have the meanings set forth in the Plan. 1. GRANT OF OPTION. The Company hereby grants to the Optionee an option to purchase [Insert Number] shares (the "Option Shares") of the common stock of the Company (the "Common Stock") at a price of [Insert Price] per share, in the manner and subject to the...

  • Page 95
    ..., the terms of the Plan shall govern. IN WITNESS WHEREOF, O'REILLY AUTOMOTIVE, INC. has caused this Agreement to be executed and its Corporate Seal to be affixed, and Optionee has signed the same, in duplicate originals as of the day and year first above written. O'REILLY AUTOMOTIVE, INC. By: _____...

  • Page 96
    ..., LLC CSK Auto Corporation CSK Auto, Inc. CSKAUTO.COM, Inc. OC Holding Company, LLC State of Incorporation Missouri Missouri Missouri Missouri Missouri Delaware Arizona Delaware Delaware One hundred percent of the capital stock of each of the above listed subsidiaries is directly or indirectly...

  • Page 97
    ... statements and schedule of O'Reilly Automotive, Inc. and Subsidiaries and the effectiveness of internal control over financial reporting of O'Reilly Automotive, Inc. and Subsidiaries, included in this Annual Report (Form 10-K) for the year ended December 31, 2009. /s/ Ernst & Young LLP Kansas City...

  • Page 98
    ... financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 26, 2010 /s/ Greg Henslee Greg Henslee, Co-President and Chief Executive Officer...

  • Page 99
    ... involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 26, 2010 /s/ Thomas McFall Thomas McFall, Executive Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer) 85

  • Page 100
    ... requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Greg Henslee Greg Henslee Chief Executive Officer February...

  • Page 101
    ... In connection with the Report of O'Reilly Automotive, Inc. (the "Company") on Form 10-K for the period ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas McFall, Chief Financial Officer of the Company, certify, pursuant to 18...

  • Page 102
    ... written request. These requests and other investor contacts should be directed to Thomas McFall, Executive Vice President of Finance and Chief Financial Officer, at the corporate address. Trading Symbol The Company's common stock is traded on The Nasdaq Global Select Market under the symbol ORLY.

  • Page 103
    MOVING FORWARD WITH OUR WINNING PROCESS. O'Reilly Automotive 2 33 South Patterson Springfield, Missouri 65802 417.862.3333 www.oreillyauto.com