O'Reilly Auto Parts 2010 Annual Report Download

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TO DELIVER
POSITIONED
O’REILLY AUTOMOTIVE
2010ANNUAL REPORT
8:18 A.M.

Table of contents

  • Page 1
    8:18 A.M. POSITIONED TO DELIVER O'REILLY AUTOMOTIVE 2010 ANNUAL REPORT

  • Page 2
    ... hAs the foundAtion in plAce to fully execute our proven duAl mArket strAtegy in All of the mArkets we serve Across the country. with 23 strAtegic distribution centers servicing 3,570 stores in 38 stAtes, stAffed And supported by over 47,000 professionAl teAm members - we work towArd one goAl - to...

  • Page 3
    7:33 A.M. 8:16 A.M. 1:55 P.M. 10:32 A.M. 7:23 P.M. 4:40 P.M.

  • Page 4
    ... team members who embrace our Culture and execute our proven business model every day. This business model consists of providing a higher level of service than our competition and focusing on both do-it-yourself and professional service provider customers - our Dual Market Strategy. Our Dual Market...

  • Page 5
    ..., now allow us to service all stores five nights a week. Completion of this robust distribution network expansion was a major milestone in the integration plan, as it is a critical tool in the implementation of our Dual Market Strategy. Conversion of Store Point of Sale Systems. Coinciding with the...

  • Page 6
    ... prices and long-term commitment to the success of their business to be their First Call supplier. We are confident in our ability to execute our commercial strategy and have seen good results since the acquisition; however, building these relationships and improving the performance to match...

  • Page 7
    ... experienced, professionAl And technicAlly proficient teAm members who consistently deliver superior customer service supported by An extensive And robust distribution network which provides unsurpAssed pArts AvAilAbility. $82 biLLioN do-it-for-me PArtS mArKet 53 YeArS iN the AUto PArtS iNdUStrY

  • Page 8
    ... Market Strategy. These efforts centered on opening five distribution centers, converting store and distribution center systems, countless hours of training, new product lines and most importantly, integrating the O'Reilly Culture of customer service. With distribution system enhancements in place...

  • Page 9
    ... order to meet our customers' demands for parts availability, we operate 23 strategic, regional distribution centers, which stock an average of 118,000 unique SKUs and are equipped with highly automated material handling equipment. These DCs are integrated with each other, as well as with the stores...

  • Page 10
    ... to our customers' auto parts needs. Our enhanced customer service ranges from installing wiper blades for our do-it-yourself customers to making special deliveries for our professional service provider customers. In all instances, our store, distribution center and corporate Team Members never...

  • Page 11
    ... Management ted wise Chief Operating Officer and Co-President lArry ellis Vice President of Distribution Western Division steve JAsinski Vice President of Information Systems doug ruble Vice President of Marketing/Advertising tony bArtholomew Vice President of Sales tom mcfAll Chief Financial...

  • Page 12
    ... Employer Identification No.) 233 South 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...

  • Page 13
    ...the registrant's documents specified below are incorporated here by reference: Document Proxy Statement for 2011 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) Part III Form 10-K Part FORM 10-K 2

  • Page 14
    ... and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV Exhibits and Financial Statement...

  • Page 15
    ... parts; maintenance items, such as oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives and appearance products; and accessories, such as floor mats, seat covers and truck accessories. Business FORM 10-K Many of our stores offer enhanced services and programs to our customers...

  • Page 16
    ... brand names: Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts and Murray's Discount Auto Parts. This acquisition added stores in twelve new states: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Michigan, Nevada, New Mexico, Oregon, Utah and Washington, and a number of new markets...

  • Page 17
    ... stocked by other auto parts retailers. We believe this timely access to a broad range of products is a key competitive advantage in satisfying customer demand and generating repeat business. We currently operate 23 DCs, four of which opened in 2010. As these DCs opened, the surrounding CSK stores...

  • Page 18
    ... and our district management team has an average length of service of 13 years. Team Members As of January 31, 2011, we employed 47,142 total team members (31,070 full-time team members and 16,072 part-time team members), of whom 39,556 were employed at our stores, 6,053 were employed at our DCs and...

  • Page 19
    ... expenses in the future in order to comply with any such law or regulation. Available Information Our Internet address is www.oreillyauto.com. Interested readers can access, free of charge, the Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any...

  • Page 20
    ... ------149 100% State Texas California Missouri Georgia Washington Tennessee Arizona Illinois Oklahoma Alabama Minnesota Arkansas North Carolina Colorado Louisiana Indiana Ohio Michigan Mississippi Wisconsin Iowa Kansas South Carolina Kentucky Utah Nevada Florida Oregon New Mexico Idaho Nebraska...

  • Page 21
    ...us to achieve additional distribution and advertising efficiencies in each market. Products and Purchasing Our stores offer DIY and professional service provider customers a wide selection of brand name and private label products for domestic and imported automobiles, vans and trucks. We do not sell...

  • Page 22
    ... regional field sales manager. Afterward, these team members spend one day per week calling on existing and potential professional service provider customers. Additionally, each team member engaged in such sales activities participates in quarterly advanced training programs for sales and business...

  • Page 23
    ...marketing materials such as flyers, quick reference guides and catalogs are produced and distributed on a regular basis to professional service providers, paint and body shops and fleet customers. Our industry leading First Call program enables our sales representatives, district managers, and store...

  • Page 24
    ... Wise, age 60, Chief Operating Officer and Co-President, has been an O'Reilly team member for 40 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...

  • Page 25
    ... O'Reilly team member for 37 years. Mr. Johnson's primary area of responsibility is Inventory Management, Purchasing, Logistics, and Store Design. He began his career in a DC in 1973, working in the stocking, shipping and will call counter departments, and was promoted to customer service manager in...

  • Page 26
    ... our financial obligations, including those relating to the notes and our credit facility; increase our vulnerability to adverse economic and industry conditions; limit our flexibility in planning for, or reacting to, changes and opportunities in our industry, which may place us at a competitive...

  • Page 27
    ..., see the "Growth Strategy" section of Item 1 of this annual report on Form 10-K. We are sensitive to regional economic and weather conditions that could reduce our costs and sales. Approximately 29% of our stores are located in Texas and California. Therefore, our business is sensitive to the...

  • Page 28
    ... a diversion of our management's attention and resources, which could have an adverse effect on our business. A change in the relationship with any of our key vendors or the unavailability of our key products at competitive prices could affect our financial health. Our business depends on developing...

  • Page 29
    ...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 uncertain whether these...

  • Page 30
    ...,133,347 Location Atlanta, GA Belleville, MI Billings, MT Dallas, TX Denver, CO Des Moines, IA Dixon, CA Greensboro, NC Houston, TX Indianapolis, IN Kansas City, MO Knoxville, TN Little Rock, AR Lubbock, TX Mobile, AL Moreno Valley, CA Nashville, TN Oklahoma City, OK Phoenix, AZ Salt Lake City, UT...

  • Page 31
    ... pre-acquisition accounting practices. The Company and the DOJ continue work to complete the final documentation necessary for the execution of the Non-Prosecution Agreement previously referenced and payment of the one-time monetary penalty of $20.9 million, also previously reported. The Company...

  • Page 32
    ... costs may not be covered by CSK's insurance policies. As a result of the CSK acquisition, O'Reilly expects to continue to incur ongoing legal fees related to the indemnity obligations related to the litigation that has commenced by the DOJ and SEC of CSK's former employees. O'Reilly has a remaining...

  • Page 33
    ...been declared since that time, and we do not anticipate paying any cash dividends in the foreseeable future. The prices in the following table represent the high and low sales price for O'Reilly Automotive, Inc. common stock as reported by Nasdaq. During fiscal 2010, the Company made no purchases or...

  • Page 34
    ... cumulative effect of accounting change Cumulative effect of accounting change (a) Earnings per share - assuming dilution Weighted-average common shares outstanding - assuming dilution PRO FORMA INCOME STATEMENT DATA: (b) Sales Cost of goods sold, including warehouse and distribution expenses Gross...

  • Page 35
    ... sales of stores open at least one year. Percentage increase in same-store sales is calculated based on store sales results, which exclude sales of specialty machinery, sales by outside salesmen, sales to team members and sales during the one to two week period certain CSK branded stores were closed...

  • Page 36
    ... line of auto body paint and related materials, automotive tools and professional service provider service equipment. As of December 31, 2010, we operated 3,570 stores in 38 states. Operating within the retail industry, we, along with other retail companies, are influenced by a number of general...

  • Page 37
    ... higher miles due to better quality power trains, and interiors and exteriors, the decrease in new car sales over the past two years and the consumers' willingness to invest in maintaining their higher-mileage, better built vehicles. As the average age of the vehicle on the road increases, a larger...

  • Page 38
    ... to our business and consolidated financial statements, while currently uncertain, are being evaluated by management. We will continue to assess how the Acts apply to us, their effect on our business and how we plan to best meet the stated requirements. On December 29, 2010, we completed a corporate...

  • Page 39
    ...opened throughout 2010 Non-store sales including machinery, sales to independent parts stores and team members Sales in 2009 for stores that have closed Total increase in sales $ 56 74 8 (5) 550 $ Comparable store sales are calculated based on the change in sales of stores open at least one year...

  • Page 40
    ...store managers with better tools to track and control inventory resulting in improved inventory shrinkage. Commercial sales are growing at a faster rate than DIY sales as a result of the enhanced distribution model in our western markets, which supports the implementation of our dual market strategy...

  • Page 41
    ... receivable, net of tax Adjusted diluted earnings per common share $ $ $ $ $ $ $ $ $ $ $ $ The financial information presented in the table above is not derived in accordance with United States generally accepted accounting principles ("GAAP"). These items include adjusted operating income...

  • Page 42
    ... 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...

  • Page 43
    ... not anticipate this favorable pricing environment to continue in 2010. Additionally, in conjunction with the opening of our distribution centers ("DC") in our western markets, we would anticipate a temporary decrease in distribution efficiencies as the new DC team members become proficient with the...

  • Page 44
    ... GAAP amounts and amortization of acquisitionrelated trade names and trademarks reflect charges to net income and earnings per share that will recur over the estimated useful lives of the assets ranging from one to three years. We compensate for such limitations by presenting, in the table above...

  • Page 45
    ... December 31, 2010. Liquidity and related ratios: Our working capital increased 6% from 2009 to 2010, primarily driven by an increased investment in hard parts inventories in the acquired CSK stores as we continue to grow and expand the professional service provider business in those markets as well...

  • Page 46
    ... DCs. We opened 149 net new stores in 2010 and 150 net new stores in both 2009 and 2008. We plan to open 170 net new stores in 2011. The costs associated with the opening of a new store (including the cost of land acquisition, improvements, fixtures, net inventory investment and computer equipment...

  • Page 47
    ... consecutive trading days ending on the last trading day of the preceding fiscal quarter; if the Notes had been called for redemption by us; or upon the occurrence of specified corporate transactions, such as a change in control. FORM 10-K • • On July 1, 2010, the Notes became exchangeable at...

  • Page 48
    ... were used to repay all outstanding borrowings under our previous secured Credit Facility, to pay fees associated with the issuance and for general corporate purposes. Prior to October 14, 2020, the 2011 4.875% Senior Notes are redeemable, in whole, at any time, or in part, from time to time, at...

  • Page 49
    ... 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 50
    ...from workers' compensation, vehicle and general liability, and employee health care benefits. These liabilities are recorded on our Consolidated Balance Sheets at our estimate of their net present value and do not have scheduled maturities, however we can estimate the timing of future payments based...

  • Page 51
    ... selfinsurance reserves were changed 10% from our estimated reserves at December 31, 2010, the financial impact would have been approximately $10 million or 1.5% of pretax income for the year ended December 31, 2010. Accounts Receivable - We provide credit to our commercial customers in the ordinary...

  • Page 52
    ... recorded for periods that were subsequently closed with the applicable taxing authority. • Inventory Obsolescence and Shrink - Inventory, which consists of automotive hard parts, maintenance items, accessories and tools, is stated at the lower of cost or market. The extended nature of the life...

  • Page 53
    ...statements and related notes included elsewhere in this annual report, and the other financial information included therein. Fiscal 2010 First Second Third Fourth Quarter Quarter Quarter Quarter (In thousands, except per share and comparable store sales data) FORM 10-K Comparable store sales Sales...

  • Page 54
    ..., which are effective for interim and annual periods beginning after December 15, 2010. The adoption of the new guidance did not have a material impact on our consolidated financial position, results of operations or cash flows. The adoption of the new Level 3 guidance is required in 2011 and is not...

  • Page 55
    ... or issue derivative financials instruments for trading purposes. All of the interest rate swap transactions that existed as of December 31, 2010, for a total notional amount of $250 million, were terminated at the Company's request on January 14, 2011, concurrent with the closing and issuance of...

  • Page 56
    ... Index FORM 10-K 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...

  • Page 57
    ... and with the participation of the Company's principal executive officer and principal financial officer, management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the...

  • Page 58
    ... with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2010 and 2009, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December...

  • Page 59
    ... balance sheets of O'Reilly Automotive, Inc. and Subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement...

  • Page 60
    Consolidated Balance Sheets (In thousands, except share data) December 31, 2010 Assets Current assets: Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $8,349 in 2010 and $6,795 in 2009 Amounts receivable from vendors Inventory Deferred income taxes Other ...

  • Page 61
    Consolidated Statements of Income (In thousands, except per share data) FORM 10-K Sales Cost of goods sold, including warehouse and distribution expenses Gross profit Selling, general and administrative expenses Legacy CSK DOJ investigation charge Operating income Other income (expense): Debt ...

  • Page 62
    ...comprehensive income Comprehensive income Issuance of common stock under employee benefit plans Issuance of common stock under stock option plans Excess tax benefit of stock options exercised Share based compensation Exchange of 6 ¾% Senior Exchangeable Notes by Holders Balance at December 31, 2010...

  • Page 63
    ... on exchangeable notes Amortization of debt issuance costs Excess tax benefit from stock options exercised Deferred income taxes Gain on settlement of note receivable Stock option compensation expense Other share based compensation expense Other Changes in operating assets and liabilities: Accounts...

  • Page 64
    ... regions of the United States and caters to both the do-it-yourself ("DIY") customer and the professional service provider. The Company's distribution system provides stores with same-day or overnight access to an extensive inventory of hard to find items not typically stocked by other auto parts...

  • Page 65
    Inventory: Inventory, which consists of automotive hard parts, maintenance items, accessories and tools, is stated at the lower of cost or market. Inventory also includes capitalized costs related to procurement, warehousing and distribution centers ("DC"). Cost has been determined using the last-in...

  • Page 66
    ... Company had a reserve balance of $7.1 million related to a note receivable acquired in the CSK acquisition that was settled in 2010, which was included as a component of "Notes receivable, less current portion" in its Condensed Consolidated Balance Sheets. Self-insurance reserves: The Company uses...

  • Page 67
    ...distribution expenses" 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 its share-based payments based on the fair value of the awards on the date of the grant. Share...

  • Page 68
    ...controls this credit risk through credit approvals, credit limits and accounts receivable and credit 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 have...

  • Page 69
    ... Supply, Kragen Auto Parts and Murray's Discount Auto Parts. As of December 31, 2010, we have converted all CSK stores to O'Reilly systems, merged 41 CSK stores with existing O'Reilly locations, closed 17 CSK stores and opened five new stores in CSK historical markets. Purchase price allocation: The...

  • Page 70
    ... liabilities related to CSK's existing closed stores for 127 locations that were closed prior to the Company's acquisition of CSK, $26.6 million of employee separation costs, and $8.9 million of exit costs associated with the planned closure of other administrative offices and certain distribution...

  • Page 71
    ... Consolidated Balance Sheets. None of the liabilities related to these unfavorable leases relate to stores to be closed as discussed in Note 2 or Note 7. As of December 31, 2010, the estimated net amortizable benefit of the Company's intangible assets and liabilities for each of the next five years...

  • Page 72
    ... 30, 2010, the last trading day of the Company's third quarter, as provided for in the indentures governing the Notes. The Notes became exchangeable as the Company's common stock closed at or above 130% of the Exchange Price for 20 trading days within the 30 consecutive trading day period ending...

  • Page 73
    ... 31, 2010. The Company assumed certain building capital leases in the CSK acquisition. During the year ended December 31, 2010, the Company purchased all properties under these capital leases with the exception of one location, which will expire in April of 2015. The present value of future minimum...

  • Page 74
    ... Credit Facility and to pay fees and expenses related to the offering of the 2011 4.875% Senior Notes, with the remainder used for general corporate purposes. Prior to October 14, 2020, the 2011 4.875% Senior Notes are redeemable in whole, at any time, or in part, from time to time, at the Company...

  • Page 75
    ...to the borrowing arrangements. NOTE 5-RELATED PARTIES The Company leases certain land and buildings related to 48 of its O'Reilly Auto Parts stores under fifteen-year operating lease agreements with New O'Reilly Investment Company LP and New O'Reilly Real Estate Company LP, entities in which certain...

  • Page 76
    .... As of December 31, 2010, the Company's remaining hedging instruments have been deemed to be highly effective. 65 FORM 10-K existing economic conditions. Adjustments to closed property reserves are made to reflect changes in estimated sublease income or actual contracted exit costs...

  • Page 77
    ... are either directly or indirectly observable. Level 3 - Unobservable inputs in which little or no market data exists, there requiring the Company to develop its own assumptions. 6¾% Exchangeable Senior Notes: As discussed in Note 4, the 6¾% Exchangeable Senior Notes were retired during 2010 and...

  • Page 78
    ...992 $ (2,970) Comprehensive income for the years ended December 31, 2010, 2009 and 2008, was $424.4 million, $311.0 million and $181.5 million, respectively. NOTE 11-SHARE-BASED EMPLOYEE COMPENSATION PLANS AND OTHER BENEFIT PLANS The Company recognizes share-based compensation expense based on the...

  • 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, 2010, the Company recognized stock option compensation expense related to these plans of $14.9 million and a corresponding income tax benefit...

  • Page 80
    ... based on the discount between the grant date fair value and the employee purchase price for shares sold to employees. During the year ended December 31, 2010, the Company recorded $1.1 million of compensation expense related to the employee share purchases with a corresponding income tax benefit of...

  • Page 81
    ..., 2010, approximately 1,251,000 shares were reserved for future issuance under this plan. 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 of service...

  • Page 82
    ... 2010 1,587 7,441 1,373 $35.61 $28.97 $48.15 Antidilutive stock options Weighted-average exercise price per share NOTE 13-INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes...

  • Page 83
    ... the accompanying consolidated financial statements. As of December 31, 2010, the Company had net operating loss carryforwards for federal income tax purposes of $5.4 million (for which a portion are also available for state tax purposes) and general business tax credit carry forwards available for...

  • Page 84
    ... pre-acquisition accounting practices. The Company and the DOJ continue work to complete the final documentation necessary for the execution of the Non-Prosecution Agreement previously referenced and payment of the one-time monetary penalty of $20.9 million, also previously reported. The Company...

  • Page 85
    ... data presented below should be read in conjunction with the Company's consolidated financial statements and related notes, and the other financial information included therein. Fiscal 2010 Second Third Quarter Quarter (In thousands, except per share data) $ 1,381,241 $ 1,425,887 672,633 693,415 181...

  • Page 86
    ... & 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, 2010, as stated in their report, which is included in Item 8. Item 9B. Other Information Not Applicable. 75

  • 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
    ...and Related Transactions" and is incorporated herein by reference. The information required by Item 407(a) of Regulation S-K will be included in the Proxy Statement under the caption "Director Independence" and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The...

  • Page 89
    ... 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, 2010 and 2009 Consolidated Statements of Income for the years...

  • Page 90
    ...Describe Column E Balance at End of Period Description (amounts in thousands) Year ended December 31, 2010: Deducted from asset account: Sales and returns allowances Allowance for doubtful accounts Year ended December 31, 2009: Deducted from asset account: Sales and returns allowances Allowance for...

  • Page 91
    ..., INC. (Registrant) Date: February 28, 2011 By /s/ Greg Henslee Greg Henslee Chief Executive Officer and Co-President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on...

  • Page 92
    ... 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 reference. Agreement and Plan of Merger, dated December 29, 2010, between O'Reilly Automotive, Inc...

  • Page 93
    ... to Retirement Agreement, dated February 7, 2001, filed as Exhibit 10.26 to the Registrant's Annual Shareholders' Report on Form 10-K for the year ended December 31, 2001, is incorporated herein by this reference. Fourth Amendment to the O'Reilly Automotive, Inc. 1993 Stock Option Plan, dated...

  • Page 94
    ..., 2011, is incorporated herein by this reference. Independent Registered Public Accounting Firm Letter Regarding Accounting Change, dated March 7, 2005, filed as Exhibit 18.0 to the Registrant's Annual Shareholders' Report on Form 10-K for the year ended December 31, 2004, is incorporated herein by...

  • Page 95
    ..., qualifications, limitations and restrictions as the Company Common Stock; WHEREAS, at the Effective Time, the Company's restated articles of incorporation will be amended by virtue of the Merger to, among other things, change the Company's name to O'Reilly Automotive Stores, Inc., and New O'Reilly...

  • Page 96
    ... shall be amended so as to delete the rights agent notice information and replace it with the following: "Computershare Trust Company, N.A. 250 Royall Street Canton, Massachusetts 02021 Attention: Client Services" (f) A new Section 35 shall be added to the Rights Agreement which shall be and read in...

  • Page 97
    ... will attempt in good faith to agree ...the parties as closely as possible,...State of Missouri and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State. [signature page follows] FORM...

  • Page 98
    ... first written above. O'REILLY AUTOMOTIVE, INC. By: /s/ Thomas McFall Name: Thomas McFall Title: Executive Vice President and Chief Financial Officer O'REILLY HOLDINGS, INC. By: /s/ Thomas McFall Name: Thomas McFall Title: Treasurer and Chief Financial Officer [signatures continue] FORM 10-K

  • Page 99
    FORM 10-K COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent By: /s/ Dennis V Mocci Name: Dennis V. Moccia Title: Manager, Contract Administrator

  • Page 100
    ... CSK Auto Corporation CSK Auto, Inc. CSKAUTO.COM, Inc. OC Holding Company, LLC State of Incorporation Missouri Missouri Missouri Missouri Missouri Missouri Delaware Arizona Delaware Delaware FORM 10-K One hundred percent of the capital stock of each of the above listed subsidiaries is directly or...

  • Page 101
    ... 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, 2010. /s/ Ernst & Young LLP Kansas City, Missouri...

  • Page 102
    ... omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in...

  • Page 103
    ... involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 28, 2011 /s/ Thomas McFall Thomas McFall Executive Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer) FORM...

  • Page 104
    ... In connection with the Report of O'Reilly Automotive, Inc. (the "Company") on Form 10-K for the period ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Greg Henslee, Chief Executive Officer of the Company, certify, pursuant to 18...

  • Page 105
    ... In connection with the Report of O'Reilly Automotive, Inc. (the "Company") on Form 10-K for the period ended December 31, 2010, 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 106
    ... Capital Markets Scott Ciccarelli Bernstein Research Morgan Keegan John R. Lawrence Robert W. Baird & Co Craig R. Kennison INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP One Kansas City Place 1200 7ain Street, Suite 2500 Kansas City, 7issouri 64105-2167 Colin McGranahan Credit...

  • Page 107
    11:37 P.M. 233 South Patterson | Springfield, Missouri 65802 | 417.862.3333 | www.oreillyauto.com