O'Reilly Auto Parts 2012 Annual Report Download - page 40

FORM 10-k
30
Earnings per share:
Our diluted earnings per common share for the year ended December 31, 2012, increased 28% to $4.75 on 123 million shares from
$3.71 on 137 million shares for the same period one year ago. The impact of share repurchases during 2012 on diluted earnings per
share was an increase of approximately $0.26.
Adjustments for nonrecurring and non-operating events:
Our results for the year ended December 31, 2011, included nonrecurring income related to a settlement between the SEC and a
former CSK officer that resulted in the reimbursement to O’Reilly, as successor issuer to CSK for SEC purposes, of $3 million ($2
million, net of tax) of incentive-based compensation and stock sale profits previously received by the officer. This “clawback”
amount was included in “Operating income” on our Consolidated Statements of Income for the year ended December 31, 2011. Our
results for the year ended December 31, 2011, also included one-time charges associated with the new financing transactions we
completed on January 14, 2011. The one-time charges included a non-cash charge to write off the balance of debt issuance costs
related to our previous ABL Credit Facility in the amount of $22 million ($13 million, net of tax) and a charge related to the
termination of our interest rate swap agreements in the amount of $4 million ($3 million, net of tax). The charges related to our new
financing transactions were included in “Other income (expense)” on our Consolidated Statements of Income for the year ended
December 31, 2011. The results discussed in the paragraph below are adjusted for these nonrecurring items and are reconciled to the
most directly comparable GAAP measure in the subsequent table.
Adjusted operating income for the year ended December 31, 2012, increased 13% to $977 million (or 15.8% of sales) from $864
million (or 14.9% of sales) for the same period one year ago. Adjusted net income for the year ended December 31, 2012 increased
12% to $586 million (or 9.5% of sales) from $522 million (or 9.0% of sales) for the same period one year ago. Adjusted diluted
earnings per common share for the year ended December 31, 2012, increased 25% to $4.75 from $3.81 for the same period one year
ago.
For the Year Ended December 31,
2012 2011
Amount % of Sales Amount % of Sales
GAAP Operating income $ 977,393 15.8 % $ 866,766 15.0 %
Former CSK officer clawback - - % (2,798) (0.1) %
N
on-GAAP adjusted operating income $ 977,393 15.8 % $ 863,968 14.9 %
GAAP net income $ 585,746 9.5 % $ 507,673 8.8 %
Write-off of asset-based revolving credit facility debt issuance costs, net of
tax - - % 13,458 0.2 %
Termination of interest rate swap agreements, net of tax - - % 2,637 - %
Former CSK officer clawback, net of tax - - % (1,741) - %
N
on-GAAP adjusted net income $ 585,746 9.5 % $ 522,027 9.0 %
GAAP diluted earnings per common share $ 4.75 $ 3.71
Write-off of asset-based revolving credit facility debt issuance costs, net of
tax - 0.09
Termination of interest rate swap agreements, net of tax - 0.02
Former CSK DOJ officer clawback, net of tax - (0.01)
N
on-GAAP adjusted diluted earnings per common share $ 4.75 $ 3.81
Weighted-average common shares outstanding - assuming dilution 123,314 136,983
The financial information presented in the paragraph and table above is not derived in accordance with United States generally
accepted accounting principles (“GAAP”). We do not, nor do we suggest investors should, consider such non-GAAP financial
measures in isolation from, or as a substitute for, GAAP financial information. We believe that the presentation of financial results
and estimates excluding the impact of the non-cash charge to write off the balance of debt issuance costs, the charge related to the
termination of interest rate swap contracts, and the former CSK officer clawback, provide meaningful supplemental information to
both management and investors, which is indicative of our core operations. We exclude these items in judging our performance and
believe this non-GAAP information is useful to investors as well. Material limitations of these non-GAAP measures are that such
measures do not reflect actual GAAP amounts. We compensate for such limitations by presenting, in the table above, the
accompanying reconciliation to the most directly comparable GAAP measures.