O'Reilly Auto Parts 2012 Annual Report Download - page 48

FORM 10-k
38
Subsequent to the end of the year and through the date of this filing, we repurchased an additional 2.1 million shares of our common
stock under our share repurchase program at an average price of $90.09 for a total investment of $186 million. We have repurchased a
total of 34.1 million shares of our common stock under our share repurchase program since the inception of the program in January of
2011 through and including February 28, 2013, at an average price of $76.37 for a total aggregate investment of $2.6 billion.
CONTRACTUAL OBLIGATIONS
Our contractual obligations as of December 31, 2012, included commitments for short and long-term debt arrangements, interest
payments related to long-term debt, future payments under non-cancelable lease arrangements, self-insurance reserves and purchase
obligations for construction contract commitments, which are identified in the table below and are fully disclosed in Note 5 “Leasing”
and Note 11 “Commitments” to the Consolidated Financial Statements. We expect to fund these commitments primarily with
operating cash flows expected to be generated in the normal course of business or through borrowings under our Revolving Credit
Facility.
Deferred income taxes, which is included in “Other liabilities” on our Consolidated Balance Sheets, as well as commitments with
various vendors for the purchase of inventory, are not reflected in the table below due to the absence of scheduled maturities, the
nature of the account or the commitment’s cancellation terms. Due to the absence of scheduled maturities, the timing of certain of
these payments cannot be determined, except for amounts estimated to be payable in 2013, which are included in “Current liabilities”
on our Consolidated Balance Sheets.
Payments Due By Period
Total
Before
1 Year
1 to 2
Years
3 to 4
Years
Years 5
and Over
(In thousands)
Contractual Obligations:
Long-term debt principal and interest payments (1) $ 1,546,063 $ 49,650 $ 99,300 $ 99,300 $ 1,297,813
Future minimum lease payments under capital leases (2) 336 234 102 - -
Future minimum lease payments under operating leases
(2) 1,843,100 240,040 429,833 332,437 840,790
Other obligations 2,400 600 1,200 600 -
Self-insurance reserves (3) 122,866 54,191 34,424 18,042 16,209
Construction commitments 89,305 89,305 - - -
Total contractual cash obligations $ 3,604,070 $ 434,020 $ 564,859 $ 450,379 $ 2,154,812
(1) Our Revolving Credit Facility, which has a maximum aggregate commitment of $660 million and matures in September of 2016, bears interest (other than
swing line loans), at our option, at either the Base Rate or Eurodollar Rate (both as defined in the agreement) plus a margin, that will vary from 0.975% to
1.600% in the case of loans bearing interest at the Eurodollar Rate and 0.000% to 0.600% in the case of loans bearing interest at the Base Rate, in each case
based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to limited
exceptions. Swing line loans made under the Revolving Credit Facility bear interest at the Base Rate plus the applicable margin described above. In
addition, we pay a facility fee on the aggregate amount of the commitments in an amount equal to a percentage of such commitments, varying from 0.150%
to 0.400% based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to
limited exceptions. Based on our current credit ratings, our margin for Base Rate loans is 0.200%, our margin for Eurodollar Rate loans is 1.200% and our
facility fee is 0.175%. As of December 31, 2012, we had no outstanding borrowings under our Revolving Credit Facility.
(2) The minimum lease payments above do not include certain tax, insurance and maintenance costs, which are also required contractual obligations under our
operating leases but are generally not fixed and can fluctuate from year to year. These expenses historically average approximately 20% of the
corresponding lease payments.
(3) We use various self-insurance mechanisms to provide for potential liabilities from workers’ compensation, vehicle and general liability, and employee health
care benefits. The self-insurance reserves above are at the undiscounted obligation amount. The self-insurance reserves 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 upon historical patterns.
We record a reserve for potential liabilities related to uncertain tax positions, including estimated interest and penalties, which are
fully disclosed in Note 14 “Income Taxes” to the Consolidated Financial Statements. These estimates are not included in the above
table because the timing related to the ultimate resolution or settlement of these positions cannot be determined. As of December 31,
2012, we recorded a liability of $59 million related to these uncertain tax positions on our Consolidated Balance Sheets, all of which
was included as a component of “Other liabilities”.
OFF-BALANCE SHEET ARRANGEMENTS
Off-balance sheet arrangements are transactions, agreements, or other contractual arrangements with an unconsolidated entity for
which we have an obligation to the entity that is not recorded in our consolidated financial statements. We have historically utilized
various off-balance sheet financial instruments, including sale-leaseback and synthetic lease transactions, but we have not entered into
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