O'Reilly Auto Parts 2012 Annual Report Download - page 52

FORM 10-k
42
Fiscal 2012
First Second Third Fourth
Quarter Quarter Quarter Quarter
(In thousands, except per share and comparable store sales data)
Comparable store sales 6.1% 2.5% 1.3% 4.2%
Sales $ 1,529,392 $ 1,562,849 $ 1,601,558 $ 1,488,385
Gross profit 761,680 779,861 805,493 750,384
Operating income 247,501 243,603 263,318 222,971
Net income 147,492 146,120 159,332 132,802
Earnings per share – basic $ 1.16 $ 1.17 $ 1.34 $ 1.16
Earnings per share – assuming dilution $ 1.14 $ 1.15 $ 1.32 $ 1.14
Fiscal 2011
First Second Third Fourth
Quarter Quarter Quarter Quarter
(In thousands, except per share and comparable store sales data)
Comparable store sales 5.7% 4.4% 4.8% 3.3%
Sales $ 1,382,738 $ 1,479,318 $ 1,535,453 $ 1,391,307
Gross profit 669,781 718,661 754,210 694,697
Former CSK officer clawback - - - (2,798)
Operating income 196,437 222,368 241,050 206,911
Write-off of debt issuance costs (21,626) - - -
Termination of interest rate swap agreements (4,237) - - -
N
et income 102,474 133,772 148,439 122,988
Earnings per share – basic $ 0.73 $ 0.97 $ 1.12 $ 0.96
Earnings per share – assuming dilution $ 0.72 $ 0.96 $ 1.10 $ 0.94
RECENT ACCOUNTING PRONOUNCEMENTS
In February of 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2013-02,
"Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ( “ASU 2013-02”). Under ASU 2013-02, an
entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (“AOCI”)
by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant
amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be
reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net
income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02
does not change the current requirements for reporting net income or other comprehensive income in the financial statements. We
plan to adopt this guidance beginning with our first quarter ended March 31, 2013; the application of this guidance affects presentation
only and therefore, is not expected to have an impact on our consolidated financial condition, results of operations or cash flows.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are subject to interest rate risk to the extent we borrow against our unsecured revolving credit facility (the “Revolving Credit
Facility”) with variable interest rates based on either a Base Rate or Eurodollar Rate, as defined in the credit agreement governing the
Revolving Credit Facility. Historically, we had entered into interest rate swap contracts to mitigate our exposure to interest rate risks
associated with borrowings against our previous credit facility with variable interest rates, however, as of December 31, 2012, we did
not have any interest rate swap contracts and had no outstanding borrowings under our Revolving Credit Facility.
We had outstanding fixed rate debt of $1.10 billion and $0.80 billion as of December 31, 2012 and 2011, respectively. The fair value
of our fixed rate debt was estimated at $1.20 billion and $0.85 billion as of December 31, 2012 and 2011, respectively, which was
determined by reference to quoted market prices.
We invest certain of our excess cash balances in short-term, highly-liquid instruments with maturities of 90 days or less. We do not
expect any material losses from our invested cash balances and we believe that our interest rate exposure is minimal. As of December
31, 2012, our cash and cash equivalents totaled $248 million.