O'Reilly Auto Parts 2012 Annual Report Download - page 69

FORM 10-k
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2014 -
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2016 -
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Total $ 1,100,000
Unsecured revolving credit facility:
In January of 2011, the Company entered into a new credit agreement for a five-year $750 million unsecured revolving credit facility
(the “Revolving Credit Facility”) arranged by Bank of America, N.A. (“BA”) and Barclays Capital, originally scheduled to mature in
January of 2016. In September of 2011, the Company amended the credit agreement (the “Credit Agreement”), decreasing the
aggregate commitments under the Revolving Credit Facility to $660 million, extending the maturity date on the Credit Agreement to
September of 2016 and reducing the facility fee and interest rate margins for borrowing under the Revolving Credit Facility. In
conjunction with the amendment, the Company recognized a one-time charge related to the modification in the amount of $0.3
million, which is included in “Other income (expense)” on the accompanying Consolidated Statements of Income for the year ended
December 31, 2011. The Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million
sub-limit for swing line borrowings under the Revolving Credit Facility. As described in the Credit Agreement governing the
Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments
under the Revolving Credit Facility by up to $200 million. As of December 31, 2012 and 2011, the Company had outstanding letters
of credit, primarily to support obligations related to workers’ compensation, general liability and other insurance policies, in the
amount of $57.3 million and $59.9 million, respectively, reducing the aggregate availability under the Revolving Credit Facility by
those amounts. As of December 31, 2012 and 2011, the Company had no outstanding borrowings under the Revolving Credit Facility.
Borrowings under the Revolving Credit Facility (other than swing line loans) bear interest, at the Company’s option, at the Base Rate
or Eurodollar Rate (both as defined in the Credit Agreement) plus an applicable margin. Swing line loans made under the Revolving
Credit Facility bear interest at the Base Rate plus the applicable margin to Base Rate loans. In addition, the Company pays a facility
fee on the aggregate amount of the commitments in an amount equal to a percentage of such commitments. The interest rate margins
and facility fee are based upon the better of the ratings assigned to the Company’s debt by Moody’s Investor Service, Inc. and
Standard & Poor’s Rating Services, subject to limited exceptions. Based upon the Company’s credit ratings at December 31, 2012, its
margin for Base Rate loans was 0.200%, its margin for Eurodollar Rate loans was 1.200% and its facility fee was 0.175%.
The Credit Agreement contains certain covenants, which include limitations on indebtedness, a minimum fixed charge coverage ratio
of 2.00 times through December 31, 2012; 2.25 times thereafter through December 31, 2014; and 2.50 times thereafter through
maturity; and a maximum adjusted consolidated leverage ratio of 3.00 times through maturity. The consolidated leverage ratio
includes a calculation of adjusted earnings before interest, taxes, depreciation, amortization, rent and stock based compensation
expense to adjusted debt. Adjusted debt includes outstanding debt, outstanding letters of credit, six-times rent expense and excludes
any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that the Company should default
on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible
termination of credit extensions, immediate payment of outstanding principal amount plus accrued interest and other amounts payable
under the Credit Agreement and litigation from lenders. As of December 31, 2012, the Company remained in compliance with all
covenants under the Credit Agreement.
Senior notes:
4.875% Senior Notes due 2021:
On January 14, 2011, the Company issued $500 million aggregate principal amount of unsecured 4.875% Senior Notes due 2021
(“4.875% Senior Notes due 2021”) at a price to the public of 99.297% of their face value with United Missouri Bank, N.A. (“UMB”)
as trustee. Interest on the 4.875% Senior Notes due 2021 is payable on January 14 and July 14 of each year and is computed on the
basis of a 360-day year.
4.625% Senior Notes due 2021:
On September 19, 2011, the Company issued $300 million aggregate principal amount of unsecured 4.625% Senior Notes due 2021
(“4.625% Senior Notes due 2021”) at a price to the public of 99.826% of their face value with UMB as trustee. Interest on the 4.625%
Senior Notes due 2021 is payable on March 15 and September 15 of each year and is computed on the basis of a 360-day year.
3.800% Senior Notes due 2022:
On August 21, 2012, the Company issued $300 million aggregate principal amount of unsecured 3.800% Senior Notes due 2022
(“3.800% Senior Notes due 2022”) at a price to the public of 99.627% of their face value with UMB as trustee. Interest on the 3.800%
Senior Notes due 2022 is payable on March 1 and September 1 of each year, beginning on March 1, 2013, and is computed on the