O'Reilly Auto Parts 2012 Annual Report Download - page 70

FORM 10-k
60
basis of a 360-day year. The net proceeds from the issuance of the 3.800% Senior Notes due 2022 were used to pay fees and expenses
related to the offering, with the remainder intended to be used to repay borrowings outstanding from time to time under the Revolving
Credit Facility and for general corporate purposes, including share repurchases.
The senior notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries (“Subsidiary Guarantors”) that
incurs or guarantees the Company’s obligations under the Company’s Revolving Credit Facility or certain other debt of the Company
or any of the Subsidiary Guarantors. The guarantees are joint and several and full and unconditional, subject to certain customary
automatic release provisions, including release of the subsidiary guarantor’s guarantee under the Company’s Credit Agreement and
certain other debt, or, in certain circumstances, the sale or other disposition of a majority of the voting power of the capital interest in,
or of all or substantially all of the property of, the subsidiary guarantor. Each of the Subsidiary Guarantors is wholly-owned, directly
or indirectly, by the Company and the Company has no independent assets or operations other than those of its subsidiaries. The only
direct or indirect subsidiaries of the Company that would not be Subsidiary Guarantors would be minor subsidiaries. Neither the
Company, nor any of its Subsidiary Guarantors, are subject to any material or significant restrictions on the Company’s ability to
obtain funds from its subsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by applicable
law. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of December 31, 2012.
NOTE 5 – LEASING
The following table identifies the future minimum lease payments under all of the Company’s operating and capital leases for each of
the next five years and in the aggregate as of December 31, 2012 (in thousands):
Operating Leases Capital Leases
Related Parties Non-Related Parties Non-Related Parties Total
2013 $ 4,439 $ 235,601 $ 234 $ 240,274
2014 4,487 222,216 77 226,780
2015 4,430 198,700 25 203,155
2016 3,996 174,171 - 178,167
2017 3,300 150,970 - 154,270
Thereafter 11,618 829,172 - 840,790
Total $ 32,270 $ 1,810,830 $ 336 $ 1,843,436
Capital lease agreements:
The Company assumed certain vehicle capital leases in the acquisition of CSK. The remaining vehicle capital lease agreements have
contractual terms of nine months, which will expire on October 15, 2013. The present value of the future minimum lease payments
under these vehicle capital leases totaled approximately $0.2 million and $0.7 million at December 31, 2012 and 2011, respectively,
which were classified as long-term debt in the accompanying consolidated financial statements. The Company did not acquire any
additional vehicles under capital leases during the periods ended December 31, 2012 or 2011.
The Company assumed certain building capital leases in the CSK acquisition. The remaining building capital lease agreement will
expire on March 31, 2017. The present value of future minimum lease payments under building capital leases totaled approximately
$0.2 million and $0.5 million at December 31, 2012 and 2011, respectively, which was classified as long-term debt in the
accompanying consolidated financial statements. The Company did not acquire any additional buildings under capital leases during
the periods ended December 31, 2012 or 2011.
Operating lease commitments:
The Company leases certain office space, retail stores, property and equipment under long-term, non-cancelable operating leases.
Most of these leases include renewal options and some include options to purchase, provisions for percentage rent based on sales
and/or incremental step increase provisions.
The future minimum lease payments under the Company’s operating leases, in the table above, do not include potential amounts for
percentage rent or other operating lease related costs and have not been reduced by expected future minimum sublease income.
Expected future minimum sublease income under non-cancelable subleases is approximately $13.9 million at December 31, 2012.
The following table summarizes the net rent expense amounts for the years ended December 31, 2012, 2011 and 2010: