O'Reilly Auto Parts 2014 Annual Report Download - page 37

FORM 10-K
30
Investing activities:
The increase in net cash used in investing activities in 2014 compared to 2013 was primarily the result of an increase in capital expenditures
during 2014 related to the mix of owned versus leased new stores as compared to the prior year, as well as an increase in the number of
new store openings. Total capital expenditures were $430 million and $396 million in 2014 and 2013, respectively.
The increase in net cash used in investing activities in 2013 compared to 2012 was primarily the result of an increase in capital expenditures
during 2013 related to the purchase and construction of new distribution facilities during 2013 to support our ongoing store growth, as
well as an increase in the number of new store openings. Total capital expenditures were $396 million and $301 million in 2013 and
2012, respectively.
We opened 200, 190, and 180 net, new stores in 2014, 2013, and 2012, respectively, and acquired 56 stores in 2012. We plan to open
205 net, new stores in 2015. The costs associated with the opening of a new store (including the cost of land acquisition, building
improvements, fixtures, vehicles, net inventory investment and computer equipment) are estimated to average approximately $1.3 million
to $1.5 million; however, such costs may be significantly reduced where we lease, rather than purchase, the store site.
Financing activities:
The increase in net cash used in financing activities during 2014 compared to 2013 was primarily attributable to the net proceeds from
the issuance of long-term senior notes during 2013, partially offset by the impact of fewer share repurchases of our common stock during
the current year under our share repurchase program.
The decrease in net cash used in financing activities during 2013 compared to 2012 was primarily attributable to the impact of fewer
share repurchases of our common stock during 2013 under our share repurchase program.
Unsecured revolving credit facility:
On January 14, 2011, we entered into a credit agreement, as amended by Amendment No. 1 dated as of September 9, 2011, and as further
amended by Amendment No. 2 dated as of July 2, 2013 (the "Credit Agreement"). The Credit Agreement provides for a $600 million
unsecured revolving credit facility ("Revolving Credit Facility") arranged by Bank of America, N.A., which is scheduled to mature in
July of 2018. 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. As described in the Credit Agreement governing the Revolving Credit Facility, we may, from time to time subject
to certain conditions, increase the aggregate commitments under the Revolving Credit Facility by up to $200 million. We had outstanding
letters of credit, primarily to support obligations related to workers' compensation, general liability and other insurance policies, in the
amount of $48 million and $52 million as of December 31, 2014 and 2013, respectively, reducing the aggregate availability under the
Revolving Credit Facility by those amounts. As of December 31, 2014 and 2013, we had no outstanding borrowings under the Revolving
Credit Facility.
Senior Notes:
We have issued $1.4 billion aggregate principal amount of unsecured senior notes due between 2021 and 2023 with United Missouri
Bank, N.A. as trustee. Interest on the unsecured senior notes of 3.800% to 4.875% is payable semi-annually and is computed on the basis
of a 360-day year.
The senior notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries ("Subsidiary Guarantors") that incurs
or guarantees obligations under our Credit Agreement or under other credit facility or capital markets debt of ours or any of our 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 our 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 the property of, the
Subsidiary Guarantor. Each of the Subsidiary Guarantors is 100% owned, directly or indirectly, by us and we have no independent assets
or operations other than those of our subsidiaries. Our only direct or indirect subsidiaries that would not be Subsidiary Guarantors would
be minor subsidiaries. Neither we, nor any of our Subsidiary Guarantors, are subject to any material or significant restrictions on our
ability to obtain funds from our subsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by
applicable law. Each of our senior notes is subject to certain customary covenants, with which we complied as of December 31, 2014.
Debt covenants:
The indentures governing our senior notes contain covenants that limit our ability and the ability of certain of our subsidiaries to, among
other things: (i) create certain liens on assets to secure certain debt; (ii) enter into certain sale and leaseback transactions; and (iii) merge
or consolidate with another company or transfer all or substantially all of our or its property, in each case as set forth in the indentures.
These covenants are, however, subject to a number of important limitations and exceptions.
The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage
ratio of 2.25 times from March 31, 2013, through December 31, 2014, and 2.50 times thereafter through maturity, and a maximum
consolidated leverage ratio of 3.00 times through maturity. The consolidated leverage ratio includes a calculation of adjusted debt to