O'Reilly Auto Parts 2015 Annual Report Download - page 38

FORM 10-K
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Investing activities:
The decrease in net cash used in investing activities in 2015 compared to 2014 was primarily the result of a decrease in capital expenditures.
Total capital expenditures were $414 million and $430 million in 2015 and 2014, respectively, and the decrease was primarily related to
the construction of additional distribution facilities in 2014 to support our ongoing store growth, partially offset by an increase in the
number of new store openings in 2015.
The increase in net cash used in investing activities in 2014 compared to 2013 was primarily the result of an increase in capital expenditures.
Total capital expenditures were $430 million and $396 million in 2014 and 2013, respectively, and the increase was primarily related to
the mix of owned versus leased new stores opened in 2014, as compared to 2013, as well as an increase in the number of new store
openings in 2014.
We opened 205, 200, and 190 net, new stores in 2015, 2014 and 2013, respectively. We plan to open 210 net, new stores in 2016. The
current 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 $1.5 million to $1.8 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 2015 compared to 2014 was primarily attributable to a greater impact from
the repurchases of our common stock under our share repurchase program during 2015.
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 a smaller impact from the repurchases of our common stock under
our share repurchase program during 2014.
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, and further amended by Amendment No. 3 dated as of June 18, 2015 (the "Credit
Agreement"). The Credit Agreement provides for a $600 million unsecured revolving credit facility (the "Revolving Credit Facility")
arranged by Bank of America, N.A., which is scheduled to mature in July 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.
As of December 31, 2015 and 2014, we had outstanding letters of credit, primarily to support obligations related to workers' compensation,
general liability and other insurance policies, in the amounts of $38 million and $48 million, respectively, reducing the aggregate availability
under the Revolving Credit Facility by those amounts. As of December 31, 2015 and 2014, 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 January 2021 and June 2023 with United
Missouri Bank, N.A. as trustee. Interest on the senior notes, ranging from 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 our 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.
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. As of December 31, 2015, we were in
compliance with the covenants applicable to our senior notes.