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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Missouri
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000-21318
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27-4358837
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(State or other jurisdiction
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Commission file
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(I.R.S. Employer
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of incorporation or organization)
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number
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Identification No.)
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Title of Each Class
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Name of Each Exchange on which Registered
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Common Stock, $0.01 par value
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The NASDAQ Stock Market LLC
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(NASDAQ Global Select Market)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Page
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•
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new and remanufactured automotive hard parts, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control and water pumps;
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•
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maintenance items, such as antifreeze, appearance products, engine additives, filters, fluids, lighting, oil and wiper blades; and
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•
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accessories, such as floor mats, seat covers and truck accessories.
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•
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battery diagnostic testing;
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•
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battery, wiper and bulb replacement;
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•
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check engine light code extraction;
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•
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custom hydraulic hoses;
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•
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drum and rotor resurfacing;
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•
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electrical and module testing;
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•
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loaner tool program;
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•
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machine shops;
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•
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professional paint shop mixing and related materials; and
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•
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used oil, oil filter and battery recycling.
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•
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superior in-store service through highly-motivated, technically-proficient store personnel (“Professional Parts People”);
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•
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an extensive selection and availability of products;
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•
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attractive stores in convenient locations;
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•
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competitive pricing, supported by a good, better, best product assortment designed to meet all of our customers’ quality and value preferences; and
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•
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a robust point-of-sale system integrated with our proprietary electronic catalog, which contains a wide variety of product images, schematics and technical specifications and equips our Team Members with highly effective tools to source products in our extensive supply network.
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(i)
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constructing a new facility or renovating an existing one on property we purchase or lease and stocking the new store with fixtures and inventory;
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(ii)
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acquiring an independently owned auto parts store, typically by the purchase of substantially all of the inventory and other assets (other than realty) of such store; or
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(iii)
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purchasing multi-store chains.
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•
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population density;
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•
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demographics, including age, ethnicity, life style and per capita income;
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•
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market economic strength, retail draw and growth patterns;
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•
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number, age and percent of makes and models of registered vehicles;
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•
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the number, type and sales potential of existing automotive repair facilities;
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•
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the number of auto parts stores and other competitors within a predetermined radius;
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•
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physical location, traffic count, size, economics and presentation of the site;
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•
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financial review of adjacent existing locations; and
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•
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the type and size of store that should be developed.
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December 31, 2016
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2017 Net, New Stores
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December 31, 2017
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|||||||||||||||
State
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|
Store
Count |
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% of Total Store Count
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|
Store
Change |
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% of Total Store Change
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Store
Count |
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% of Total Store Count
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|
Cumulative % of Total Store Count
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|||||||
Texas
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667
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13.8
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%
|
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23
|
|
|
12.1
|
%
|
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690
|
|
|
13.7
|
%
|
|
13.7
|
%
|
California
|
|
534
|
|
|
11.0
|
%
|
|
7
|
|
|
3.7
|
%
|
|
541
|
|
|
10.8
|
%
|
|
24.5
|
%
|
Missouri
|
|
195
|
|
|
4.0
|
%
|
|
5
|
|
|
2.6
|
%
|
|
200
|
|
|
4.0
|
%
|
|
28.5
|
%
|
Georgia
|
|
187
|
|
|
3.9
|
%
|
|
9
|
|
|
4.7
|
%
|
|
196
|
|
|
3.9
|
%
|
|
32.4
|
%
|
Illinois
|
|
186
|
|
|
3.9
|
%
|
|
7
|
|
|
3.7
|
%
|
|
193
|
|
|
3.8
|
%
|
|
36.2
|
%
|
Florida
|
|
163
|
|
|
3.4
|
%
|
|
17
|
|
|
8.9
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%
|
|
180
|
|
|
3.6
|
%
|
|
39.8
|
%
|
Ohio
|
|
169
|
|
|
3.5
|
%
|
|
11
|
|
|
5.8
|
%
|
|
180
|
|
|
3.6
|
%
|
|
43.4
|
%
|
Tennessee
|
|
162
|
|
|
3.4
|
%
|
|
5
|
|
|
2.6
|
%
|
|
167
|
|
|
3.3
|
%
|
|
46.7
|
%
|
Michigan
|
|
158
|
|
|
3.3
|
%
|
|
4
|
|
|
2.1
|
%
|
|
162
|
|
|
3.2
|
%
|
|
49.9
|
%
|
North Carolina
|
|
155
|
|
|
3.2
|
%
|
|
7
|
|
|
3.7
|
%
|
|
162
|
|
|
3.2
|
%
|
|
53.1
|
%
|
Washington
|
|
155
|
|
|
3.2
|
%
|
|
1
|
|
|
0.5
|
%
|
|
156
|
|
|
3.1
|
%
|
|
56.2
|
%
|
Arizona
|
|
136
|
|
|
2.8
|
%
|
|
1
|
|
|
0.5
|
%
|
|
137
|
|
|
2.7
|
%
|
|
58.9
|
%
|
Alabama
|
|
125
|
|
|
2.6
|
%
|
|
7
|
|
|
3.7
|
%
|
|
132
|
|
|
2.6
|
%
|
|
61.5
|
%
|
Indiana
|
|
120
|
|
|
2.5
|
%
|
|
6
|
|
|
3.2
|
%
|
|
126
|
|
|
2.5
|
%
|
|
64.0
|
%
|
Minnesota
|
|
119
|
|
|
2.5
|
%
|
|
3
|
|
|
1.6
|
%
|
|
122
|
|
|
2.4
|
%
|
|
66.4
|
%
|
Oklahoma
|
|
121
|
|
|
2.5
|
%
|
|
—
|
|
|
0.0
|
%
|
|
121
|
|
|
2.4
|
%
|
|
68.8
|
%
|
Wisconsin
|
|
118
|
|
|
2.4
|
%
|
|
2
|
|
|
1.1
|
%
|
|
120
|
|
|
2.4
|
%
|
|
71.2
|
%
|
Louisiana
|
|
109
|
|
|
2.3
|
%
|
|
7
|
|
|
3.7
|
%
|
|
116
|
|
|
2.3
|
%
|
|
73.5
|
%
|
Arkansas
|
|
107
|
|
|
2.2
|
%
|
|
3
|
|
|
1.6
|
%
|
|
110
|
|
|
2.2
|
%
|
|
75.7
|
%
|
South Carolina
|
|
91
|
|
|
1.9
|
%
|
|
13
|
|
|
6.7
|
%
|
|
104
|
|
|
2.1
|
%
|
|
77.8
|
%
|
Colorado
|
|
99
|
|
|
2.1
|
%
|
|
2
|
|
|
1.1
|
%
|
|
101
|
|
|
2.0
|
%
|
|
79.8
|
%
|
Kentucky
|
|
77
|
|
|
1.6
|
%
|
|
11
|
|
|
5.8
|
%
|
|
88
|
|
|
1.8
|
%
|
|
81.6
|
%
|
Kansas
|
|
82
|
|
|
1.7
|
%
|
|
2
|
|
|
1.1
|
%
|
|
84
|
|
|
1.7
|
%
|
|
83.3
|
%
|
Mississippi
|
|
75
|
|
|
1.6
|
%
|
|
—
|
|
|
0.0
|
%
|
|
75
|
|
|
1.5
|
%
|
|
84.8
|
%
|
Iowa
|
|
73
|
|
|
1.5
|
%
|
|
1
|
|
|
0.5
|
%
|
|
74
|
|
|
1.5
|
%
|
|
86.3
|
%
|
Virginia
|
|
66
|
|
|
1.4
|
%
|
|
8
|
|
|
4.2
|
%
|
|
74
|
|
|
1.5
|
%
|
|
87.8
|
%
|
Oregon
|
|
66
|
|
|
1.4
|
%
|
|
3
|
|
|
1.6
|
%
|
|
69
|
|
|
1.4
|
%
|
|
89.2
|
%
|
Utah
|
|
61
|
|
|
1.3
|
%
|
|
—
|
|
|
0.0
|
%
|
|
61
|
|
|
1.2
|
%
|
|
90.4
|
%
|
Nevada
|
|
54
|
|
|
1.1
|
%
|
|
1
|
|
|
0.5
|
%
|
|
55
|
|
|
1.1
|
%
|
|
91.5
|
%
|
New Mexico
|
|
52
|
|
|
1.1
|
%
|
|
1
|
|
|
0.5
|
%
|
|
53
|
|
|
1.1
|
%
|
|
92.6
|
%
|
Nebraska
|
|
41
|
|
|
0.8
|
%
|
|
2
|
|
|
1.1
|
%
|
|
43
|
|
|
1.0
|
%
|
|
93.6
|
%
|
Idaho
|
|
40
|
|
|
0.8
|
%
|
|
2
|
|
|
1.1
|
%
|
|
42
|
|
|
0.9
|
%
|
|
94.5
|
%
|
Maine
|
|
35
|
|
|
0.7
|
%
|
|
—
|
|
|
0.0
|
%
|
|
35
|
|
|
0.7
|
%
|
|
95.2
|
%
|
New Hampshire
|
|
38
|
|
|
0.8
|
%
|
|
(3
|
)
|
|
(1.6
|
)%
|
|
35
|
|
|
0.7
|
%
|
|
95.9
|
%
|
Massachusetts
|
|
30
|
|
|
0.6
|
%
|
|
2
|
|
|
1.1
|
%
|
|
32
|
|
|
0.6
|
%
|
|
96.5
|
%
|
Montana
|
|
27
|
|
|
0.6
|
%
|
|
—
|
|
|
0.0
|
%
|
|
27
|
|
|
0.5
|
%
|
|
97.0
|
%
|
Vermont
|
|
24
|
|
|
0.5
|
%
|
|
—
|
|
|
0.0
|
%
|
|
24
|
|
|
0.5
|
%
|
|
97.5
|
%
|
Wyoming
|
|
20
|
|
|
0.4
|
%
|
|
1
|
|
|
0.5
|
%
|
|
21
|
|
|
0.4
|
%
|
|
97.9
|
%
|
Pennsylvania
|
|
12
|
|
|
0.2
|
%
|
|
5
|
|
|
2.6
|
%
|
|
17
|
|
|
0.3
|
%
|
|
98.2
|
%
|
South Dakota
|
|
16
|
|
|
0.3
|
%
|
|
1
|
|
|
0.5
|
%
|
|
17
|
|
|
0.3
|
%
|
|
98.5
|
%
|
Alaska
|
|
15
|
|
|
0.3
|
%
|
|
—
|
|
|
0.0
|
%
|
|
15
|
|
|
0.3
|
%
|
|
98.8
|
%
|
North Dakota
|
|
15
|
|
|
0.3
|
%
|
|
—
|
|
|
0.0
|
%
|
|
15
|
|
|
0.3
|
%
|
|
99.1
|
%
|
West Virginia
|
|
12
|
|
|
0.2
|
%
|
|
3
|
|
|
1.6
|
%
|
|
15
|
|
|
0.3
|
%
|
|
99.4
|
%
|
Connecticut
|
|
5
|
|
|
0.1
|
%
|
|
7
|
|
|
3.7
|
%
|
|
12
|
|
|
0.2
|
%
|
|
99.6
|
%
|
Hawaii
|
|
12
|
|
|
0.2
|
%
|
|
—
|
|
|
0.0
|
%
|
|
12
|
|
|
0.2
|
%
|
|
99.8
|
%
|
Rhode Island
|
|
3
|
|
|
0.1
|
%
|
|
2
|
|
|
1.1
|
%
|
|
5
|
|
|
0.1
|
%
|
|
99.9
|
%
|
New York
|
|
2
|
|
|
—
|
%
|
|
1
|
|
|
0.5
|
%
|
|
3
|
|
|
0.1
|
%
|
|
100.0
|
%
|
Total
|
|
4,829
|
|
|
100.0
|
%
|
|
190
|
|
|
100.0
|
%
|
|
5,019
|
|
|
100.0
|
%
|
|
|
•
|
continue to enhance our distribution network through the engineering, design, expansion or relocation of new or current DCs;
|
•
|
continue to utilize routing software to continue to enhance logistics efficiencies;
|
•
|
continue to implement labor management software to improve DC productivity and overall operating efficiency;
|
•
|
make proven, return-on-investment based capital enhancements to material handling equipment in DCs, including conveyor systems, picking modules, lift equipment and computer hardware.
|
•
|
broad selection of merchandise at competitive prices;
|
•
|
dedicated Professional Service Specialists in our stores;
|
•
|
multiple, daily deliveries from our stores;
|
•
|
same-day or overnight access to thousands of SKUs through seven days a week store inventory replenishments;
|
•
|
separate service counter and phone line in our stores dedicated exclusively to service professional service provider customers;
|
•
|
trade credit for qualified accounts;
|
•
|
First Call Online, a dedicated proprietary Internet based catalog and ordering system designed specifically to connect professional service provider customers directly to our inventory system;
|
•
|
Mitchell 1 shop management systems;
|
•
|
training and seminars covering topics of interest, such as technical updates, safety and general business management;
|
•
|
access to a comprehensive inventory of products and equipment needed to operate and maintain their shop; and
|
•
|
Certified Auto Repair Center Program, a program that provides professional service provider customers with business tools they can utilize to profitably grow and market their shops.
|
•
|
national retail and wholesale automotive parts chains (such as AutoZone, Inc., Advance Auto Parts, CARQUEST, NAPA and the Pep Boys - Manny, Moe and Jack, Inc.);
|
•
|
regional retail and wholesale automotive parts chains;
|
•
|
wholesalers or jobber stores (some of which are associated with national automotive parts distributors or associations such as NAPA, CARQUEST, Bumper to Bumper and Auto Value);
|
•
|
automobile dealers; and
|
•
|
mass merchandisers and online retailers that carry automotive replacement parts, maintenance items and accessories (such as Wal-Mart Stores, Inc. and Amazon.com, Inc.).
|
•
|
We may not be able to continue to identify suitable acquisition targets or to acquire additional companies at favorable prices or on other favorable terms.
|
•
|
Our management’s attention may be distracted.
|
•
|
We may fail to retain key personnel from acquired businesses.
|
•
|
We may assume unanticipated legal liabilities and other problems.
|
•
|
We may not be able to successfully integrate the operations (accounting and billing functions, for example) of businesses we acquire to realize economic, operational and other benefits.
|
•
|
We may fail, or be unable to, discover liabilities of businesses that we acquire for which we or the subsequent owner or operator may be liable.
|
•
|
make it more difficult to satisfy our financial obligations, including those relating to the senior unsecured notes and our credit facility;
|
•
|
increase our vulnerability to adverse economic and industry conditions;
|
•
|
limit our flexibility in planning for, or reacting to, changes and opportunities in our industry, which may place us at a competitive disadvantage;
|
•
|
require us to dedicate a substantial portion of our cash flows to service the principal and interest on the debt, reducing the funds available for other business purposes, such as working capital, capital expenditures or other cash requirements;
|
•
|
limit our ability to incur additional debt with acceptable terms, if at all; and
|
•
|
expose us to fluctuations in interest rates.
|
Location
|
|
Principal Use(s)
|
|
Operating Square Footage
(1)
|
|
Nature of Occupancy
|
|
Lease Term Expiration
|
|
Aurora, CO
|
|
Distribution Center
|
|
321,242
|
|
|
Owned
|
|
|
Belleville, MI
|
|
Distribution Center
|
|
333,262
|
|
|
Leased
|
|
2/28/2025
|
Billings, MT
|
|
Distribution Center
|
|
129,142
|
|
|
Leased
|
|
1/31/2031
|
Brooklyn Park, MN
|
|
Distribution Center
|
|
324,668
|
|
|
Owned
|
|
|
Brownsburg, IN
|
|
Distribution Center
|
|
657,603
|
|
|
Owned
|
|
|
Des Moines, IA
|
|
Distribution Center
|
|
253,886
|
|
|
Owned
|
|
|
Devens, MA
|
|
Distribution Center
|
|
511,261
|
|
|
Owned
|
|
|
Forest Park, GA
|
|
Distribution Center
|
|
492,350
|
|
|
Leased
|
|
10/31/2024
|
Greensboro, NC
|
|
Distribution Center
|
|
685,230
|
|
|
Owned
|
|
|
Houston, TX
|
|
Distribution Center
|
|
532,615
|
|
|
Owned
|
|
|
Kansas City, MO
|
|
Distribution Center
|
|
299,018
|
|
|
Owned
|
|
|
Knoxville, TN
|
|
Distribution Center
|
|
150,766
|
|
|
Owned
|
|
|
Lakeland, FL
|
|
Distribution Center
|
|
569,419
|
|
|
Owned
|
|
|
Lubbock, TX
|
|
Distribution Center
|
|
276,896
|
|
|
Owned
|
|
|
Moreno Valley, CA
|
|
Distribution Center
|
|
547,478
|
|
|
Owned
|
|
|
Naperville, IL
|
|
Distribution Center
|
|
499,471
|
|
|
Owned
|
|
|
Nashville, TN
|
|
Distribution Center
|
|
315,977
|
|
|
Leased
|
|
12/31/2018
|
North Little Rock, AR
|
|
Distribution Center
|
|
122,969
|
|
|
Leased
|
|
3/31/2022
|
Oklahoma City, OK
|
|
Distribution Center
|
|
320,667
|
|
|
Owned
|
|
|
Phoenix, AZ
|
|
Distribution Center
|
|
383,570
|
|
|
Leased
|
|
6/30/2025
|
Puyallup, WA
|
|
Distribution Center
|
|
533,790
|
|
|
Owned
|
|
|
Salt Lake City, UT
|
|
Distribution Center
|
|
294,932
|
|
|
Owned
|
|
|
Saraland, AL
|
|
Distribution Center
|
|
301,068
|
|
|
Leased
|
|
12/31/2022
|
Seagoville, TX
|
|
Distribution Center
|
|
442,000
|
|
|
Owned
|
|
|
Selma, TX
|
|
Distribution Center
|
|
552,703
|
|
|
Owned
|
|
|
Springfield, MO
|
|
Distribution Center
|
|
266,306
|
|
|
Owned
|
|
|
Stockton, CA
|
|
Distribution Center
|
|
720,836
|
|
|
Leased
|
|
6/30/2035
|
Springfield, MO
|
|
Bulk Facility
|
|
35,200
|
|
|
Owned
|
|
|
Springfield, MO
|
|
Return/Deconsolidation Facility, Corporate Offices
|
|
290,580
|
|
|
Owned
|
|
|
Phoenix, AZ
|
|
Corporate Offices
|
|
12,327
|
|
|
Leased
|
|
11/30/2022
|
Springfield, MO
|
|
Corporate Offices
|
|
435,600
|
|
|
Owned
|
|
|
Springfield, MO
|
|
Corporate Offices
|
|
46,970
|
|
|
Leased
|
|
8/31/2024
|
Springfield, MO
|
|
Corporate Offices, Training and Technical Center
|
|
22,000
|
|
|
Owned
|
|
|
|
|
|
|
11,681,802
|
|
|
|
|
|
(1)
|
Includes floor and mezzanine operating square footage, excludes subleased square footage.
|
|
2017
|
|
2016
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
282.81
|
|
|
$
|
254.35
|
|
|
$
|
276.64
|
|
|
$
|
232.16
|
|
Second Quarter
|
269.28
|
|
|
216.04
|
|
|
277.82
|
|
|
253.32
|
|
||||
Third Quarter
|
220.41
|
|
|
172.85
|
|
|
290.63
|
|
|
271.33
|
|
||||
Fourth Quarter
|
251.07
|
|
|
202.72
|
|
|
285.53
|
|
|
253.00
|
|
||||
For the Year
|
$
|
282.81
|
|
|
$
|
172.85
|
|
|
$
|
290.63
|
|
|
$
|
232.16
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs
(1)
|
||||||
October 1, 2017, to October 31, 2017
|
|
336
|
|
|
$
|
209.12
|
|
|
336
|
|
|
$
|
924,560
|
|
November 1, 2017, to November 30, 2017
|
|
508
|
|
|
214.81
|
|
|
508
|
|
|
815,367
|
|
||
December 1, 2017, to December 31, 2017
|
|
410
|
|
|
243.67
|
|
|
410
|
|
|
$
|
715,389
|
|
|
Total as of December 31, 2017
|
|
1,254
|
|
|
$
|
222.73
|
|
|
1,254
|
|
|
|
(1)
|
Under the Company’s share repurchase program, as approved by its Board of Directors on January 11, 2011, the Company may, from time to time, repurchase shares of its common stock, solely through open market purchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate trading policy requirements and overall market conditions not to exceed a dollar limit authorized by the Board of Directors. The Company’s Board of Directors may increase or otherwise modify, renew, suspend or terminate the share repurchase program at any time, without prior notice. As announced on
November 16, 2016
,
May 10, 2017
,
September 1, 2017
, and
February 7, 2018
, the Company’s Board of Directors each time approved a resolution to increase the authorization amount under the share repurchase program by an additional
$1.0 billion
, resulting in a cumulative authorization amount of
$10.8 billion
. Each additional authorization is effective for a
three
-year period, beginning on its respective announcement date. The authorizations under the share repurchase program that currently have capacity are scheduled to expire on
September 1, 2020
, and
February 7, 2021
. No other share repurchase programs existed during the twelve months ended
December 31, 2017
.
|
|
|
December 31,
|
||||||||||||||||||||||
Company/Index
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
O’Reilly Automotive, Inc.
|
|
$
|
100
|
|
|
$
|
144
|
|
|
$
|
215
|
|
|
$
|
283
|
|
|
$
|
311
|
|
|
$
|
269
|
|
S&P 500 Retail Index
|
|
100
|
|
|
144
|
|
|
158
|
|
|
197
|
|
|
206
|
|
|
265
|
|
||||||
S&P 500
|
|
$
|
100
|
|
|
$
|
130
|
|
|
$
|
144
|
|
|
$
|
143
|
|
|
$
|
157
|
|
|
$
|
187
|
|
Years ended December 31,
|
2017
|
2016
|
2015
|
2014
|
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
(In thousands, except per share, Team Members, stores and ratio data)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME STATEMENT DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales ($)
|
8,977,726
|
|
8,593,096
|
|
7,966,674
|
|
7,216,081
|
|
6,649,237
|
|
6,182,184
|
|
5,788,816
|
|
5,397,525
|
|
4,847,062
|
|
3,576,553
|
|
Cost of goods sold, including warehouse and distribution expenses
|
4,257,043
|
|
4,084,085
|
|
3,804,031
|
|
3,507,180
|
|
3,280,236
|
|
3,084,766
|
|
2,951,467
|
|
2,776,533
|
|
2,520,534
|
|
1,948,627
|
|
Gross profit
|
4,720,683
|
|
4,509,011
|
|
4,162,643
|
|
3,708,901
|
|
3,369,001
|
|
3,097,418
|
|
2,837,349
|
|
2,620,992
|
|
2,326,528
|
|
1,627,926
|
|
Selling, general and administrative expenses
|
2,995,283
|
|
2,809,805
|
|
2,648,622
|
|
2,438,527
|
|
2,265,516
|
|
2,120,025
|
|
1,973,381
|
|
1,887,316
|
|
1,788,909
|
|
1,292,309
|
|
Former CSK officer clawback
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,798
|
)
|
—
|
|
—
|
|
—
|
|
Legacy CSK Department of Justice investigation charge
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20,900
|
|
—
|
|
—
|
|
Operating income
|
1,725,400
|
|
1,699,206
|
|
1,514,021
|
|
1,270,374
|
|
1,103,485
|
|
977,393
|
|
866,766
|
|
712,776
|
|
537,619
|
|
335,617
|
|
Write-off of asset-based revolving credit agreement debt issuance costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(21,626
|
)
|
—
|
|
—
|
|
—
|
|
Termination of interest rate swap agreements
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,237
|
)
|
—
|
|
—
|
|
—
|
|
Gain on settlement of note receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,639
|
|
—
|
|
—
|
|
Other income (expense), net
|
(87,596
|
)
|
(62,015
|
)
|
(53,655
|
)
|
(48,192
|
)
|
(44,543
|
)
|
(35,872
|
)
|
(25,130
|
)
|
(35,042
|
)
|
(40,721
|
)
|
(33,085
|
)
|
Total other income (expense)
|
(87,596
|
)
|
(62,015
|
)
|
(53,655
|
)
|
(48,192
|
)
|
(44,543
|
)
|
(35,872
|
)
|
(50,993
|
)
|
(23,403
|
)
|
(40,721
|
)
|
(33,085
|
)
|
Income before income taxes
|
1,637,804
|
|
1,637,191
|
|
1,460,366
|
|
1,222,182
|
|
1,058,942
|
|
941,521
|
|
815,773
|
|
689,373
|
|
496,898
|
|
302,532
|
|
Provision for income taxes (a)(b)
|
504,000
|
|
599,500
|
|
529,150
|
|
444,000
|
|
388,650
|
|
355,775
|
|
308,100
|
|
270,000
|
|
189,400
|
|
116,300
|
|
Net income ($) (a)(b)
|
1,133,804
|
|
1,037,691
|
|
931,216
|
|
778,182
|
|
670,292
|
|
585,746
|
|
507,673
|
|
419,373
|
|
307,498
|
|
186,232
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share – basic ($)
|
12.82
|
|
10.87
|
|
9.32
|
|
7.46
|
|
6.14
|
|
4.83
|
|
3.77
|
|
3.02
|
|
2.26
|
|
1.50
|
|
Weighted-average common shares outstanding – basic
|
88,426
|
|
95,447
|
|
99,965
|
|
104,262
|
|
109,244
|
|
121,182
|
|
134,667
|
|
138,654
|
|
136,230
|
|
124,526
|
|
Earnings per common share -assuming dilution: (a)(b)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share – assuming dilution ($)
|
12.67
|
|
10.73
|
|
9.17
|
|
7.34
|
|
6.03
|
|
4.75
|
|
3.71
|
|
2.95
|
|
2.23
|
|
1.48
|
|
Weighted-average common shares outstanding – assuming dilution
|
89,502
|
|
96,720
|
|
101,514
|
|
106,041
|
|
111,101
|
|
123,314
|
|
136,983
|
|
141,992
|
|
137,882
|
|
125,413
|
|
SELECTED OPERATING DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Team Members at year end
|
75,552
|
|
74,580
|
|
71,621
|
|
67,569
|
|
61,909
|
|
53,063
|
|
49,324
|
|
46,858
|
|
44,880
|
|
40,735
|
|
Number of stores at year end (c)
|
5,019
|
|
4,829
|
|
4,571
|
|
4,366
|
|
4,166
|
|
3,976
|
|
3,740
|
|
3,570
|
|
3,421
|
|
3,285
|
|
Total store square footage at year end (d)
|
36,685
|
|
35,123
|
|
33,148
|
|
31,591
|
|
30,077
|
|
28,628
|
|
26,530
|
|
25,315
|
|
24,200
|
|
23,205
|
|
Sales per weighted-average store (e)($)
|
1,807
|
|
1,826
|
|
1,769
|
|
1,678
|
|
1,614
|
|
1,590
|
|
1,566
|
|
1,527
|
|
1,424
|
|
1,379
|
|
Sales per weighted-average square foot (d)(f)($)
|
248
|
|
251
|
|
244
|
|
232
|
|
224
|
|
224
|
|
221
|
|
216
|
|
202
|
|
201
|
|
Percentage increase in comparable store sales (g)(h)
|
1.4
|
%
|
4.8
|
%
|
7.5
|
%
|
6.0
|
%
|
4.6
|
%
|
3.5
|
%
|
4.6
|
%
|
8.8
|
%
|
4.8
|
%
|
1.3
|
%
|
(a)
|
During the year ended December 31, 2017, the Company adopted a new accounting standard that requires excess tax benefits related to share-based compensation payments to be recorded through the income statement. In compliance with the standard, the Company did not restate prior period amounts to conform to current period presentation. The Company recorded a cumulative effect adjustment to opening retained earnings, due to the adoption of the new accounting standard. See Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements of this annual report on Form 10-K for more information.
|
(b)
|
Following the enactment of the U.S. Tax Cuts and Jobs Act in December of 2017, the Company revalued its deferred income tax liabilities, which resulted in a one-time benefit to the Company’s Consolidated Statement of Income for the year ended December 31, 2017. See Note 12 “Income Taxes” to the Consolidated Financial Statements of this annual report on Form 10-K for more information.
|
(c)
|
In 2008, 2012, and 2016, the Company acquired CSK Auto Corporation (“CSK”), and materially all assets of VIP Parts, Tires & Service (“VIP”) and Bond Auto Parts (“Bond”), respectively. The 2008 CSK acquisition added 1,342 stores, the 2012 VIP acquisition added 56 stores, and the 2016 Bond acquisition added 48 stores to the O’Reilly store count. Financial results for these acquired companies have been included in the Company’s consolidated financial statements from the dates of the acquisitions forward.
|
(d)
|
Total square footage includes normal selling, office, stockroom and receiving space.
|
(e)
|
Sales per weighted-average store are weighted to consider the approximate dates of store openings, acquisitions or closures.
|
(f)
|
Sales per weighted-average square foot are weighted to consider the approximate dates of store openings, acquisitions, expansions or closures.
|
(g)
|
Comparable store sales are calculated based on the change in sales of stores open at least one year and excludes sales of specialty machinery, sales to independent parts stores, sales to Team Members, sales from Leap Day during the years ended December 31, 2016, 2012 and 2008, and sales during the one to two week period certain CSK branded stores were closed for conversion.
|
(h)
|
Comparable store sales for 2008 include sales for stores acquired in the CSK acquisition. Comparable store sales for stores operating on O’Reilly systems open at least one year increased 2.4% for the year ended December 31, 2008. Comparable store sales for stores operating on the legacy CSK system open at least one year decreased 1.7% for the portion of CSK’s sales in 2008 since the July 11, 2008, acquisition.
|
(i)
|
Certain prior period amounts have been reclassified to conform to current period presentation, due to the Company’s adoption of new accounting standards during the fourth quarter ended December 31, 2015. See Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements of the annual report on Form 10-K for the year ended December 31, 2015.
|
(j)
|
Inventory turnover is calculated as cost of goods sold for the last 12 months divided by average inventory. Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator.
|
(k)
|
Accounts payable to inventory is calculated as accounts payable divided by inventory.
|
(l)
|
Free cash flow is calculated as net cash provided by operating activities less capital expenditures and excess tax benefit from share-based compensation payments for the period.
|
(m)
|
Certain prior period amounts have been reclassified to conform to current period presentation, due to the Company's adoption of new accounting standard during the first quarter ended March 31, 2017. See Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements of this annual report on Form 10-K for more information.
|
•
|
an overview of the key drivers of the automotive aftermarket industry;
|
•
|
key events and recent developments within our company;
|
•
|
our results of operations for the years ended
December 31, 2017
,
2016
and
2015
;
|
•
|
our liquidity and capital resources;
|
•
|
any contractual obligations, to which we are committed;
|
•
|
any off-balance sheet arrangements we utilize;
|
•
|
our critical accounting estimates;
|
•
|
the inflation and seasonality of our business;
|
•
|
our quarterly results for the years ended
December 31, 2017
, and
2016
; and
|
•
|
recent accounting pronouncements that may affect our Company.
|
•
|
Number of Miles Driven
– The number of total miles driven in the U.S. influences the demand for repair and maintenance products sold within the automotive aftermarket. In total, vehicles in the U.S. are driven approximately
three trillion
miles per year, resulting in ongoing wear and tear and a corresponding continued demand for the repair and maintenance products necessary to keep these vehicles in operation. According to the Department of Transportation, the number of total miles driven in the U.S. increased
1.2%
,
2.4%
and
3.5%
in 2017, 2016 and 2015, respectively, and we expect to continue to see modest improvements in total miles driven in the U.S., supported by an increasing number of registered vehicles on the road, resulting in continued demand for automotive aftermarket products.
|
•
|
Number of U.S. Registered Vehicles, New Light Vehicle Registrations and Average Vehicle Age
– The total number of vehicles on the road and the average age of the vehicle population heavily influence the demand for products sold within the automotive aftermarket industry. As reported by The Auto Care Association, the total number of registered vehicles increased
7%
from 2006 to 2016, bringing the number of light vehicles on the road to
264 million
by the end of 2016. For the year ended December 31, 2017, the seasonally adjusted annual rate of light vehicle sales in the U.S. (“SAAR”) was approximately
17.8 million
, contributing to the continued growth in the total number of registered vehicles on the road. In the past decade, vehicle scrappage rates have remained relatively stable, ranging from
4.3%
to
5.7%
annually. As a result, over the past decade, the average age of the U.S. vehicle population has increased, growing
22%
, from
9.5
years in 2006 to
11.6
years in 2016. We believe this increase in average age can be attributed to better engineered and manufactured vehicles, which can be reliably driven at higher mileages due to better quality power trains and interiors and exteriors, and the consumer’s willingness to invest in maintaining these higher-mileage, better built vehicles. As the average age of vehicles on the road increases, a larger percentage of miles are being driven by vehicles that are outside of a manufacturer warranty. These out-of-warranty, older vehicles generate strong demand for automotive aftermarket products as they go through more routine maintenance cycles, have more frequent mechanical failures and generally require more maintenance than newer vehicles. We believe consumers will continue to invest in these reliable, higher-quality, higher-mileage vehicles and these investments, along with an increasing total light vehicle fleet, will support continued demand for automotive aftermarket products.
|
•
|
Unemployment
– Unemployment, underemployment, the threat of future joblessness and the uncertainty surrounding the overall economic health of the U.S. have a negative impact on consumer confidence and the level of consumer discretionary spending. Long-term trends of high unemployment have historically impeded the growth of annual miles driven, as well as decrease consumer discretionary spending, both of which negatively impact demand for products sold in the automotive aftermarket industry. As of December 31, 2016, the U.S. unemployment rate was
4.7%
, and as of
December 31, 2017
, the U.S. unemployment rate decreased to
4.1%
. We believe total employment should remain at healthy levels supporting the trend of modest growth in total miles driven in the U.S. and the continued demand for automotive aftermarket products.
|
•
|
Under the Company’s share repurchase program, as approved by our Board of Directors in January of 2011, we may, from time to time, repurchase shares of our common stock, solely through open market purchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate trading policy requirements and overall market conditions. Our Board of Directors may increase or otherwise modify, renew, suspend or terminate the share repurchase program at any time, without prior notice. As announced on
May 10, 2017
,
September 1, 2017
, and
February 7, 2018
, our Board of Directors each time approved a resolution to increase the authorization amount under our share repurchase program by an additional
$1.00 billion
, resulting in a cumulative authorization amount of
$10.75 billion
. Each additional authorization is effective for a
three
-year period, beginning on its respective announcement date. As of
February 28, 2018
, we had repurchased approximately
67.4 million
shares of our common stock at an aggregate cost of
$9.32 billion
under this program.
|
•
|
On
April 5, 2017
, we entered into a new credit agreement. The new credit agreement provided for a
$1.20 billion
unsecured revolving credit facility arranged by
JPMorgan Chase Bank, N.A., which is scheduled to mature in
April 2022
.
|
•
|
On
August 17, 2017
, we issued
$750 million
aggregate principal amount of unsecured
3.600%
Senior Notes due 2027 (“3.600% Senior Notes due 2027”) at a price to the public of
99.840%
of their face value with UMB, N.A. as trustee. Interest on the 3.600% Senior Notes due 2027 is payable on March 1 and September 1 of each year, beginning on March 1, 2018, and is computed on the basis of a
360
-day year.
|
|
For the Year Ended
December 31, |
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold, including warehouse and distribution expenses
|
47.4
|
|
|
47.5
|
|
|
47.7
|
|
Gross profit
|
52.6
|
|
|
52.5
|
|
|
52.3
|
|
Selling, general and administrative expenses
|
33.4
|
|
|
32.7
|
|
|
33.2
|
|
Operating income
(1)
|
19.2
|
|
|
19.8
|
|
|
19.0
|
|
Interest expense
|
(1.0
|
)
|
|
(0.8
|
)
|
|
(0.7
|
)
|
Interest income
|
—
|
|
|
0.1
|
|
|
—
|
|
Income before income taxes
|
18.2
|
|
|
19.1
|
|
|
18.3
|
|
Provision for income taxes
|
5.6
|
|
|
7.0
|
|
|
6.6
|
|
Net income
|
12.6
|
%
|
|
12.1
|
%
|
|
11.7
|
%
|
(1)
|
Each percentage of sales amount is computed independently and may not compute to presented totals.
|
|
Increase in Sales for the Year Ended December 31, 2017,
Compared to the Same Period in 2016 |
||
Store sales:
|
|
||
Comparable store sales, including sales from the 48 acquired Bond stores
|
$
|
182
|
|
Non-comparable store sales:
|
|
||
Sales for stores opened throughout 2016, excluding stores open at least one year that are included in comparable store sales
|
126
|
|
|
Sales for stores opened throughout 2017
|
108
|
|
|
Sales from Leap Day in 2016
|
(25
|
)
|
|
Sales in 2016 for stores that have closed
|
(5
|
)
|
|
Non-store sales:
|
|
||
Includes sales of machinery and sales to independent parts stores and Team Members
|
(1
|
)
|
|
Total increase in sales
|
$
|
385
|
|
|
Increase in Sales for the Year Ended December 31, 2016,
Compared to the Same Period in 2015 |
||
Store sales:
|
|
||
Comparable store sales
|
$
|
375
|
|
Non-comparable store sales:
|
|
||
Sales for stores opened throughout 2015, excluding stores open at least one year that are included in comparable store sales
|
115
|
|
|
Sales for stores opened throughout 2016 and sales from acquired Bond stores
|
106
|
|
|
Sales from Leap Day
|
24
|
|
|
Sales in 2015 for stores that have closed
|
(4
|
)
|
|
Non-store sales:
|
|
||
Includes sales of machinery and sales to independent parts stores and Team Members
|
10
|
|
|
Total increase in sales
|
$
|
626
|
|
|
|
December 31,
|
|
Percentage Change
|
|||||||
Liquidity and Related Ratios
|
|
2017
|
|
2016
|
|
||||||
Current assets
|
|
$
|
3,398
|
|
|
$
|
3,258
|
|
|
4.3
|
%
|
Current liabilities
|
|
3,647
|
|
|
3,401
|
|
|
7.2
|
%
|
||
Working capital
(1)
|
|
(250
|
)
|
|
(143
|
)
|
|
(74.8
|
)%
|
||
Total debt
|
|
2,978
|
|
|
1,887
|
|
|
57.8
|
%
|
||
Total equity
|
|
$
|
653
|
|
|
$
|
1,627
|
|
|
(59.9
|
)%
|
Debt to equity
(2)
|
|
4.56:1
|
|
|
1.16:1
|
|
|
293.1
|
%
|
(1)
|
Working capital is calculated as current assets less current liabilities.
|
(2)
|
Debt to equity is calculated as total debt divided by total equity.
|
|
|
For the Year Ended
December 31, |
||||||||||
Liquidity:
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total cash provided by/(used in):
|
|
|
|
|
|
|
||||||
Operating activities
(1)
|
|
$
|
1,403,687
|
|
|
$
|
1,510,713
|
|
|
$
|
1,345,488
|
|
Investing activities
|
|
(464,223
|
)
|
|
(529,096
|
)
|
|
(407,188
|
)
|
|||
Financing activities
(1)
|
|
(1,039,714
|
)
|
|
(951,320
|
)
|
|
(1,072,559
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(100,250
|
)
|
|
$
|
30,297
|
|
|
$
|
(134,259
|
)
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
$
|
465,940
|
|
|
$
|
476,344
|
|
|
$
|
414,020
|
|
Free cash flow
(2)
|
|
889,059
|
|
|
978,375
|
|
|
868,390
|
|
(1)
|
Prior period amount has been reclassified to conform to current period presentation, due to the Company’s adoption of a new accounting standard during the first quarter ended March 31, 2017.
|
(2)
|
Calculated as net cash provided by operating activities, less capital expenditures and excess tax benefit from share-based compensation payments for the period.
|
|
For the Year Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
GAAP net income
|
$
|
1,133,804
|
|
|
$
|
1,037,691
|
|
Add: Interest expense
|
91,349
|
|
|
70,931
|
|
||
Rent expense
|
298,614
|
|
|
283,253
|
|
||
Provision for income taxes
|
504,000
|
|
|
599,500
|
|
||
Depreciation expense
|
232,674
|
|
|
217,009
|
|
||
Amortization expense
|
1,171
|
|
|
857
|
|
||
Non-cash share-based compensation
|
19,401
|
|
|
18,859
|
|
||
Non-GAAP EBITDAR
|
$
|
2,281,013
|
|
|
$
|
2,228,100
|
|
|
|
|
|
||||
Interest expense
|
$
|
91,349
|
|
|
$
|
70,931
|
|
Capitalized interest
|
8,548
|
|
|
7,933
|
|
||
Rent expense
|
298,614
|
|
|
283,253
|
|
||
Total fixed charges
|
$
|
398,511
|
|
|
$
|
362,117
|
|
|
|
|
|
||||
Consolidated fixed charge coverage ratio
|
5.72
|
|
|
6.15
|
|
||
|
|
|
|
||||
GAAP debt
|
$
|
2,978,390
|
|
|
$
|
1,887,019
|
|
Add: Stand-by letters of credit
|
36,843
|
|
|
38,680
|
|
||
Discount on senior notes
|
3,721
|
|
|
3,149
|
|
||
Debt issuance costs
|
13,889
|
|
|
9,832
|
|
||
Five-times rent expense
|
1,493,070
|
|
|
1,416,265
|
|
||
Non-GAAP adjusted debt
|
$
|
4,525,913
|
|
|
$
|
3,354,945
|
|
|
|
|
|
||||
Consolidated leverage ratio
|
1.98
|
|
|
1.51
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash provided by operating activities
(1)
|
$
|
1,403,687
|
|
|
$
|
1,510,713
|
|
|
$
|
1,345,488
|
|
Less: Capital expenditures
|
465,940
|
|
|
476,344
|
|
|
414,020
|
|
|||
Excess tax benefit from share-based compensation
|
48,688
|
|
|
55,994
|
|
|
63,078
|
|
|||
Free cash flow
|
$
|
889,059
|
|
|
$
|
978,375
|
|
|
$
|
868,390
|
|
(1)
|
Prior period amount has been reclassified to conform to current period presentation, due to the Company’s adoption of a new accounting standard during the first quarter ended March 31, 2017.
|
|
For the Year Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Shares repurchased
|
9,301
|
|
|
5,698
|
|
||
Average price per share
|
$
|
233.57
|
|
|
$
|
264.21
|
|
Total investment
|
$
|
2,172,437
|
|
|
$
|
1,505,371
|
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Before
1 Year |
|
Years
1 and 2
|
|
Years
3 and 4
|
|
Years 5
and Over |
||||||||||
Long-term debt principal and interest payments
(1)
|
|
$
|
3,749,456
|
|
|
$
|
123,845
|
|
|
$
|
245,440
|
|
|
$
|
1,628,581
|
|
|
$
|
1,751,590
|
|
Future minimum lease payments under operating leases
(2)
|
|
2,367,161
|
|
|
293,317
|
|
|
535,669
|
|
|
433,506
|
|
|
1,104,669
|
|
|||||
Self-insurance reserves
(3)
|
|
147,661
|
|
|
71,695
|
|
|
47,306
|
|
|
18,490
|
|
|
10,170
|
|
|||||
Construction commitments
|
|
54,368
|
|
|
54,368
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
|
$
|
6,318,646
|
|
|
$
|
543,225
|
|
|
$
|
828,415
|
|
|
$
|
2,080,577
|
|
|
$
|
2,866,429
|
|
(1)
|
Our Revolving Credit Facility, which has a maximum aggregate commitment of
$1.20 billion
and matures in
April 2022
, bears interest (other than swing line loans), at our option, at either the Alternate Base Rate or Eurodollar Revolving Loans(both as defined in the agreement) plus a margin, that will vary from
0.000%
to
0.250%
in the case of loans bearing interest at the Alternate Base Rate and
0.680%
to
1.250%
in the case of loans bearing interest at the Eurodollar Revolving Loan, in each case based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to limited exceptions. Swing line loans made under the Revolving Credit Facility bear interest at the Alternate Base Rate plus the applicable margin described above. In addition, we pay a facility fee on the aggregate amount of the commitments in an amount equal to a percentage of such commitments, varying from
0.070%
to
0.250%
per annum based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to limited exceptions. Based on our current credit ratings, our margin for Alternate Base Rate loans was
0.000%
, our margin for Eurodollar Revolving Loans was
0.9%
and our facility fee was
0.100%
. As of
December 31, 2017
, we had outstanding borrowings in the amount of
$346 million
under our Revolving Credit Facility.
|
(2)
|
The minimum lease payments above do not include certain tax, insurance and maintenance costs, which are also required contractual obligations under our operating leases but are generally not fixed and can fluctuate from year to year. These expenses historically average approximately
20%
of the corresponding lease payments. See Note 6 “Leasing” to the Consolidated Financial Statements for further information on our operating leases.
|
(3)
|
We use various self-insurance mechanisms to provide for potential liabilities from workers’ compensation, vehicle and general liability, and employee health care benefits. The self-insurance reserves above are at the undiscounted obligation amount. The self-insurance reserves liabilities are recorded on our Consolidated Balance Sheets at our estimate of their net present value and do not have scheduled maturities; however, we can estimate the timing of future payments based upon historical patterns. See Note 10 “Commitments” to the Consolidated Financial Statements for further information on our self-insurance reserves.
|
|
Fiscal 2017
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Comparable store sales
|
0.8
|
%
|
|
1.7
|
%
|
|
1.8
|
%
|
|
1.3
|
%
|
||||
Sales
|
$
|
2,156,259
|
|
|
$
|
2,290,829
|
|
|
$
|
2,339,830
|
|
|
$
|
2,190,808
|
|
Gross profit
|
1,131,147
|
|
|
1,200,062
|
|
|
1,230,294
|
|
|
1,159,180
|
|
||||
Operating income
|
403,157
|
|
|
457,445
|
|
|
461,963
|
|
|
402,835
|
|
||||
Net income
|
264,934
|
|
|
282,821
|
|
|
283,734
|
|
|
302,315
|
|
||||
Earnings per share – basic
(1)
|
$
|
2.88
|
|
|
$
|
3.14
|
|
|
$
|
3.26
|
|
|
$
|
3.56
|
|
Earnings per share – assuming dilution
(1)
|
$
|
2.83
|
|
|
$
|
3.10
|
|
|
$
|
3.22
|
|
|
$
|
3.52
|
|
|
Fiscal 2016
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Comparable store sales
|
6.1
|
%
|
|
4.3
|
%
|
|
4.2
|
%
|
|
4.8
|
%
|
||||
Sales
|
$
|
2,096,150
|
|
|
$
|
2,176,689
|
|
|
$
|
2,220,955
|
|
|
$
|
2,099,302
|
|
Gross profit
|
1,097,579
|
|
|
1,127,179
|
|
|
1,170,026
|
|
|
1,114,227
|
|
||||
Operating income
|
418,626
|
|
|
425,061
|
|
|
447,809
|
|
|
407,710
|
|
||||
Net income
|
255,374
|
|
|
257,794
|
|
|
278,493
|
|
|
246,030
|
|
||||
Earnings per share – basic
(1)
|
$
|
2.63
|
|
|
$
|
2.69
|
|
|
$
|
2.93
|
|
|
$
|
2.62
|
|
Earnings per share – assuming dilution
(1)
|
$
|
2.59
|
|
|
$
|
2.65
|
|
|
$
|
2.90
|
|
|
$
|
2.59
|
|
(1)
|
Earnings per share amounts are computed independently for each quarter and annual period. The quarterly earnings per share amounts may not sum to equal the full-year earnings per share amount.
|
Index
|
|||
|
Page
|
||
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
/s/
|
Greg Henslee
|
|
/s/
|
Thomas McFall
|
Greg Henslee
|
|
Thomas McFall
|
||
Chief Executive Officer
|
|
Executive Vice President and
|
||
February 28, 2018
|
|
Chief Financial Officer
|
||
|
|
February 28, 2018
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
46,348
|
|
|
$
|
146,598
|
|
Accounts receivable, less allowance for doubtful accounts $12,717 in 2017 and $12,040 in 2016
|
216,251
|
|
|
197,274
|
|
||
Amounts receivable from suppliers
|
76,236
|
|
|
82,105
|
|
||
Inventory
|
3,009,800
|
|
|
2,778,976
|
|
||
Other current assets
|
49,037
|
|
|
53,022
|
|
||
Total current assets
|
3,397,672
|
|
|
3,257,975
|
|
||
|
|
|
|
||||
Property and equipment, at cost
|
5,191,135
|
|
|
4,832,342
|
|
||
Less: accumulated depreciation and amortization
|
1,847,329
|
|
|
1,708,911
|
|
||
Net property and equipment
|
3,343,806
|
|
|
3,123,431
|
|
||
|
|
|
|
||||
Goodwill
|
789,058
|
|
|
785,399
|
|
||
Other assets, net
|
41,349
|
|
|
37,384
|
|
||
Total assets
|
$
|
7,571,885
|
|
|
$
|
7,204,189
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,190,029
|
|
|
$
|
2,936,656
|
|
Self-insurance reserves
|
71,695
|
|
|
67,921
|
|
||
Accrued payroll
|
77,147
|
|
|
71,717
|
|
||
Accrued benefits and withholdings
|
69,308
|
|
|
74,454
|
|
||
Other current liabilities
|
239,187
|
|
|
249,901
|
|
||
Total current liabilities
|
3,647,366
|
|
|
3,400,649
|
|
||
|
|
|
|
||||
Long-term debt
|
2,978,390
|
|
|
1,887,019
|
|
||
Deferred income taxes
|
85,406
|
|
|
90,166
|
|
||
Other liabilities
|
207,677
|
|
|
199,219
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value:
|
|
|
|
||||
Authorized shares - 5,000,000
|
|
|
|
||||
Issued and outstanding shares - none
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value:
|
|
|
|
||||
Authorized shares – 245,000,000
|
|
|
|
||||
Issued and outstanding shares –
|
|
|
|
||||
84,302,187 as of December 31, 2017, and
|
|
|
|
||||
92,851,815 as of December 31, 2016
|
843
|
|
|
929
|
|
||
Additional paid-in capital
|
1,265,043
|
|
|
1,336,707
|
|
||
Retained (deficit) earnings
|
(612,840
|
)
|
|
289,500
|
|
||
Total shareholders’ equity
|
653,046
|
|
|
1,627,136
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
7,571,885
|
|
|
$
|
7,204,189
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
8,977,726
|
|
|
$
|
8,593,096
|
|
|
$
|
7,966,674
|
|
Cost of goods sold, including warehouse and distribution expenses
|
4,257,043
|
|
|
4,084,085
|
|
|
3,804,031
|
|
|||
Gross profit
|
4,720,683
|
|
|
4,509,011
|
|
|
4,162,643
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
2,995,283
|
|
|
2,809,805
|
|
|
2,648,622
|
|
|||
Operating income
|
1,725,400
|
|
|
1,699,206
|
|
|
1,514,021
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(91,349
|
)
|
|
(70,931
|
)
|
|
(57,129
|
)
|
|||
Interest income
|
2,347
|
|
|
4,224
|
|
|
2,340
|
|
|||
Other, net
|
1,406
|
|
|
4,692
|
|
|
1,134
|
|
|||
Total other expense
|
(87,596
|
)
|
|
(62,015
|
)
|
|
(53,655
|
)
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
1,637,804
|
|
|
1,637,191
|
|
|
1,460,366
|
|
|||
|
|
|
|
|
|
||||||
Provision for income taxes
|
504,000
|
|
|
599,500
|
|
|
529,150
|
|
|||
Net income
|
$
|
1,133,804
|
|
|
$
|
1,037,691
|
|
|
$
|
931,216
|
|
|
|
|
|
|
|
||||||
Earnings per share-basic:
|
|
|
|
|
|
||||||
Earnings per share
|
$
|
12.82
|
|
|
$
|
10.87
|
|
|
$
|
9.32
|
|
Weighted-average common shares outstanding – basic
|
88,426
|
|
|
95,447
|
|
|
99,965
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share-assuming dilution:
|
|
|
|
|
|
||||||
Earnings per share
|
$
|
12.67
|
|
|
$
|
10.73
|
|
|
$
|
9.17
|
|
Weighted-average common shares outstanding – assuming dilution
|
89,502
|
|
|
96,720
|
|
|
101,514
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings (Deficit)
|
|
Total
|
|||||||||||
|
Shares
|
|
Par Value
|
|
|
|
||||||||||||
Balance at December 31, 2014
|
101,603
|
|
|
$
|
1,016
|
|
|
$
|
1,194,929
|
|
|
$
|
822,473
|
|
|
$
|
2,018,418
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
931,216
|
|
|
931,216
|
|
||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes
|
59
|
|
|
—
|
|
|
11,630
|
|
|
—
|
|
|
11,630
|
|
||||
Net issuance of common stock upon exercise of stock options
|
976
|
|
|
10
|
|
|
52,901
|
|
|
—
|
|
|
52,911
|
|
||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
63,078
|
|
|
—
|
|
|
63,078
|
|
||||
Share based compensation
|
—
|
|
|
—
|
|
|
20,274
|
|
|
—
|
|
|
20,274
|
|
||||
Share repurchases, including fees
|
(4,901
|
)
|
|
(49
|
)
|
|
(61,315
|
)
|
|
(1,074,849
|
)
|
|
(1,136,213
|
)
|
||||
Balance at December 31, 2015
|
97,737
|
|
|
$
|
977
|
|
|
$
|
1,281,497
|
|
|
$
|
678,840
|
|
|
$
|
1,961,314
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,037,691
|
|
|
1,037,691
|
|
||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes
|
56
|
|
|
1
|
|
|
12,613
|
|
|
—
|
|
|
12,614
|
|
||||
Net issuance of common stock upon exercise of stock options
|
757
|
|
|
8
|
|
|
47,386
|
|
|
—
|
|
|
47,394
|
|
||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
55,994
|
|
|
—
|
|
|
55,994
|
|
||||
Share based compensation
|
—
|
|
|
—
|
|
|
17,566
|
|
|
—
|
|
|
17,566
|
|
||||
Share repurchases, including fees
|
(5,698
|
)
|
|
(57
|
)
|
|
(78,349
|
)
|
|
(1,427,031
|
)
|
|
(1,505,437
|
)
|
||||
Balance at December 31, 2016
|
92,852
|
|
|
$
|
929
|
|
|
$
|
1,336,707
|
|
|
$
|
289,500
|
|
|
$
|
1,627,136
|
|
Cumulative effective adjustment from adoption of ASU 2016-09 (See Note 1)
|
—
|
|
|
—
|
|
|
434
|
|
|
(266
|
)
|
|
168
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,133,804
|
|
|
1,133,804
|
|
||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes
|
66
|
|
|
—
|
|
|
13,466
|
|
|
—
|
|
|
13,466
|
|
||||
Net issuance of common stock upon exercise of stock options
|
685
|
|
|
7
|
|
|
33,222
|
|
|
—
|
|
|
33,229
|
|
||||
Share based compensation
|
—
|
|
|
—
|
|
|
17,773
|
|
|
—
|
|
|
17,773
|
|
||||
Share repurchases, including fees
|
(9,301
|
)
|
|
(93
|
)
|
|
(136,559
|
)
|
|
(2,035,878
|
)
|
|
(2,172,530
|
)
|
||||
Balance at December 31, 2017
|
84,302
|
|
|
$
|
843
|
|
|
$
|
1,265,043
|
|
|
$
|
(612,840
|
)
|
|
$
|
653,046
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
(As Adjusted, Note)
|
|
(As Adjusted, Note)
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,133,804
|
|
|
$
|
1,037,691
|
|
|
$
|
931,216
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization of property, equipment and intangibles
|
233,845
|
|
|
217,866
|
|
|
210,256
|
|
|||
Amortization of debt discount and issuance costs
|
2,871
|
|
|
2,451
|
|
|
2,106
|
|
|||
Deferred income taxes
|
(4,593
|
)
|
|
10,394
|
|
|
(22,650
|
)
|
|||
Share-based compensation programs
|
19,401
|
|
|
18,859
|
|
|
21,899
|
|
|||
Other
|
11,790
|
|
|
6,434
|
|
|
6,839
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(27,742
|
)
|
|
(38,548
|
)
|
|
(23,858
|
)
|
|||
Inventory
|
(231,802
|
)
|
|
(119,270
|
)
|
|
(76,226
|
)
|
|||
Accounts payable
|
253,265
|
|
|
322,427
|
|
|
191,064
|
|
|||
Income taxes payable
|
14,220
|
|
|
26,880
|
|
|
81,617
|
|
|||
Accrued payroll
|
5,430
|
|
|
12,616
|
|
|
(19,341
|
)
|
|||
Accrued benefits and withholdings
|
3,042
|
|
|
(256
|
)
|
|
18,904
|
|
|||
Other
|
(9,844
|
)
|
|
13,169
|
|
|
23,662
|
|
|||
Net cash provided by operating activities
|
1,403,687
|
|
|
1,510,713
|
|
|
1,345,488
|
|
|||
|
|
|
|
|
|
||||||
Investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(465,940
|
)
|
|
(476,344
|
)
|
|
(414,020
|
)
|
|||
Proceeds from sale of property and equipment
|
4,464
|
|
|
5,119
|
|
|
2,758
|
|
|||
Payments received on notes receivable
|
—
|
|
|
1,047
|
|
|
4,074
|
|
|||
Other
|
(2,747
|
)
|
|
(58,918
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(464,223
|
)
|
|
(529,096
|
)
|
|
(407,188
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings on revolving credit facility
|
3,101,000
|
|
|
—
|
|
|
—
|
|
|||
Payments on revolving credit facility
|
(2,755,000
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the issuance of long-term debt
|
748,800
|
|
|
499,160
|
|
|
—
|
|
|||
Payment of debt issuance costs
|
(7,590
|
)
|
|
(4,125
|
)
|
|
—
|
|
|||
Principal payments on capital leases
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||
Repurchases of common stock
|
(2,172,530
|
)
|
|
(1,505,437
|
)
|
|
(1,136,213
|
)
|
|||
Net proceeds from issuance of common stock
|
45,762
|
|
|
59,634
|
|
|
64,613
|
|
|||
Other
|
(156
|
)
|
|
(552
|
)
|
|
(934
|
)
|
|||
Net cash used in financing activities
|
(1,039,714
|
)
|
|
(951,320
|
)
|
|
(1,072,559
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(100,250
|
)
|
|
30,297
|
|
|
(134,259
|
)
|
|||
Cash and cash equivalents at beginning of the year
|
146,598
|
|
|
116,301
|
|
|
250,560
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
46,348
|
|
|
$
|
146,598
|
|
|
$
|
116,301
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
496,728
|
|
|
$
|
569,677
|
|
|
$
|
485,824
|
|
Interest paid, net of capitalized interest
|
77,766
|
|
|
63,648
|
|
|
55,061
|
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
|
•
|
Level 2 – Inputs other than quoted prices in active markets included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 – Unobservable inputs for the asset or liability.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Self-insurance reserves (undiscounted)
|
$
|
147,664
|
|
|
$
|
138,687
|
|
Self-insurance reserves (discounted)
|
137,970
|
|
|
129,437
|
|
Cost of goods sold, including warehouse and distribution expenses
|
|
Selling, general and administrative expenses
|
Total cost of merchandise sold, including:
|
|
Payroll and benefit costs for store and corporate Team Members
|
Freight expenses associated with acquiring merchandise and with moving merchandise inventories from the Company’s distribution centers to the stores
|
|
Occupancy costs of store and corporate facilities
|
Defective merchandise and warranty costs
|
|
Depreciation and amortization related to store and corporate assets
|
Supplier allowances and incentives, including:
|
|
Vehicle expenses for store delivery services
|
Allowances that are not reimbursements for specific, incremental and identifiable costs
|
|
Self-insurance costs
|
Cash discounts on payments to suppliers
|
|
Closed store expenses
|
Costs associated with the Company’s supply chain, including:
|
|
Other administrative costs, including:
|
Payroll and benefit costs
|
|
Accounting, legal and other professional services
|
Warehouse occupancy costs
|
|
Bad debt, banking and credit card fees
|
Transportation costs
|
|
Supplies
|
Depreciation
|
|
Travel
|
Inventory shrinkage
|
|
Advertising costs
|
|
December 31, 2017
|
||||||||||||||
|
Quoted Prices in Active Markets for Identical Instruments
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Marketable securities
|
$
|
25,706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,706
|
|
|
December 31, 2016
|
||||||||||||||
|
Quoted Prices in Active Markets for Identical Instruments
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
||||||||
Marketable securities
|
$
|
20,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,462
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying Amount
|
|
Estimated Fair Value
|
|
Carrying Amount
|
|
Estimated Fair Value
|
||||||||
Senior Notes
|
$
|
2,632,390
|
|
|
$
|
2,728,167
|
|
|
$
|
1,887,019
|
|
|
$
|
1,977,510
|
|
|
Original Useful Lives
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Land
|
|
|
$
|
695,669
|
|
|
$
|
648,689
|
|
Buildings and building improvements
|
15 – 39 years
|
|
1,968,079
|
|
|
1,805,347
|
|
||
Leasehold improvements
|
3 – 25 years
|
|
626,714
|
|
|
593,785
|
|
||
Furniture, fixtures and equipment
|
3 – 20 years
|
|
1,250,690
|
|
|
1,215,929
|
|
||
Vehicles
|
5 – 10 years
|
|
392,130
|
|
|
359,362
|
|
||
Construction in progress
|
|
|
257,853
|
|
|
209,230
|
|
||
Total property and equipment
|
|
|
5,191,135
|
|
|
4,832,342
|
|
||
Less: accumulated depreciation and amortization
|
|
|
1,847,329
|
|
|
1,708,911
|
|
||
Net property and equipment
|
|
|
$
|
3,343,806
|
|
|
$
|
3,123,431
|
|
|
2017
|
|
2016
|
||||
Goodwill, balance at January 1,
|
$
|
785,399
|
|
|
$
|
757,142
|
|
Change in goodwill
|
3,659
|
|
|
28,257
|
|
||
Goodwill, balance at December 31,
|
$
|
789,058
|
|
|
$
|
785,399
|
|
|
Cost of Amortizable
Intangibles |
|
Accumulated Amortization
(Expense) Benefit
|
|
Net Amortizable Intangibles
|
||||||||||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2017 |
|
December 31,
2016 |
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Favorable leases
|
$
|
22,500
|
|
|
$
|
27,960
|
|
|
$
|
(14,495
|
)
|
|
$
|
(18,104
|
)
|
|
$
|
8,005
|
|
|
$
|
9,856
|
|
Non-compete agreements
|
1,851
|
|
|
1,887
|
|
|
(464
|
)
|
|
(414
|
)
|
|
1,387
|
|
|
1,473
|
|
||||||
Total amortizable intangible assets
|
$
|
24,351
|
|
|
$
|
29,847
|
|
|
$
|
(14,959
|
)
|
|
$
|
(18,518
|
)
|
|
$
|
9,392
|
|
|
$
|
11,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unfavorable leases
|
$
|
14,470
|
|
|
$
|
19,950
|
|
|
$
|
11,853
|
|
|
$
|
15,840
|
|
|
$
|
2,617
|
|
|
$
|
4,110
|
|
|
December 31, 2017
|
||||||||||
|
Amortization Expense
|
|
Amortization Benefit
|
|
Total Amortization Expense
|
||||||
2018
|
$
|
(1,622
|
)
|
|
$
|
923
|
|
|
$
|
(699
|
)
|
2019
|
(1,405
|
)
|
|
713
|
|
|
(692
|
)
|
|||
2020
|
(1,228
|
)
|
|
541
|
|
|
(687
|
)
|
|||
2021
|
(1,001
|
)
|
|
389
|
|
|
(612
|
)
|
|||
2022
|
(883
|
)
|
|
51
|
|
|
(832
|
)
|
|||
Total
|
$
|
(6,139
|
)
|
|
$
|
2,617
|
|
|
$
|
(3,522
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revolving Credit Facility, weighted-average variable interest rate of 2.675%
|
$
|
346,000
|
|
|
$
|
—
|
|
$500 million, 4.875% Senior Notes due 2021
(1)
, effective interest rate of 4.956%
|
497,565
|
|
|
496,758
|
|
||
$300 million, 4.625% Senior Notes due 2021
(2)
, effective interest rate of 4.645%
|
298,961
|
|
|
298,679
|
|
||
$300 million, 3.800% Senior Notes due 2022
(3)
, effective interest rate of 3.845%
|
298,214
|
|
|
297,868
|
|
||
$300 million, 3.850% Senior Notes due 2023
(4)
, effective interest rate of 3.851%
|
298,583
|
|
|
298,355
|
|
||
$500 million, 3.550% Senior Notes due 2026
(5)
, effective interest rate of 3.570%
|
495,792
|
|
|
495,359
|
|
||
$750 million, 3.600% Senior Notes due 2027
(6)
, effective interest rate of 3.619%
|
743,275
|
|
|
—
|
|
||
Long-term debt
|
$
|
2,978,390
|
|
|
$
|
1,887,019
|
|
(1)
|
Net of unamortized discount of
$1.1 million
and
$1.4 million
as of
December 31, 2017
and
2016
, respectively, and debt issuance costs of
$1.4 million
and
$1.8 million
as of
December 31, 2017
and
2016
, respectively.
|
(2)
|
Net of unamortized discount of
$0.2 million
and
$0.2 million
as of
December 31, 2017
and
2016
, respectively, and debt issuance costs of
$0.8 million
and
$1.1 million
as of
December 31, 2017
and
2016
, respectively.
|
(3)
|
Net of unamortized discount of
$0.6 million
and
$0.7 million
as of
December 31, 2017
and
2016
, respectively, and debt issuance costs of
$1.2 million
and
$1.5 million
as of
December 31, 2017
and
2016
, respectively.
|
(4)
|
Net of unamortized discount of less than
$0.1 million
as of
December 31, 2017
and
2016
, and debt issuance costs of
$1.4 million
and
$1.6 million
as of
December 31, 2017
and
2016
, respectively.
|
(5)
|
Net of unamortized discount of
$0.7 million
and
$0.8 million
as of
December 31, 2017
and
2016
, respectively, and debt issuance costs of
$3.5 million
and
$3.9 million
as of
December 31, 2017
and
2016
, respectively.
|
(6)
|
Net of unamortized discount of
$1.2 million
as of
December 31, 2017
, and debt issuance costs of
$5.6 million
as of
December 31, 2017
.
|
|
Scheduled Maturities
|
||
2018
|
$
|
—
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
2021
|
800,000
|
|
|
2022
|
646,000
|
|
|
Thereafter
|
1,550,000
|
|
|
Total
|
$
|
2,996,000
|
|
|
December 31, 2017
|
||||||||||
|
Related Parties
|
|
Non-Related Parties
|
|
Total
|
||||||
2018
|
$
|
4,663
|
|
|
$
|
288,654
|
|
|
$
|
293,317
|
|
2019
|
3,210
|
|
|
274,694
|
|
|
277,904
|
|
|||
2020
|
2,389
|
|
|
255,376
|
|
|
257,765
|
|
|||
2021
|
1,922
|
|
|
227,392
|
|
|
229,314
|
|
|||
2022
|
1,164
|
|
|
203,028
|
|
|
204,192
|
|
|||
Thereafter
|
4,476
|
|
|
1,100,193
|
|
|
1,104,669
|
|
|||
Total
|
$
|
17,824
|
|
|
$
|
2,349,337
|
|
|
$
|
2,367,161
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Minimum operating lease expense
|
$
|
289,245
|
|
|
$
|
273,559
|
|
|
$
|
263,479
|
|
Contingent rents
|
1,049
|
|
|
892
|
|
|
947
|
|
|||
Other lease related occupancy costs
|
12,478
|
|
|
13,241
|
|
|
12,852
|
|
|||
Total rent expense
|
302,772
|
|
|
287,692
|
|
|
277,278
|
|
|||
Less: sublease income
|
4,158
|
|
|
4,439
|
|
|
4,019
|
|
|||
Net rent expense
|
$
|
298,614
|
|
|
$
|
283,253
|
|
|
$
|
273,259
|
|
|
2017
|
|
2016
|
||||
Warranty liabilities, balance at January 1,
|
$
|
36,623
|
|
|
$
|
35,223
|
|
Warranty claims
|
(79,660
|
)
|
|
(73,925
|
)
|
||
Warranty accruals
|
87,435
|
|
|
75,325
|
|
||
Warranty liabilities, balance at December 31,
|
$
|
44,398
|
|
|
$
|
36,623
|
|
|
For the Year Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Shares repurchased
|
9,301
|
|
|
5,698
|
|
||
Average price per share
|
$
|
233.57
|
|
|
$
|
264.21
|
|
Total investment
|
$
|
2,172,437
|
|
|
$
|
1,505,371
|
|
|
|
December 31, 2017
|
||||
Plans
|
|
Total Shares Authorized for Issuance under the Plans
|
|
Shares Available for Future Issuance under the Plans
|
||
Employee Incentive Plans
|
|
34,000
|
|
|
5,834
|
|
Director Stock Plan
|
|
1,000
|
|
|
263
|
|
Performance Incentive Plan
|
|
650
|
|
|
370
|
|
Employee Stock Purchase Plans
|
|
4,250
|
|
|
646
|
|
Profit Sharing and Savings Plan
|
|
4,200
|
|
|
349
|
|
|
Shares
(in thousands)
|
|
Weighted-Average Exercise Price
|
|
Average Remaining Contractual Terms
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
2,789
|
|
|
$
|
105.11
|
|
|
|
|
|
||
Granted
|
282
|
|
|
251.26
|
|
|
|
|
|
|||
Exercised
|
(674
|
)
|
|
48.58
|
|
|
|
|
|
|||
Forfeited or expired
|
(33
|
)
|
|
215.46
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
2,364
|
|
|
$
|
137.08
|
|
|
5.3 Years
|
|
$
|
244,562
|
|
Vested or expected to vest at December 31, 2017
|
2,319
|
|
|
$
|
135.11
|
|
|
5.2 Years
|
|
$
|
244,492
|
|
Exercisable at December 31, 2017
|
1,571
|
|
|
$
|
85.00
|
|
|
3.8 Years
|
|
$
|
244,360
|
|
|
Shares
(in thousands) |
|
Weighted-Average Exercise Price
|
|
Average Remaining Contractual Terms
|
|
Aggregate Intrinsic Value
(in thousands) |
||||||
Outstanding at December 31, 2016
|
11
|
|
|
$
|
48.31
|
|
|
|
|
|
|||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
||||
Exercised
|
(11
|
)
|
|
48.31
|
|
|
|
|
|
||||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
||||
Outstanding at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Vested or expected to vest at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Exercisable at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
•
|
Risk-free interest rate
– The United States Treasury rates in effect at the time the options are granted for the options’ expected life.
|
•
|
|
•
|
Expected life
– Represents the period of time that options granted are expected to be outstanding. The Company uses historical experience to estimate the expected life of options granted.
|
•
|
Expected volatility
– Measure of the amount, by which the Company’s stock price is expected to fluctuate, based on a historical trend.
|
•
|
Expected dividend yield
–
The Company has not paid, nor does it have plans in the foreseeable future to pay, any dividends.
|
|
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Risk free interest rate
|
1.98
|
%
|
|
1.44
|
%
|
|
1.52
|
%
|
Expected life
|
5.4 Years
|
|
|
5.5 Years
|
|
|
5.7 Years
|
|
Expected volatility
|
22.4
|
%
|
|
22.3
|
%
|
|
22.3
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Compensation expense for stock options awarded (in thousands)
|
$
|
15,561
|
|
|
$
|
15,404
|
|
|
$
|
18,209
|
|
Income tax benefit from compensation expense related to stock options (in thousands)
|
5,934
|
|
|
5,753
|
|
|
6,811
|
|
|||
Total intrinsic value of stock options exercised (in thousands)
|
135,533
|
|
|
157,115
|
|
|
169,248
|
|
|||
Cash received from exercise of stock options (in thousands)
|
33,229
|
|
|
47,394
|
|
|
105,822
|
|
|||
Weighted-average grant-date fair value of options awarded
|
$
|
62.79
|
|
|
$
|
63.42
|
|
|
$
|
51.56
|
|
Weighted-average remaining contractual life of exercisable options
|
3.8 Years
|
|
|
3.9 Years
|
|
|
4.2 Years
|
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Non-vested at December 31, 2016
|
3
|
|
|
$
|
204.33
|
|
Granted during the period
|
1
|
|
|
256.69
|
|
|
Vested during the period
(1)
|
(1
|
)
|
|
182.10
|
|
|
Forfeited during the period
|
—
|
|
|
—
|
|
|
Non-vested at December 31, 2017
|
3
|
|
|
$
|
244.06
|
|
(1)
|
Includes less than
one thousand
shares withheld to cover employees’ taxes upon vesting.
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Non-vested at December 31, 2016
|
6
|
|
|
$
|
222.77
|
|
Granted during the period
|
3
|
|
|
252.45
|
|
|
Vested during the period
|
(4
|
)
|
|
200.81
|
|
|
Forfeited during the period
|
—
|
|
|
—
|
|
|
Non-vested at December 31, 2017
|
5
|
|
|
$
|
250.85
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Compensation expense for restricted shares awarded
|
$
|
1,628
|
|
|
$
|
1,293
|
|
|
$
|
1,625
|
|
Income tax benefit from compensation expense related to restricted shares
|
$
|
621
|
|
|
$
|
483
|
|
|
$
|
610
|
|
Total fair value of restricted shares at vest date
|
$
|
1,202
|
|
|
$
|
2,384
|
|
|
$
|
3,284
|
|
Shares awarded under the plans
|
4
|
|
|
4
|
|
|
4
|
|
|||
Weighted-average grant-date fair value of shares awarded under the plans
|
$
|
253.78
|
|
|
$
|
264.24
|
|
|
$
|
208.56
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Compensation expense for shares issued under the ESPP
|
$
|
2,212
|
|
|
$
|
2,162
|
|
|
$
|
2,065
|
|
Income tax benefit from compensation expense for shares issued under the ESPP
|
$
|
844
|
|
|
$
|
807
|
|
|
$
|
773
|
|
Shares issued under the ESPP
|
64
|
|
|
54
|
|
|
60
|
|
|||
Weighted-average price of shares issued under the ESPP
|
$
|
196.72
|
|
|
$
|
227.12
|
|
|
$
|
195.04
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
1,885
|
|
|
$
|
2,686
|
|
Tax credits
|
7,179
|
|
|
9,363
|
|
||
Other accruals
|
97,247
|
|
|
153,955
|
|
||
Net operating losses
|
346
|
|
|
304
|
|
||
Other
|
14,784
|
|
|
19,870
|
|
||
Total deferred tax assets
|
121,441
|
|
|
186,178
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Inventories
|
55,965
|
|
|
76,694
|
|
||
Property and equipment
|
122,354
|
|
|
157,228
|
|
||
Other
|
28,528
|
|
|
42,422
|
|
||
Total deferred tax liabilities
|
206,847
|
|
|
276,344
|
|
||
|
|
|
|
||||
Net deferred tax liabilities
|
$
|
(85,406
|
)
|
|
$
|
(90,166
|
)
|
|
For the Year Ended
December 31, 2017 |
||||||||||
|
Current
|
|
Deferred
|
|
Total
|
||||||
Federal income tax expense (benefit)
|
$
|
467,577
|
|
|
$
|
(13,053
|
)
|
|
$
|
454,524
|
|
State income tax expense
|
41,183
|
|
|
8,293
|
|
|
49,476
|
|
|||
Net income tax expense (benefit)
|
$
|
508,760
|
|
|
$
|
(4,760
|
)
|
|
$
|
504,000
|
|
|
For the Year Ended
December 31, 2016 |
||||||||||
|
Current
|
|
Deferred
|
|
Total
|
||||||
Federal income tax expense
|
$
|
540,090
|
|
|
$
|
7,558
|
|
|
$
|
547,648
|
|
State income tax expense
|
49,016
|
|
|
2,836
|
|
|
51,852
|
|
|||
Net income tax expense
|
$
|
589,106
|
|
|
$
|
10,394
|
|
|
$
|
599,500
|
|
|
For the Year Ended
December 31, 2015 |
||||||||||
|
Current
|
|
Deferred
|
|
Total
|
||||||
Federal income tax expense (benefit)
|
$
|
504,558
|
|
|
$
|
(21,973
|
)
|
|
$
|
482,585
|
|
State income tax expense (benefit)
|
47,242
|
|
|
(677
|
)
|
|
46,565
|
|
|||
Net income tax expense (benefit)
|
$
|
551,800
|
|
|
$
|
(22,650
|
)
|
|
$
|
529,150
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Federal income taxes at statutory rate
|
$
|
573,231
|
|
|
$
|
573,020
|
|
|
$
|
511,128
|
|
State income taxes, net of federal tax benefit
|
39,062
|
|
|
35,285
|
|
|
32,137
|
|
|||
Excess tax benefit from share-based compensation
|
(48,688
|
)
|
|
—
|
|
|
—
|
|
|||
Revaluation of deferred tax liability
|
(53,240
|
)
|
|
—
|
|
|
—
|
|
|||
Other items, net
|
(6,365
|
)
|
|
(8,805
|
)
|
|
(14,115
|
)
|
|||
Total provision for income taxes
|
$
|
504,000
|
|
|
$
|
599,500
|
|
|
$
|
529,150
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Unrealized tax benefit, balance at January 1,
|
$
|
34,798
|
|
|
$
|
36,928
|
|
|
$
|
49,598
|
|
Additions based on tax positions related to the current year
|
6,299
|
|
|
6,116
|
|
|
5,405
|
|
|||
Additions based on tax positions related to prior years
|
—
|
|
|
—
|
|
|
995
|
|
|||
Payments related to items settled with taxing authorities
|
—
|
|
|
(195
|
)
|
|
(4,012
|
)
|
|||
Reductions due to the lapse of statute of limitations and settlements
|
(5,709
|
)
|
|
(8,051
|
)
|
|
(15,058
|
)
|
|||
Unrealized tax benefit, balance at December 31,
|
$
|
35,388
|
|
|
$
|
34,798
|
|
|
$
|
36,928
|
|
|
For the Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator (basic and diluted):
|
|
|
|
|
|
||||||
Net income
|
$
|
1,133,804
|
|
|
$
|
1,037,691
|
|
|
$
|
931,216
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding – basic
|
88,426
|
|
|
95,447
|
|
|
99,965
|
|
|||
Effect of stock options
(1)
|
1,076
|
|
|
1,273
|
|
|
1,549
|
|
|||
Weighted-average common shares outstanding – assuming dilution
|
89,502
|
|
|
96,720
|
|
|
101,514
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
||||||
Earnings per share-basic
|
$
|
12.82
|
|
|
$
|
10.87
|
|
|
$
|
9.32
|
|
Earnings per share-assuming dilution
|
$
|
12.67
|
|
|
$
|
10.73
|
|
|
$
|
9.17
|
|
|
|
|
|
|
|
||||||
Antidilutive potential common shares not included in the calculation of diluted earnings per share:
|
|
|
|
|
|
||||||
Stock options
(1)
|
715
|
|
|
332
|
|
|
245
|
|
|||
Weighted-average exercise price per share of antidilutive stock options
(1)
|
$
|
252.16
|
|
|
$
|
265.77
|
|
|
$
|
216.29
|
|
(1)
|
See Note 9 for further information concerning the terms of the Company’s share-based compensation plans.
|
|
Fiscal 2017
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Sales
|
$
|
2,156,259
|
|
|
$
|
2,290,829
|
|
|
$
|
2,339,830
|
|
|
$
|
2,190,808
|
|
Gross profit
|
1,131,147
|
|
|
1,200,062
|
|
|
1,230,294
|
|
|
1,159,180
|
|
||||
Operating income
|
403,157
|
|
|
457,445
|
|
|
461,963
|
|
|
402,835
|
|
||||
Net income
|
264,934
|
|
|
282,821
|
|
|
283,734
|
|
|
302,315
|
|
||||
Earnings per share – basic
(1)
|
$
|
2.88
|
|
|
$
|
3.14
|
|
|
$
|
3.26
|
|
|
$
|
3.56
|
|
Earnings per share – assuming dilution
(1)
|
$
|
2.83
|
|
|
$
|
3.10
|
|
|
$
|
3.22
|
|
|
$
|
3.52
|
|
|
Fiscal 2016
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Sales
|
$
|
2,096,150
|
|
|
$
|
2,176,689
|
|
|
$
|
2,220,955
|
|
|
$
|
2,099,302
|
|
Gross profit
|
1,097,579
|
|
|
1,127,179
|
|
|
1,170,026
|
|
|
1,114,227
|
|
||||
Operating income
|
418,626
|
|
|
425,061
|
|
|
447,809
|
|
|
407,710
|
|
||||
Net income
|
255,374
|
|
|
257,794
|
|
|
278,493
|
|
|
246,030
|
|
||||
Earnings per share – basic
(1)
|
$
|
2.63
|
|
|
$
|
2.69
|
|
|
$
|
2.93
|
|
|
$
|
2.62
|
|
Earnings per share – assuming dilution
(1)
|
$
|
2.59
|
|
|
$
|
2.65
|
|
|
$
|
2.90
|
|
|
$
|
2.59
|
|
(1)
|
Earnings per share amounts are computed independently for each quarter and annual period. The quarterly earnings per share amounts may not sum to equal the full-year earnings per share amount.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
1.
|
Financial Statements - O’Reilly Automotive, Inc. and Subsidiaries
|
2.
|
Financial Statement Schedules - O’Reilly Automotive, Inc. and Subsidiaries
|
3.
|
Exhibits
|
Exhibit No.
|
Description
|
4.1
|
Form of Stock Certificate for Common Stock, filed as Exhibit 4.1 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
Exhibit No.
|
Description
|
10.1 (a)
|
Form of Employment Agreement between the Registrant and David E. O’Reilly, filed as Exhibit 10.1 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.2
|
Lease between the Registrant and O’Reilly Investment Company, filed as Exhibit 10.2 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.3
|
Lease between the Registrant and O’Reilly Real Estate Company, filed as Exhibit 10.3 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.4 (a)
|
O’Reilly Automotive, Inc. 1993 Stock Option Plan, filed as Exhibit 10.8 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.5 (a)
|
O’Reilly Automotive, Inc. Stock Purchase Plan, filed as Exhibit 10.9 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.6 (a)
|
O’Reilly Automotive, Inc. Director Stock Option Plan, filed as Exhibit 10.10 to the Registration Statement of the Registrant on Form S-1, File No. 33-58948, is incorporated herein by this reference.
|
10.7 (a)
|
O’Reilly Automotive, Inc. Profit Sharing and Savings Plan, filed as Exhibit 4.1 to the Registration Statement of the Registrant on Form S-8, File No. 33-73892, is incorporated herein by this reference.
|
Exhibit No.
|
Description
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
(a)
|
Management contract or compensatory plan or arrangement.
|
*
|
Furnished (and not filed) herewith pursuant to Item 601 (b)(32)(ii) of Regulation S-K.
|
Description
|
|
Balance at
Beginning of Period
|
|
Additions - Charged to
Costs and Expenses
|
|
Additions - Charged to
Other Accounts - Describe
|
|
Deductions -
Describe
|
|
Balance at
End of Period
|
|||||||||||
Sales and returns allowances:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended December 31, 2017
|
|
$
|
9,595
|
|
|
$
|
1,347
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
10,942
|
|
For the year ended December 31, 2016
|
|
7,978
|
|
|
1,617
|
|
|
—
|
|
|
—
|
|
|
|
9,595
|
|
|||||
For the year ended December 31, 2015
|
|
$
|
6,855
|
|
|
$
|
1,123
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended December 31, 2017
|
|
$
|
12,040
|
|
|
$
|
8,598
|
|
|
$
|
—
|
|
|
$
|
7,921
|
|
(1)
|
|
$
|
12,717
|
|
For the year ended December 31, 2016
|
|
9,637
|
|
|
9,587
|
|
|
—
|
|
|
7,184
|
|
(1)
|
|
12,040
|
|
|||||
For the year ended December 31, 2015
|
|
$
|
8,713
|
|
|
$
|
7,119
|
|
|
$
|
—
|
|
|
$
|
6,195
|
|
(1)
|
|
$
|
9,637
|
|
(1)
|
Uncollectable accounts written off.
|
|
O’REILLY AUTOMOTIVE, INC.
|
||
|
(Registrant)
|
||
|
|
|
|
|
Date:
|
February 28, 2018
|
|
|
|
|
|
|
By:
|
/s/
|
Greg Henslee
|
|
|
Greg Henslee
|
|
|
|
Chief Executive Officer
|
Date:
|
February 28, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
David O’Reilly
|
|
/s/
|
Charles H. O’Reilly Jr.
|
|
|
David O’Reilly
|
|
Charles H. O’Reilly Jr.
|
|
||
|
Director and Chairman of the Board
|
|
Director and Vice Chairman of the Board
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Larry O’Reilly
|
|
/s/
|
Rosalie O’Reilly Wooten
|
|
|
Larry O’Reilly
|
|
Rosalie O’Reilly Wooten
|
|
||
|
Director and Vice Chairman of the Board
|
|
Director
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Jay D. Burchfield
|
|
/s/
|
Thomas T. Hendrickson
|
|
|
Jay D. Burchfield
|
|
Thomas T. Hendrickson
|
|
||
|
Director
|
|
Director
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Paul R. Lederer
|
|
/s/
|
John R. Murphy
|
|
|
Paul R. Lederer
|
|
John R. Murphy
|
|
||
|
Director
|
|
Director
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Dana M. Perlman
|
|
/s/
|
Ronald Rashkow
|
|
|
Dana M. Perlman
|
|
Ronald Rashkow
|
|
||
|
Director
|
|
Director
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Greg Henslee
|
|
/s/
|
Thomas McFall
|
|
|
Greg Henslee
|
|
Thomas McFall
|
|
||
|
Director and
|
|
Executive Vice President and
|
|
||
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
||
|
(Principal Executive Officer)
|
|
(Principal Financial and Accounting Officer)
|
|
Subsidiary
|
State of Incorporation
|
O’Reilly Automotive Stores, Inc.
|
Missouri
|
Ozark Automotive Distributors, Inc.
|
Missouri
|
Ozark Services, Inc.
|
Missouri
|
Ozark Purchasing, LLC
|
Missouri
|
O’Reilly Auto Enterprises, LLC
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 033-91022), Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (Form S-8 No. 033-91022) and Post-Effective Amendment No. 2 to Registration Statement on Form S-8 (Form S-8 No. 033-91022) pertaining to the O’Reilly Automotive, Inc. Performance Incentive Plan;
|
(2)
|
Registration Statement (Form S-8 No. 333-63467) and Post-Effective Amendment No. 1 (Form S-8 No. 333-63467) pertaining to the O’Reilly Automotive, Inc. Director Stock Option Plan and the O’Reilly Automotive, Inc. 1993 Stock Option Plan;
|
(3)
|
Registration Statements (Form S-8 No. 333-59568 and 333-136958) and Post-Effective Amendment No. 1 (Form S-8 No. 333-59568 and 333-136958) pertaining to the O’Reilly Automotive, Inc. Profit Sharing and Savings Plan;
|
(4)
|
Registration Statement (Form S-8 No. 333-111976) and Post-Effective Amendment No. 1 (Form S-8 No. 333-111976) pertaining to the O’Reilly Automotive, Inc. 2003 Employee Stock Option Plan, O’Reilly Automotive, Inc. 2003 Director Stock Option Plan, O’Reilly Automotive, Inc. 1993 Employee Stock Option Plan, and the O’Reilly Automotive, Inc. Stock Purchase Plan;
|
(5)
|
Post-Effective Amendment No. 1 to Registration Statement on Form S-8 to Form S-4 (Form S-8 No. 333-151578) and Post-Effective Amendment No. 2 (Form S-8 No. 333-151578) pertaining to the CSK Auto Corporation 2004 Stock and Incentive Plan, CSK Auto Corporation 1999 Employee Stock Option Plan, CSK Auto Corporation 1996 Executive Stock Option Plan, CSK Auto Corporation 1996 Associate Stock Option Plan and CSK Auto Corporation Nonqualified Stock Option Agreement with Lawrence N. Mondry;
|
(6)
|
Registration Statement (Form S-8 No. 333-157862) and Post-Effective Amendment No. 1 (Form S-8 No. 333-157862) pertaining to the O’Reilly Automotive, Inc. Stock Purchase Plan;
|
(7)
|
Registration Statement (Form S-8 No. 333-159351) and Post-Effective Amendment No. 1 (Form S-8 No. 333-159351) pertaining to the O’Reilly Automotive, Inc. 2009 Stock Purchase Plan and to the O’Reilly Automotive, Inc. 2009 Incentive Plan;
|
(8)
|
Registration Statement (Form S-8 No. 333-181364) pertaining to the O’Reilly Automotive, Inc. 2012 Incentive Award Plan and Post-Effective Amendment No. 1 (Form S-8 No. 333-181364) pertaining to the O’Reilly Automotive, Inc. 2012 Incentive Award Plan and to the O’Reilly Automotive, Inc. 2017 Incentive Award Plan; and
|
(9)
|
Registration Statement (Form S-3ASR No. 333-209788) pertaining to the offer from time to time of debt securities;
|
1.
|
I have reviewed this report on Form 10-K of O’Reilly Automotive, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 28, 2018
|
/s/
|
Greg Henslee
|
|
Greg Henslee
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-K of O’Reilly Automotive, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: February 28, 2018
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/s/
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Thomas McFall
|
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Thomas McFall
|
|
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Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/
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Greg Henslee
|
Greg Henslee
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/
|
Thomas McFall
|
Thomas McFall
|
|
Chief Financial Officer
|