Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information | ||
Document type | 10-Q | |
Amendment flag | FALSE | |
Document period end date | 31-Mar-15 | |
Document fiscal year focus | 2015 | |
Current fiscal year end date | -19 | |
Document fiscal period focus | Q1 | |
Entity registrant name | O REILLY AUTOMOTIVE INC | |
Entity central index key | 898173 | |
Entity filer category | Large Accelerated Filer | |
Entity common stock, shares outstanding | 100,989,965 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | |
In Thousands, unless otherwise specified | |||
Assets | |||
Cash and cash equivalents | $473,646 | $250,560 | [1] |
Accounts receivable, net | 162,020 | 143,900 | [1] |
Amounts receivable from suppliers | 69,545 | 69,311 | [1] |
Inventory | 2,527,982 | 2,554,789 | [1] |
Other current assets | 40,928 | 48,418 | [1] |
Total current assets | 3,274,121 | 3,066,978 | [1] |
Property and equipment, at cost | 4,080,350 | 3,993,509 | [1] |
Less: accumulated depreciation and amortization | 1,381,502 | 1,334,949 | [1] |
Net property and equipment | 2,698,848 | 2,658,560 | [1] |
Notes receivable, less current portion | 12,414 | 13,349 | [1] |
Goodwill | 756,384 | 756,384 | [1] |
Other assets, net | 43,943 | 45,030 | [1] |
Total assets | 6,785,710 | 6,540,301 | [1] |
Liabilities and shareholders' equity | |||
Accounts payable | 2,470,749 | 2,417,167 | [1] |
Self-insurance reserves | 67,676 | 64,882 | [1] |
Accrued payroll | 75,059 | 78,442 | [1] |
Accrued benefits and withholdings | 42,413 | 62,946 | [1] |
Deferred income taxes | 16,651 | 17,258 | [1] |
Income taxes payable | 78,939 | 0 | [1] |
Other current liabilities | 200,888 | 189,836 | [1] |
Current portion of long-term debt | 6 | 25 | [1] |
Total current liabilities | 2,952,381 | 2,830,556 | [1] |
Long-term debt, less current portion | 1,396,741 | 1,396,615 | [1] |
Deferred income taxes | 81,330 | 85,164 | [1] |
Other liabilities | 211,758 | 209,548 | [1] |
Shareholders' equity: | |||
Common stock, $0.01 par value: Authorized shares - 245,000,000 Issued and outstanding shares - 101,347,744 as of March 31, 2015, and 101,602,935 as of December 31, 2014 | 1,013 | 1,016 | [1] |
Additional paid-in capital | 1,234,133 | 1,194,929 | [1] |
Retained earnings | 908,354 | 822,473 | [1] |
Total shareholders' equity | 2,143,500 | 2,018,418 | [1] |
Total liabilities and shareholders' equity | $6,785,710 | $6,540,301 | [1] |
[1] | The balance sheet at December 31, 2014, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 245,000,000 | 245,000,000 |
Common stock, shares issued | 101,347,744 | 101,602,935 |
Common stock, shares outstanding | 101,347,744 | 101,602,935 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Sales | $1,901,903 | $1,727,943 |
Cost of goods sold, including warehouse and distribution expenses | 914,944 | 850,227 |
Gross profit | 986,959 | 877,716 |
Selling, general and administrative expenses | 636,586 | 590,596 |
Operating income | 350,373 | 287,120 |
Other income (expense): | ||
Interest expense | -14,402 | -13,409 |
Interest income | 580 | 631 |
Other, net | 1,113 | 618 |
Total other expense | -12,709 | -12,160 |
Income before income taxes | 337,664 | 274,960 |
Provision for income taxes | 124,800 | 101,100 |
Net income | $212,864 | $173,860 |
Earnings per share-basic: | ||
Earnings per share - basic | $2.09 | $1.64 |
Weighted-average common shares outstanding - basic | 101,612 | 106,191 |
Earnings per share-assuming dilution: | ||
Earnings per share - assuming dilution | $2.06 | $1.61 |
Weighted-average common shares outstanding - assuming dilution | 103,257 | 108,070 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | |
Operating activities: | |||
Net income | $212,864 | $173,860 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property, equipment and intangibles | 54,950 | 47,477 | |
Amortization of debt discount and issuance costs | 525 | 520 | |
Excess tax benefit from stock options exercised | -21,188 | -17,850 | |
Deferred income taxes | -4,441 | -3,796 | |
Share-based compensation programs | 5,890 | 5,096 | |
Other | 1,355 | 1,526 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | -19,867 | -13,016 | |
Inventory | 26,807 | -21,994 | |
Accounts payable | 53,582 | 104,376 | |
Income taxes payable | 117,221 | 69,922 | |
Other | -21,673 | -572 | |
Net cash provided by operating activities | 406,025 | 345,549 | |
Investing activities: | |||
Purchases of property and equipment | -91,140 | -83,085 | |
Proceeds from sale of property and equipment | 658 | 287 | |
Payments received on notes receivable | 935 | 900 | |
Net cash used in investing activities | -89,547 | -81,898 | |
Financing activities: | |||
Principal payments on capital leases | -19 | -18 | |
Repurchases of common stock | -134,813 | -22,067 | |
Excess tax benefit from stock options exercised | 21,188 | 17,850 | |
Net proceeds from issuance of common stock | 20,252 | 21,097 | |
Net cash (used in) provided by financing activities | -93,392 | 16,862 | |
Net increase in cash and cash equivalents | 223,086 | 280,513 | |
Cash and cash equivalents at beginning of the period | 250,560 | [1] | 231,318 |
Cash and cash equivalents at end of the period | 473,646 | 511,831 | |
Supplemental disclosures of cash flow information: | |||
Income taxes paid | 8,675 | 33,331 | |
Interest paid, net of capitalized interest | $23,435 | $22,419 | |
[1] | The balance sheet at December 31, 2014, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | NOTE 1 - BASIS OF PRESENTATION |
The accompanying unaudited condensed consolidated financial statements of O'Reilly Automotive, Inc. and its subsidiaries (the "Company" or "O'Reilly") have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||||||||||||||||||||||||
Fair value measurements | NOTE 2 – FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||||||||
The Company uses the fair value hierarchy, which prioritizes the inputs used to measure the fair value of certain of its financial instruments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company uses the income and market approaches to determine the fair value of its assets and liabilities. The three levels of the fair value hierarchy are set forth below: | ||||||||||||||||||||||||||||||||
• | 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. | |||||||||||||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis: | ||||||||||||||||||||||||||||||||
The carrying amount of the Company's marketable securities is included in "Other assets, net" on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2015, and December 31, 2014. The Company recorded $0.4 million of appreciation in fair value related to its marketable securities, which is included in "Other income (expense)" on the accompanying Condensed Consolidated Statements of Income, for the three months ended March 31, 2015. | ||||||||||||||||||||||||||||||||
The table below identifies the estimated fair value of the Company's marketable securities, determined by reference to quoted market prices (Level 1), as of March 31, 2015, and December 31, 2014 (in thousands): | ||||||||||||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||||||||||||||||||
Marketable securities | $ | 16,656 | $ | 15,378 | $ | — | $ | — | $ | — | $ | — | $ | 16,656 | $ | 15,378 | ||||||||||||||||
Non-financial assets and liabilities measured at fair value on a nonrecurring basis: | ||||||||||||||||||||||||||||||||
Certain long-lived non-financial assets and liabilities may be required to be measured at fair value on a nonrecurring basis in certain circumstances, including when there is evidence of impairment. These non-financial assets and liabilities may include assets acquired in a business combination or property and equipment that are determined to be impaired. As of March 31, 2015, and December 31, 2014, the Company did not have any non-financial assets or liabilities that had been measured at fair value subsequent to initial recognition. | ||||||||||||||||||||||||||||||||
Fair value of financial instruments: | ||||||||||||||||||||||||||||||||
The carrying amounts of the Company's senior notes are included in "Long-term debt, less current portion" on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2015, and December 31, 2014. See Note 3 for further discussion on the Company's senior notes. | ||||||||||||||||||||||||||||||||
The table below identifies the estimated fair value of the Company's senior notes, using the market approach. The fair values as of March 31, 2015, and December 31, 2014, were determined by reference to quoted market prices of the same or similar instruments (Level 2) (in thousands): | ||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||
4.875% Senior Notes due 2021 | $ | 497,964 | $ | 558,055 | $ | 497,876 | $ | 566,700 | ||||||||||||||||||||||||
4.625% Senior Notes due 2021 | 299,663 | 331,769 | 299,650 | 337,222 | ||||||||||||||||||||||||||||
3.800% Senior Notes due 2022 | 299,134 | 314,468 | 299,109 | 310,749 | ||||||||||||||||||||||||||||
3.850% Senior Notes due 2023 | $ | 299,980 | $ | 314,806 | $ | 299,980 | $ | 311,656 | ||||||||||||||||||||||||
The accompanying Condensed Consolidated Balance Sheets include other financial instruments, including cash and cash equivalents, accounts receivable, amounts receivable from suppliers and accounts payable. Due to the short-term nature of these financial instruments, the Company believes that the carrying values of these instruments approximate their fair values. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-term debt | NOTE 3 – LONG-TERM DEBT | |||||||
The following table identifies the amounts included in "Current portion of long-term debt" and "Long-term debt, less current portion" on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2015, and December 31, 2014 (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Revolving Credit Facility | $ | — | $ | — | ||||
4.875% Senior Notes due 2021(1), effective interest rate of 4.966% | 497,964 | 497,876 | ||||||
4.625% Senior Notes due 2021(2), effective interest rate of 4.648% | 299,663 | 299,650 | ||||||
3.800% Senior Notes due 2022(3), effective interest rate of 3.845% | 299,134 | 299,109 | ||||||
3.850% Senior Notes due 2023(4), effective interest rate of 3.851% | 299,980 | 299,980 | ||||||
Capital leases | 6 | 25 | ||||||
Total debt and capital lease obligations | 1,396,747 | 1,396,640 | ||||||
Current portion of long-term debt | 6 | 25 | ||||||
Long-term debt, less current portion | $ | 1,396,741 | $ | 1,396,615 | ||||
(1) | Net of unamortized discount of $2.0 million as of March 31, 2015, and $2.1 million as of December 31, 2014. | |||||||
(2) | Net of unamortized discount of $0.3 million as of March 31, 2015, and $0.4 million as of December 31, 2014. | |||||||
(3) | Net of unamortized discount of $0.9 million as of March 31, 2015, and December 31, 2014. | |||||||
(4) | Net of unamortized discount of less than $0.1 million as of March 31, 2015, and December 31, 2014. | |||||||
Unsecured revolving credit facility: | ||||||||
On January 14, 2011, the Company entered into a credit agreement, as amended by Amendment No. 1 dated as of September 9, 2011, and as further amended by Amendment No. 2 dated as of July 2, 2013 (the "Credit Agreement"). The Credit Agreement provides for a $600 million unsecured revolving credit facility (the "Revolving Credit Facility") arranged by Bank of America, N.A., which is scheduled to mature in July of 2018. The Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings under the Revolving Credit Facility. As described in the Credit Agreement governing the Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments under the Revolving Credit Facility by up to $200 million. As of March 31, 2015, and December 31, 2014, the Company had outstanding letters of credit, primarily to support obligations related to workers' compensation, general liability and other insurance policies, in the amount of $50.5 million and $47.9 million, respectively, reducing the aggregate availability under the Revolving Credit Facility by those amounts. As of March 31, 2015, and December 31, 2014, the Company had no outstanding borrowings under the Revolving Credit Facility. | ||||||||
Borrowings under the Revolving Credit Facility (other than swing line loans) bear interest, at the Company's option, at the Base Rate or Eurodollar Rate (both as defined in the Credit Agreement) plus an applicable margin. Swing line loans made under the Revolving Credit Facility bear interest at the Base Rate plus the applicable margin for Base Rate loans. In addition, the Company pays a facility fee on the aggregate amount of the commitments in an amount equal to a percentage of such commitments. The interest rate margins and facility fee are based upon the better of the ratings assigned to the Company's debt by Moody's Investor Service, Inc. and Standard & Poor's Ratings Services, subject to limited exceptions. As of March 31, 2015, based upon the Company's credit ratings, its margin for Base Rate loans was 0.000%, its margin for Eurodollar Rate loans was 0.875% and its facility fee was 0.125%. | ||||||||
The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50 times through maturity, and a maximum consolidated leverage ratio of 3.00 times through maturity. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit and similar instruments, six-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that the Company should default on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the Credit Agreement and litigation from lenders. As of March 31, 2015, the Company remained in compliance with all covenants under the Credit Agreement. | ||||||||
Senior notes: | ||||||||
The Company has issued $1.4 billion aggregate principal amount of unsecured senior notes due between 2021 and 2023 with United Missouri Bank, N.A. as trustee. Interest on the senior notes, ranging from 3.800% to 4.875%, is payable biannually and is computed on the basis of a 360-day year. | ||||||||
The senior notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries ("Subsidiary Guarantors") that incurs or guarantees obligations under the Company's Credit Agreement or under other credit facility or capital markets debt of the Company's or any of the Company's Subsidiary Guarantors. The guarantees are joint and several and full and unconditional, subject to certain customary automatic release provisions, including release of the Subsidiary Guarantor's guarantee under the Company's Credit Agreement and certain other debt, or, in certain circumstances, the sale or other disposition of a majority of the voting power of the capital interest in, or of all or substantially all of the property of, the Subsidiary Guarantor. Each of the Subsidiary Guarantors is 100% owned, directly or indirectly, by the Company and the Company has no independent assets or operations other than those of its subsidiaries. The only direct or indirect subsidiaries of the Company that would not be Subsidiary Guarantors would be minor subsidiaries. Neither the Company, nor any of its Subsidiary Guarantors, is subject to any material or significant restrictions on the Company's ability to obtain funds from its subsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by applicable law. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2015. |
Warranties
Warranties | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Product Warranties Disclosures [Abstract] | ||||
Warranties | NOTE 4 – WARRANTIES | |||
The Company provides warranties on certain merchandise it sells with warranty periods ranging from 30 days to limited lifetime warranties. The risk of loss arising from warranty claims is typically the obligation of the Company's suppliers. Certain suppliers provide upfront allowances to the Company in lieu of accepting the obligation for warranty claims. For this merchandise, when sold, the Company bears the risk of loss associated with the cost of warranty claims. Differences between supplier allowances received by the Company in lieu of warranty obligations and estimated warranty expense are recorded as an adjustment to cost of sales. Estimated warranty costs, which are recorded as obligations at the time of sale, are based on the historical failure rate of each individual product line. The Company's historical experience has been that failure rates are relatively consistent over time and that the ultimate cost of warranty claims to the Company has been driven by volume of units sold as opposed to fluctuations in failure rates or the variation of the cost of individual claims. | ||||
The Company's product warranty liabilities are included in "Other current liabilities" on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2015, and December 31, 2014. The following table identifies the changes in the Company's aggregate product warranty liabilities for the three months ended March 31, 2015 (in thousands): | ||||
Balance at December 31, 2014 | $ | 34,226 | ||
Warranty claims | (10,733 | ) | ||
Warranty accruals | 8,616 | |||
Balance at March 31, 2015 | $ | 32,109 | ||
Share_Repurchase_Program
Share Repurchase Program | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Proceeds from (Repurchase of) Equity [Abstract] | ||||||||
Share repurchase program | NOTE 5 – SHARE REPURCHASE PROGRAM | |||||||
In January of 2011, the Company's Board of Directors approved a share repurchase program. Under the program, 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. The Company and its 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 February 4, 2015, the Company's Board of Directors approved a resolution to increase the authorization amount under the share repurchase program by an additional $500 million, resulting in a cumulative authorization amount of $5.0 billion. The additional $500 million authorization is effective for a three-year period, beginning on its announcement date. | ||||||||
The following table identifies shares of the Company's common stock that have been repurchased as part of the Company's publicly announced share repurchase program (in thousands, except per share data): | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Shares repurchased | 650 | 149 | ||||||
Average price per share | $ | 207.5 | $ | 148.18 | ||||
Total investment | $ | 134,803 | $ | 22,065 | ||||
As of March 31, 2015, the Company had $644.5 million remaining under its share repurchase program. Subsequent to the end of the first quarter and through May 8, 2015, the Company repurchased an additional 0.6 million shares of its common stock under its share repurchase program, at an average price of $218.25, for a total investment of $133.9 million. The Company has repurchased a total of 47.6 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through May 8, 2015, at an average price of $94.29, for a total aggregate investment of $4.5 billion. |
ShareBased_Compensation_and_Be
Share-Based Compensation and Benefit Plans | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Employee Benefits and Share-based Compensation [Abstract] | ||||||||
Share-based compensation and benefit plans | NOTE 6 – SHARE-BASED COMPENSATION AND BENEFIT PLANS | |||||||
The Company recognizes share-based compensation expense based on the fair value of the grants, awards or shares at the time of the grant, award or issuance. Share-based compensation includes stock option awards issued under the Company's employee incentive plans and director stock plan, restricted stock awarded under the Company's employee incentive plans, performance incentive plan and director stock plan, stock issued through the Company's employee stock purchase plan and stock awarded to employees through other benefit programs. | ||||||||
Stock options: | ||||||||
The Company's stock-based incentive plans provide for the granting of stock options for the purchase of common stock of the Company to directors and certain key employees of the Company. Options are granted at an exercise price that is equal to the closing market price of the Company's common stock on the date of the grant. Director options granted under the plans expire after seven years and are fully vested after six months. Employee options granted under the plans expire after ten years and typically vest 25% per year, over four years. The Company records compensation expense for the grant date fair value of the option awards, adjusted for estimated forfeitures, evenly over the minimum required service period. | ||||||||
The table below identifies stock option activity under these plans during the three months ended March 31, 2015: | ||||||||
Shares | Weighted-Average | |||||||
(in thousands) | Exercise Price | |||||||
Outstanding at December 31, 2014 | 4,065 | $ | 64.57 | |||||
Granted | 209 | 200.96 | ||||||
Exercised | (377 | ) | 46.3 | |||||
Forfeited | (28 | ) | 86.31 | |||||
Outstanding at March 31, 2015 | 3,869 | $ | 73.58 | |||||
Exercisable at March 31, 2015 | 2,566 | $ | 48.16 | |||||
The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option pricing model. The Black-Scholes model requires the use of assumptions, including the risk free rate, expected life, expected volatility and expected dividend yield. | ||||||||
• | 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 has historically fluctuated. | |||||||
• | Expected dividend yield – The Company has not paid, nor does it have plans in the foreseeable future to pay, any dividends. | |||||||
The table below identifies the weighted-average assumptions used for grants awarded during the three months ended March 31, 2015 and 2014: | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Risk free interest rate | 1.57 | % | 1.74 | % | ||||
Expected life | 6.1 | Years | 5.9 | Years | ||||
Expected volatility | 22.4 | % | 25.5 | % | ||||
Expected dividend yield | — | % | — | % | ||||
The Company's forfeiture rate is the estimated percentage of options awarded that are expected to be forfeited or canceled prior to becoming fully vested. The Company's estimate is evaluated periodically and is based upon historical experience at the time of evaluation and reduces expense ratably over the vesting period or the minimum required service period. | ||||||||
The following table summarizes activity related to stock options awarded by the Company for the three months ended March 31, 2015 and 2014 (in thousands, except per share data): | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Compensation expense for stock options awarded | $ | 4,997 | $ | 4,085 | ||||
Income tax benefit from compensation expense related to stock options | 1,847 | 1,512 | ||||||
Weighted-average grant-date fair value of options awarded | $ | 51.57 | $ | 39.13 | ||||
The remaining unrecognized compensation expense related to unvested stock option awards at March 31, 2015, was $33.5 million and the weighted-average period of time over which this cost will be recognized is 2.7 years. | ||||||||
Other share-based compensation plans: | ||||||||
The Company sponsors other share-based compensation plans: an employee stock purchase plan (the "ESPP"), which permits all eligible employees to purchase shares of the Company’s common stock at 85% of the fair market value; a performance incentive plan, which provides for the award of shares of restricted stock to its corporate and senior management that vest evenly over a three-year period and are held in escrow until such vesting has occurred; and a director stock plan, which provides for the award of shares of restricted stock to the Company's independent directors that vest evenly over a three-year period and are held in escrow until such vesting has occurred. The fair value of shares awarded under these plans is based on the closing market price of the Company's common stock on the date of award, and compensation expense is recorded evenly over the minimum required service period. | ||||||||
The table below summarizes activity related to the Company's other share-based compensation plans for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Compensation expense for shares issued under the ESPP | $ | 489 | $ | 438 | ||||
Income tax benefit from compensation expense related to shares issued under the ESPP | 181 | 162 | ||||||
Compensation expense for restricted shares awarded | 404 | 573 | ||||||
Income tax benefit from compensation expense related to restricted awards | $ | 149 | $ | 212 | ||||
Profit sharing and savings plan: | ||||||||
The Company sponsors a contributory profit sharing and savings plan (the "401(k) Plan") that covers substantially all employees who are at least 21 years of age and have at least six months of service. The Company makes matching contributions equal to 100% of the first 2% of each employee's wages that are contributed and 25% of the next 4% of each employee's wages that are contributed. An employee must be employed on December 31 to receive that year's Company matching contribution, with the matching contribution funded annually in the January following the year in which the matching contribution was earned. The Company may also make additional discretionary profit sharing contributions to the plan on an annual basis as determined by the Board of Directors. The Company did not make any discretionary contributions to the 401(k) Plan during the three months ended March 31, 2015 or 2014. The Company expensed matching contributions under the 401(k) Plan in the amounts of $4.2 million and $3.9 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Nonqualified deferred compensation plan: | ||||||||
The Company sponsors a nonqualified deferred compensation plan (the "Deferred Compensation Plan") for highly compensated employees whose contributions to the 401(k) Plan are limited due to the application of the annual limitations under the Internal Revenue Code. The Deferred Compensation Plan provides these employees with the opportunity to defer compensation that was precluded under the Company's 401(k) Plan due to the annual limitations, including salary and incentive based compensation, which is then matched by the Company using the same formula as the 401(k) Plan. An employee must be employed on December 31 to receive that year's Company matching contribution, with the matching contribution funded annually in the January following the year in which the matching contribution was earned. In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors. The Company has an unsecured obligation to pay, in the future, the value of the deferred compensation and Company match adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. The liability for compensation deferred under the Deferred Compensation Plan was $16.7 million and $15.4 million as of March 31, 2015, and December 31, 2014, respectively, and was included within "Other liabilities" on the Condensed Consolidated Balance Sheets. The Company expensed matching contributions under the Deferred Compensation Plan in the amounts of less than $0.1 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings per share | NOTE 7 – EARNINGS PER SHARE | |||||||
The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2015 and 2014 (in thousands, except per share data): | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Numerator (basic and diluted): | ||||||||
Net income | $ | 212,864 | $ | 173,860 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share - weighted-average shares | 101,612 | 106,191 | ||||||
Effect of stock options (1) | 1,645 | 1,879 | ||||||
Denominator for diluted earnings per share - weighted-average shares | 103,257 | 108,070 | ||||||
Earnings per share: | ||||||||
Earnings per share-basic | $ | 2.09 | $ | 1.64 | ||||
Earnings per share-assuming dilution | $ | 2.06 | $ | 1.61 | ||||
Antidilutive potential common shares not included in the calculation of diluted earnings per share: | ||||||||
Stock options (1) | 278 | 288 | ||||||
Weighted-average exercise price per share of antidilutive stock options (1) | $ | 195.9 | $ | 135.22 | ||||
(1) | See Note 6 for further discussion on the terms of the Company's share-based compensation plans. | |||||||
For the three months ended March 31, 2015 and 2014, the computation of diluted earnings per share did not include certain securities. These securities represent underlying stock options not included in the computation of diluted earnings per share, because the inclusion of such equity awards would have been antidilutive. | ||||||||
Subsequent to the end of the first quarter and through May 8, 2015, the Company repurchased 0.6 million shares of its common stock, at an average price of $218.25, for a total investment of $133.9 million. |
Legal_Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2015 | |
Loss Contingency [Abstract] | |
Legal matters | NOTE 8 – LEGAL MATTERS |
O'Reilly is currently involved in litigation incidental to the ordinary conduct of the Company's business. The Company records reserves for litigation losses in instances where a material adverse outcome is probable and the Company is able to reasonably estimate the probable loss. The Company reserves for an estimate of material legal costs to be incurred in pending litigation matters. Although the Company cannot ascertain the amount of liability that it may incur from any of these matters, it does not currently believe that, in the aggregate, these matters, taking into account applicable insurance and reserves, will have a material adverse effect on its consolidated financial position, results of operations or cash flows in a particular quarter or annual period. | |
As previously reported, the Company received a subpoena from the District Attorney of the County of Alameda, along with other environmental prosecutorial offices in the state of California, seeking documents and information related to the handling, storage and disposal of hazardous waste. Management has an ongoing and open dialogue with these agencies regarding this matter and is cooperating fully with the request; however, at this time a prediction of the ultimate outcome of these efforts cannot be determined. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent accounting pronouncements | NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS |
In May of 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). Under ASU 2014-09, an entity is required to follow a five-step process to determine the amount of revenue to recognize when promised goods or services are transferred to customers. ASU 2014-09 offers specific accounting guidance for costs to obtain or fulfill a contract with a customer. In addition, an entity is required to disclose sufficient information to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. For public companies, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including periods within that reporting period, and can be adopted either retrospectively or as a cumulative effect adjustment at the date of adoption, with early adoption not permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2017. The Company is in the process of evaluating the potential future impact, if any, of ASU 2014-09 on its consolidated financial position, results of operations and cash flows. | |
In January of 2015, the FASB issued ASU No. 2015-01, "Extraordinary and Unusual Items (Subtopic 225-20)" ("ASU 2015-01"). ASU 2015-01 eliminates from generally accepted accounting principles the concept of extraordinary items; such that, an entity will no longer need to assess whether a particular event or transaction event is extraordinary. ASU 2015-01 is effective for annual reporting periods beginning after December 15, 2015, including periods within that reporting period, and early adoption is permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2016. The application of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. | |
In April of 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)" ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including periods within that reporting period, requires retrospective application, and early adoption is permitted. The Company will adopt this guidance with its first quarter ending March 31, 2016. The application of this guidance affects classification only, and therefore, it is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. |
Fair_Value_Measurements_Polici
Fair Value Measurements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Fair value of financial instruments, policy | The Company uses the fair value hierarchy, which prioritizes the inputs used to measure the fair value of certain of its financial instruments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company uses the income and market approaches to determine the fair value of its assets and liabilities. |
Warranties_Policies
Warranties (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |
Warranties, policy | The Company provides warranties on certain merchandise it sells with warranty periods ranging from 30 days to limited lifetime warranties. The risk of loss arising from warranty claims is typically the obligation of the Company's suppliers. Certain suppliers provide upfront allowances to the Company in lieu of accepting the obligation for warranty claims. For this merchandise, when sold, the Company bears the risk of loss associated with the cost of warranty claims. Differences between supplier allowances received by the Company in lieu of warranty obligations and estimated warranty expense are recorded as an adjustment to cost of sales. Estimated warranty costs, which are recorded as obligations at the time of sale, are based on the historical failure rate of each individual product line. The Company's historical experience has been that failure rates are relatively consistent over time and that the ultimate cost of warranty claims to the Company has been driven by volume of units sold as opposed to fluctuations in failure rates or the variation of the cost of individual claims. |
Recent_Accounting_Pronouncemen1
Recent Accounting Pronouncements Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Recent accounting pronouncements, policy | In May of 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). Under ASU 2014-09, an entity is required to follow a five-step process to determine the amount of revenue to recognize when promised goods or services are transferred to customers. ASU 2014-09 offers specific accounting guidance for costs to obtain or fulfill a contract with a customer. In addition, an entity is required to disclose sufficient information to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. For public companies, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including periods within that reporting period, and can be adopted either retrospectively or as a cumulative effect adjustment at the date of adoption, with early adoption not permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2017. The Company is in the process of evaluating the potential future impact, if any, of ASU 2014-09 on its consolidated financial position, results of operations and cash flows. |
In January of 2015, the FASB issued ASU No. 2015-01, "Extraordinary and Unusual Items (Subtopic 225-20)" ("ASU 2015-01"). ASU 2015-01 eliminates from generally accepted accounting principles the concept of extraordinary items; such that, an entity will no longer need to assess whether a particular event or transaction event is extraordinary. ASU 2015-01 is effective for annual reporting periods beginning after December 15, 2015, including periods within that reporting period, and early adoption is permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2016. The application of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. | |
In April of 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)" ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including periods within that reporting period, requires retrospective application, and early adoption is permitted. The Company will adopt this guidance with its first quarter ending March 31, 2016. The application of this guidance affects classification only, and therefore, it is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||||||||||||||||||||||||
Valuation of marketable securities | ||||||||||||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||||||||||||||||||
Marketable securities | $ | 16,656 | $ | 15,378 | $ | — | $ | — | $ | — | $ | — | $ | 16,656 | $ | 15,378 | ||||||||||||||||
Valuation of senior notes | ||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||
4.875% Senior Notes due 2021 | $ | 497,964 | $ | 558,055 | $ | 497,876 | $ | 566,700 | ||||||||||||||||||||||||
4.625% Senior Notes due 2021 | 299,663 | 331,769 | 299,650 | 337,222 | ||||||||||||||||||||||||||||
3.800% Senior Notes due 2022 | 299,134 | 314,468 | 299,109 | 310,749 | ||||||||||||||||||||||||||||
3.850% Senior Notes due 2023 | $ | 299,980 | $ | 314,806 | $ | 299,980 | $ | 311,656 | ||||||||||||||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Outstanding long-term debt and capital lease obligations | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Revolving Credit Facility | $ | — | $ | — | ||||
4.875% Senior Notes due 2021(1), effective interest rate of 4.966% | 497,964 | 497,876 | ||||||
4.625% Senior Notes due 2021(2), effective interest rate of 4.648% | 299,663 | 299,650 | ||||||
3.800% Senior Notes due 2022(3), effective interest rate of 3.845% | 299,134 | 299,109 | ||||||
3.850% Senior Notes due 2023(4), effective interest rate of 3.851% | 299,980 | 299,980 | ||||||
Capital leases | 6 | 25 | ||||||
Total debt and capital lease obligations | 1,396,747 | 1,396,640 | ||||||
Current portion of long-term debt | 6 | 25 | ||||||
Long-term debt, less current portion | $ | 1,396,741 | $ | 1,396,615 | ||||
(1) | Net of unamortized discount of $2.0 million as of March 31, 2015, and $2.1 million as of December 31, 2014. | |||||||
(2) | Net of unamortized discount of $0.3 million as of March 31, 2015, and $0.4 million as of December 31, 2014. | |||||||
(3) | Net of unamortized discount of $0.9 million as of March 31, 2015, and December 31, 2014. | |||||||
(4) | Net of unamortized discount of less than $0.1 million as of March 31, 2015, and December 31, 2014. |
Warranties_Tables
Warranties (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Product Warranties Disclosures [Abstract] | ||||
Product warranty liabilities | ||||
Balance at December 31, 2014 | $ | 34,226 | ||
Warranty claims | (10,733 | ) | ||
Warranty accruals | 8,616 | |||
Balance at March 31, 2015 | $ | 32,109 | ||
Share_Repurchase_Program_Table
Share Repurchase Program (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Proceeds from (Repurchase of) Equity [Abstract] | ||||||||
Schedule of shares repurchased | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Shares repurchased | 650 | 149 | ||||||
Average price per share | $ | 207.5 | $ | 148.18 | ||||
Total investment | $ | 134,803 | $ | 22,065 | ||||
ShareBased_Compensation_and_Be1
Share-Based Compensation and Benefit Plans (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stock Option [Member] | ||||||||
Summary of stock options | ||||||||
Shares | Weighted-Average | |||||||
(in thousands) | Exercise Price | |||||||
Outstanding at December 31, 2014 | 4,065 | $ | 64.57 | |||||
Granted | 209 | 200.96 | ||||||
Exercised | (377 | ) | 46.3 | |||||
Forfeited | (28 | ) | 86.31 | |||||
Outstanding at March 31, 2015 | 3,869 | $ | 73.58 | |||||
Exercisable at March 31, 2015 | 2,566 | $ | 48.16 | |||||
Black-Scholes option pricing model | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Risk free interest rate | 1.57 | % | 1.74 | % | ||||
Expected life | 6.1 | Years | 5.9 | Years | ||||
Expected volatility | 22.4 | % | 25.5 | % | ||||
Expected dividend yield | — | % | — | % | ||||
Summary of activity of share-based compensation | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Compensation expense for stock options awarded | $ | 4,997 | $ | 4,085 | ||||
Income tax benefit from compensation expense related to stock options | 1,847 | 1,512 | ||||||
Weighted-average grant-date fair value of options awarded | $ | 51.57 | $ | 39.13 | ||||
Restricted Stock [Member] | Employee Stock Purchase Plan [Member] | ||||||||
Summary of activity of share-based compensation | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Compensation expense for shares issued under the ESPP | $ | 489 | $ | 438 | ||||
Income tax benefit from compensation expense related to shares issued under the ESPP | 181 | 162 | ||||||
Compensation expense for restricted shares awarded | 404 | 573 | ||||||
Income tax benefit from compensation expense related to restricted awards | $ | 149 | $ | 212 | ||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Computation of basic and diluted earnings per share | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Numerator (basic and diluted): | ||||||||
Net income | $ | 212,864 | $ | 173,860 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share - weighted-average shares | 101,612 | 106,191 | ||||||
Effect of stock options (1) | 1,645 | 1,879 | ||||||
Denominator for diluted earnings per share - weighted-average shares | 103,257 | 108,070 | ||||||
Earnings per share: | ||||||||
Earnings per share-basic | $ | 2.09 | $ | 1.64 | ||||
Earnings per share-assuming dilution | $ | 2.06 | $ | 1.61 | ||||
Antidilutive potential common shares not included in the calculation of diluted earnings per share: | ||||||||
Stock options (1) | 278 | 288 | ||||||
Weighted-average exercise price per share of antidilutive stock options (1) | $ | 195.9 | $ | 135.22 | ||||
(1) | See Note 6 for further discussion on the terms of the Company's share-based compensation plans. |
Fair_Value_Measurements_Narrat
Fair Value Measurements (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Appreciation in fair value of marketable securities | $0.40 | |
Non-financial assets and liabilities measured at fair value on a nonrecurring basis | $0 | $0 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements Fair Value Measurements (Fair Value of Marketable Securities) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value Measurements | ||
Estimated fair value of marketable securities | $16,656 | $15,378 |
Fair value, inputs, Level 1 [Member] | ||
Fair Value Measurements | ||
Estimated fair value of marketable securities | 16,656 | 15,378 |
Fair value, inputs, Level 2 [Member] | ||
Fair Value Measurements | ||
Estimated fair value of marketable securities | 0 | 0 |
Fair value, inputs, Level 3 [Member] | ||
Fair Value Measurements | ||
Estimated fair value of marketable securities | $0 | $0 |
Fair_Value_Measurements_Fair_V1
Fair Value Measurements (Fair Value of Senior Notes) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Senior Notes due 2021 at 4.875% [Member] | ||
Carrying amount of senior notes | $497,964 | $497,876 |
Estimated fair value of senior notes | 558,055 | 566,700 |
Senior Notes due 2021 at 4.625% [Member] | ||
Carrying amount of senior notes | 299,663 | 299,650 |
Estimated fair value of senior notes | 331,769 | 337,222 |
Senior Notes due 2022 at 3.800% [Member] | ||
Carrying amount of senior notes | 299,134 | 299,109 |
Estimated fair value of senior notes | 314,468 | 310,749 |
Senior Notes due 2023 at 3.850% [Member] | ||
Carrying amount of senior notes | 299,980 | 299,980 |
Estimated fair value of senior notes | $314,806 | $311,656 |
LongTerm_Debt_Unsecured_Revolv
Long-Term Debt (Unsecured Revolving Credit Facility) (Details) (Unsecured debt [Member], Line of credit facility [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Rate | ||
Credit agreement inception date | 14-Jan-11 | |
Current maximum borrowing capacity under credit facility | $600,000,000 | |
Line of credit facility expiration date | 2-Jul-18 | |
Maximum aggregate increase to credit facility | 200,000,000 | |
Letters of credit | 50,500,000 | 47,900,000 |
Outstanding borrowings under credit facility | 0 | 0 |
Covenant description for debt instrument | The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50 times through maturity, and a maximum consolidated leverage ratio of 3.00 times through maturity. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit and similar instruments, six-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that the Company should default on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the Credit Agreement and litigation from lenders. | |
Line of credit facility fee percentage | 0.13% | |
Line of credit facility covenant compliance | As of March 31, 2015, the Company remained in compliance with all covenants under the Credit Agreement. | |
Amendment one [Member] | ||
Credit agreement amendment date | 9-Sep-11 | |
Amendment two [Member] | ||
Credit agreement amendment date | 2-Jul-13 | |
Letter of credit [Member] | ||
Line of credit facility sublimit | 200,000,000 | |
Swing line revolver [Member] | ||
Line of credit facility sublimit | $75,000,000 | |
Spread over Eurodollar rate [Member] | ||
Line of credit current interest rate | 0.88% | |
Spread over Base rate [Member] | ||
Line of credit current interest rate | 0.00% | |
Through maturity [Member] | ||
Minimum debt instrument consolidated fixed charge coverage ratio covenant | 2.5 | |
Maximum debt instrument consolidated leverage ratio covenant | 3 |
LongTerm_Debt_Senior_Notes_Det
Long-Term Debt (Senior Notes) (Details) (USD $) | 3 Months Ended |
In Billions, unless otherwise specified | Mar. 31, 2015 |
D | |
Rate | |
Aggregate principle of unsecured senior notes | $1.40 |
Interest rate of notes, minimum | 3.80% |
Interest rate of notes, maximum | 4.88% |
Number of days in annual interest calculation period | 360 |
Debt instrument covenant description | Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2015. |
LongTerm_Debt_Outstanding_Long
Long-Term Debt (Outstanding Long-Term Debt) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | |
Revolving Credit Facility | $0 | $0 | |
Capital leases | 6,000 | 25,000 | |
Total debt and capital lease obligation | 1,396,747,000 | 1,396,640,000 | |
Current portion of long-term debt | 6,000 | 25,000 | [1] |
Long-term debt, less current portion | 1,396,741,000 | 1,396,615,000 | [1] |
Senior Notes due 2021 at 4.875% [Member] | |||
Senior notes | 497,964,000 | 497,876,000 | |
Senior notes, unamortized discount | 2,000,000 | 2,100,000 | |
Effective interest rate | 4.97% | ||
Senior Notes due 2021 at 4.625% [Member] | |||
Senior notes | 299,663,000 | 299,650,000 | |
Senior notes, unamortized discount | 300,000 | 400,000 | |
Effective interest rate | 4.65% | ||
Senior Notes due 2022 at 3.800% [Member] | |||
Senior notes | 299,134,000 | 299,109,000 | |
Senior notes, unamortized discount | 900,000 | 900,000 | |
Effective interest rate | 3.85% | ||
Senior Notes due 2023 at 3.850% [Member] | |||
Senior notes | 299,980,000 | 299,980,000 | |
Senior notes, unamortized discount | $100,000 | $100,000 | |
Effective interest rate | 3.85% | ||
[1] | The balance sheet at December 31, 2014, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. |
Warranties_Product_Warranty_Li
Warranties (Product Warranty Liabilities) (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Product Warranties Disclosures [Abstract] | |
Balance at December 31, 2014 | $34,226 |
Warranty claims | -10,733 |
Warranty accruals | 8,616 |
Balance at March 31, 2015 | $32,109 |
Share_Repurchase_Program_Narra
Share Repurchase Program (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 1 Months Ended | 52 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Feb. 04, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | 8-May-15 | 8-May-15 |
Share repurchase program | |||||
Increase in authorized amount | $500,000,000 | ||||
Cumulative authorized amount | 5,000,000,000 | ||||
Authorization effective period | 3 years | ||||
Remaining balance under share repurchase program | 644,500,000 | ||||
Common stock repurchased, shares | 650 | 149 | |||
Common stock repurchased, average price per share | $207.50 | $148.18 | |||
Common stock repurchased, value | 134,803,000 | 22,065,000 | |||
Subsequent Event [Member] | |||||
Share repurchase program | |||||
Common stock repurchased, shares | 600 | 47,600 | |||
Common stock repurchased, average price per share | $218.25 | $94.29 | |||
Common stock repurchased, value | $133,900,000 | $4,500,000,000 |
Share_Repurchase_Program_Sched
Share Repurchase Program (Schedule Of Shares Repurchased) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Proceeds from (Repurchase of) Equity [Abstract] | ||
Shares repurchased | 650 | 149 |
Average price per share | $207.50 | $148.18 |
Total investment | $134,803 | $22,065 |
ShareBased_Compensation_and_Be2
Share-Based Compensation and Benefit Plans (Stock Option Narrative) (Details) (Stock Option [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Vesting of options description | The Company's stock-based incentive plans provide for the granting of stock options for the purchase of common stock of the Company to directors and certain key employees of the Company. Options are granted at an exercise price that is equal to the closing market price of the Company's common stock on the date of the grant. Director options granted under the plans expire after seven years and are fully vested after six months. Employee options granted under the plans expire after ten years and typically vest 25% per year, over four years. The Company records compensation expense for the grant date fair value of the option awards, adjusted for estimated forfeitures, evenly over the minimum required service period. |
Remaining unrecognized compensation expense | $33.50 |
Weighted-average period for cost recognition | 2 years 8 months 8 days |
Director [Member] | |
Options expiration date | 7 years |
Vesting period | 6 months |
Employee Stock Option [Member] | |
Options expiration date | 10 years |
Vesting period | 4 years |
Option vesting rate per year | 25.00% |
ShareBased_Compensation_and_Be3
Share-Based Compensation and Benefit Plans (Other Share-Based Compensation) (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Rate | |
Employee Stock Purchase Plan [Member] | |
Other employee benefit plan description | an employee stock purchase plan (the "ESPP"), which permits all eligible employees to purchase shares of the Company’s common stock at 85% of the fair market value |
Employee stock purchase plan stock purchase percentage | 85.00% |
Restricted Stock [Member] | |
Other employee benefit plan description | a performance incentive plan, which provides for the award of shares of restricted stock to its corporate and senior management that vest evenly over a three-year period and are held in escrow until such vesting has occurred; and a director stock plan, which provides for the award of shares of restricted stock to the Company's independent directors that vest evenly over a three-year period and are held in escrow until such vesting has occurred. The fair value of shares awarded under these plans is based on the closing market price of the Company's common stock on the date of award, and compensation expense is recorded evenly over the minimum required service period |
Vesting period | 3 years |
ShareBased_Compensation_and_Be4
Share-Based Compensation and Benefit Plans (Summary Of Stock Options) (Details) (Stock Option [Member], USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 |
Stock Option [Member] | |
Outstanding at December 31, 2014, shares | 4,065 |
Outstanding at December 31, 2014, weighted-average exercise price | $64.57 |
Granted, shares | 209 |
Granted, weighted-average exercise price | $200.96 |
Exercised, shares | -377 |
Exercised, weighted-average exercise price | $46.30 |
Forfeited, shares | -28 |
Forfeited, weighted-average exercise price | $86.31 |
Outstanding at March 31, 2015, shares | 3,869 |
Outstanding at March 31, 2015, weighted-average exercise price | $73.58 |
Exercisable at March 31, 2015, shares | 2,566 |
Exercisable at March 31, 2015, weighted-average exercise price | $48.16 |
ShareBased_Compensation_and_Be5
Share-Based Compensation and Benefit Plans (Black-Scholes Option Pricing Model) (Details) (Stock Option [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Rate | Rate | |
Stock Option [Member] | ||
Risk-free interest rate | 1.57% | 1.74% |
Expected life | 6 years 1 month 6 days | 5 years 10 months 15 days |
Expected volatility | 22.40% | 25.50% |
Expected dividend yield | 0.00% | 0.00% |
ShareBased_Compensation_and_Be6
Share-Based Compensation and Benefit Plans (Stock Option Activity) (Details) (Stock Option [Member], USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock Option [Member] | ||
Compensation expense for benefit plans | $4,997 | $4,085 |
Income tax benefit from compensation expense for benefit plans | $1,847 | $1,512 |
Weighted-average grant date fair value of options awarded | $51.57 | $39.13 |
ShareBased_Compensation_and_Be7
Share-Based Compensation and Benefit Plans (Other Share-Based Compensation Activity) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Stock Purchase Plan [Member] | ||
Compensation expense for benefit plans | $489 | $438 |
Income tax benefit from compensation expense for benefit plans | 181 | 162 |
Restricted Stock [Member] | ||
Compensation expense for benefit plans | 404 | 573 |
Income tax benefit from compensation expense for benefit plans | $149 | $212 |
ShareBased_Compensation_and_Be8
Share-Based Compensation and Benefit Plans (Profit Sharing and Savings Plan) (Narrative) (Details) (Profit Sharing And Savings Plan [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Profit Sharing And Savings Plan [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Other employee benefit plan description | The Company sponsors a contributory profit sharing and savings plan (the "401(k) Plan") that covers substantially all employees who are at least 21 years of age and have at least six months of service. The Company makes matching contributions equal to 100% of the first 2% of each employee's wages that are contributed and 25% of the next 4% of each employee's wages that are contributed. | |
Profit sharing and savings plan employer discretionary contribution | $0 | $0 |
Profit sharing and savings plan cost recognized | $4.20 | $3.90 |
ShareBased_Compensation_and_Be9
Share-Based Compensation and Benefit Plans (Nonqualified Deferred Compensation Plan) (Narrative) (Details) (Nonqualified Deferred Compensation Plan [Member], USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Nonqualified Deferred Compensation Plan [Member] | |||
Share-Based Compensation and Benefit Plans | |||
Deferred compensation plan description | The Company sponsors a nonqualified deferred compensation plan (the "Deferred Compensation Plan") for highly compensated employees whose contributions to the 401(k) Plan are limited due to the application of the annual limitations under the Internal Revenue Code. The Deferred Compensation Plan provides these employees with the opportunity to defer compensation that was precluded under the Company's 401(k) Plan due to the annual limitations, including salary and incentive based compensation, which is then matched by the Company using the same formula as the 401(k) Plan. | ||
Deferred compensation plan obligation | $16.70 | $15.40 | |
Deferred compensation plan cost recognized | $0.10 | $0.10 |
Earnings_Per_Share_Narrative_D
Earnings Per Share (Narrative) (Details) (USD $) | 3 Months Ended | 1 Months Ended | 52 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | 8-May-15 | 8-May-15 |
Earnings Per Share | ||||
Common stock repurchased, shares | 650 | 149 | ||
Common stock repurchased, average price per share | $207.50 | $148.18 | ||
Common stock repurchased, value | $134,803 | $22,065 | ||
Subsequent Event [Member] | ||||
Earnings Per Share | ||||
Common stock repurchased, shares | 600 | 47,600 | ||
Common stock repurchased, average price per share | $218.25 | $94.29 | ||
Common stock repurchased, value | $133,900 | $4,500,000 |
Earnings_Per_Share_Computation
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Numerator (basic and diluted): | ||||
Net income | $212,864 | $173,860 | ||
Denominator: | ||||
Denominator for basic earnings per share - weighted-average shares | 101,612 | 106,191 | ||
Effect of stock options | 1,645 | [1] | 1,879 | [1] |
Denominator for diluted earnings per share - weighted-average shares | 103,257 | 108,070 | ||
Earnings per share - basic | $2.09 | $1.64 | ||
Earnings per share - assuming dilution | $2.06 | $1.61 | ||
Antidilutive stock options | 278 | [1] | 288 | [1] |
Weighted-average exercise price | $195.90 | [1] | $135.22 | [1] |
[1] | See Note 6 for further discussion on the terms of the Company's share-based compensation plans. |