Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 29, 2024 | |
Document and Entity Information | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document transition report | false | |
Amendment flag | false | |
Current fiscal year end date | --12-31 | |
Document period end date | Mar. 31, 2024 | |
Document fiscal year focus | 2024 | |
Document fiscal period focus | Q1 | |
Entity registrant name | O Reilly Automotive Inc | |
Entity central index key | 0000898173 | |
Entity incorporation, state | MO | |
Entity file number | 000-21318 | |
Entity tax identification number | 27-4358837 | |
Entity address, address | 233 South Patterson Avenue | |
Entity address, city | Springfield | |
Entity address, postal zip code | 65802 | |
Entity address, state | MO | |
City area code | 417 | |
Local phone number | 862-6708 | |
Title of 12(b) security | Common Stock, | |
Trading symbol | ORLY | |
Security exchange name | NASDAQ | |
Entity current reporting status | Yes | |
Entity filer category | Large Accelerated Filer | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity interactive data current | Yes | |
Entity shell company | false | |
Entity common stock, shares outstanding | 58,894,096 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | [1] |
Assets | |||
Cash and cash equivalents | $ 89,264 | $ 279,132 | |
Accounts receivable, net | 437,821 | 375,049 | |
Amounts receivable from suppliers | 139,267 | 140,443 | |
Inventory | 4,805,164 | 4,658,367 | |
Other current assets | 128,181 | 105,311 | |
Total current assets | 5,599,697 | 5,558,302 | |
Property and equipment, at cost | 8,555,556 | 8,312,367 | |
Less: accumulated depreciation and amortization | 3,360,351 | 3,275,387 | |
Net property and equipment | 5,195,205 | 5,036,980 | |
Operating lease, right-of-use assets | 2,227,783 | 2,200,554 | |
Goodwill | 1,009,857 | 897,696 | |
Other assets, net | 180,512 | 179,463 | |
Total assets | 14,213,054 | 13,872,995 | |
Liabilities and shareholders' deficit | |||
Accounts payable | 6,117,068 | 6,091,700 | |
Self-insurance reserves | 130,974 | 128,548 | |
Accrued payroll | 127,704 | 138,122 | |
Accrued benefits and withholdings | 174,125 | 174,650 | |
Income taxes payable | 147,645 | 7,860 | |
Current portion of operating lease liabilities | 399,245 | 389,536 | |
Other current liabilities | 791,633 | 730,937 | |
Total current liabilities | 7,888,394 | 7,661,353 | |
Long-term debt | 5,288,632 | 5,570,125 | |
Operating lease liabilities, less current portion | 1,900,200 | 1,881,344 | |
Deferred income taxes | 321,323 | 295,471 | |
Other liabilities | 205,703 | 203,980 | |
Shareholders' (equity) deficit: | |||
Common stock, $0.01 par value: Authorized shares - 245,000,000 Issued and outstanding shares - 58,982,123 as of March 31, 2024, and 59,072,792 as of December 31, 2023 | 590 | 591 | |
Additional paid-in capital | 1,410,756 | 1,352,275 | |
Retained deficit | (2,849,108) | (3,131,532) | |
Accumulated other comprehensive income | 46,564 | 39,388 | |
Total shareholders' deficit | (1,391,198) | (1,739,278) | |
Total liabilities and shareholders' deficit | $ 14,213,054 | $ 13,872,995 | |
[1]The balance sheet at December 31, 2023, 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 BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 245,000,000 | 245,000,000 |
Common stock, shares issued | 58,982,123 | 59,072,792 |
Common stock, shares outstanding | 58,982,123 | 59,072,792 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Income | ||
Sales | $ 3,976,240 | $ 3,707,864 |
Cost of goods sold, including warehouse and distribution expenses | 1,942,068 | 1,817,535 |
Gross profit | 2,034,172 | 1,890,329 |
Selling, general and administrative expenses | 1,281,691 | 1,173,684 |
Operating income | 752,481 | 716,645 |
Other income (expense): | ||
Interest expense | (57,148) | (44,572) |
Interest income | 1,656 | 868 |
Other, net | 3,401 | 4,479 |
Total other expense | (52,091) | (39,225) |
Income before income taxes | 700,390 | 677,420 |
Provision for income taxes | 153,152 | 160,535 |
Net income | $ 547,238 | $ 516,885 |
Earnings per share-basic: | ||
Earnings per share | $ 9.27 | $ 8.36 |
Weighted-average common shares outstanding - basic | 59,017 | 61,840 |
Earnings per share-assuming dilution: | ||
Earnings per share | $ 9.20 | $ 8.28 |
Weighted-average common shares outstanding - assuming dilution | 59,454 | 62,398 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net Income (Loss) | $ 547,238 | $ 516,885 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 7,176 | 18,898 |
Total other comprehensive income (loss) | 7,176 | 18,898 |
Comprehensive income | $ 554,414 | $ 535,783 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common stock [Member] | Additional paid-in capital [Member] | Retained earnings (deficit) [Member] | Accumulated other comprehensive income (loss) [Member] | Total | |
Balance at beginning of period at Dec. 31, 2022 | $ 624 | $ 1,311,488 | $ (2,375,860) | $ 2,996 | $ (1,060,752) | |
Balance (in shares) at Dec. 31, 2022 | 62,353,000 | |||||
Net Income (Loss) | 516,885 | 516,885 | ||||
Other comprehensive income (loss) | 18,898 | 18,898 | ||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes | 5,293 | 5,293 | ||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes, shares | 8,000 | |||||
Net issuance of common stock upon exercise of stock options | 10,255 | 10,255 | ||||
Net issuance of common stock upon exercise of stock options, shares | 35,000 | |||||
Share-based compensation | 6,980 | 6,980 | ||||
Share repurchases, including fees | $ (14) | (28,740) | (1,082,707) | $ (1,111,461) | ||
Share repurchases, including fees, shares | (1,357,000) | (1,357,000) | ||||
Excise tax on net share repurchases | (11,115) | $ (11,115) | ||||
Balance at end of period at Mar. 31, 2023 | $ 610 | 1,305,276 | (2,952,797) | 21,894 | (1,625,017) | |
Balance (in shares) at Mar. 31, 2023 | 61,039,000 | |||||
Balance at beginning of period at Dec. 31, 2023 | $ 591 | 1,352,275 | (3,131,532) | 39,388 | $ (1,739,278) | [1] |
Balance (in shares) at Dec. 31, 2023 | 59,073,000 | 59,072,792 | ||||
Net Income (Loss) | 547,238 | $ 547,238 | ||||
Other comprehensive income (loss) | 7,176 | 7,176 | ||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes | 5,607 | 5,607 | ||||
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes, shares | 6,000 | |||||
Net issuance of common stock upon exercise of stock options | $ 2 | 52,414 | 52,416 | |||
Net issuance of common stock upon exercise of stock options, shares | 165,000 | |||||
Share-based compensation | 6,548 | 6,548 | ||||
Share repurchases, including fees | $ (3) | (6,088) | (263,928) | $ (270,019) | ||
Share repurchases, including fees, shares | (262,000) | (262,000) | ||||
Excise tax on net share repurchases | (886) | $ (886) | ||||
Balance at end of period at Mar. 31, 2024 | $ 590 | $ 1,410,756 | $ (2,849,108) | $ 46,564 | $ (1,391,198) | |
Balance (in shares) at Mar. 31, 2024 | 58,982,000 | 58,982,123 | ||||
[1]The balance sheet at December 31, 2023, 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 STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net Income (Loss) | $ 547,238 | $ 516,885 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property, equipment and intangibles | 109,648 | 93,747 |
Amortization of debt discount and issuance costs | 1,593 | 1,215 |
Deferred income taxes | 2,374 | 3,393 |
Share-based compensation programs | 7,022 | 7,435 |
Other | 2,997 | 29 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (36,954) | (2,610) |
Inventory | (92,042) | (179,481) |
Accounts payable | 6,107 | 172,701 |
Income taxes payable | 140,025 | 145,441 |
Other | 16,207 | (44,991) |
Net cash provided by operating activities | 704,215 | 713,764 |
Investing activities: | ||
Purchases of property and equipment | (249,240) | (223,268) |
Proceeds from sale of property and equipment | 3,853 | 2,704 |
Other | (155,366) | (956) |
Net cash used in investing activities | (400,753) | (221,520) |
Financing activities: | ||
Proceeds from borrowings on revolving credit facility | 30,000 | 1,216,000 |
Payments on revolving credit facility | 0 | (661,000) |
Net payments of commercial paper | (310,805) | 0 |
Repurchases of common stock | (270,019) | (1,111,461) |
Net proceeds from issuance of common stock | 57,815 | 15,146 |
Other | (569) | (354) |
Net cash used in financing activities | (493,578) | (541,669) |
Effect of exchange rate changes on cash | 248 | 714 |
Net decrease in cash and cash equivalents | (189,868) | (48,711) |
Cash and cash equivalents at beginning of the period | 279,132 | 108,583 |
Cash and cash equivalents at end of the period | 89,264 | 59,872 |
Supplemental disclosures of cash flow information: | ||
Income taxes paid | 9,798 | 9,696 |
Interest paid, net of capitalized interest | $ 34,671 | $ 26,531 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation | |
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, 2024, are not necessarily indicative of the results that may be expected for the year ended December 31, 2024. 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, 2023. Principles of consolidation: The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination | |
Business combination | NOTE 2 – BUSINESS COMBINATION On January 22, 2024, the Company completed the previously announced strategic acquisition of Groupe Del Vasto (“Vast Auto”), an auto parts supplier headquartered in Montreal, Quebec, Canada, pursuant to a stock purchase agreement whereby 100% of all outstanding shares of Vast Auto were acquired, with all consideration paid in cash at closing. The acquisition of Vast Auto represents O’Reilly’s entrance into the Canadian automotive aftermarket. At the time of the acquisition, Vast Auto operated two distribution centers and six satellite warehouses that support a network of 23 company-owned stores and thousands of independent jobber and professional customers across Eastern Canada. The results of Vast Auto’s operations have been included in the Company’s condensed consolidated financial statements beginning from the date of acquisition. Pro forma results of operations related to the acquisition of Vast Auto are not presented as Vast Auto’s results are not material to the Company’s results of operations. The purchase price allocation process consists of collecting data and information to enable the Company to value the assets acquired and liabilities assumed as a result of the business combination. Potential identifiable intangible assets under evaluation include, but are not limited to, trade names and trademarks, non-compete agreements, and customer relationships. In addition, other assets, including internal use software, and other assumed liabilities may be identified, valued, and recorded. Due to the close proximity of the Vast Auto acquisition closing date and the Company’s fiscal quarter end, the Company remains in the initial measurement period. The preliminary purchase price allocation, which is provisional and will change as additional information is obtained and valuation work is completed during the initial measurement period, resulted in the initial recognition of $109.8 million of goodwill and intangible assets included in “Goodwill”, including impacts from the recognition of applicable deferred taxes related to the acquisition, on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2024. Goodwill generated from this acquisition is not amortizable for tax purposes. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities | |
Variable interest entities | NOTE 3 – VARIABLE INTEREST ENTITIES The Company invests in certain tax credit funds that promote renewable energy. These investments generate a return primarily through the realization of federal tax credits and other tax benefits. The Company accounts for the tax attributes of its renewable energy investments using the deferral method. Under this method, realized investment tax credits and other tax benefits are recognized as a reduction of the renewable energy tax credits. The Company has determined its investment in these tax credit funds were investments in variable interest entities (“VIEs”). The Company analyzes any investments in VIEs at inception and again if certain triggering events are identified to determine if it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIEs’ economic performance including, but not limited to, the ability to direct financing, leasing, construction, and other operating decisions and activities. As of March 31, 2024, the Company had invested in six unconsolidated tax credit fund entities that were considered to be VIEs and concluded it was not the primary beneficiary of any of the entities, as it did not have the power to control the activities that most significantly impact the entities, and has therefore accounted for these investments using the equity method. The Company’s maximum exposure to losses associated with these VIEs is generally limited to its net investment, which was $29.8 million as of March 31, 2024, and was included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Fair value measurements | NOTE 4 – 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 Company invests in various marketable securities with the intention of selling these securities to fulfill its future unsecured obligations under the Company’s nonqualified deferred compensation plan. See Note 12 for further information concerning the Company’s benefit plans. The Company’s marketable securities were accounted for as trading securities and the carrying amount of its marketable securities were included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023. The Company recorded an increase in fair value related to its marketable securities in the amount of $3.5 million and $2.5 million for the three months ended March 31, 2024 and 2023, respectively, which were included in “Other income (expense)” on the accompanying Condensed Consolidated Statements of Income. The tables below identify the estimated fair value of the Company’s marketable securities, determined by reference to quoted market prices (Level 1), as of March 31, 2024, and December 31, 2023 (in thousands): March 31, 2024 Quoted Priced in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 62,219 $ — $ — $ 62,219 December 31, 2023 Quoted Prices in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 59,508 $ — $ — $ 59,508 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, 2024, and December 31, 2023, 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, unsecured revolving credit facility borrowings, and commercial paper program borrowings are included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023. The table below identifies the estimated fair value of the Company’s senior notes, using the market approach. The fair value as of March 31, 2024, and December 31, 2023, was determined by reference to quoted market prices of the same or similar instruments (Level 2) (in thousands): March 31, 2024 December 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes $ 4,821,943 $ 4,643,028 $ 4,820,543 $ 4,687,065 The carrying amount of the Company’s unsecured revolving credit facility approximates fair value (Level 2), as borrowings under the facility bear variable interest at current market rates. The carrying amount of the Company’s commercial paper program approximates fair value (Level 2), as borrowings under the program bear interest at market rates prevailing at the time of issuance. See Note 7 for further information concerning the Company’s senior notes, unsecured revolving credit facility, and commercial paper program. 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. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Leases | NOTE 5 – LEASES The Company leases certain office space, retail stores, distribution centers, and equipment under long-term, non-cancelable operating leases. The following table summarizes Total lease cost for the three months ended March 31, 2024 and 2023, which were primarily included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income (in thousands): For the Three Months Ended March 31, 2024 2023 Operating lease cost $ 103,556 $ 96,518 Short-term operating lease cost 2,500 3,704 Variable operating lease cost 25,634 24,471 Sublease income (1,154) (1,214) Total lease cost $ 130,536 $ 123,479 The following table summarizes other lease-related information for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 101,616 $ 95,494 Right-of-use assets obtained in exchange for new operating lease liabilities 88,091 126,986 |
SUPPLIER FINANCE PROGRAMS
SUPPLIER FINANCE PROGRAMS | 3 Months Ended |
Mar. 31, 2024 | |
Supplier Finance Programs | |
Supplier Finance Programs | NOTE 6 – SUPPLIER FINANCE PROGRAM The Company has established and maintains supplier finance programs with certain third-party financial institutions, which allow participating merchandise suppliers to voluntarily elect to assign the Company’s payment obligations due to these merchandise suppliers to one of the designated third-party institutions. Under these supplier finance programs, the Company has agreed to pay the third-party financial institutions the stated amount of confirmed merchandise supplier invoices on the original maturity dates of the invoices, which are generally for a term of one year. The Company does not have any assets pledged as security or other forms of guarantees for the committed payment to the third-party financial institutions. As of March 31, 2024, and December 31, 2023, the Company had obligations outstanding under these programs for invoices that were confirmed as valid to the third-party financial institutions in the amounts of $4.3 billion and $4.4 billion, respectively, which were included as a component of “Accounts payable” on the accompanying Condensed Consolidated Balance Sheets. |
FINANCING
FINANCING | 3 Months Ended |
Mar. 31, 2024 | |
Financing | |
Financing | NOTE 7 – FINANCING The following table identifies the amounts included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Revolving Credit Facility, weighted-average variable interest rate of 8.500% $ 30,000 $ — Commercial paper program, weighted-average variable interest rate of 5.527% as of March 31, 2024, and 5.640% as of December 31, 2023 437,000 750,900 3.550% Senior Notes due 2026, effective interest rate of 3.570% 500,000 500,000 5.750% Senior Notes due 2026, effective interest rate of 5.767% 750,000 750,000 3.600% Senior Notes due 2027, effective interest rate of 3.619% 750,000 750,000 4.350% Senior Notes due 2028, effective interest rate of 4.383% 500,000 500,000 3.900% Senior Notes due 2029, effective interest rate of 3.901% 500,000 500,000 4.200% Senior Notes due 2030, effective interest rate of 4.205% 500,000 500,000 1.750% Senior Notes due 2031, effective interest rate of 1.798% 500,000 500,000 4.700% Senior Notes due 2032, effective interest rate of 4.740% 850,000 850,000 Total principal amount of debt 5,317,000 5,600,900 Less: Unamortized discount and debt issuance costs 28,368 30,775 Total long-term debt $ 5,288,632 $ 5,570,125 Unsecured revolving credit facility: The Company is party to a credit agreement dated June 15, 2021, as amended as of March 6, 2023 (the “Credit Agreement”). The Credit Agreement provides for a five-year $1.8 billion unsecured revolving credit facility (the “Revolving Credit Facility”) arranged by JPMorgan Chase Bank, N.A., which is scheduled to mature in June of 2026. 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 $900 million, provided that the aggregate amount of the commitments does not exceed $2.7 billion at any time. As of March 31, 2024, and December 31, 2023, the Company had outstanding letters of credit, primarily to support obligations related to workers’ compensation, general liability, and other insurance policies, under the Credit Agreement in the amounts of $5.7 million and $5.4 million, respectively, reducing the aggregate availability under the Credit Agreement by those amounts. Substantially all of these outstanding letters of credit have a one-year term from the date of issuance. Borrowings under the Revolving Credit Facility (other than swing line loans) bear interest, at the Company’s option, at either an Alternate Base Rate or an Adjusted Term SOFR Rate (both as defined in the Credit Agreement) plus an applicable margin. Swing line loans made under the Revolving Credit Facility bear interest at an Alternate Base Rate plus the applicable margin for Alternate Base Rate loans. In addition, the Company pays a facility fee on the aggregate amount of the commitments under the Credit Agreement 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, 2024, based upon the Company’s current credit ratings, its margin for Alternate Base Rate loans was 0.000%, its margin for Term Benchmark Revolving Loans was 0.900% and its facility fee was 0.100%. The Credit Agreement contains certain covenants, including limitations on subsidiary indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent, and non-cash share-based compensation expense to fixed charges. Fixed charges include interest expense, capitalized interest, and rent expense. 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, five-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 (subject to customary grace periods, cure rights, and materiality thresholds) contained in 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, 2024, the Company remained in compliance with all covenants under the Credit Agreement. In addition to the letters of credit issued under the Credit Agreement described above, as of March 31, 2024, and December 31, 2023, the Company had additional outstanding letters of credit, primarily to support obligations under workers’ compensation, general liability, and other insurance policies, in the amount of $132.1 million and $106.8 million, respectively. Substantially all of these letters of credit have a one-year term from the date of issuance and were not issued under the Company’s Credit Agreement or another committed facility. Commercial paper program: On August 9, 2023, the Company established a commercial paper program (the “Program”) pursuant to which it may issue short-term, unsecured commercial paper notes (the “Notes”) under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the Notes outstanding under the Program at any time not to exceed $1.8 billion. The Notes will have maturities of up to 397 days from the date of issue. The Notes rank at least pari passu with all of the Company’s other unsecured and unsubordinated indebtedness. The Company plans to use its Revolving Credit Facility as a liquidity backstop for the repayment of Notes outstanding under the Program. The Notes issued under the Program were included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheet as of March 31, 2024, as the Company has the ability and intent to refinance these Notes on a long-term basis. Senior notes: As of March 31, 2024, the Company has issued and outstanding a cumulative $4.9 billion aggregate principal amount of unsecured senior notes, which are due between 2026 and 2032, with UMB Bank, N.A. and U.S. Bank Trust Company, National Association as trustees. Interest on the senior notes, ranging from 1.750% to 5.750%, is payable semi-annually and is computed on the basis of a 360-day year. None of the Company’s subsidiaries is a guarantor under the senior notes. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2024. |
WARRANTIES
WARRANTIES | 3 Months Ended |
Mar. 31, 2024 | |
Warranties | |
Warranties | NOTE 8 – 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, 2024, and December 31, 2023; the following table identifies the changes in the Company’s aggregate product warranty liabilities for the three months ended March 31, 2024 (in thousands): Warranty liabilities, balance at December 31, 2023 $ 117,895 Warranty claims (44,585) Warranty accruals 48,275 Foreign currency translation 14 Warranty liabilities, balance at March 31, 2024 $ 121,599 |
SHARE REPURCHASE PROGRAM
SHARE REPURCHASE PROGRAM | 3 Months Ended |
Mar. 31, 2024 | |
Share Repurchase Program | |
Share repurchase program | NOTE 9 – 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’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 May 23, 2023, and November 16, 2023, the Company’s Board of Directors each time approved a resolution to increase the authorization amount under the share repurchase program by an additional $2.0 billion, resulting in a cumulative authorization amount of $25.8 billion. The additional authorizations are effective for three years, beginning on its respective 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 for the three months ended March 31, 2024 and 2023 (in thousands, except per share data): For the Three Months Ended March 31, 2024 2023 Shares repurchased 262 1,357 Average price per share $ 1,029.24 $ 819.06 Total investment $ 270,017 $ 1,111,447 As of March 31, 2024, the Company had $2.3 billion remaining under its share repurchase authorization. Excise tax on shares repurchased, assessed at one percent of the fair market value of shares repurchased, was $2.7 million for the three months ended March 31, 2024. Subsequent to the end of the first quarter and through May 9, 2024, the Company repurchased 0.2 million additional shares of its common stock under its share repurchase program, at an average price of $1,053.19, for a total investment of $208.7 million. The Company has repurchased a total of 94.5 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through May 9, 2024, at an average price of $250.21, for a total aggregate investment of $23.7 billion. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2024 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) includes adjustments for foreign currency translations. The tables below summarize activity for changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 (in thousands): Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2023 $ 39,388 $ 39,388 Change in accumulated other comprehensive income 7,176 7,176 Accumulated other comprehensive income, balance at March 31, 2024 $ 46,564 $ 46,564 Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2022 $ 2,996 $ 2,996 Change in accumulated other comprehensive income 18,898 18,898 Accumulated other comprehensive income, balance at March 31, 2023 $ 21,894 $ 21,894 (1) Foreign currency translation is not shown net of additional U.S. tax, as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2024 | |
Revenue | |
Revenue | NOTE 11 – REVENUE The table below identifies the Company’s revenues disaggregated by major customer type for the three months ended March 31, 2024 and 2023 (in thousands): For the Three Months Ended March 31, 2024 2023 Sales to do-it-yourself customers $ 2,001,986 $ 1,918,467 Sales to professional service provider customers 1,869,740 1,711,964 Other sales, sales adjustments, and sales from the acquired Vast Auto stores 104,514 77,433 Total sales $ 3,976,240 $ 3,707,864 See Note 8 for information concerning the expected costs associated with the Company’s assurance warranty obligations. |
SHARE-BASED COMPENSATION AND BE
SHARE-BASED COMPENSATION AND BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Compensation and Benefit Plans | |
Share-based compensation and benefit plans | NOTE 12 – 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, restricted stock awards, and stock appreciation rights issued under the Company’s incentive plans and stock issued through the Company’s employee stock purchase plan. Stock options: The Company’s incentive plans provide for the granting of stock options for the purchase of common stock of the Company to certain key employees of the Company. Employee stock 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. Employee stock options granted under the plans expire after 10 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 evenly over the vesting period or minimum required service period. The table below identifies stock option activity under these plans during the three months ended March 31, 2024 (in thousands, except per share data): Shares Weighted- Average (in thousands) Exercise Price Outstanding at December 31, 2023 884 $ 428.50 Granted 54 1,069.20 Exercised (165) 316.84 Forfeited or expired (2) 641.53 Outstanding at March 31, 2024 771 $ 496.55 Exercisable at March 31, 2024 545 $ 369.68 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 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. The table below identifies the weighted-average assumptions used for grants awarded during the three months ended March 31, 2024 and 2023: March 31, 2024 2023 Risk free interest rate 4.14 % 3.91 % Expected life 6.6 Years 6.5 Years Expected volatility 28.3 % 29.1 % Expected dividend yield — % — % The following table summarizes activity related to stock options awarded by the Company for the three months ended March 31, 2024 and 2023 (in thousands, except per share data): For the Three Months Ended March 31, 2024 2023 Compensation expense for stock options awarded $ 5,595 $ 6,119 Income tax benefit from compensation expense related to stock options 1,438 1,534 The weighted-average grant-date fair value of options granted during the three months ended March 31, 2024, was $411.22, compared to $318.08 for the three months ended March 31, 2023. The remaining unrecognized compensation expense related to unvested stock option awards at March 31, 2024, was $55.5 million, and the weighted-average period of time over which this cost will be recognized is 3.0 years. Other share-based compensation plans: The Company sponsors other share-based compensation plans: an employee stock purchase plan and incentive plans that provide for the awarding of shares of restricted stock to certain key employees and directors. The Company’s employee stock purchase plan (the “ESPP”) permits eligible employees to purchase shares of the Company’s common stock at 85% of the fair market value. The fair value of shares issued under the ESPP is based on the average of the high and low market prices of the Company’s common stock during the offering periods, and compensation expense is recognized based on the discount between the fair value and the employee purchase price for the shares sold to employees. Restricted stock awarded under the incentive plans to certain key employees and directors vests after one-year or evenly over a three-year period and is held in escrow until such vesting has occurred. The fair value of shares awarded under the incentive plans is based on the closing market price of the Company’s common stock on the date of the award, and compensation expense is recorded evenly over the vesting period or 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, 2024 and 2023 (in thousands): For the Three Months Ended March 31, 2024 2023 Compensation expense for shares issued under the ESPP $ 953 $ 861 Income tax benefit from compensation expense related to shares issued under the ESPP 245 216 Compensation expense for restricted shares awarded 474 455 Income tax benefit from compensation expense related to restricted awards $ 122 $ 114 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. 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. The Company may also make additional discretionary profit sharing contributions to the 401(k) 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, 2024 or 2023. The Company expensed matching contributions under the 401(k) Plan in the amount of $13.8 million and $9.6 million for the three months ended March 31, 2024 and 2023, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income. 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, which could then be matched by the Company using the same formula as the 401(k) plan. 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, if applicable, adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. See Note 4 for further information concerning the Company’s marketable securities held to fulfill our future unsecured obligations under this plan. The liability for compensation deferred under the Deferred Compensation Plan was $62.2 million and $59.5 million as of March 31, 2024, and December 31, 2023, respectively, which was included in “Other liabilities” on the accompanying Condensed Consolidated Balance Sheets. The Company expensed contributions under the Deferred Compensation Plan in the amount of $0.1 million and less than $0.1 million for each of the three months ended March 31, 2024 and 2023, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income. Stock appreciation rights: The Company’s incentive plans provide for the granting of stock appreciation rights, which expire after 10 years and vest 25% per year, over four years, and are settled in cash. As of March 31, 2024, and December 31, 2023, there were 14,204 and 13,079 stock appreciation rights outstanding, respectively. During the three months ended March 31, 2024, there were 1,125 stock appreciation rights granted and no stock appreciation rights exercised of $1.6 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income. |
COMMITMENTS
COMMITMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Commitments | |
Commitments | NOTE 13 – COMMITMENTS The Company has entered into a conditional agreement to purchase federal renewable energy tax credits (“RETC”). As of March 31, 2024, the Company has committed to purchase approximately $375 million RETCs upon the credit transfer date, which is anticipated to occur by June of 2025. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Earnings per share | NOTE 14 – EARNINGS PER SHARE The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands, except per share data): For the Three Months Ended March 31, 2024 2023 Numerator (basic and diluted): Net income $ 547,238 $ 516,885 Denominator: Weighted-average common shares outstanding – basic 59,017 61,840 Effect of stock options (1) 437 558 Weighted-average common shares outstanding – assuming dilution 59,454 62,398 Earnings per share: Earnings per share-basic $ 9.27 $ 8.36 Earnings per share-assuming dilution $ 9.20 $ 8.28 Antidilutive potential common shares not included in the calculation of diluted earnings per share: Stock options (1) 119 149 Weighted-average exercise price per share of antidilutive stock options (1) $ 917.74 $ 725.14 (1) See Note 12 for further information concerning the terms of the Company’s share-based compensation plans. For the three months ended March 31, 2024 and 2023, 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. See Note 9 for information concerning the Company’s subsequent share repurchases. |
LEGAL MATTERS
LEGAL MATTERS | 3 Months Ended |
Mar. 31, 2024 | |
Legal Matters | |
Legal matters | NOTE 15 – LEGAL MATTERS The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business. Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to reasonably estimate the probable loss in accordance with Accounting Standard Codification 450-20. The Company also accrues for an estimate of legal costs to be incurred for litigation matters. Although the Company cannot ascertain the amount of liability that it may incur from legal matters, it does not currently believe that, in the aggregate, these matters, taking into account applicable insurance and accruals, will have a material adverse effect on its consolidated financial position, results of operations or cash flows in a particular quarter or annual period. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Recent Accounting Pronouncements | |
Recent accounting pronouncements | NOTE 16 – RECENT ACCOUNTING PRONOUNCEMENTS In November of 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 increases the disclosures about a public entity’s reportable segments. Under ASU 2023-07, a public entity would be required to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 in interim periods, any additional measures of a segment’s profit or loss used by the CODM to allocate resources, and the title and position of the CODM. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 allows for early adoption and requires retrospective adoption. The Company will adopt this guidance beginning with its fourth quarter ending December 31, 2024. The application of this new guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations, or cash flows, as the guidance pertains to disclosure only. In December of 2023, FASB issued Accounting Standard Update ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). Under ASU 2023-09, a public entity will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, such as if the effect of the reconciling item is equal to or greater than five percent of the amount computed by multiplying pretax income/loss by the applicable statutory income tax rate. Entities would also have to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid, along with income/loss from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. ASU 2023-09 allows for early adoption for annual financial statements that have not yet been issued and allows retrospective and prospective adoption. The Company will adopt this guidance beginning with its fourth quarter ending December 31, 2025. The application of this new guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations, or cash flows, as the guidance pertains to disclosure only. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation. | |
Principles of consolidation, policy | Principles of consolidation: The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. |
VARIABLE INTEREST ENTITIES (Pol
VARIABLE INTEREST ENTITIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities | |
Variable interest entities, policy | The Company invests in certain tax credit funds that promote renewable energy. These investments generate a return primarily through the realization of federal tax credits and other tax benefits. The Company accounts for the tax attributes of its renewable energy investments using the deferral method. Under this method, realized investment tax credits and other tax benefits are recognized as a reduction of the renewable energy tax credits. The Company has determined its investment in these tax credit funds were investments in variable interest entities (“VIEs”). The Company analyzes any investments in VIEs at inception and again if certain triggering events are identified to determine if it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIEs’ economic performance including, but not limited to, the ability to direct financing, leasing, construction, and other operating decisions and activities. As of March 31, 2024, the Company had invested in six unconsolidated tax credit fund entities that were considered to be VIEs and concluded it was not the primary beneficiary of any of the entities, as it did not have the power to control the activities that most significantly impact the entities, and has therefore accounted for these investments using the equity method. The Company’s maximum exposure to losses associated with these VIEs is generally limited to its net investment, which was $29.8 million as of March 31, 2024, and was included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets. |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Fair value of financial instruments | 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. |
WARRANTIES (Policies)
WARRANTIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Warranties | |
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. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Valuation of marketable securities | The tables below identify the estimated fair value of the Company’s marketable securities, determined by reference to quoted market prices (Level 1), as of March 31, 2024, and December 31, 2023 (in thousands): March 31, 2024 Quoted Priced in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 62,219 $ — $ — $ 62,219 December 31, 2023 Quoted Prices in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 59,508 $ — $ — $ 59,508 |
Valuation of senior notes | March 31, 2024 December 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes $ 4,821,943 $ 4,643,028 $ 4,820,543 $ 4,687,065 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Summary of total lease cost | For the Three Months Ended March 31, 2024 2023 Operating lease cost $ 103,556 $ 96,518 Short-term operating lease cost 2,500 3,704 Variable operating lease cost 25,634 24,471 Sublease income (1,154) (1,214) Total lease cost $ 130,536 $ 123,479 |
Other lease related information | For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 101,616 $ 95,494 Right-of-use assets obtained in exchange for new operating lease liabilities 88,091 126,986 |
FINANCING (Tables)
FINANCING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Financing | |
Outstanding financing facilities | March 31, 2024 December 31, 2023 Revolving Credit Facility, weighted-average variable interest rate of 8.500% $ 30,000 $ — Commercial paper program, weighted-average variable interest rate of 5.527% as of March 31, 2024, and 5.640% as of December 31, 2023 437,000 750,900 3.550% Senior Notes due 2026, effective interest rate of 3.570% 500,000 500,000 5.750% Senior Notes due 2026, effective interest rate of 5.767% 750,000 750,000 3.600% Senior Notes due 2027, effective interest rate of 3.619% 750,000 750,000 4.350% Senior Notes due 2028, effective interest rate of 4.383% 500,000 500,000 3.900% Senior Notes due 2029, effective interest rate of 3.901% 500,000 500,000 4.200% Senior Notes due 2030, effective interest rate of 4.205% 500,000 500,000 1.750% Senior Notes due 2031, effective interest rate of 1.798% 500,000 500,000 4.700% Senior Notes due 2032, effective interest rate of 4.740% 850,000 850,000 Total principal amount of debt 5,317,000 5,600,900 Less: Unamortized discount and debt issuance costs 28,368 30,775 Total long-term debt $ 5,288,632 $ 5,570,125 |
WARRANTIES (Tables)
WARRANTIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Warranties | |
Changes in product warranty liabilities | Warranty liabilities, balance at December 31, 2023 $ 117,895 Warranty claims (44,585) Warranty accruals 48,275 Foreign currency translation 14 Warranty liabilities, balance at March 31, 2024 $ 121,599 |
SHARE REPURCHASE PROGRAM (Table
SHARE REPURCHASE PROGRAM (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share Repurchase Program | |
Schedule of shares repurchased | For the Three Months Ended March 31, 2024 2023 Shares repurchased 262 1,357 Average price per share $ 1,029.24 $ 819.06 Total investment $ 270,017 $ 1,111,447 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accumulated Other Comprehensive Income (Loss) | |
Summary of activity for changes in accumulated other comprehensive income (loss) | Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2023 $ 39,388 $ 39,388 Change in accumulated other comprehensive income 7,176 7,176 Accumulated other comprehensive income, balance at March 31, 2024 $ 46,564 $ 46,564 Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2022 $ 2,996 $ 2,996 Change in accumulated other comprehensive income 18,898 18,898 Accumulated other comprehensive income, balance at March 31, 2023 $ 21,894 $ 21,894 (1) Foreign currency translation is not shown net of additional U.S. tax, as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue | |
Disaggregation of revenue | For the Three Months Ended March 31, 2024 2023 Sales to do-it-yourself customers $ 2,001,986 $ 1,918,467 Sales to professional service provider customers 1,869,740 1,711,964 Other sales, sales adjustments, and sales from the acquired Vast Auto stores 104,514 77,433 Total sales $ 3,976,240 $ 3,707,864 |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Employee Stock Option [Member] | |
Share-Based Compensation and Benefit Plans | |
Summary of stock options | Shares Weighted- Average (in thousands) Exercise Price Outstanding at December 31, 2023 884 $ 428.50 Granted 54 1,069.20 Exercised (165) 316.84 Forfeited or expired (2) 641.53 Outstanding at March 31, 2024 771 $ 496.55 Exercisable at March 31, 2024 545 $ 369.68 |
Black-Scholes option pricing model | March 31, 2024 2023 Risk free interest rate 4.14 % 3.91 % Expected life 6.6 Years 6.5 Years Expected volatility 28.3 % 29.1 % Expected dividend yield — % — % |
Summary of activity of share-based compensation and benefit plans | For the Three Months Ended March 31, 2024 2023 Compensation expense for stock options awarded $ 5,595 $ 6,119 Income tax benefit from compensation expense related to stock options 1,438 1,534 |
Restricted stock [Member] | |
Share-Based Compensation and Benefit Plans | |
Summary of activity of share-based compensation and benefit plans | For the Three Months Ended March 31, 2024 2023 Compensation expense for shares issued under the ESPP $ 953 $ 861 Income tax benefit from compensation expense related to shares issued under the ESPP 245 216 Compensation expense for restricted shares awarded 474 455 Income tax benefit from compensation expense related to restricted awards $ 122 $ 114 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | For the Three Months Ended March 31, 2024 2023 Numerator (basic and diluted): Net income $ 547,238 $ 516,885 Denominator: Weighted-average common shares outstanding – basic 59,017 61,840 Effect of stock options (1) 437 558 Weighted-average common shares outstanding – assuming dilution 59,454 62,398 Earnings per share: Earnings per share-basic $ 9.27 $ 8.36 Earnings per share-assuming dilution $ 9.20 $ 8.28 Antidilutive potential common shares not included in the calculation of diluted earnings per share: Stock options (1) 119 149 Weighted-average exercise price per share of antidilutive stock options (1) $ 917.74 $ 725.14 (1) See Note 12 for further information concerning the terms of the Company’s share-based compensation plans. |
Business Combination (Narrative
Business Combination (Narrative) (Details) - Groupe Del Vasto [Member] $ in Millions | Mar. 31, 2024 USD ($) | Jan. 22, 2024 item |
Business Combination | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |
Number of distribution centers | 2 | |
Number of satellite warehouses | 6 | |
Number of stores | 23 | |
Goodwill [Member] | ||
Business Combination | ||
Provisional goodwill and intangibles acquired | $ | $ 109.8 |
VARIABLE INTEREST ENTITIES (Nar
VARIABLE INTEREST ENTITIES (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) entity | |
Variable Interest Entities | |
Number of unconsolidated tax credit fund entities that were considered to be Variable Interest Entities | entity | 6 |
Equity method investment in VIEs, net | $ | $ 29.8 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Fair Value Measurements | |||
Increase (decrease) in fair value of marketable securities | $ 3.5 | $ 2.5 | |
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 of Marketable Securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Measurements | ||
Estimated fair value of marketable securities | $ 62,219 | $ 59,508 |
Fair value, inputs, Level 1 [Member] | ||
Fair Value Measurements | ||
Estimated fair value of marketable securities | $ 62,219 | $ 59,508 |
FAIR VALUE MEASUREMENTS (Fair_2
FAIR VALUE MEASUREMENTS (Fair Value of Senior Notes) (Details) - Fair value, inputs, Level 2 [Member] - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Measurements | ||
Carrying amount of senior notes | $ 4,821,943 | $ 4,820,543 |
Estimated fair value of senior notes | $ 4,643,028 | $ 4,687,065 |
LEASES (Summary of Total Lease
LEASES (Summary of Total Lease Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Operating lease cost | $ 103,556 | $ 96,518 |
Short-term operating lease cost | 2,500 | 3,704 |
Variable operating lease cost | 25,634 | 24,471 |
Sublease income | (1,154) | (1,214) |
Total lease cost | $ 130,536 | $ 123,479 |
LEASES (Supplemental Cash Flow
LEASES (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities, operating cash flows from operating leases | $ 101,616 | $ 95,494 |
Right-of-use asset obtained in exchange for new operating lease liability | $ 88,091 | $ 126,986 |
SUPPLIER FINANCE PROGRAMS (Deta
SUPPLIER FINANCE PROGRAMS (Details) - Supplier Finance Programs [Member] - USD ($) $ in Billions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Debt instrument term | 1 year | 1 year |
Assets pledged as security or other forms of guarantees | $ 0 | $ 0 |
Accounts payable, trade | $ 4.3 | $ 4.4 |
FINANCING (Unsecured Revolving
FINANCING (Unsecured Revolving Credit Facility) (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Unsecured debt [Member] | Letter of credit [Member] | ||
Financing | ||
Number of years in credit facility, term | 1 year | |
Letters of credit | $ 132.1 | $ 106.8 |
Line of credit facility [Member] | ||
Financing | ||
Line of credit facility covenant compliance | As of March 31, 2024, the Company remained in compliance with all covenants under the Credit Agreement. | |
Line of credit facility [Member] | Unsecured debt [Member] | ||
Financing | ||
Credit agreement inception date | Jun. 15, 2021 | |
Number of years in credit facility, term | 5 years | |
Current maximum borrowing capacity under credit facility | $ 1,800 | |
Maximum aggregate increase to credit facility allowable | 900 | |
Maximum aggregate capacity of credit facility allowable | $ 2,700 | |
Line of credit facility [Member] | Unsecured debt [Member] | Minimum [Member] | ||
Financing | ||
Consolidated fixed charge coverage ratio | 2.50 | |
Line of credit facility [Member] | Unsecured debt [Member] | Maximum [Member] | ||
Financing | ||
Consolidated fixed charge coverage ratio | 3.50 | |
Line of credit facility [Member] | Unsecured debt [Member] | Spread over Alternate Base rate [Member] | ||
Financing | ||
Line of credit current interest rate | 0% | |
Line of credit facility [Member] | Unsecured debt [Member] | Spread over Term Benchmark Revolving Loans rate [Member] | ||
Financing | ||
Line of credit current interest rate | 0.90% | |
Line of credit facility [Member] | Unsecured debt [Member] | Spread over Secured Overnight Financing Rate [Member] | ||
Financing | ||
Line of credit facility fee percentage | 0.10% | |
Line of credit facility [Member] | Unsecured debt [Member] | Letter of credit [Member] | ||
Financing | ||
Number of years in credit facility, term | 1 year | |
Line of credit facility sublimit | $ 200 | |
Letters of credit | 5.7 | $ 5.4 |
Line of credit facility [Member] | Unsecured debt [Member] | Swing line revolver [Member] | ||
Financing | ||
Line of credit facility sublimit | $ 75 |
FINANCING (Commercial Paper Pro
FINANCING (Commercial Paper Program) (Narrative) (Details) - Commercial Paper [Member] $ in Billions | Mar. 31, 2024 USD ($) |
Financing | |
Number of years in credit facility, term | 397 days |
Maximum [Member] | |
Financing | |
Current maximum borrowing capacity under credit facility | $ 1.8 |
FINANCING (Senior Notes) (Narra
FINANCING (Senior Notes) (Narrative) (Details) - Senior notes [Member] $ in Billions | 3 Months Ended |
Mar. 31, 2024 USD ($) D entity | |
Financing | |
Face amount of senior notes | $ | $ 4.9 |
Number of days in annual interest calculation period | D | 360 |
Number of guarantors under the senior notes | entity | 0 |
Debt instrument covenant compliance | Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2024. |
Minimum [Member] | |
Financing | |
Interest rate of senior notes | 1.75% |
Maximum [Member] | |
Financing | |
Interest rate of senior notes | 5.75% |
FINANCING (Outstanding Financin
FINANCING (Outstanding Financing Facilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
Financing | |||
Total principal amount of debt | $ 5,317,000 | $ 5,600,900 | |
Less: Unamortized discount and debt issuance costs | 28,368 | 30,775 | |
Total long-term debt | 5,288,632 | 5,570,125 | [1] |
Revolving Credit Facility [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 30,000 | ||
Weighted-average variable interest rate | 8.50% | ||
Commercial Paper [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 437,000 | $ 750,900 | |
Weighted-average variable interest rate | 5.527% | 5.64% | |
Senior notes [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 4,900,000 | ||
Senior notes [Member] | 3.550% Senior Notes due 2026 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 500,000 | $ 500,000 | |
Interest rate of senior notes | 3.55% | 3.55% | |
Senior notes, effective interest rate | 3.57% | 3.57% | |
Senior notes [Member] | 5.750% Senior Notes due 2026 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 750,000 | $ 750,000 | |
Interest rate of senior notes | 5.75% | 5.75% | |
Senior notes, effective interest rate | 5.767% | 5.767% | |
Senior notes [Member] | 3.600% Senior Notes due 2027 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 750,000 | $ 750,000 | |
Interest rate of senior notes | 3.60% | 3.60% | |
Senior notes, effective interest rate | 3.619% | 3.619% | |
Senior notes [Member] | 4.350% Senior Notes due 2028 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 500,000 | $ 500,000 | |
Interest rate of senior notes | 4.35% | 4.35% | |
Senior notes, effective interest rate | 4.383% | 4.383% | |
Senior notes [Member] | 3.900% Senior Notes due 2029 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 500,000 | $ 500,000 | |
Interest rate of senior notes | 3.90% | 3.90% | |
Senior notes, effective interest rate | 3.901% | 3.901% | |
Senior notes [Member] | 4.200% Senior Notes due 2030 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 500,000 | $ 500,000 | |
Interest rate of senior notes | 4.20% | 4.20% | |
Senior notes, effective interest rate | 4.205% | 4.205% | |
Senior notes [Member] | 1.750% Senior Notes due 2031 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 500,000 | $ 500,000 | |
Interest rate of senior notes | 1.75% | 1.75% | |
Senior notes, effective interest rate | 1.798% | 1.798% | |
Senior notes [Member] | 4.700% Senior Notes due 2032 [Member] | |||
Financing | |||
Debt instrument, principal amount | $ 850,000 | $ 850,000 | |
Interest rate of senior notes | 4.70% | 4.70% | |
Senior notes, effective interest rate | 4.74% | 4.74% | |
[1]The balance sheet at December 31, 2023, 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) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Warranties | |
Warranty liabilities, beginning balance | $ 117,895 |
Warranty claims | (44,585) |
Warranty accruals | 48,275 |
Foreign currency translation | 14 |
Warranty liabilities, ending balance | $ 121,599 |
SHARE REPURCHASE PROGRAM (Narra
SHARE REPURCHASE PROGRAM (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 160 Months Ended | |||
Nov. 16, 2023 | May 23, 2023 | May 09, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | May 09, 2024 | |
Share Repurchase Program | ||||||
Increase in authorized amount | $ 2,000,000 | $ 2,000,000 | ||||
Cumulative authorized amount | $ 25,800,000 | |||||
Authorization effective period | 3 years | 3 years | ||||
Remaining balance under share repurchase program | $ 2,300,000 | |||||
Common stock repurchased, shares | 262 | 1,357 | ||||
Common stock repurchased, average price per share | $ 1,029.24 | $ 819.06 | ||||
Common stock repurchased, value | $ 270,017 | $ 1,111,447 | ||||
Excise tax on share repurchase | $ 2,700 | |||||
Subsequent event [Member] | ||||||
Share Repurchase Program | ||||||
Common stock repurchased, shares | 200 | 94,500 | ||||
Common stock repurchased, average price per share | $ 1,053.19 | $ 250.21 | ||||
Common stock repurchased, value | $ 208,700 | $ 23,700,000 |
SHARE REPURCHASE PROGRAM (Sched
SHARE REPURCHASE PROGRAM (Schedule of Shares Repurchased) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Repurchase Program | ||
Shares repurchased | 262 | 1,357 |
Average price per share | $ 1,029.24 | $ 819.06 |
Total investment | $ 270,017 | $ 1,111,447 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Balance at beginning of period | $ (1,739,278) | [1] | $ (1,060,752) |
Change in accumulated other comprehensive income (loss) | 7,176 | 18,898 | |
Balance at end of period | (1,391,198) | (1,625,017) | |
Accumulated other comprehensive income (loss) [Member] | |||
Balance at beginning of period | 39,388 | 2,996 | |
Change in accumulated other comprehensive income (loss) | 7,176 | 18,898 | |
Balance at end of period | 46,564 | 21,894 | |
Foreign currency [Member] | |||
Balance at beginning of period | 39,388 | 2,996 | |
Change in accumulated other comprehensive income (loss) | 7,176 | 18,898 | |
Balance at end of period | $ 46,564 | $ 21,894 | |
[1]The balance sheet at December 31, 2023, 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. |
REVENUE (Disaggregation of Reve
REVENUE (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue | ||
Sales | $ 3,976,240 | $ 3,707,864 |
DIY customer [Member] | ||
Disaggregation of Revenue | ||
Sales | 2,001,986 | 1,918,467 |
Professional service provider customer [Member] | ||
Disaggregation of Revenue | ||
Sales | 1,869,740 | 1,711,964 |
Other customers and sales adjustments [Member] | ||
Disaggregation of Revenue | ||
Sales | $ 104,514 | $ 77,433 |
SHARE-BASED COMPENSATION AND _3
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Option) (Narrative) (Details) - Stock option [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation and Benefit Plans | ||
Weighted-average grant-date fair value of options awarded | $ 411.22 | $ 318.08 |
Remaining unrecognized compensation expense | $ 55.5 | |
Weighted-average period for cost recognition | 3 years | |
Employee Stock Option [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Options expiration period | 10 years | |
Vesting period | 4 years | |
Option vesting rate per year | 25% |
SHARE-BASED COMPENSATION AND _4
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Other Share-Based Compensation) (Narrative) (Details) - Employee stock purchase plan [Member] | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Compensation and Benefit Plans | |
Employee stock purchase plan stock purchase percentage | 85% |
Restricted stock [Member] | Minimum [Member] | |
Share-Based Compensation and Benefit Plans | |
Vesting period | 1 year |
Restricted stock [Member] | Maximum [Member] | |
Share-Based Compensation and Benefit Plans | |
Vesting period | 3 years |
SHARE-BASED COMPENSATION AND _5
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Profit Sharing and Savings Plan) (Narrative) (Detail) - Profit sharing and savings plan [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation and Benefit Plans | ||
Profit sharing and savings plan, employer discretionary contribution | $ 0 | $ 0 |
Profit sharing and savings plan, cost recognized | $ 13,800 | $ 9,600 |
Employee's first 2% of contributed wages [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Profit sharing and savings plan, Company match | 100% | |
Employee's next 4% of contributed wages [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Profit sharing and savings plan, Company match | 25% |
SHARE-BASED COMPENSATION AND _6
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Nonqualified Deferred Compensation Plan) (Narrative) (Details) - Nonqualified Deferred Compensation Plan [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Share-Based Compensation and Benefit Plans | |||
Deferred compensation plan obligation | $ 62.2 | $ 59.5 | |
Deferred compensation plan cost recognized | $ 0.1 | $ 0.1 |
SHARE-BASED COMPENSATION AND _7
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Appreciation Rights) (Narrative) (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Share-Based Compensation and Benefit Plans | |||
Stock appreciation rights expiration period | 10 years | ||
Stock appreciation rights vesting rate per year | 25% | ||
Vesting period | 4 years | ||
Stock appreciation rights outstanding | 14,204 | 13,079 | |
Stock appreciation rights granted during the period, units | 1,125 | ||
Stock appreciation rights exercised during the period, units | 0 | ||
Stock appreciation rights forfeited during the period, units | 0 | ||
Liability for compensation to be paid for redeemed stock appreciation rights | $ 6.2 | $ 4.5 | |
Compensation expense (benefit) for share-based compensation | $ 1.6 | $ 0.3 |
SHARE-BASED COMPENSATION AND _8
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Summary of Stock Options) (Details) - Employee Stock Option [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Share-Based Compensation and Benefit Plans | |
Outstanding shares, beginning balance | shares | 884 |
Outstanding weighted-average exercise price, beginning balance | $ / shares | $ 428.50 |
Granted, shares | shares | 54 |
Granted, weighted-average exercise price | $ / shares | $ 1,069.20 |
Exercised, shares | shares | (165) |
Exercised, weighted-average exercise price | $ / shares | $ 316.84 |
Forfeited or expired, shares | shares | (2) |
Forfeited or expired, weighted-average exercise price | $ / shares | $ 641.53 |
Outstanding shares, ending balance | shares | 771 |
Outstanding weighted-average exercise price, ending balance | $ / shares | $ 496.55 |
Exercisable shares, ending balance | shares | 545 |
Exercisable weighted-average exercise price, ending balance | $ / shares | $ 369.68 |
SHARE-BASED COMPENSATION AND _9
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Black-Scholes Option Pricing Model) (Details) - Employee Stock Option | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation and Benefit Plans | ||
Risk-free interest rate | 4.14% | 3.91% |
Expected life | 6 years 7 months 6 days | 6 years 6 months |
Expected volatility | 28.30% | 29.10% |
Expected dividend yield | 0% | 0% |
SHARE-BASED COMPENSATION AND_10
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Option Activity) (Details) - Employee Stock Option [Member] - Stock option [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation and Benefit Plans | ||
Compensation expense (benefit) for share-based compensation | $ 5,595 | $ 6,119 |
Income tax benefit from compensation expense for share-based compensation | $ 1,438 | $ 1,534 |
SHARE-BASED COMPENSATION AND_11
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Other Share-Based Compensation Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee stock purchase plan [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Compensation expense (benefit) for share-based compensation | $ 953 | $ 861 |
Income tax benefit from compensation expense for share-based compensation | 245 | 216 |
Restricted stock [Member] | ||
Share-Based Compensation and Benefit Plans | ||
Compensation expense (benefit) for share-based compensation | 474 | 455 |
Income tax benefit from compensation expense for share-based compensation | $ 122 | $ 114 |
COMMITMENTS (Commitments) (Narr
COMMITMENTS (Commitments) (Narrative) (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Commitments | |
Purchase commitment | $ 375 |
EARNINGS PER SHARE (Computation
EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator (basic and diluted): | ||
Net Income (Loss) | $ 547,238 | $ 516,885 |
Denominator: | ||
Denominator for basic earnings per share - weighted-average shares | 59,017 | 61,840 |
Effect of stock options | 437 | 558 |
Denominator for diluted earnings per share - weighted-average shares and assumed conversion | 59,454 | 62,398 |
Earnings per share - basic | $ 9.27 | $ 8.36 |
Earnings per share - assuming dilution | $ 9.20 | $ 8.28 |
Antidilutive stock options | 119 | 149 |
Weighted-average exercise price per share of antidilutive stock options | $ 917.74 | $ 725.14 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 547,238 | $ 516,885 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Chris Mancini [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the Company’s fiscal quarter ended March 31, 2024, Chris Mancini, Senior Vice President of Central Store Operations of the Company, terminated a Rule 10b5-1 trading plan that was originally established on August 23, 2023. The plan was terminated during the Company’s unrestricted trading window and at a time when Mr. Mancini was not in possession of material, non-public information about the Company |
Name | Chris Mancini |
Title | Senior Vice President of Central Store Operations |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | Mar. 31, 2024 |