SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11 - K
(Mark One) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
(X) SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-21318
A. Full title of the plan and the address of the plan, if different from
that of the Issuer named below.
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
O'Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802
Securities and Exchange Commission
Washington, D.C. 20549
FORM 11-K
REQUIRED INFORMATION
(a) Financial Statements. Filed as part of this Report on Form 11-K are the
financial statements and the schedules thereto of the O'Reilly Automotive,
Inc. Profit Sharing and Savings Plan as required by Form 11-K, together
with the report thereon of Ernst & Young LLP, independent auditors, dated
May 8, 2002.
(b) Exhibits. A consent of Ernst & Young LLP is being filed as Exhibit 23 to
this Report.
Financial Statements and Schedules
(Modified Cash Basis)
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
December 31, 2001 and 2000, and the year ended
December 31, 2001
with Report of Independent Auditors
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Financial Statements
and Schedules
December 31, 2001 and 2000, and the year ended
December 31, 2001
Contents
Report of Independent Auditors.................................................1
Audited Financial Statements (Modified Cash Basis)
Statements of Net Assets Available for Plan Benefits...........................2
Statement of Changes in Net Assets Available for Plan Benefits.................3
Notes to Financial Statements..................................................4
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year...............................................................10
Schedule H, Line 4j - Schedule of Reportable Transactions.....................11
Report of Independent Auditors
The Plan Administrators and Participants
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits (modified cash basis) of the O'Reilly Automotive, Inc. Profit Sharing
and Savings Plan (the Plan) as of December 31, 2001 and 2000, and the related
statement of changes in net assets available for plan benefits (modified cash
basis) for the year ended December 31, 2001. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
As described in Note 1, the financial statements and supplemental schedules were
prepared on the modified cash basis of accounting, which is a comprehensive
basis of accounting other than accounting principles generally accepted in the
United States.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits (modified cash
basis) as of December 31, 2001 and 2000, and the changes in net assets available
for plan benefits (modified cash basis) for the year ended December 31, 2001, on
the basis of accounting described in Note 1.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules (modified
cash basis) of assets held for investment purposes at the end of the year, and
reportable transactions for the year then ended, are presented for purposes of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules (modified cash basis) are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
Ernst & Young LLP
Kansas City, Missouri
May 8, 2002
1
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statements of Net Assets Available for Plan Benefits
(Modified Cash Basis)
December 31,
2001 2000
-----------------------------------
Assets
Investments, at fair value (Note 3) $63,724,017 $49,720,079
-----------------------------------
Net assets available for benefits $63,724,017 $49,720,079
===================================
See accompanying notes.
2
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
(Modified Cash Basis)
Year ended December 31, 2001
Additions:
Investment income:
Net realized and unrealized appreciation
in fair value of investments (Note 3) $ 10,065,683
Dividend and interest income 468,016
Contributions:
Employer 2,655,246
Employee 3,815,812
----------------
6,471,058
----------------
Total additions 17,004,757
Deductions:
Distributions to participants (3,000,819)
----------------
Net increase 14,003,938
Net assets available for benefits, at beginning of year 49,720,079
----------------
Net assets available for benefits, at end of year $ 63,724,017
================
See accompanying notes.
3
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements
December 31, 2001
1. Summary of Significant Accounting Policies
The following is a summary of the significant accounting policies of the
O'Reilly Automotive, Inc. (the "Company") Profit Sharing and Savings Plan (the
"Plan"):
Basis of Presentation
The accompanying financial statements have been prepared on the modified cash
basis of accounting, which is a comprehensive basis of accounting other than
generally accepted accounting principles. Under this basis, contributions are
recorded when received rather than in the period to which they relate, and
expenses are recorded when paid rather than when incurred.
Valuation of Investments
The value of investments in common and collective trusts, registered investment
company funds and O'Reilly Automotive, Inc. common stock is based on quoted
market values received from SunTrust Bank, Central Florida, N.A. (SunTrust) on
the last business day of the plan year.
Use of Estimates
The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
4
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
2. Description of the Plan
The following description of the Plan is provided for general information only.
Participants should refer to the plan agreement for a more complete description
of the Plan's provisions.
The Plan is a defined contribution pension plan providing retirement benefits to
substantially all employees of the Company who have attained age 21 and
completed six months and at least 1,000 hours of service in a
12-consecutive-month period of employment. The Plan is sponsored by the Company
and is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
The Plan allows participants to contribute up to 15% of their annual
compensation to the Plan. At its discretion, the Company has elected to
contribute 50% of each employee's voluntary contribution up to 2% of the
employee's compensation and 25% of the next 4% of each employee's voluntary
contribution. Additionally, the Company may make voluntary contributions to the
Plan annually, as determined by its Board of Directors, up to a maximum
aggregate company contribution of 15% of participants' annual compensation. All
employer contributions are invested in the O'Reilly Automotive, Inc. Stock Fund.
During the year ended December 31, 2001, the Plan received discretionary
contributions from the Company amounting to $1,729,324, not including matching
contributions.
Each participant's account is credited with the participant's contribution and
an allocation of the Company's contribution and Plan earnings. Allocations of
Company contributions are based on participant contributions and compensation.
Allocations of Plan earnings are based on participants' account balances.
Forfeitures of terminated participants' non-vested accounts are allocated based
on participant compensation. Total forfeitures at the end of 2001, amounting to
$749,008, were first applied to administrative expenses and then reduced
employer contributions.
Participants are immediately vested with respect to their voluntary
contributions. With respect to employer contributions, participants become 20%
vested after three years of service with the Company. Vesting increases in 20%
increments annually to 100% after seven years.
Participating employees are entitled to borrow from the Plan the lesser of
$50,000 or 50% of the employee's vested account balance at a rate equal to one
percentage point above the prime interest rate in effect as reported in the Wall
Street Journal on the last business day of the month prior to the date the loan
is made. Loans are repaid by payroll deductions over a period no longer than
five years.
5
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
2. Description of the Plan (continued)
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
Benefit distributions are payable in monthly payments to the beneficiary or in a
lump sum, as elected by the participant. At December 31, 2001, and 2000,
terminated employees had approximately $408,480 and $703,184, respectively,
included in net assets available for plan benefits which were to be paid in 2002
and 2001, respectively. The Plan pays all administrative expenses. During 2001,
administrative expenses totaled $229,759 and are included in the net
realized/unrealized appreciation in fair value of investments in the
accompanying Statement of Changes in Net Assets Available for Plan Benefits.
3. Investments
At December 31, 2001, and 2000, the Plan's investments are held by SunTrust, in
a bank-administered trust fund. SunTrust has authority for the purchase and sale
of investments based on participant discretion, subject to certain restrictions
as specified in the trust agreement and in ERISA.
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
2001 2000
-------------------------------
SunTrust common collective trusts:
Classic Balanced Fund $ 3,978,469 $3,700,449
Stable Asset Fund 5,380,347 4,948,356
500 Index Fund 4,988,900 5,385,736
Registered investment company fund:
O'Reilly Automotive, Inc. common stock 14,790,033 12,034,985
Participant Directed
O'Reilly Automotive, Inc. common stock
Non-participant Directed
25,961,178 17,899,934
6
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
3. Investments (Continued)
During 2001, the Plan's investments (including investments purchased, sold, as
well as held, during the year) appreciated (depreciated) in fair value as
follows:
Net Realized
And
Unrealized
Appreciation
(Depreciation)
in Fair Value of
Investments
-----------------------
Year ended December 31, 2001
Stable Asset Fund $ 64,875
Classic 500 Index Fund (682,255)
Classic Investment Grade Bond Fund 49,007
Classic Balanced Fund (166,901)
Classic Capital Appreciation Fund (41,383)
Classic Life Vision-Moderate Growth (8,841)
Classic Life Vision-Growth & Income (1,613)
Classic Life Vision-Aggressive Growth (1,917)
Franklin Small Cap Growth Fund (29,435)
Fidelity Advisor Equity Income Fund (46,339)
Fidelity Advisor Growth Opportunities Fund (73,022)
Janus Worldwide Fund (325,907)
Janus Advisor Aggressive Growth Fund (134,180)
Classic Small Cap Fund 45,636
American Century Value Advisor Fund 23,933
O'Reilly Automotive, Inc. common stock 11,394,025
-----------------------
$ 10,065,683
=======================
7
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
4. Non-participant Directed Investments
Information about the net assets and the significant components of the changes
in net assets relating to the non-participant directed investments is as
follows:
December 31,
2001 2000
----------------------------
Investments, at fair value:
O'Reilly Automotive, Inc. common stock $ 25,961,178 $ 17,899,934
----------------------------
$ 25,961,178 $ 17,899,934
============================
Year Ended
December 31, 2001
-----------------
Changes in net assets:
Contributions $ 3,030,160
Net realized and unrealized appreciation
in fair value 7,439,964
Distributions to participants (2,408,880)
-----------------
$ 8,061,244
=================
5. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
2001 2000
------ ------
Net assets available for benefits per
the financial statements $ 63,724,017 $ 49,720,079
Accrual for employer voluntary contribution
to be received in the subsequent year 2,201,499 1,737,697
-------------------------------
Net assets available for benefits per the
Form 5500 $ 65,925,516 $ 51,457,776
===============================
8
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
5. Differences Between Financial Statements and Form 5500 (Continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended
December 31, 2001
------------------
Benefits paid to the participants per
the financial statements $ 3,000,819
Amounts allocated on Form 5500 as
corrective distributions 6,391
Benefits paid to the participants per
the Form 5500 $ 3,007,210
==================
6. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated February 7, 1995, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes the Plan as amended is
qualified and the related trust is tax exempt.
9
Supplemental Schedules
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
EIN#-44-00618012 Plan#-002
Schedule H, Line 4i
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
Number of
Identify of Issue Shares Cost Fair Value
--------------------------------------------------------------------------------
SunTrust common and collective trusts*:
Stable Asset Fund $ 2,546,273 $ 5,380,346
Classic Investment Grade Bond Fund 1,653,102 1,743,073
Classic Balanced Fund 3,312,005 3,978,469
Classic Capital Appreciation Fund 408,254 359,242
Classic Small Cap Fund 330,388 390,906
Classic 500 Index Fund 6,581,554 5,711,825
Classic Life Vision-Moderate Growth 254,187 244,994
Classic Life Vision-Growth & Income 65,323 63,134
Classic Life Vision-Aggressive Growth 51,606 47,927
Registered investment company funds:
Fidelity Advisor Equity Income Fund 781,842 743,946
Franklin Small Cap Growth Fund 294,530 270,859
Janus Worldwide Fund 1,807,745 1,375,068
Janus Advisor Aggressive Growth Fund 392,594 283,895
American Century Value Advisor Fund 308,639 339,070
O'Reilly Automotive, Inc. common stock* 1,117,390 16,526,603 40,751,212
Participant loans (interest rates ranging
from 6.0% to 10.5%) -- 2,040,051
--------------------------
$35,314,645 $63,724,017
==========================
*Party-in-interest to the Plan
10
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
EIN #-44-0618012 Plan #-002
Schedule H, Line 4j
Schedule of Reportable Transactions
Year ended December 31, 2001
Current
Identity of Party Cost of Value of Net Gain
Involved Description of Assets Purchases Sales Assets Assets (Loss)
------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of plan assets
O'Reilly O'Reilly Automotive, Inc. common stock $7,249,862 $ -- $7,249,862 $7,249,862 $ --
O'Reilly O'Reilly Automotive, Inc. common stock -- 7,840,205 7,934,812 7,840,205 (94,607)
There were no category (i), (ii) or (iv) reportable transactions during 2001.
11
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-73892) pertaining to the Profit Sharing and Savings Plan of O'Reilly
Automotive, Inc. of our report dated May 8, 2002, with respect to the financial
statements and schedules of the O'Reilly Automotive, Inc. Profit Sharing and
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 2001.
Ernst & Young LLP
Kansas City, Missouri
June 25, 2002