UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11 - K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended December 31, 2004
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
REQUIRED INFORMATION
The following audited financial statements are being furnished for the
O'Reilly Automotive, Inc. Profit Sharing and Savings Plan (the "Plan"):
1. Statements of Net Assets Available for Benefits as of December 31,
2004 and 2003.
2. Statement of Changes in Net Assets Available for Benefits for the year
ended December 31, 2004.
EXHIBITS
Exhibit No. Description
----------- ------------------------------------------------------------------
23.1 Consent of Independent Registered Public Accounting Firm
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
O'REILLY AUTOMOTIVE, INC.
PROFIT SHARING AND SAVINGS PLAN
By:/s/ James R. Batten
-------------------------------------
Executive Vice President and CFO
O'Reilly Automotive, Inc.
Financial Statements and Schedule
(Modified Cash Basis)
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
December 31, 2004 and 2003, and the year ended
December 31, 2004
with Report of Independent Registered Public Accounting Firm
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Financial Statements
and Schedule
December 31, 2004 and 2003, and the year ended
December 31, 2004
Contents
Report of Independent Registered Public Accounting Firm........................1
Audited Financial Statements (Modified Cash Basis)
Statements of Net Assets Available for Benefits................................2
Statement of Changes in Net Assets Available for Benefits......................3
Notes to Financial Statements..................................................4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................10
Report of Independent Registered Public Accounting Firm
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 benefits
(modified cash basis) of the O'Reilly Automotive, Inc. Profit Sharing and
Savings Plan (the Plan) as of December 31, 2004 and 2003, and the related
statement of changes in net assets available for benefits (modified cash basis)
for the year ended December 31, 2004. 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 the standards of the Public Company
Accounting Oversight Board (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. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, 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 schedule 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, information regarding the Plan's net assets available for
benefits (modified cash basis) as of December 31, 2004 and 2003, and changes
therein (modified cash basis) for the year ended December 31, 2004, 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 schedule (modified
cash basis) of assets (held at end of year) as of December 31, 2004 is presented
for purposes of additional analysis and is not a required part of the financial
statements but is 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. This supplemental schedule (modified
cash basis) is the responsibility of the Plan's management. The supplemental
schedule (modified cash basis) has been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Ernst & Young LLP
Kansas City, Missouri
May 6, 2005
1
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statements of Net Assets Available for Benefits
(Modified Cash Basis)
December 31,
2004 2003
-----------------------------
Assets:
Investments, at fair value (Note 3) $97,451,057 $81,848,066
-----------------------------
Net assets available for benefits $97,451,057 $81,848,066
=============================
See accompanying notes.
2
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Benefits
(Modified Cash Basis)
Year ended December 31, 2004
Additions:
Dividend and interest income $ 984,020
Contributions:
Rollovers from other plans 540,855
Employer 4,287,523
Employee 5,873,009
-------------
10,701,387
-------------
Net realized and unrealized appreciation
in fair value of investments (Note 3) 10,354,533
-------------
22,039,940
Total additions
Deductions:
Distributions to participants (6,436,949)
-------------
Net increase 15,602,991
Net assets available for benefits,
at beginning of year 81,848,066
-------------
Net assets available for benefits,
at end of year $ 97,451,057
=============
See accompanying notes.
3
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements
December 31, 2004
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
accounting principles generally accepted in the United States. 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. Participant loans are valued at their
outstanding balances, which approximates fair value.
Administrative Expenses
The Plan pays all administrative expenses.
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 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 100% of their annual
compensation to the Plan up to $13,000 ($12,000 for 2003). 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.
Participants are eligible for these voluntary contributions after at least 1,000
hours of service in a 12 consecutive month period of employment. All employer
contributions are initially invested in the O'Reilly Automotive, Inc. Stock
Fund. Participants may reallocate the employer contribution after the initial
investment. Participants may elect to allocate their contributions to their
account balances in various equity, bond or fixed income funds or the O'Reilly
Automotive, Inc. Stock Fund, or a combination thereof. During the year ended
December 31, 2004, the Plan received discretionary contributions from the
Company amounting to approximately $3,000,000, not including matching
contributions.
Participants are immediately vested with respect to their voluntary
contributions. With respect to employer contributions, participants become 20%
vested after two years of service with the Company. Vesting increases in 20%
increments annually to 100% after six years of consecutive service.
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. The
non-vested portions of terminated participants' account balances are forfeited
and such forfeitures serve to reduce future administrative expenses and employer
contributions. At December 31, 2004 and 2003, the Plan retained $606,369 and
$487,908 in forfeitures.
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 The
Wall Street Journal, on the last business day of the
5
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
2. Description of the Plan (continued)
month prior to the date the loan is made. Loans are repaid by payroll deductions
over a period no longer than five years.
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, 2004, and 2003,
terminated employees had approximately $84,258 and $39,645, respectively,
included in net assets available for benefits, which were to be paid in 2005 and
2004, respectively. The Plan pays all administrative expenses. During 2004,
administrative expenses totaled $570,221 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 Benefits.
3. Investments
At December 31, 2004 and 2003, 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:
December 31,
2004 2003
------------- -------------
SunTrust common collective trusts:
Classic Life Vision-Moderate Growth $ 5,664,086 *$ 3,976,163
Stable Asset Fund 10,512,080 9,814,175
Classic 500 Index Fund 6,714,302 5,945,203
Registered investment company fund:
O'Reilly Automotive, Inc. common stock:
Participant Directed 53,102,539 45,201,043
* Below 5% threshold
6
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
3. Investments (Continued)
During 2004, 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, 2004
Stable Asset Fund $ 370,605
Classic 500 Index Fund 576,426
Classic Investment Grade Bond Fund 7,377
Classic Balanced Fund 120,901
Classic Capital Appreciation Fund 105,901
Classic Life Vision-Moderate Growth 80,034
Classic Life Vision-Growth & Income 17,538
Classic Life Vision-Aggressive Growth 46,038
Franklin Small Cap Growth Fund 93,121
Fidelity Advisor Equity Income Fund 132,300
Templeton Growth Fund 228,064
Fidelity Advisor Equity Growth Fund 7,405
MFS Research Bond Fund (6,056)
Classic Life Vision-Conservative 2,039
Classic Small Cap Fund 162,472
Classic Small Cap Growth Stock Fund 22,842
Classic Mid-cap Equity 122,506
Classic Value Income Stock Fund 164,784
American Century Value Advisor Fund (12,346)
O'Reilly Automotive, Inc. common stock 8,112,582
------------
$ 10,354,533
============
7
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
4. Income Tax Status
The underlying non-standardized prototype plan has received an opinion letter
from the Internal Revenue Service (IRS) dated September 9, 2003 stating that the
form of the plan is qualified under Section 401 of the Internal Revenue Code,
and therefore, the related trust is tax exempt. In accordance with Revenue
Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has determined that
it is eligible to and has chosen to rely on the current IRS prototype plan
opinion letter. 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 that the Plan is qualified and the related trust
is tax exempt
5. Related Party Transactions
Certain Plan investments are shares in registered investment companies managed
by SunTrust. SunTrust is the Trustee as described by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
6. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
8
Supplemental Schedule
(Modified Cash Basis)
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
(Modified Cash Basis)
December 31, 2004
Identity of Issue, Borrower, Number of Current
Lessor, or Similar Party Shares Cost Value
--------------------------------------- ----------- ----------- -----------
SunTrust common and collective trusts*:
Stable Asset Fund $ 7,395,446 $10,512,080
Classic Capital Appreciation Fund 2,368,987 2,351,703
Classic Small Cap Fund 1,161,096 1,491,084
Classic 500 Index Fund 5,771,419 6,714,302
Classic Mid-Cap Equity 754,183 913,943
Classic Small Cap Growth Stock Fund 730,895 795,269
Classic Value Income Stock Fund 1,222,116 1,414,444
Classic Life Vision-Moderate Growth 5,568,404 5,664,086
Classic Life Vision-Conservative 6,565 6,684
Classic Life Vision-Aggressive Growth 471,186 528,394
Registered investment company funds:
Fidelity Advisor Equity Income Fund 1,431,926 1,653,736
Fidelity Advisor Equity Growth Fund 265,138 292,159
Franklin Small Cap Growth Fund 737,324 842,523
Templeton Growth Fund 2,281,066 2,585,847
American Century Value Advisor Fund 839,950 898,537
MFS Research Bond Fund 3,344,125 3,340,323
O'Reilly Automotive, Inc. common stock* 1,178,747 25,404,345 53,102,539
Participant loans (interest rates
ranging from 5.00% to 10.5%) -- 4,343,404
----------- ----------- -----------
$59,754,171 $97,451,057
=========== ===========
* Party-in-interest to the Plan
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
EXHIBIT INDEX
Exhibit No. Description
----------- ----------------------------------------------------------------
23.1 Consent of Ernst & Young LLP
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements
(Forms S-8 No. 33-73892 and No. 333-59568) pertaining to the O'Reilly
Automotive, Inc. Profit Sharing and Savings Plan of our report dated May 6,
2005, with respect to the financial statements and schedule 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, 2004.
/s/ Ernst & Young LLP
Kansas City, Missouri
June 21, 2005