O’Reilly Automotive Inc., balance sheet: debt

US$ in thousands

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Long-term debt	3,826,978)	4,123,217)	3,890,527)	3,417,122)	2,978,390)
	Total long-term debt (carrying amount)	3,826,978)	4,123,217)	3,890,527)	3,417,122)	2,978,390)

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Debt item	Description	The company
Total long-term debt (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	O’Reilly Automotive Inc. total debt increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

	Dec 31, 2021
Selected Financial Data (US$ in thousands)
Senior Notes	4,135,629)
Unsecured revolving credit facility	—)
Total long-term debt (fair value)	4,135,629)
Financial Ratio
Debt, fair value to carrying amount ratio	1.08

Weighted-average interest rate on long-term debt: 3.62%

Interest rate	Debt amount¹	Interest rate × Debt amount
3.85%	300,000)	11,535)
3.85%	300,000)	11,553)
3.57%	500,000)	17,850)
3.62%	750,000)	27,143)
4.38%	500,000)	21,915)
3.90%	500,000)	19,505)
4.21%	500,000)	21,025)
1.80%	500,000)	8,990)
Total	3,850,000)	139,516)
3.62%

¹ US$ in thousands

² Weighted-average interest rate = 100 × 139,516 ÷ 3,850,000 = 3.62%

O’Reilly Automotive Inc., interest costs incurred

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Interest expense	144,768)	161,126)	139,975)	122,129)	91,349)
Interest costs capitalized	7,000)	10,200)	13,000)	9,100)	8,500)
Interest costs incurred	151,768)	171,326)	152,975)	131,229)	99,849)

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Debt item	Description	The company
Interest expense	Amount of the cost of borrowed funds accounted for as interest expense for debt.	O’Reilly Automotive Inc. interest expense increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Interest costs capitalized	Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.	O’Reilly Automotive Inc. interest costs capitalized decreased from 2019 to 2020 and from 2020 to 2021.
Interest costs incurred	Total interest costs incurred during the period and either capitalized or charged against earnings.	O’Reilly Automotive Inc. interest costs incurred increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Net income	2,164,685)	1,752,302)	1,391,042)	1,324,487)	1,133,804)
Add: Income tax expense	617,229)	514,103)	399,287)	369,600)	504,000)
Add: Interest expense	144,768)	161,126)	139,975)	122,129)	91,349)
Earnings before interest and tax (EBIT)	2,926,682)	2,427,531)	1,930,304)	1,816,216)	1,729,153)

Interest costs incurred	151,768)	171,326)	152,975)	131,229)	99,849)
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)¹	20.22	15.07	13.79	14.87	18.93
Adjusted interest coverage ratio (with capitalized interest)²	19.28	14.17	12.62	13.84	17.32

2021 Calculations

¹ Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 2,926,682 ÷ 144,768 = 20.22

² Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 2,926,682 ÷ 151,768 = 19.28

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Solvency ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	O’Reilly Automotive Inc. adjusted interest coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

O’Reilly Automotive Inc. (NASDAQ:ORLY)

Analysis of Debt