8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): May 8, 2018

O’REILLY AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
Missouri	000-21318	27-4358837
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
233 South Patterson
Springfield, Missouri 65802
(Address of principal executive offices, Zip code)
(417) 862-6708
(Registrant’s telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 (230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2).

¨ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Section 5 – Corporate Governance and Management

Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Following O’Reilly Automotive, Inc.’s (the “Company”) 2018 Annual Meeting of Shareholders (the “Annual Meeting”) held on May 8, 2018, two members of the Company’s Board of Directors (the “Board”), Charles H. O’Reilly Jr. and Paul R. Lederer, tendered their notices of resignation from the Board, consistent with the Board’s mandatory retirement age policy.  The Board accepted their resignations and subsequently decreased the size of the Board from 11 to nine members. 

Item 5.07 – Submission of Matters to a Vote of Security Holders

At the Annual Meeting held on May 8, 2018, of the 83,300,192 shares entitled to vote at the Annual Meeting, 74,321,830 shares were present in person or by proxy. At the Annual Meeting, the shareholders were asked to vote on three Company proposals and one shareholder proposal. A brief description of each proposal, along with the outcome and tabulation of voting results is set forth below:

(a) The individuals listed in the table below were elected as directors, to hold office until the annual meeting of the Company’s shareholders in 2019 and until his or her successor has been duly elected and qualified. The voting results for each such director are as follows:

	Number of Shares
Name of Nominee	Voted For	Voted Against	Abstain	Broker Non-Votes
David O'Reilly	63,446,576	3,259,369	96,423	7,519,462
Larry O'Reilly	59,420,849	7,309,013	72,506	7,519,462
Rosalie O'Reilly Wooten	59,395,953	7,334,941	71,474	7,519,462
Greg Henslee	63,814,461	2,914,743	73,164	7,519,462
Jay D. Burchfield	61,812,932	4,912,165	77,271	7,519,462
Thomas T. Hendrickson	66,374,790	313,075	114,503	7,519,462
John R. Murphy	63,621,738	3,090,938	89,692	7,519,462
Dana M. Perlman	66,576,221	137,060	89,087	7,519,462
Ronald Rashkow	65,452,116	1,257,238	93,014	7,519,462

(b) The shareholders voted to approve, by a non-binding, advisory vote, the 2017 compensation of the Company’s Named Executive Officers (“NEOs”). The voting results are as follows:

Number of Shares
Voted For	Voted Against	Abstain	Broker Non-Votes
64,297,880	2,293,343	211,145	7,519,462

(c) The shareholders voted to ratify the appointment of Ernst & Young LLP, as the Company’s independent auditors for the fiscal year ending December 31, 2018. The voting results are as follows:

Number of Shares
Voted For	Voted Against	Abstain
73,409,598	783,708	128,524

(d) The shareholders voted against the shareholder proposal entitled “Special Shareholder Meeting Improvement.” The voting results are as follows:

Number of Shares
Voted For	Voted Against	Abstain	Broker Non-Votes
27,395,765	39,093,798	312,805	7,519,462

Section 7 – Regulation FD

Item 7.01 – Regulation FD Disclosure

On May 8, 2018, the Company issued a press release announcing the completion of its previously announced executive leadership succession plan and an update to its rent-adjusted debt to EBITDAR target leverage ratio. The text of the press release is attached hereto as Exhibit 99.1.

Section 8 – Other Events

Item 8.01 – Other Events

On May 8, 2018, the Company announced the completion of its leadership succession plan, previously described in its Form 8-K dated February 7, 2018, and updated the Company’s target rent-adjusted Debt to EBITDAR leverage ratio, from the previous target range originally established in January of 2011 at 2.00 times to 2.25 times, to a target ratio of 2.50 times, using six-times capitalized rent.

Section 9 – Financial Statements and Exhibits

Item 9.01 – Financial Statements and Exhibits

Exhibit Number	Description
99.1	Press Release dated May 8, 2018

The information in Section 7 and Section 9 of this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 8, 2018	O’REILLY AUTOMOTIVE, INC.
	By:	/s/ Thomas McFall
		Thomas McFall
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

O’REILLY AUTOMOTIVE, INC. ANNOUNCES LEADERSHIP SUCCESSION

AND UPDATE TO TARGET LEVERAGE RATIO

• Greg Johnson promoted to Chief Executive Officer and Co-President

• Jeff Shaw promoted to Chief Operating Officer and Co-President

• Adjusted Debt to EBITDAR Target Leverage Ratio updated to 2.50 times

Springfield, MO, May 8, 2018 – O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced the completion of its previously announced leadership succession plan and updated the target leverage ratio as part of its long-term capital structure. During today’s Annual Meeting of Shareholders, Greg Henslee, who has served as the Company’s Chief Executive Officer (“CEO”) since February of 2005, was elected to serve as a Director on the Company’s Board of Directors (the “Board”) and was subsequently appointed by the Board to serve as Executive Vice Chairman. In conjunction with Mr. Henslee’s election to the Board, Greg Johnson, was promoted to CEO and Co-President, and Jeff Shaw was promoted to Chief Operating Officer and Co-President.

“With Greg Henslee’s election to the Board and accepting the Executive Vice Chairman position, we have successfully completed our leadership succession plan,” stated David O’Reilly, O’Reilly’s Executive Chairman of the Board. “Greg Johnson and Jeff Shaw have assumed all of the day-to-day operational responsibility of the business, and we are very excited to continue O’Reilly’s success under their leadership. I would also like to take this opportunity to express my deep gratitude to Charles O’Reilly, Jr. and Paul Lederer who completed their final terms as Board members today. We are extremely grateful to both gentlemen for their long years of loyal service to the Company, and I would to thank each of them for their significant contributions to our long-term success.”

During the quarterly Board meeting following the Annual Meeting of Shareholders, the Board approved a change to the Company’s target rent-adjusted Debt to EBITDAR leverage ratio, updating the previous target range originally established in January of 2011 at 2.00 times to 2.25 times to a target ratio of 2.50 times, using six-times capitalized rent.

Greg Johnson, O’Reilly’s CEO and Co-President stated, “We established our original target leverage ratio range of 2.00 to 2.25 times over seven years ago, and based on our profitable growth and effective management of our capital, we believe it is appropriate to update our target leverage ratio to 2.50 times, which will provide us with increased financial flexibility and liquidity while also maintaining our historically prudent financial policies. We believe this updated ratio is the appropriate capital structure for our Company, and we remain committed to maintaining our investment-grade credit ratings. Adjusted debt to EBITDAR is a very important metric but only one of several we use to manage our capital structure, and we will reach the new target at the appropriate time.”

About O’Reilly Automotive, Inc.

O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company’s website at www.oreillyauto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities and other programs. As of March 31, 2018, the Company operated 5,097 stores in 47 states.

Forward-looking Statements

The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as “estimate,” “may,” “could,” “will,” “believe,” “expect,” “would,” “consider,” “should,” “anticipate,” “project,” “plan,” “intend” or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements concerning the updated target leverage ratio, expected growth, store development, integration and expansion strategy, business strategies, the impact of the U.S. Tax Cuts and Jobs Act, future revenues and our future capital structure, liquidity, performance and credit ratings. These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events and results. Such statements are subject to risks, uncertainties and assumptions, including, but not limited to, the economy in general, inflation, product demand, the market for auto parts, competition, weather, risks associated with the performance of acquired businesses, our ability to hire and retain qualified employees, consumer debt levels, our increased debt levels, credit ratings on public debt, governmental regulations, terrorist activities, war and the threat of war. Further, there can be no assurance that we will achieve our updated target leverage ratio. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended December 31, 2017, for additional factors that could materially affect the Company’s financial performance. Forward-looking statements speak only as of the date they were made and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information contact:	Investor & Media Contact
	Mark Merz (417) 829-5878