Name: O’Reilly Automotive Inc. (NASDAQ:ORLY) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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O’Reilly Automotive Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Accounts payable	4,695,312)	4,184,662)	3,604,722)	3,376,403)	3,190,029)
Self-insurance reserves	128,794)	109,199)	79,079)	77,012)	71,695)
Accrued payroll	107,588)	88,875)	100,816)	86,520)	77,147)
Accrued benefits and withholdings	234,872)	242,724)	98,539)	89,082)	69,308)
Income taxes payable	—)	16,786)	—)	11,013)	—)
Current portion of operating lease liabilities	337,832)	322,778)	316,061)	—)	—)
Other current liabilities	370,217)	297,393)	270,210)	253,990)	239,187)
Current liabilities	5,874,615)	5,262,417)	4,469,427)	3,894,020)	3,647,366)
Long-term debt	3,826,978)	4,123,217)	3,890,527)	3,417,122)	2,978,390)
Operating lease liabilities, less current portion	1,701,757)	1,718,691)	1,655,297)	—)	—)
Deferred income taxes	175,212)	155,899)	133,280)	105,566)	85,406)
Other liabilities	206,568)	196,160)	171,289)	210,414)	207,677)
Noncurrent liabilities	5,910,515)	6,193,967)	5,850,393)	3,733,102)	3,271,473)
Total liabilities	11,785,130)	11,456,384)	10,319,820)	7,627,122)	6,918,839)
Preferred stock, $0.01 par value; none issued and outstanding shares	—)	—)	—)	—)	—)
Common stock, $0.01 par value	670)	711)	756)	790)	843)
Additional paid-in capital	1,305,508)	1,280,841)	1,280,760)	1,262,063)	1,265,043)
Retained deficit	(1,365,802)	(1,139,139)	(889,066)	(909,186)	(612,840)
Accumulated other comprehensive income (loss)	(6,799)	(2,155)	4,890)	—)	—)
Shareholders’ equity (deficit)	(66,423)	140,258)	397,340)	353,667)	653,046)
Total liabilities and shareholders’ equity (deficit)	11,718,707)	11,596,642)	10,717,160)	7,980,789)	7,571,885)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The liability structure demonstrates a consistent expansion over the five-year period, characterized by a steady increase in both current and noncurrent obligations. Total liabilities grew from approximately 6.92 billion US dollars in 2017 to 11.79 billion US dollars by 2021, representing a significant increase in the company's total leverage.

Current Liability Trends: Accounts payable served as the primary driver of current liabilities, increasing linearly from 3.19 billion US dollars in 2017 to 4.70 billion US dollars in 2021. This trend suggests an increasing reliance on trade credit to fund operations. Total current liabilities rose from 3.65 billion US dollars to 5.87 billion US dollars over the same period.
Long-term Debt and Lease Obligations: Long-term debt experienced a general upward trend, peaking at 4.12 billion US dollars in 2020 before declining to 3.83 billion US dollars in 2021. A notable shift occurred in 2019 with the introduction of operating lease liabilities, which added approximately 1.66 billion US dollars to noncurrent liabilities and 316 million US dollars to current liabilities, likely reflecting changes in accounting standards. Noncurrent liabilities overall expanded from 3.27 billion US dollars in 2017 to 5.91 billion US dollars in 2021.

The stockholders' equity position reveals a progressive erosion of the capital base, culminating in a negative equity position by the end of the analyzed period. This trajectory indicates a capital allocation strategy that prioritizes returning value to shareholders or financing operations through debt rather than retained earnings.

Retained Deficit Expansion: The retained deficit grew substantially, moving from negative 612.84 million US dollars in 2017 to negative 1.37 billion US dollars in 2021. The consistent growth of this deficit suggests that dividends or share repurchases have significantly exceeded net income over the five-year span.
Equity Erosion and Deficit: Shareholders' equity declined from 653.05 million US dollars in 2017 to a deficit of 66.42 million US dollars in 2021. This transition into negative equity indicates that total liabilities now exceed total assets, a condition often associated with aggressive share buyback programs financed by debt.

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