O REILLY AUTOMOTIVE INC

Previous wording

We claim 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 quarterly report that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues, and future performance. 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; consumer debt levels; product demand; a public health crisis; the market for auto parts; competition; weather; tariffs; availability of key products and supply chain disruptions; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; damage, failure, or interruption of information technology systems, including information security and cyber-attacks; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; and governmental regulations. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2023, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect our financial performance. Forward-looking statements speak only as of the date they were made, and we undertake 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.

Current wording

We claim 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 quarterly report that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues, and future performance. 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; consumer debt levels; product demand; a public health crisis; the market for auto parts; competition; weather; trade disputes and changes in trade policies, including the imposition of new or increased tariffs; availability of key products and supply chain disruptions; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; damage, failure, or interruption of information technology systems, including information security and cyber-attacks; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; and governmental regulations. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2024, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect our financial performance. Forward-looking statements speak only as of the date they were made, and we undertake 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.

Previous wording

We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, Mexico, and Canada. We are one of the largest U.S. automotive aftermarket specialty retailers, selling our products to both DIY customers and professional service providers – our “dual market strategy.” Our goal is to achieve growth in sales and profitability by capitalizing on our competitive advantages, such as our dual market strategy, superior customer service provided by well-trained and technically proficient Team Members, and strategic distribution and hub store network that provides same day and over-night inventory access for our stores to offer a broad selection of product offerings. The successful execution of our growth strategy includes aggressively opening new stores, growing sales in existing stores, continually enhancing merchandising and store layouts, and implementing our Omnichannel initiatives. As of September 30, 2024, we operated 6,187 stores in 48 U.S. states and Puerto Rico, 78 stores in Mexico, and 26 stores in Canada.

Current wording

We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, Mexico, and Canada. We are one of the largest North American automotive aftermarket specialty retailers, selling our products to both DIY customers and professional service providers – our “dual market strategy.” Our goal is to achieve growth in sales and profitability by capitalizing on our competitive advantages, such as our dual market strategy, superior customer service provided by well-trained and technically proficient Team Members, and strategic distribution and hub store network that provides same day and over-night inventory access for our stores to offer a broad selection of product offerings. The successful execution of our growth strategy includes aggressively opening new stores, growing sales in existing stores, continually enhancing merchandising and store layouts, and implementing our Omnichannel initiatives. As of March 31, 2025, we operated 6,298 stores in 48 U.S. states and Puerto Rico, 93 stores in Mexico, and 25 stores in Canada.

Previous wording

The extensive product line offered in our stores consists of new and remanufactured automotive hard parts, maintenance items, accessories, a complete line of auto body paint and related materials, automotive tools, and professional service provider service equipment. Our extensive product line includes an assortment of products that are differentiated by quality and price for most of the product lines we offer. For many of our product offerings, this quality differentiation reflects “good,” “better,” and “best” alternatives.

Current wording

The extensive product line offered in our stores consists of new and remanufactured automotive hard parts, maintenance items, accessories, a complete line of auto body paint and related materials, automotive tools, and professional service provider service equipment. Our extensive product line includes an assortment of products that are differentiated by quality and price for most of the product lines we offer. For many of our product offerings, this quality differentiation reflects “good,” “better,” and “best” alternatives. Our sales and total gross profit dollars are, generally, highest for the “best” quality category of products. Consumers’ willingness to select products at a higher point on the value spectrum is a driver of enhanced sales and profitability in our industry. We have ongoing

Previous wording

Our sales and total gross profit dollars are, generally, highest for the “best” quality category of products. Consumers’ willingness to select products at a higher point on the value spectrum is a driver of enhanced sales and profitability in our industry. We have ongoing initiatives focused on marketing and training to educate customers on the advantages of ongoing vehicle maintenance, as well as “purchasing up” on the value spectrum.

Current wording

initiatives focused on marketing and training to educate customers on the advantages of ongoing vehicle maintenance, as well as “purchasing up” on the value spectrum.

Previous wording

Our business is influenced by a number of general macroeconomic factors that impact both our industry and consumers, including, but not limited to, inflation, including rising consumer staples; fuel and energy costs; unemployment trends; interest rates; and other economic factors. Future changes, such as continued broad-based inflation and rapid fuel cost increases that exceed wage growth, may negatively impact our consumers’ level of disposable income, and we cannot predict the degree these changes, or other future changes, may have on our business or industry.

Current wording

Our business is influenced by a number of general macroeconomic factors that impact both our industry and consumers, including, but not limited to, inflation, tariffs, fuel and energy costs, unemployment trends, interest rates, and other economic factors. Future changes, such as continued broad-based inflation and rapid fuel cost increases that exceed wage growth, may negatively impact our consumers’ level of disposable income, and we cannot predict the degree these changes, or other future changes, may have on our business or industry.

Previous wording

We believe the key drivers of demand over the long-term for the products sold within the automotive aftermarket include the number of U.S. miles driven, number of U.S. registered vehicles, annual rate of light vehicle sales, and average vehicle age.

Current wording

We believe the key drivers of demand over the long-term for the products sold within the automotive aftermarket include the number of miles driven, number of registered vehicles, annual rate of light vehicle sales, and average vehicle age. Currently, our consolidated revenue is primarily generated within the United States.

Previous wording

The number of total miles driven in the U.S. influences the demand for repair and maintenance products sold within the automotive aftermarket. In total, vehicles in the U.S. are driven approximately three trillion miles per year, resulting in ongoing wear and tear and a corresponding continued demand for the repair and maintenance products necessary to keep these vehicles in operation. According to the U.S. Department of Transportation, the number of total miles driven in the U.S. increased 0.9% and 2.1% in 2022 and 2023, respectively, and year-to-date through August of 2024, miles driven have increased 0.9%. Total miles driven can be impacted by macroeconomic factors, including rapid increases in fuel cost, but we are unable to predict the degree of impact these factors may have on miles driven in the future.

Current wording

The number of total miles driven in the U.S. influences the demand for repair and maintenance products sold within the automotive aftermarket. In total, vehicles in the U.S. are driven approximately three trillion miles per year, resulting in ongoing wear and tear and a corresponding continued demand for the repair and maintenance products necessary to keep these vehicles in operation. According to the U.S. Department of Transportation, the number of total miles driven in the U.S. increased 2.1% and 1.0% in 2023 and 2024, respectively, and year-to-date through March of 2025, miles driven have increased 0.6% despite 2024 containing one more day with Leap Day. Total miles driven can be impacted by macroeconomic factors, including rapid increases in fuel cost, but we are unable to predict the degree of impact these factors may have on miles driven in the future.

Previous wording

The total number of vehicles on the road and the average age of the vehicle population heavily influence the demand for products sold within the automotive aftermarket industry. As reported by the Auto Care Association, the total number of registered vehicles increased 14.2% from 2013 to 2023, bringing the number of light vehicles on the road to 284 million by the end of 2023. For the year ended December 31, 2023, the seasonally adjusted annual rate of light vehicle sales in the U.S. (“SAAR”) was approximately 15.8 million vehicles, and for 2024, the SAAR is estimated to be approximately 15.8 million vehicles, contributing to the continued growth in the total number of registered vehicles on the road. From 2013 to 2023, vehicle scrappage rates have remained relatively stable, ranging from 4.1% to 5.7% annually. As a result, over the past decade, the average age of the U.S. vehicle population has increased, growing 10.6%, from 11.3 years in 2013 to 12.5 years in 2023. While the annual changes to the vehicle population resulting from new vehicle sales and the fluctuation in vehicle scrappage rates in any given year represent a small percentage of the total light vehicle population and have a muted impact on the total number and average age of vehicles on the road over the short term, we believe our business benefits from the current environment of elevated new and used vehicle prices, as consumers are more willing to continue to invest in their current vehicle.

Current wording

The total number of vehicles on the road and the average age of the vehicle population heavily influence the demand for products sold within the automotive aftermarket industry. As reported by the Auto Care Association, the total number of U.S. registered vehicles increased 14.2% from 2013 to 2023, bringing the number of light vehicles on the road to 284 million by the end of 2023. For the year ended December 31, 2024, the seasonally adjusted annual rate of light vehicle sales in the U.S. (“SAAR”) was approximately 16.8 million vehicles, and for 2025, the SAAR is estimated to be approximately 17.8 million vehicles, contributing to the continued growth in the total number of registered vehicles on the road. From 2013 to 2023, U.S. vehicle scrappage rates have remained relatively stable, ranging from 4.1% to 5.7% annually. As a result, over the past decade, the average age of the U.S. vehicle population has increased, growing 10.6%, from 11.3 years in 2013 to 12.5 years in 2023. While the annual changes to the vehicle population resulting from new vehicle sales and the fluctuation in vehicle scrappage rates in any given year represent a small percentage of the total light vehicle population and have a muted impact on the total number and average age of vehicles on the road over the short term, we believe our business benefits from rising average new and used vehicle prices, as consumers are more willing to continue to invest in their current vehicle.

Previous wording

Inflationary cost pressures impact our business; however, historically we have been successful, in many cases, in reducing the effects of merchandise cost increases, principally by taking advantage of supplier incentive programs, economies of scale resulting from increased volume of purchases and selective forward buying. To the extent our acquisition costs increase due to base commodity price increases or other input cost increases affecting the entire industry, we have typically been able to pass along these cost increases through higher selling prices for the affected products. As a result, we do not believe inflation has had a material adverse effect on our operations.

Current wording

Inflationary cost pressures impact our business; however, historically we have been successful, in many cases, in reducing the effects of merchandise cost increases, principally by taking advantage of supplier incentive programs and economies of scale resulting from increased volume of purchases. To the extent our acquisition costs increase due to base commodity price increases or other input cost increases affecting the entire industry, we have typically been able to pass along these cost increases through higher selling prices for the affected products. As a result, we do not believe inflation has had a material adverse effect on our operations.

Previous wording

Sales for the three months ended September 30, 2024, increased $161 million, or 4%, to $4.36 billion from $4.20 billion for the same period one year ago. Sales for the nine months ended September 30, 2024, increased $633 million or 5% to $12.61 billion from $11.98 billion for the same period one year ago. Comparable store sales for stores open at least one year increased 1.5% and 8.7% for the three months ended September 30, 2024 and 2023, respectively. Comparable store sales for stores open at least one year increased 2.4% and 9.4% for the nine months ended September 30, 2024 and 2023, respectively. Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, and sales to Team Members, as well as sales from Leap Day in the nine months ended September 30, 2024. Online sales for ship-to-home orders and pickup in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. We opened 47 and 111 net, new stores during the three and nine months ended September 30, 2024, respectively, compared to opening 40 and 140 net, new stores during the three and nine months ended September 30, 2023, respectively. Additionally, we began operating 23 stores in Canada from the Vast Auto acquisition during the nine months ended September 30, 2024. We anticipate total new store growth to be 190 to 200 net, new store openings in 2024. We anticipate total new store growth to be 200 to 210 net, new store openings in 2025.

Current wording

Sales for the three months ended March 31, 2025, increased $161 million, or 4%, to $4.14 billion from $3.98 billion for the same period one year ago. Comparable store sales for stores open at least one year increased 3.6% and 3.4% for the three months ended March 31, 2025 and 2024, respectively. Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, and sales to Team Members, as well as sales from Leap Day in the three months ended March 31, 2024. Online sales for ship-to-home orders and pickup in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. We opened 38 and 37 net, new stores during the three months ended March 31, 2025 and 2024, respectively. Additionally, we began operating 23 stores in Canada from the Groupe Del Vasto (Vast Auto) acquisition during the three months ended March 31, 2024. We anticipate total new store growth to be 200 to 210 net, new store openings in 2025.

Previous wording

The increase in sales for the three months ended September 30, 2024, was primarily the result of the 1.5% increase in domestic comparable store sales, a $66 million increase in sales from new stores opened in 2023 and 2024 that are not considered comparable stores, and sales from the acquired Vast Auto stores. The increase in sales for the nine months ended September 30, 2024, was primarily the result of 2.4% increase in domestic comparable store sales, a $210 million increase in sales from new stores opened in 2023 and 2024 that are not considered comparable stores, sales from the acquired Vast Auto stores, and sales from one additional day due to Leap Day. Our comparable store sales increases for the three and nine months ended September 30, 2024, were driven by increases in average ticket values for both professional service provider and DIY customers and positive transaction counts from professional service provider customers, partially offset by negative transaction counts from DIY customers. Average ticket values benefited from inflationary increases in average selling prices, as compared to the same periods in 2023. Average ticket values also continue to be positively impacted by the increasing complexity and cost of replacement parts necessary to maintain the current population of better-engineered and more technically advanced vehicles. These better-engineered, more technically advanced vehicles require less frequent repairs, as the component parts are more durable and last for longer periods of time. The resulting decrease in repair frequency creates pressure on customer transaction counts; however, when repairs are needed, the cost of replacement parts is, on average, greater, which is a benefit to average ticket values. The decreases in DIY customer transaction counts were driven by pressured consumer spending on discretionary categories and broader industry pressure in certain repair related hard part categories.

Current wording

The increase in sales for the three months ended March 31, 2025, was primarily the result of the 3.6% increase in domestic comparable store sales, a $73 million increase in sales from new stores opened in 2024 and 2025 that are not considered comparable stores, partially offset by the effect of sales from one additional day in the prior year due to Leap Day. Our comparable store sales increase for the three months ended March 31, 2025, was driven by increases in average ticket values and transaction costs for both professional service provider and DIY customers. Average ticket values continue to be positively impacted by the increasing complexity and cost of replacement parts necessary to maintain the current population of better-engineered and more technically advanced vehicles. These better-engineered, more technically advanced vehicles require less frequent repairs, as the component parts are more durable and last for longer periods of time. The resulting decrease in repair frequency creates pressure on customer transaction counts; however, when repairs are needed, the cost of replacement parts is, on average, greater, which is a benefit to average ticket values.

Previous wording

See Note 2 “Business Combination” to the Condensed Consolidated Financial Statements for further information concerning the recent acquisition of Vast Auto. See Note 11 “Revenue” to the Condensed Consolidated Financial Statements for further information concerning the Company’s sales.

Current wording

See Note 11 “Revenue” to the Condensed Consolidated Financial Statements for further information concerning the Company’s sales.

Previous wording

Gross profit for the three months ended September 30, 2024, increased 4% to $2.25 billion (or 51.6% of sales) from $2.16 billion (or 51.4% of sales) for the same period one year ago. Gross profit for the nine months ended September 30, 2024, increased 5% to $6.45 billion (or 51.2% of sales) from $6.14 billion (or 51.2% of sales) for the same period one year ago. The increase in gross profit dollars for the three months ended September 30, 2024, was primarily the result of the increase in comparable store sales at existing stores and sales from new and acquired stores. The increase in gross profit dollars for the nine months ended September 30, 2024, was primarily the result of the increase in comparable store sales at existing stores, sales from new and acquired stores, and one additional day due to Leap Day. The increase in gross profit as a percentage of sales for the three months ended September 30, 2024, was primarily due to improved acquisition costs, partially offset by a greater percentage of our total sales mix being generated from professional service provider customers, which carry a lower gross margin than DIY sales, and the inclusion of the lower gross margin sales from the acquired Vast Auto business. Gross profit as a percentage of sales for the nine months ended September 30, 2024, was flat.

Current wording

Gross profit for the three months ended March 31, 2025, increased 4% to $2.12 billion (or 51.3% of sales) from $2.03 billion (or 51.2% of sales) for the same period one year ago. The increase in gross profit dollars for the three months ended March 31, 2025, was primarily the result of the increase in comparable store sales at existing stores and sales from new stores, partially offset by prior year gross profit dollars generated from one additional day due to Leap Day. The increase in gross profit as a percentage of sales for the three months ended March 31, 2025, was primarily due to improved acquisition costs, partially offset by a greater percentage of our total sales mix being generated from professional service provider customers, which carry a lower gross margin percentage than DIY sales.

Previous wording

Selling, general and administrative expenses (“SG&A”) for the three months ended September 30, 2024, increased 7% to $1.35 billion (or 31.0% of sales) from $1.26 billion (or 30.1% of sales) for the same period one year ago. SG&A for the nine months ended September 30, 2024, increased 7% to $3.94 billion (or 31.2% of sales) from $3.67 billion (or 30.6% of sales) for the same period one year ago. The increase in total SG&A dollars for the three months ended September 30, 2024, was primarily the result of additional Team Members and vehicles to support our increased sales and store count and SG&A associated with the Vast Auto operations. The

Current wording

Selling, general and administrative expenses (“SG&A”) for the three months ended March 31, 2025, increased 8% to $1.38 billion (or 33.4% of sales) from $1.28 billion (or 32.2% of sales) for the same period one year ago. The increase in total SG&A dollars for the three months ended March 31, 2025, was primarily the result of additional Team Members and operating expenses to support our increased sales and store count and enhancements to store level pay plans, partially offset by prior year incremental SG&A expenses incurred from one additional day due to Leap Day. The increase in SG&A as a percentage of sales for the three months ended March 31, 2025, was principally due to enhancements to store level pay plans, inflationary pressures in medical plan costs, maintenance and refreshment of stores, and information technology investments.

Previous wording

Total other expense for the three months ended September 30, 2024, decreased 3% to $49 million (or 1.1% of sales) from $51 million (or 1.2% of sales) for the same period one year ago. Total other expense for the nine months ended September 30, 2024, increased 14% to $153 million (or 1.2% of sales) from $134 million (or 1.1% of sales) for the same period one year ago. The decrease in total other expense for the three months ended September 30, 2024, was the result of an increase in the value of our trading securities, as compared to a decrease in the same period in 2023, partially offset by increased interest expense on higher average outstanding borrowings. The increase in total other expense for the nine months ended September 30, 2024, was the result of increased interest expense on higher average outstanding borrowings. See Note 4 “Fair Value Measurements” to the Condensed Consolidated Financial Statements for further information concerning the Company’s trading securities. See Note 7 “Financing” to the Condensed Consolidated Financial Statements for further information concerning the Company’s borrowings.

Current wording

Total other expense for the three months ended March 31, 2025, increased 10% to $57 million (or 1.4% of sales) from $52 million (or 1.3% of sales) for the same period one year ago. The increase in total other expense for the three months ended March 31, 2025, was the result of a decrease in the value of our trading securities, as compared to an increase in the same period in 2024. See Note 4 “Fair Value Measurements” to the Condensed Consolidated Financial Statements for further information concerning the Company’s trading securities.

Previous wording

Our provision for income taxes for the three months ended September 30, 2024, decreased 7% to $182 million (21.5% effective tax rate) from $197 million (23.2% effective tax rate) for the same period one year ago. Our provision for income taxes for the nine months ended September 30, 2024, decreased 3% to $524 million (22.2% effective tax rate) from $539 million (23.1% effective tax rate) for the same period one year ago. The decreases in our provision for income taxes and our effective tax rate for the three and nine months ended September 30, 2024, were the result of higher excess tax benefits from share-based compensation in the current period, as compared to the same period one year ago.

Current wording

Our provision for income taxes for the three months ended March 31, 2025, decreased 5% to $146 million (21.3% effective tax rate) from $153 million (21.9% effective tax rate) for the same period one year ago. The decrease in our provision for income taxes and our effective tax rate for the three months ended March 31, 2025, was the result of timing of recognizing tax credits in the current period, as compared to the same period in 2024, partially offset by lower excess tax benefits from share-based compensation in the current period, as compared to the same period one year ago. The decrease in our provision for income taxes for the three months ended March 31, 2025, was also reduced by lower income before income taxes.

Previous wording

Our diluted earnings per common share for the three months ended September 30, 2024, increased 6% to $11.41 on 58 million shares from $10.72 on 61 million shares for the same period one year ago. Our diluted earnings per common share for the nine months ended September 30, 2024, increased 7% to $31.14 on 59 million shares from $29.20 on 61 million shares for the same period one year ago.

Current wording

Our diluted earnings per common share for the three months ended March 31, 2025, increased 2% to $9.35 on 58 million shares from $9.20 on 59 million shares for the same period one year ago.

Previous wording

The following table identifies cash provided by/(used in) our operating, investing and financing activities for the nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table identifies cash provided by/(used in) our operating, investing and financing activities for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

The decrease in net cash provided by operating activities during the nine months ended September 30, 2024, compared to the same period in 2023, was primarily due to a smaller increase in income taxes payable, due to the timing of tax payments related to benefits from federal renewable energy tax credits, partially offset by an increase in operating income.

Current wording

The increase in net cash provided by operating activities during the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to an increase in accrued payroll and benefits and a smaller increase in net inventory investment.

Previous wording

The increase in net cash used in investing activities during the nine months ended September 30, 2024, compared to the same period in 2023, was the result of the acquisition of Vast Auto, partially offset by a decrease in capital expenditures. The decrease in capital expenditures was primarily due to the timing of property acquisitions, closings, construction costs for new stores, partially offset by an increase in the number of owned new store openings in the current period, as compared to the same period in the prior year.

Current wording

The decrease in net cash used in investing activities during the three months ended March 31, 2025, compared to the same period in 2024, was the result of the acquisition of Vast Auto in the prior year, partially offset by an increase in capital expenditures. The increase in capital expenditures was primarily due to distribution enhancement and expansion projects and an increase in investments in new store capital growth, as compared to the same period in the prior year.

Previous wording

The decrease in net cash used in financing activities during the nine months ended September 30, 2024, compared to the same period in 2023, was attributable to a lower level of repurchases of our common stock in the current period, the issuance of $500 million aggregate principal amount of senior notes in the current period, and the redemption of $300 million aggregate principal amount of senior notes in the same period in 2023, partially offset by a net paydown on the Company’s commercial paper issuances in the current period versus net borrowings on the Company’s commercial paper program during the same period in 2023.

Current wording

The decrease in net cash used in financing activities during the three months ended March 31, 2025, compared to the same period in 2024, was attributable to a net borrowings on the Company’s commercial paper program in the current period versus net paydown on the Company’s commercial paper issuances during the same period in 2024, partially offset by an increase in repurchases of our common stock.

Previous wording

The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent, and non-cash share-based compensation expense to fixed charges. Fixed charges include interest expense, capitalized interest, and rent expense. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent, and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit, and similar instruments, five-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that we should default

Current wording

The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent, and non-cash share-based compensation expense to fixed charges. Fixed charges include interest expense, capitalized interest, and rent expense. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent, and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit, and similar instruments, five-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that we should default on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the Credit Agreement, and litigation from our lenders.

Previous wording

We had a consolidated fixed charge coverage ratio of 6.14 times and 6.56 times as of September 30, 2024 and 2023, respectively, and a consolidated leverage ratio of 1.85 times and 1.83 times as of September 30, 2024 and 2023, respectively, remaining in compliance with all covenants related to the borrowing arrangements.

Current wording

We had a consolidated fixed charge coverage ratio of 6.03 times and 6.31 times as of March 31, 2025 and 2024, respectively, and a consolidated leverage ratio of 1.92 times and 1.84 times as of March 31, 2025 and 2024, respectively, remaining in compliance with all covenants related to the borrowing arrangements.

Previous wording

The table below outlines the calculation of Free cash flow and reconciles Free cash flow to Net cash provided by operating activities, the most directly comparable GAAP financial measure, for the nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The table below outlines the calculation of Free cash flow and reconciles Free cash flow to Net cash provided by operating activities, the most directly comparable GAAP financial measure, for the three months ended March 31, 2025 and 2024 (in thousands):