O'Reilly Automotive (ORLY) 10-Q9 May 232023 Q1 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 01, 2023
Document and Entity Information
Document type	10-Q
Document quarterly report	true
Document transition report	false
Amendment flag	false
Current fiscal year end date	--12-31
Document period end date	Mar. 31, 2023
Document fiscal year focus	2023
Document fiscal period focus	Q1
Entity registrant name	O Reilly Automotive Inc
Entity central index key	0000898173
Entity incorporation, state	MO
Entity file number	000-21318
Entity tax identification number	27-4358837
Entity address, address	233 South Patterson Avenue
Entity address, city	Springfield
Entity address, postal zip code	65802
Entity address, state	MO
City area code	417
Local phone number	862-6708
Title of 12(b) security	Common Stock,
Trading symbol	ORLY
Security exchange name	NASDAQ
Entity current reporting status	Yes
Entity filer category	Large Accelerated Filer
Entity small business	false
Entity emerging growth company	false
Entity interactive data current	Yes
Entity shell company	false
Entity common stock, shares outstanding		60,878,940

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	[1]
Assets
Cash and cash equivalents	$ 59,872	$ 108,583
Accounts receivable, net	346,037	343,155
Amounts receivable from suppliers	128,758	127,019
Inventory	4,543,980	4,359,126
Other current assets	109,347	110,376
Total current assets	5,187,994	5,048,259
Property and equipment, at cost	7,649,066	7,438,065
Less: accumulated depreciation and amortization	3,090,010	3,014,024
Net property and equipment	4,559,056	4,424,041
Operating lease, right-of-use assets	2,166,646	2,112,267
Goodwill	892,094	884,445
Other assets, net	167,026	158,967
Total assets	12,972,816	12,627,979
Liabilities and shareholders' deficit
Accounts payable	6,055,992	5,881,157
Self-insurance reserves	136,723	138,926
Accrued payroll	111,324	126,888
Accrued benefits and withholdings	132,022	166,433
Income taxes payable	117,790	0
Current portion of operating lease liabilities	375,451	366,721
Other current liabilities	427,006	383,692
Total current liabilities	7,356,308	7,063,817
Long-term debt	4,927,678	4,371,653
Operating lease liabilities, less current portion	1,854,533	1,806,656
Deferred income taxes	249,903	245,347
Other liabilities	209,411	201,258
Shareholders' (equity) deficit:
Common stock, $0.01 par value: Authorized shares - 245,000,000 Issued and outstanding shares - 61,038,936 as of March 31, 2023, and 62,353,221 as of December 31, 2022	610	624
Additional paid-in capital	1,305,276	1,311,488
Retained deficit	(2,952,797)	(2,375,860)
Accumulated other comprehensive income	21,894	2,996
Total shareholders' deficit	(1,625,017)	(1,060,752)
Total liabilities and shareholders' deficit	$ 12,972,816	$ 12,627,979

[1]The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Condensed Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	245,000,000	245,000,000
Common stock, shares issued	61,038,936	62,353,221
Common stock, shares outstanding	61,038,936	62,353,221

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Condensed Consolidated Statements of Income
Sales	$ 3,707,864	$ 3,296,011
Cost of goods sold, including warehouse and distribution expenses	1,817,535	1,587,939
Gross profit	1,890,329	1,708,072
Selling, general and administrative expenses	1,173,684	1,038,542
Operating income	716,645	669,530
Other income (expense):
Interest expense	(44,572)	(34,841)
Interest income	868	510
Other, net	4,479	(1,938)
Total other expense	(39,225)	(36,269)
Income before income taxes	677,420	633,261
Provision for income taxes	160,535	151,381
Net income	$ 516,885	$ 481,880
Earnings per share-basic:
Earnings per share	$ 8.36	$ 7.24
Weighted-average common shares outstanding - basic	61,840	66,572
Earnings per share-assuming dilution:
Earnings per share	$ 8.28	$ 7.17
Weighted-average common shares outstanding - assuming dilution	62,398	67,190

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 516,885	$ 481,880
Other comprehensive income (loss):
Foreign currency translation adjustments	18,898	5,063
Total other comprehensive income	18,898	5,063
Comprehensive income	$ 535,783	$ 486,943

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common stock [Member]	Additional paid-in capital [Member]	Retained earnings (deficit) [Member]	Accumulated other comprehensive income (loss) [Member]	Total
Balance at beginning of period at Dec. 31, 2021	$ 670	$ 1,305,508	$ (1,365,802)	$ (6,799)	$ (66,423)
Balance (in shares) at Dec. 31, 2021	67,029,000
Net income			481,880		481,880
Other comprehensive income (loss)				5,063	5,063
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		4,882			4,882
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes, shares	8,000
Net issuance of common stock upon exercise of stock options	$ 1	15,438			15,439
Net issuance of common stock upon exercise of stock options, shares	50,000
Share-based compensation		6,094			6,094
Share repurchases, including fees	$ (12)	(22,851)	(752,345)		$ (775,208)
Share repurchases, including fees, shares	(1,167,000)				(1,167,000)
Balance at end of period at Mar. 31, 2022	$ 659	1,309,071	(1,636,267)	(1,736)	$ (328,273)
Balance (in shares) at Mar. 31, 2022	65,920,000
Balance at beginning of period at Dec. 31, 2022	$ 624	1,311,488	(2,375,860)	2,996	$ (1,060,752)	[1]
Balance (in shares) at Dec. 31, 2022	62,353,000				62,353,221
Net income			516,885		$ 516,885
Other comprehensive income (loss)				18,898	18,898
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		5,293			5,293
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes, shares	8,000
Net issuance of common stock upon exercise of stock options		10,255			10,255
Net issuance of common stock upon exercise of stock options, shares	35,000
Share-based compensation		6,980			6,980
Share repurchases, including fees	$ (14)	(28,740)	(1,082,707)		$ (1,111,461)
Share repurchases, including fees, shares	(1,357,000)				(1,357,000)
Excise tax on share repurchases			(11,115)		$ (11,115)
Balance at end of period at Mar. 31, 2023	$ 610	$ 1,305,276	$ (2,952,797)	$ 21,894	$ (1,625,017)
Balance (in shares) at Mar. 31, 2023	61,039,000				61,038,936

[1]The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities:
Net income	$ 516,885	$ 481,880
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and intangibles	93,747	82,923
Amortization of debt discount and issuance costs	1,215	1,102
Deferred income taxes	3,393	5,031
Share-based compensation programs	7,435	6,533
Other	29	1,007
Changes in operating assets and liabilities:
Accounts receivable	(2,610)	(33,678)
Inventory	(179,481)	(158,387)
Accounts payable	172,701	247,280
Income taxes payable	145,441	138,228
Other	(44,991)	(82,033)
Net cash provided by operating activities	713,764	689,886
Investing activities:
Purchases of property and equipment	(223,268)	(103,990)
Proceeds from sale of property and equipment	2,704	3,157
Investment in tax credit equity investments	0	(4,080)
Other	(956)	(68)
Net cash used in investing activities	(221,520)	(104,981)
Financing activities:
Proceeds from borrowings on revolving credit facility	1,216,000	0
Payments on revolving credit facility	(661,000)	0
Repurchases of common stock	(1,111,461)	(775,208)
Net proceeds from issuance of common stock	15,146	19,939
Other	(354)	(350)
Net cash used in financing activities	(541,669)	(755,619)
Effect of exchange rate changes on cash	714	147
Net decrease in cash and cash equivalents	(48,711)	(170,567)
Cash and cash equivalents at beginning of the period	108,583	362,113
Cash and cash equivalents at end of the period	59,872	191,546
Supplemental disclosures of cash flow information:
Income taxes paid	9,696	8,584
Interest paid, net of capitalized interest	$ 26,531	$ 31,514

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
BASIS OF PRESENTATION	Mar. 31, 2023
Basis of Presentation
Basis of presentation	NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of O’Reilly Automotive, Inc. and its subsidiaries (the “Company” or “O’Reilly”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2022. Principles of consolidation: The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES	3 Months Ended
VARIABLE INTEREST ENTITIES	Mar. 31, 2023
Variable Interest Entities
Variable interest entities	NOTE 2 – VARIABLE INTEREST ENTITIES The Company invests in certain tax credit funds that promote renewable energy. These investments generate a return primarily through the realization of federal tax credits and other tax benefits. The Company accounts for the tax attributes of its renewable energy investments using the deferral method. Under this method, realized investment tax credits and other tax benefits are recognized as a reduction of the renewable energy tax credits. The Company has determined its investment in these tax credit funds were investments in variable interest entities (“VIEs”). The Company analyzes any investments in VIEs at inception and again if certain triggering events are identified to determine if it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIEs’ economic performance including, but not limited to, the ability to direct financing, leasing, construction, and other operating decisions and activities. As of March 31, 2023, the Company had invested in six unconsolidated tax credit fund entities that were considered to be VIEs and concluded it was not the primary beneficiary of any of the entities, as it did not have the power to control the activities that most significantly impact the entities, and has therefore accounted for these investments using the equity method. The Company’s maximum exposure to losses associated with these VIEs is generally limited to its net investment, which was $36.9 million as of March 31, 2023, and was included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2023, the Company had commitments to make certain additional capital contributions to one of its tax credit funds totaling approximately $3.1 million upon achievement of project milestones by the solar energy farms, which was paid subsequent to the end of the first quarter.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
FAIR VALUE MEASUREMENTS	Mar. 31, 2023
Fair Value Measurements
Fair value measurements	NOTE 3 – FAIR VALUE MEASUREMENTS The Company uses the fair value hierarchy, which prioritizes the inputs used to measure the fair value of certain of its financial instruments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company uses the income and market approaches to determine the fair value of its assets and liabilities. The three levels of the fair value hierarchy are set forth below: ● Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. ● Level 2 – Inputs other than quoted prices in active markets included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Unobservable inputs for the asset or liability. Financial assets and liabilities measured at fair value on a recurring basis: The Company invests in various marketable securities with the intention of selling these securities to fulfill its future unsecured obligations under the Company’s nonqualified deferred compensation plan. See Note 11 for further information concerning the Company’s benefit plans. The Company’s marketable securities were accounted for as trading securities and the carrying amount of its marketable securities were included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022. The Company recorded an increase in fair value related to its marketable securities in the amount of $2.5 million and a decrease in fair value related to its marketable securities in the amount of $2.8 million for the three months ended March 31, 2023 and 2022, respectively, which were included in “Other income (expense)” on the accompanying Condensed Consolidated Statements of Income. The tables below identify the estimated fair value of the Company’s marketable securities, determined by reference to quoted market prices (Level 1), as of March 31, 2023, and December 31, 2022 (in thousands): March 31, 2023 Quoted Priced in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 53,321 $ — $ — $ 53,321 December 31, 2022 Quoted Prices in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 49,371 $ — $ — $ 49,371 Non-financial assets and liabilities measured at fair value on a nonrecurring basis: Certain long-lived non-financial assets and liabilities may be required to be measured at fair value on a nonrecurring basis in certain circumstances, including when there is evidence of impairment. These non-financial assets and liabilities may include assets acquired in a business combination or property and equipment that are determined to be impaired. As of March 31, 2023, and December 31, 2022, the Company did not have any non-financial assets or liabilities that had been measured at fair value subsequent to initial recognition. Fair value of financial instruments: The carrying amounts of the Company’s senior notes and unsecured revolving credit facility borrowings are included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022. The table below identifies the estimated fair value of the Company’s senior notes, using the market approach. The fair value as of March 31, 2023, and December 31, 2022, was determined by reference to quoted market prices of the same or similar instruments (Level 2) (in thousands): March 31, 2023 December 31, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes $ 4,372,678 $ 4,194,546 $ 4,371,653 $ 4,119,777 The carrying amount of the Company’s unsecured revolving credit facility approximates fair value (Level 2), as borrowings under the facility bear variable interest at current market rates. See Note 6 for further information concerning the Company’s senior notes and unsecured revolving credit facility. The accompanying Condensed Consolidated Balance Sheets include other financial instruments, including cash and cash equivalents, accounts receivable, amounts receivable from suppliers, and accounts payable. Due to the short-term nature of these financial instruments, the Company believes that the carrying values of these instruments approximate their fair values.

LEASES

LEASES	3 Months Ended
LEASES	Mar. 31, 2023
Leases
Leases	NOTE 4 – LEASES The Company leases certain office space, retail stores, distribution centers, and equipment under long-term, non-cancelable operating leases. The following table summarizes Total lease cost for the three months ended March 31, 2023 and 2022, which were primarily included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income (in thousands): For the Three Months Ended March 31, 2023 2022 Operating lease cost $ 96,518 $ 89,709 Short-term operating lease cost 3,704 2,777 Variable operating lease cost 24,471 23,457 Sublease income (1,214) (1,145) Total lease cost $ 123,479 $ 114,798 The following table summarizes other lease-related information for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 95,494 $ 89,829 Right-of-use assets obtained in exchange for new operating lease liabilities 126,986 63,934

SUPPLIER FINANCE PROGRAMS

SUPPLIER FINANCE PROGRAMS	3 Months Ended
SUPPLIER FINANCE PROGRAMS	Mar. 31, 2023
Supplier Finance Programs
Supplier Finance Programs	NOTE 5 – SUPPLIER FINANCE PROGRAMS The Company has established and maintains supplier finance programs with certain third-party financial institutions, which allow participating merchandise suppliers to voluntarily elect to assign the Company’s payment obligations due to these merchandise suppliers to one of the designated third-party institutions. Under these supplier finance programs, the Company has agreed to pay the third-party financial institutions the stated amount of confirmed merchandise supplier invoices on the original maturity dates of the invoices, which are generally for a term of one year. The Company does not have any assets pledged as security or other forms of guarantees for the committed payment to the third-party financial institutions. As of March 31, 2023, and December 31, 2022, the Company had obligations outstanding under these programs for invoices that were confirmed as valid to the third-party financial institutions in the amounts of $4.3 billion and $4.2 billion, respectively, which were included as a component of “Accounts payable” on the accompanying Condensed Consolidated Balance Sheets.

FINANCING

FINANCING	3 Months Ended
FINANCING	Mar. 31, 2023
Financing
Financing	NOTE 6 – FINANCING The following table identifies the amounts included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Revolving Credit Facility, weighted-average variable interest rate of 6.900% $ 555,000 $ — 3.850% Senior Notes due 2023, effective interest rate of 3.851% 300,000 300,000 3.550% Senior Notes due 2026, effective interest rate of 3.570% 500,000 500,000 3.600% Senior Notes due 2027, effective interest rate of 3.619% 750,000 750,000 4.350% Senior Notes due 2028, effective interest rate of 4.383% 500,000 500,000 3.900% Senior Notes due 2029, effective interest rate of 3.901% 500,000 500,000 4.200% Senior Notes due 2030, effective interest rate of 4.205% 500,000 500,000 1.750% Senior Notes due 2031, effective interest rate of 1.798% 500,000 500,000 4.700% Senior Notes due 2032, effective interest rate of 4.740% 850,000 850,000 Total principal amount of debt 4,955,000 4,400,000 Less: Unamortized discount and debt issuance costs 27,322 28,347 Total long-term debt $ 4,927,678 $ 4,371,653 Unsecured revolving credit facility: The Company is party to a credit agreement dated June 15, 2021, as amended as of March 6, 2023 (the “Credit Agreement”). The Credit Agreement provides for a five-year $1.8 billion unsecured revolving credit facility (the “Revolving Credit Facility”) arranged by JPMorgan Chase Bank, N.A., which is scheduled to mature in June of 2026. The Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings under the Revolving Credit Facility. As described in the Credit Agreement governing the Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments under the Revolving Credit Facility by up to $900 million, provided that the aggregate amount of the commitments does not exceed $2.7 billion at any time. On March 6, 2023, the Company entered into the First Amendment (the “Amendment”) to the credit agreement to convert the LIBOR based pricing to Secured Overnight Financing Rate (“SOFR”) based pricing. The Amendment replaces an Adjusted LIBO Rate with an Adjusted Term SOFR Rate, comprised of the Term SOFR Rate plus 0.100%. The Amendment made no other material changes to the terms of the credit agreement. As of March 31, 2023, and December 31, 2022, the Company had outstanding letters of credit, primarily to support obligations related to workers’ compensation, general liability, and other insurance policies, under the Credit Agreement in the amounts of $5.0 million and $5.1 million, respectively, reducing the aggregate availability under the Credit Agreement by those amounts. Substantially all of these outstanding letters of credit have a one-year term from the date of issuance. Borrowings under the Revolving Credit Facility (other than swing line loans) bear interest, at the Company’s option, at either an Alternate Base Rate or an Adjusted Term SOFR Rate (both as defined in the Credit Agreement) plus an applicable margin. Swing line loans made under the Revolving Credit Facility bear interest at an Alternate Base Rate plus the applicable margin for Alternate Base Rate loans. In addition, the Company pays a facility fee on the aggregate amount of the commitments under the Credit Agreement in an amount equal to a percentage of such commitments. The interest rate margins and facility fee are based upon the better of the ratings assigned to the Company’s debt by Moody’s Investor Service, Inc. and Standard & Poor’s Ratings Services, subject to limited exceptions. As of March 31, 2023, based upon the Company’s current credit ratings, its margin for Alternate Base Rate loans was 0.000%, its margin for Term Benchmark Revolving Loans was 0.900% and its facility fee was 0.100%. The Credit Agreement contains certain covenants, including limitations on subsidiary 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 the Company should default on any covenant (subject to customary grace periods, cure rights, and materiality thresholds) contained in 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 lenders. As of March 31, 2023, the Company remained in compliance with all covenants under the Credit Agreement. In addition to the letters of credit issued under the Credit Agreement described above, as of March 31, 2023, and December 31, 2022, respectively, the Company had additional outstanding letters of credit, primarily to support obligations under workers’ compensation, general liability, and other insurance policies, in the amount of $111.7 million and $96.6 million. Substantially all of these letters of credit have a one-year term from the date of issuance and were not issued under the Company’s Credit Agreement or another committed facility. Senior notes: As of March 31, 2023, the Company has issued and outstanding a cumulative $4.4 billion aggregate principal amount of unsecured senior notes, which are due between 2023 and 2032, with UMB Bank, N.A. and U.S. Bank Trust Company, National Association as trustees. Interest on the senior notes, ranging from 1.750% to 4.700%, is payable semi-annually and is computed on the basis of a 360-day year. The $300 million aggregate principal amount of unsecured 3.850% Senior Notes due 2023 was included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheet as of March 31, 2023, and December 31, 2022, as the Company has the ability and intent to refinance these notes on a long-term basis. None of the Company’s subsidiaries is a guarantor under the senior notes. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2023.

WARRANTIES

WARRANTIES	3 Months Ended
WARRANTIES	Mar. 31, 2023
Warranties
Warranties	NOTE 7 – WARRANTIES The Company provides warranties on certain merchandise it sells with warranty periods ranging from 30 days to limited lifetime warranties. The risk of loss arising from warranty claims is typically the obligation of the Company’s suppliers. Certain suppliers provide upfront allowances to the Company in lieu of accepting the obligation for warranty claims. For this merchandise, when sold, the Company bears the risk of loss associated with the cost of warranty claims. Differences between supplier allowances received by the Company, in lieu of warranty obligations and estimated warranty expense, are recorded as an adjustment to cost of sales. Estimated warranty costs, which are recorded as obligations at the time of sale, are based on the historical failure rate of each individual product line. The Company’s historical experience has been that failure rates are relatively consistent over time and that the ultimate cost of warranty claims to the Company has been driven by volume of units sold as opposed to fluctuations in failure rates or the variation of the cost of individual claims. The Company’s product warranty liabilities are included in “Other current liabilities” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022; the following table identifies the changes in the Company’s aggregate product warranty liabilities for the three months ended March 31, 2023 (in thousands): Warranty liabilities, balance at December 31, 2022 $ 98,564 Warranty claims (38,626) Warranty accruals 39,219 Foreign currency translation 41 Warranty liabilities, balance at March 31, 2023 $ 99,198

SHARE REPURCHASE PROGRAM

SHARE REPURCHASE PROGRAM	3 Months Ended
SHARE REPURCHASE PROGRAM	Mar. 31, 2023
Share Repurchase Program
Share repurchase program	NOTE 8 – SHARE REPURCHASE PROGRAM In January of 2011, the Company’s Board of Directors approved a share repurchase program. Under the program, the Company may, from time to time, repurchase shares of its common stock, solely through open market purchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate trading policy requirements, and overall market conditions. The Company’s Board of Directors may increase or otherwise modify, renew, suspend, or terminate the share repurchase program at any time, without prior notice. As announced on November 15, 2022, the Company’s Board of Directors approved a resolution to increase the authorization amount under the share repurchase program by an additional $1.5 billion, resulting in a cumulative authorization amount of $21.8 billion. The additional authorization is effective for three years, beginning on its respective announcement date. The following table identifies shares of the Company’s common stock that have been repurchased as part of the Company’s publicly announced share repurchase program for the three months ended March 31, 2023 and 2022 (in thousands, except per share data): For the Three Months Ended March 31, 2023 2022 Shares repurchased 1,357 1,167 Average price per share $ 819.06 $ 664.15 Total investment $ 1,111,447 $ 775,196 As of March 31, 2023, the Company had $611.9 million remaining under its share repurchase authorization. Excise tax on shares repurchased, assessed at one percent of the fair market value of net shares repurchased, was $11.1 million for the three months ended March 31, 2023. Subsequent to the end of the first quarter and through May 9, 2023, the Company repurchased 0.2 million additional shares of its common stock under its share repurchase program, at an average price of $867.43, for a total investment of $152.2 million. The Company has repurchased a total of 92.0 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through May 9, 2023, at an average price of $231.29, for a total aggregate investment of $21.3 billion.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	3 Months Ended
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)	NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) includes adjustments for foreign currency translations. The tables below summarize activity for changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2023 and 2022 (in thousands): Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2022 $ 2,996 $ 2,996 Change in accumulated other comprehensive income 18,898 18,898 Accumulated other comprehensive income, balance at March 31, 2023 $ 21,894 $ 21,894 Foreign Total Accumulated Other Currency (1) Comprehensive Loss Accumulated other comprehensive loss, balance at December 31, 2021 $ (6,799) $ (6,799) Change in accumulated other comprehensive income 5,063 5,063 Accumulated other comprehensive loss, balance at March 31, 2022 $ (1,736) $ (1,736) (1) Foreign currency translation is not shown net of additional U.S. tax, as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

REVENUE

REVENUE	3 Months Ended
REVENUE	Mar. 31, 2023
Revenue
Revenue	NOTE 10 – REVENUE The table below identifies the Company’s revenues disaggregated by major customer type for the three months ended March 31, 2023 and 2022 (in thousands): For the Three Months Ended March 31, 2023 2022 Sales to do-it-yourself customers $ 1,918,467 $ 1,815,814 Sales to professional service provider customers 1,711,964 1,399,364 Other sales and sales adjustments 77,433 80,833 Total sales $ 3,707,864 $ 3,296,011 See Note 7 for information concerning the expected costs associated with the Company’s assurance warranty obligations.

SHARE-BASED COMPENSATION AND BE

SHARE-BASED COMPENSATION AND BENEFIT PLANS	3 Months Ended
SHARE-BASED COMPENSATION AND BENEFIT PLANS	Mar. 31, 2023
Share-Based Compensation and Benefit Plans
Share-based compensation and benefit plans	NOTE 11 – SHARE-BASED COMPENSATION AND BENEFIT PLANS The Company recognizes share-based compensation expense based on the fair value of the grants, awards, or shares at the time of the grant, award, or issuance. Share-based compensation includes stock option awards, restricted stock awards, and stock appreciation rights issued under the Company’s incentive plans and stock issued through the Company’s employee stock purchase plan. Stock options: The Company’s incentive plans provide for the granting of stock options for the purchase of common stock of the Company to certain key employees of the Company. Employee stock options are granted at an exercise price that is equal to the closing market price of the Company’s common stock on the date of the grant. Employee stock options granted under the plans expire after 10 years and typically vest 25% per year, over four years. The Company records compensation expense for the grant date fair value of the option awards evenly over the vesting period or minimum required service period. The table below identifies stock option activity under these plans during the three months ended March 31, 2023 (in thousands, except per share data): Shares Weighted- Average (in thousands) Exercise Price Outstanding at December 31, 2022 1,069 $ 356.76 Granted 62 829.83 Exercised (35) 291.35 Forfeited or expired (5) 557.30 Outstanding at March 31, 2023 1,091 $ 385.00 Exercisable at March 31, 2023 803 $ 302.61 The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option pricing model. The Black-Scholes model requires the use of assumptions, including the risk-free rate, expected life, expected volatility, and expected dividend yield. ● Risk-free interest rate – The United States Treasury rates in effect at the time the options are granted for the options’ expected life. ● Expected life – Represents the period of time that options granted are expected to be outstanding. The Company uses historical experience to estimate the expected life of options granted. ● Expected volatility – Measure of the amount, by which the Company’s stock price is expected to fluctuate, based on a historical trend. ● Expected dividend yield – The Company has not paid, nor does it have plans in the foreseeable future to pay, any dividends. The table below identifies the weighted-average assumptions used for grants awarded during the three months ended March 31, 2023 and 2022: March 31, 2023 2022 Risk free interest rate 3.91 % 1.61 % Expected life 6.5 Years 6.5 Years Expected volatility 29.1 % 28.5 % Expected dividend yield — % — % The following table summarizes activity related to stock options awarded by the Company for the three months ended March 31, 2023 and 2022 (in thousands, except per share data): For the Three Months Ended March 31, 2023 2022 Compensation expense for stock options awarded $ 6,119 $ 5,301 Income tax benefit from compensation expense related to stock options 1,534 1,346 Weighted-average grant-date fair value of options awarded $ 318.08 $ 217.68 The remaining unrecognized compensation expense related to unvested stock option awards at March 31, 2023, was $48.2 million, and the weighted-average period of time over which this cost will be recognized is 2.8 years. Other share-based compensation plans: The Company sponsors other share-based compensation plans: an employee stock purchase plan and incentive plans that provide for the awarding of shares of restricted stock to certain key employees and directors. The Company’s employee stock purchase plan (the “ESPP”) permits eligible employees to purchase shares of the Company’s common stock at 85% of the fair market value. The fair value of shares issued under the ESPP is based on the average of the high and low market prices of the Company’s common stock during the offering periods, and compensation expense is recognized based on the discount between the fair value and the employee purchase price for the shares sold to employees. Restricted stock awarded under the incentive plans to certain key employees and directors vests after one-year or evenly over a three-year period and is held in escrow until such vesting has occurred. The fair value of shares awarded under the incentive plans is based on the closing market price of the Company’s common stock on the date of the award, and compensation expense is recorded evenly over the vesting period or the minimum required service period. The table below summarizes activity related to the Company’s other share-based compensation plans for the three months ended March 31, 2023 and 2022 (in thousands): For the Three Months Ended March 31, 2023 2022 Compensation expense for shares issued under the ESPP $ 861 $ 793 Income tax benefit from compensation expense related to shares issued under the ESPP 216 201 Compensation expense for restricted shares awarded 455 439 Income tax benefit from compensation expense related to restricted awards $ 114 $ 112 Profit sharing and savings plan: The Company sponsors a contributory profit sharing and savings plan (the “401(k) Plan”) that covers substantially all employees who are at least 21 years of age. The Company makes matching contributions equal to 100% of the first 2% of each employee’s wages that are contributed and 25% of the next 4% of each employee’s wages that are contributed. The Company may also make additional discretionary profit sharing contributions to the 401(k) Plan on an annual basis as determined by the Board of Directors. The Company did not make any discretionary contributions to the 401(k) Plan during the three months ended March 31, 2023 or 2022. The Company expensed matching contributions under the 401(k) Plan in the amount of $9.6 million and $8.6 million for the three months ended March 31, 2023 and 2022, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income. Nonqualified deferred compensation plan: The Company sponsors a nonqualified deferred compensation plan (the “Deferred Compensation Plan”) for highly compensated employees whose contributions to the 401(k) Plan are limited due to the application of the annual limitations under the Internal Revenue Code. The Company may make discretionary contributions to the Deferred Compensation Plan on an annual basis as determined by the Board of Directors. In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors. The Company has an unsecured obligation to pay, in the future, the value of the deferred compensation and Company match, if applicable, adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. See Note 3 for further information concerning the Company’s marketable securities held to fulfill our future unsecured obligations under this plan. The liability for compensation deferred under the Deferred Compensation Plan was $53.3 million and $49.4 million as of March 31, 2023, and December 31, 2022, respectively, which was included in “Other liabilities” on the accompanying Condensed Consolidated Balance Sheets. The Company did not make any discretionary contributions to the Deferred Compensation Plan during the three months ended March 31, 2023 or 2022. The Company expensed matching contributions under the Deferred Compensation Plan in the amount of less than $0.1 million for each of the three months ended March 31, 2023 and 2022, which were included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income. Stock appreciation rights: The Company’s incentive plans provide for the granting of stock appreciation rights, which expire after 10 years and vest 25% per year, over four years, and are settled in cash. As of March 31, 2023, and December 31, 2022, respectively, there were 14,748 and 13,159 stock appreciation rights outstanding. During the three months ended March 31, 2023, there were 1,714 stock appreciation rights granted and 125 stock appreciation rights exercised. The liability for compensation to be paid for redeemed stock appreciation rights was $3.2 million and $2.9 million as of March 31, 2023, and December 31, 2022, respectively, which were included in “Other liabilities” on the Condensed Consolidated Balance Sheets. The Company recorded compensation expense for stock appreciation rights in the amount of $0.3 million and compensation benefit for stock appreciation rights in the amount of less than $0.1 million for the three months ended March 31, 2023 and 2022, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Condensed Consolidated Statements of Income.

COMMITMENTS

COMMITMENTS	3 Months Ended
COMMITMENTS	Mar. 31, 2023
Commitments
Commitments	NOTE 12 COMMITMENTS Renewable energy tax credits: The Company has entered into an agreement to purchase federal renewable energy tax credits (“RETC”). As of March 31, 2023, the Company has committed to purchase approximately $300 million RETCs upon the credit transfer date, which is anticipated to occur by September of 2024.

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
EARNINGS PER SHARE	Mar. 31, 2023
Earnings Per Share
Earnings per share	NOTE 13 – EARNINGS PER SHARE The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except per share data): For the Three Months Ended March 31, 2023 2022 Numerator (basic and diluted): Net income $ 516,885 $ 481,880 Denominator: Weighted-average common shares outstanding – basic 61,840 66,572 Effect of stock options (1) 558 618 Weighted-average common shares outstanding – assuming dilution 62,398 67,190 Earnings per share: Earnings per share-basic $ 8.36 $ 7.24 Earnings per share-assuming dilution $ 8.28 $ 7.17 Antidilutive potential common shares not included in the calculation of diluted earnings per share: Stock options (1) 149 115 Weighted-average exercise price per share of antidilutive stock options (1) $ 725.14 $ 657.14 (1) See Note 11 for further information concerning the terms of the Company’s share-based compensation plans. For the three months ended March 31, 2023 and 2022, the computation of diluted earnings per share did not include certain securities. These securities represent underlying stock options not included in the computation of diluted earnings per share, because the inclusion of such equity awards would have been antidilutive. See Note 8 for information concerning the Company’s subsequent share repurchases.

LEGAL MATTERS

LEGAL MATTERS	3 Months Ended
LEGAL MATTERS	Mar. 31, 2023
Legal Matters
Legal matters	NOTE 14 – LEGAL MATTERS The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business. Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to reasonably estimate the probable loss in accordance with Accounting Standard Codification 450-20. The Company also accrues for an estimate of legal costs to be incurred for litigation matters. Although the Company cannot ascertain the amount of liability that it may incur from legal matters, it does not currently believe that, in the aggregate, these matters, taking into account applicable insurance and accruals, will have a material adverse effect on its consolidated financial position, results of operations or cash flows in a particular quarter or annual period.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
RECENT ACCOUNTING PRONOUNCEMENTS	Mar. 31, 2023
Recent Accounting Pronouncements
Recent accounting pronouncements	NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS In September of 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) No. 2022-04, “Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”). ASU 2022-04 enhances the transparency of supplier finance programs. Under ASU 2022-04, a buyer in a supplier finance program would be required to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for annual reporting periods beginning after December 15, 2022, including interim periods within that reporting period, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. ASU 2022-04 allows for early adoption and requires retrospective adoption, except on rollforward information, which should be applied prospectively. The Company adopted this guidance, using the retrospective adoption method, beginning with its first quarter ending March 31, 2023, with the exception, as stated in the guidance, of the rollforward information, which will be adopted prospectively, disclosure for which will be effective with the Company’s fiscal year beginning after December 15, 2023. The application of this new guidance did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows, as the guidance requires disclosure only. See Note 5 for further information concerning the Company’s supplier finance programs.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
BASIS OF PRESENTATION (Policies)	Mar. 31, 2023
Basis of Presentation.
Principles of consolidation, policy	Principles of consolidation: The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

VARIABLE INTEREST ENTITIES (Pol

VARIABLE INTEREST ENTITIES (Policies)	3 Months Ended
VARIABLE INTEREST ENTITIES (Policies)	Mar. 31, 2023
Variable Interest Entities
Variable interest entities, policy	The Company invests in certain tax credit funds that promote renewable energy. These investments generate a return primarily through the realization of federal tax credits and other tax benefits. The Company accounts for the tax attributes of its renewable energy investments using the deferral method. Under this method, realized investment tax credits and other tax benefits are recognized as a reduction of the renewable energy tax credits. The Company has determined its investment in these tax credit funds were investments in variable interest entities (“VIEs”). The Company analyzes any investments in VIEs at inception and again if certain triggering events are identified to determine if it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIEs’ economic performance including, but not limited to, the ability to direct financing, leasing, construction, and other operating decisions and activities. As of March 31, 2023, the Company had invested in six unconsolidated tax credit fund entities that were considered to be VIEs and concluded it was not the primary beneficiary of any of the entities, as it did not have the power to control the activities that most significantly impact the entities, and has therefore accounted for these investments using the equity method. The Company’s maximum exposure to losses associated with these VIEs is generally limited to its net investment, which was $36.9 million as of March 31, 2023, and was included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2023, the Company had commitments to make certain additional capital contributions to one of its tax credit funds totaling approximately $3.1 million upon achievement of project milestones by the solar energy farms, which was paid subsequent to the end of the first quarter.

FAIR VALUE MEASUREMENTS (Polici

FAIR VALUE MEASUREMENTS (Policies)	3 Months Ended
FAIR VALUE MEASUREMENTS (Policies)	Mar. 31, 2023
Fair Value Measurements
Fair value of financial instruments	The Company uses the fair value hierarchy, which prioritizes the inputs used to measure the fair value of certain of its financial instruments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company uses the income and market approaches to determine the fair value of its assets and liabilities. The three levels of the fair value hierarchy are set forth below: ● Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. ● Level 2 – Inputs other than quoted prices in active markets included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Unobservable inputs for the asset or liability.

WARRANTIES (Policies)

WARRANTIES (Policies)	3 Months Ended
WARRANTIES (Policies)	Mar. 31, 2023
Warranties
Warranties, policy	The Company provides warranties on certain merchandise it sells with warranty periods ranging from 30 days to limited lifetime warranties. The risk of loss arising from warranty claims is typically the obligation of the Company’s suppliers. Certain suppliers provide upfront allowances to the Company in lieu of accepting the obligation for warranty claims. For this merchandise, when sold, the Company bears the risk of loss associated with the cost of warranty claims. Differences between supplier allowances received by the Company, in lieu of warranty obligations and estimated warranty expense, are recorded as an adjustment to cost of sales. Estimated warranty costs, which are recorded as obligations at the time of sale, are based on the historical failure rate of each individual product line. The Company’s historical experience has been that failure rates are relatively consistent over time and that the ultimate cost of warranty claims to the Company has been driven by volume of units sold as opposed to fluctuations in failure rates or the variation of the cost of individual claims.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
FAIR VALUE MEASUREMENTS (Tables)	Mar. 31, 2023
Fair Value Measurements
Valuation of marketable securities	The tables below identify the estimated fair value of the Company’s marketable securities, determined by reference to quoted market prices (Level 1), as of March 31, 2023, and December 31, 2022 (in thousands): March 31, 2023 Quoted Priced in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 53,321 $ — $ — $ 53,321 December 31, 2022 Quoted Prices in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 49,371 $ — $ — $ 49,371
Valuation of senior notes	March 31, 2023 December 31, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes $ 4,372,678 $ 4,194,546 $ 4,371,653 $ 4,119,777

LEASES (Tables)

LEASES (Tables)	3 Months Ended
LEASES (Tables)	Mar. 31, 2023
Leases
Summary of total lease cost	For the Three Months Ended March 31, 2023 2022 Operating lease cost $ 96,518 $ 89,709 Short-term operating lease cost 3,704 2,777 Variable operating lease cost 24,471 23,457 Sublease income (1,214) (1,145) Total lease cost $ 123,479 $ 114,798
Other lease related information	For the Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 95,494 $ 89,829 Right-of-use assets obtained in exchange for new operating lease liabilities 126,986 63,934

FINANCING (Tables)

FINANCING (Tables)	3 Months Ended
FINANCING (Tables)	Mar. 31, 2023
Financing
Outstanding financing facilities	March 31, 2023 December 31, 2022 Revolving Credit Facility, weighted-average variable interest rate of 6.900% $ 555,000 $ — 3.850% Senior Notes due 2023, effective interest rate of 3.851% 300,000 300,000 3.550% Senior Notes due 2026, effective interest rate of 3.570% 500,000 500,000 3.600% Senior Notes due 2027, effective interest rate of 3.619% 750,000 750,000 4.350% Senior Notes due 2028, effective interest rate of 4.383% 500,000 500,000 3.900% Senior Notes due 2029, effective interest rate of 3.901% 500,000 500,000 4.200% Senior Notes due 2030, effective interest rate of 4.205% 500,000 500,000 1.750% Senior Notes due 2031, effective interest rate of 1.798% 500,000 500,000 4.700% Senior Notes due 2032, effective interest rate of 4.740% 850,000 850,000 Total principal amount of debt 4,955,000 4,400,000 Less: Unamortized discount and debt issuance costs 27,322 28,347 Total long-term debt $ 4,927,678 $ 4,371,653

WARRANTIES (Tables)

WARRANTIES (Tables)	3 Months Ended
WARRANTIES (Tables)	Mar. 31, 2023
Warranties
Changes in product warranty liabilities	Warranty liabilities, balance at December 31, 2022 $ 98,564 Warranty claims (38,626) Warranty accruals 39,219 Foreign currency translation 41 Warranty liabilities, balance at March 31, 2023 $ 99,198

SHARE REPURCHASE PROGRAM (Table

SHARE REPURCHASE PROGRAM (Tables)	3 Months Ended
SHARE REPURCHASE PROGRAM (Tables)	Mar. 31, 2023
Share Repurchase Program
Schedule of shares repurchased	For the Three Months Ended March 31, 2023 2022 Shares repurchased 1,357 1,167 Average price per share $ 819.06 $ 664.15 Total investment $ 1,111,447 $ 775,196

ACCUMULATED OTHER COMPREHENSI_2

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	3 Months Ended
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss)
Summary of activity for changes in accumulated other comprehensive income (loss)	Foreign Total Accumulated Other Currency (1) Comprehensive Income Accumulated other comprehensive income, balance at December 31, 2022 $ 2,996 $ 2,996 Change in accumulated other comprehensive income 18,898 18,898 Accumulated other comprehensive income, balance at March 31, 2023 $ 21,894 $ 21,894 Foreign Total Accumulated Other Currency (1) Comprehensive Loss Accumulated other comprehensive loss, balance at December 31, 2021 $ (6,799) $ (6,799) Change in accumulated other comprehensive income 5,063 5,063 Accumulated other comprehensive loss, balance at March 31, 2022 $ (1,736) $ (1,736) (1) Foreign currency translation is not shown net of additional U.S. tax, as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
REVENUE (Tables)	Mar. 31, 2023
Revenue
Disaggregation of revenue	For the Three Months Ended March 31, 2023 2022 Sales to do-it-yourself customers $ 1,918,467 $ 1,815,814 Sales to professional service provider customers 1,711,964 1,399,364 Other sales and sales adjustments 77,433 80,833 Total sales $ 3,707,864 $ 3,296,011

SHARE-BASED COMPENSATION AND _2

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Tables)	3 Months Ended
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Tables)	Mar. 31, 2023
Employee stock option [Member]
Share-Based Compensation and Benefit Plans
Summary of stock options	Shares Weighted- Average (in thousands) Exercise Price Outstanding at December 31, 2022 1,069 $ 356.76 Granted 62 829.83 Exercised (35) 291.35 Forfeited or expired (5) 557.30 Outstanding at March 31, 2023 1,091 $ 385.00 Exercisable at March 31, 2023 803 $ 302.61
Black-Scholes option pricing model	March 31, 2023 2022 Risk free interest rate 3.91 % 1.61 % Expected life 6.5 Years 6.5 Years Expected volatility 29.1 % 28.5 % Expected dividend yield — % — %
Summary of activity of share-based compensation and benefit plans	For the Three Months Ended March 31, 2023 2022 Compensation expense for stock options awarded $ 6,119 $ 5,301 Income tax benefit from compensation expense related to stock options 1,534 1,346 Weighted-average grant-date fair value of options awarded $ 318.08 $ 217.68
Restricted stock [Member]
Share-Based Compensation and Benefit Plans
Summary of activity of share-based compensation and benefit plans	For the Three Months Ended March 31, 2023 2022 Compensation expense for shares issued under the ESPP $ 861 $ 793 Income tax benefit from compensation expense related to shares issued under the ESPP 216 201 Compensation expense for restricted shares awarded 455 439 Income tax benefit from compensation expense related to restricted awards $ 114 $ 112

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
EARNINGS PER SHARE (Tables)	Mar. 31, 2023
Earnings Per Share
Computation of basic and diluted earnings per share	For the Three Months Ended March 31, 2023 2022 Numerator (basic and diluted): Net income $ 516,885 $ 481,880 Denominator: Weighted-average common shares outstanding – basic 61,840 66,572 Effect of stock options (1) 558 618 Weighted-average common shares outstanding – assuming dilution 62,398 67,190 Earnings per share: Earnings per share-basic $ 8.36 $ 7.24 Earnings per share-assuming dilution $ 8.28 $ 7.17 Antidilutive potential common shares not included in the calculation of diluted earnings per share: Stock options (1) 149 115 Weighted-average exercise price per share of antidilutive stock options (1) $ 725.14 $ 657.14 (1) See Note 11 for further information concerning the terms of the Company’s share-based compensation plans.

VARIABLE INTEREST ENTITIES (Nar

VARIABLE INTEREST ENTITIES (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) entity
Basis of Presentation
Number of unconsolidated tax credit fund entities that were considered to be Variable Interest Entities \| entity	6
Equity method investment in VIEs, net	$ 36.9
Capital contributions	$ 3.1

FAIR VALUE MEASUREMENTS (Narrat

FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Fair Value Measurements
Increase (decrease) in fair value of marketable securities	$ 2.5	$ (2.8)
Non-financial assets and liabilities measured at fair value on a nonrecurring basis	$ 0		$ 0

FAIR VALUE MEASUREMENTS (Fair V

FAIR VALUE MEASUREMENTS (Fair Value of Marketable Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Measurements
Estimated fair value of marketable securities	$ 53,321	$ 49,371
Fair value, inputs, Level 1 [Member]
Fair Value Measurements
Estimated fair value of marketable securities	$ 53,321	$ 49,371

FAIR VALUE MEASUREMENTS (Fair_2

FAIR VALUE MEASUREMENTS (Fair Value of Senior Notes) (Details) - Fair value, inputs, Level 2 [Member] - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Measurements
Carrying amount of senior notes	$ 4,372,678	$ 4,371,653
Estimated fair value of senior notes	$ 4,194,546	$ 4,119,777

LEASES (Summary of Total Lease

LEASES (Summary of Total Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases
Operating lease cost	$ 96,518	$ 89,709
Short-term operating lease cost	3,704	2,777
Variable operating lease cost	24,471	23,457
Sublease income	(1,214)	(1,145)
Total lease cost	$ 123,479	$ 114,798

LEASES (Supplemental Cash Flow

LEASES (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases
Cash paid for amounts included in the measurement of operating lease liabilities, operating cash flows from operating leases	$ 95,494	$ 89,829
Right-of-use asset obtained in exchange for new operating lease liability	$ 126,986	$ 63,934

SUPPLIER FINANCE PROGRAMS (Deta

SUPPLIER FINANCE PROGRAMS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Accounts payable, trade	$ 4,300,000	$ 4,200,000
Supplier Finance Programs [Member]
Debt Instrument [Line Items]
Debt instrument term	1 year
Assets pledged as security or other forms of guarantees	$ 0

FINANCING (Unsecured Revolving

FINANCING (Unsecured Revolving Credit Facility) (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Letter of credit [Member]
Financing
Letters of credit	$ 111.7	$ 111.7	$ 96.6
Line of credit facility [Member]
Financing
Line of credit facility covenant compliance		As of March 31, 2023, the Company remained in compliance with all covenants under the Credit Agreement.
Line of credit facility [Member] \| Unsecured debt [Member]
Financing
Credit agreement inception date		Jun. 15, 2021
Number of years in credit facility, term	5 years	5 years
Current maximum borrowing capacity under credit facility	$ 1,800	$ 1,800
Maximum aggregate increase to credit facility allowable		900
Maximum aggregate capacity of credit facility allowable		2,700
Letters of credit	$ 5	$ 5	$ 5.1
Line of credit facility fee percentage		0.10%
Minimum debt instrument consolidated fixed charge coverage ratio covenant		2.50
Maximum debt instrument consolidated leverage ratio covenant		3.50
Line of credit facility [Member] \| Unsecured debt [Member] \| Spread over Alternate Base rate [Member]
Financing
Line of credit current interest rate		0%
Line of credit facility [Member] \| Unsecured debt [Member] \| Spread over Term Benchmark Revolving Loans rate [Member]
Financing
Line of credit current interest rate		0.90%
Line of credit facility [Member] \| Unsecured debt [Member] \| Spread over Secured Overnight Financing Rate [Member]
Financing
Line of credit current interest rate	0.10%
Line of credit facility [Member] \| Unsecured debt [Member] \| Letter of credit [Member]
Financing
Line of credit facility sublimit		$ 200
Line of credit facility [Member] \| Unsecured debt [Member] \| Swing line revolver [Member]
Financing
Line of credit facility sublimit		$ 75

FINANCING (Senior Notes) (Narra

FINANCING (Senior Notes) (Narrative) (Details) - Senior notes [Member] $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) entity D	Dec. 31, 2022
Financing
Face amount of senior notes	$ 4,400
Number of days in annual interest calculation period \| D	360
Number of guarantors under the senior notes \| entity	0
Debt instrument covenant compliance	Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2023.
Minimum [Member]
Financing
Interest rate of senior notes	1.75%
Maximum [Member]
Financing
Interest rate of senior notes	4.70%
3.850% Senior Notes due 2023 [Member]
Financing
Face amount of senior notes	$ 300
Interest rate of senior notes	3.85%	3.85%
4.700% Senior Notes due 2032 [Member]
Financing
Interest rate of senior notes	4.70%	4.70%

FINANCING (Outstanding Financin

FINANCING (Outstanding Financing Facilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financing
Total principal amount of debt	$ 4,955,000	$ 4,400,000
Less: Unamortized discount and debt issuance costs	27,322	28,347
Total long-term debt	4,927,678	4,371,653	[1]
Revolving Credit Facility [Member] \| Revolving Credit Facility [Member]
Financing
Revolving credit facility	$ 555,000
Unsecured revolving credit facility, weighted-average variable interest rate	6.90%
Senior notes [Member]
Financing
Senior notes, principal amount	$ 4,400,000
Senior notes [Member] \| 3.850% Senior Notes due 2023 [Member]
Financing
Senior notes	300,000	$ 300,000
Senior notes, principal amount	$ 300,000
Interest rate of senior notes	3.85%	3.85%
Senior notes, effective interest rate	3.851%	3.851%
Senior notes [Member] \| 3.550% Senior Notes due 2026 [Member]
Financing
Senior notes	$ 500,000	$ 500,000
Interest rate of senior notes	3.55%	3.55%
Senior notes, effective interest rate	3.57%	3.57%
Senior notes [Member] \| 3.600% Senior Notes due 2027 [Member]
Financing
Senior notes	$ 750,000	$ 750,000
Interest rate of senior notes	3.60%	3.60%
Senior notes, effective interest rate	3.619%	3.619%
Senior notes [Member] \| 4.350% Senior Notes due 2028 [Member]
Financing
Senior notes	$ 500,000	$ 500,000
Interest rate of senior notes	4.35%	4.35%
Senior notes, effective interest rate	4.383%	4.383%
Senior notes [Member] \| 3.900% Senior Notes due 2029 [Member]
Financing
Senior notes	$ 500,000	$ 500,000
Interest rate of senior notes	3.90%	3.90%
Senior notes, effective interest rate	3.901%	3.901%
Senior notes [Member] \| 4.200% Senior Notes due 2030 [Member]
Financing
Senior notes	$ 500,000	$ 500,000
Interest rate of senior notes	4.20%	4.20%
Senior notes, effective interest rate	4.205%	4.205%
Senior notes [Member] \| 1.750% Senior Notes due 2031 [Member]
Financing
Senior notes, principal amount	$ 500,000	$ 500,000
Interest rate of senior notes	1.75%	1.75%
Senior notes, effective interest rate	1.798%	1.798%
Senior notes [Member] \| 4.700% Senior Notes due 2032 [Member]
Financing
Senior notes	$ 850,000	$ 850,000
Interest rate of senior notes	4.70%	4.70%
Senior notes, effective interest rate	4.74%	4.74%

[1]The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

WARRANTIES (Product Warranty Li

WARRANTIES (Product Warranty Liabilities) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Warranties
Warranty liabilities, beginning balance	$ 98,564
Warranty claims	(38,626)
Warranty accruals	39,219
Foreign currency translation	41
Warranty liabilities, ending balance	$ 99,198

SHARE REPURCHASE PROGRAM (Narra

SHARE REPURCHASE PROGRAM (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended	3 Months Ended		148 Months Ended
	Nov. 15, 2022	May 09, 2023	Mar. 31, 2023	Mar. 31, 2022	May 09, 2023
Share Repurchase Program
Increase in authorized amount	$ 1,500,000
Cumulative authorized amount	$ 21,800,000
Authorization effective period	3 years
Remaining balance under share repurchase program			$ 611,900
Common stock repurchased, shares			1,357	1,167
Common stock repurchased, average price per share			$ 819.06	$ 664.15
Common stock repurchased, value			$ 1,111,447	$ 775,196
Excise tax on share repurchases			$ 11,115
Subsequent event [Member]
Share Repurchase Program
Common stock repurchased, shares		200			92,000
Common stock repurchased, average price per share		$ 867.43			$ 231.29
Common stock repurchased, value		$ 152,200			$ 21,300,000

SHARE REPURCHASE PROGRAM (Sched

SHARE REPURCHASE PROGRAM (Schedule of Shares Repurchased) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Repurchase Program
Shares repurchased	1,357	1,167
Average price per share	$ 819.06	$ 664.15
Total investment	$ 1,111,447	$ 775,196

ACCUMULATED OTHER COMPREHENSI_3

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023		Mar. 31, 2022
Balance at beginning of period	$ (1,060,752)	[1]	$ (66,423)
Change in accumulated other comprehensive income (loss)	18,898		5,063
Balance at end of period	(1,625,017)		(328,273)
Accumulated other comprehensive income (loss) [Member]
Balance at beginning of period	2,996		(6,799)
Change in accumulated other comprehensive income (loss)	18,898		5,063
Balance at end of period	21,894		(1,736)
Foreign currency [Member]
Balance at beginning of period	2,996		(6,799)
Change in accumulated other comprehensive income (loss)	18,898		5,063
Balance at end of period	$ 21,894		$ (1,736)

[1]The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

REVENUE (Disaggregation of Reve

REVENUE (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue
Sales	$ 3,707,864	$ 3,296,011
DIY customer [Member]
Disaggregation of Revenue
Sales	1,918,467	1,815,814
Professional service provider customer [Member]
Disaggregation of Revenue
Sales	1,711,964	1,399,364
Other customers and sales adjustments [Member]
Disaggregation of Revenue
Sales	$ 77,433	$ 80,833

SHARE-BASED COMPENSATION AND _3

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Option) (Narrative) (Details) - Stock option [Member] $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Share-Based Compensation and Benefit Plans
Remaining unrecognized compensation expense	$ 48.2
Weighted-average period for cost recognition	2 years 9 months 18 days
Employee stock option [Member]
Share-Based Compensation and Benefit Plans
Options expiration period	10 years
Vesting period	4 years
Option vesting rate per year	25%

SHARE-BASED COMPENSATION AND _4

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Other Share-Based Compensation) (Narrative) (Details) - Employee stock purchase plan [Member]	3 Months Ended
	Mar. 31, 2023
Share-Based Compensation and Benefit Plans
Employee stock purchase plan stock purchase percentage	85%
Restricted stock [Member] \| Minimum [Member]
Share-Based Compensation and Benefit Plans
Vesting period	1 year
Restricted stock [Member] \| Maximum [Member]
Share-Based Compensation and Benefit Plans
Vesting period	3 years

SHARE-BASED COMPENSATION AND _5

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Profit Sharing and Savings Plan) (Narrative) (Detail) - Profit sharing and savings plan [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation and Benefit Plans
Profit sharing and savings plan, employer discretionary contribution	$ 0	$ 0
Profit sharing and savings plan, cost recognized	$ 9,600	$ 8,600
Employee's first 2% of contributed wages [Member]
Share-Based Compensation and Benefit Plans
Profit sharing and savings plan, Company match	100%
Employee's next 4% of contributed wages [Member]
Share-Based Compensation and Benefit Plans
Profit sharing and savings plan, Company match	25%

SHARE-BASED COMPENSATION AND _6

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Nonqualified Deferred Compensation Plan) (Narrative) (Details) - Nonqualified Deferred Compensation Plan [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-Based Compensation and Benefit Plans
Deferred compensation plan obligation	$ 53.3		$ 49.4
Deferred compensation plan, employer discretionary contribution	0	$ 0
Deferred compensation plan cost recognized	$ 0.1	$ 0.1

SHARE-BASED COMPENSATION AND _7

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Appreciation Rights) (Narrative) (Details) - Stock appreciation rights (SARs) [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-Based Compensation and Benefit Plans
Stock appreciation rights expiration period	10 years
Stock appreciation rights vesting rate per year	25%
Vesting period	4 years
Stock appreciation rights outstanding	14,748		13,159
Stock appreciation rights granted during the period, units	1,714
Stock appreciation rights exercised during the period, units	125
Liability for compensation to be paid for redeemed stock appreciation rights	$ 3.2		$ 2.9
Compensation expense (benefit) for share-based compensation	$ 0.3	$ (0.1)

SHARE-BASED COMPENSATION AND _8

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Summary of Stock Options) (Details) - Employee stock option [Member] shares in Thousands	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Share-Based Compensation and Benefit Plans
Outstanding shares, beginning balance \| shares	1,069
Outstanding weighted-average exercise price, beginning balance \| $ / shares	$ 356.76
Granted, shares \| shares	62
Granted, weighted-average exercise price \| $ / shares	$ 829.83
Exercised, shares \| shares	(35)
Exercised, weighted-average exercise price \| $ / shares	$ 291.35
Forfeited or expired, shares \| shares	(5)
Forfeited or expired, weighted-average exercise price \| $ / shares	$ 557.30
Outstanding shares, ending balance \| shares	1,091
Outstanding weighted-average exercise price, ending balance \| $ / shares	$ 385
Exercisable shares, ending balance \| shares	803
Exercisable weighted-average exercise price, ending balance \| $ / shares	$ 302.61

SHARE-BASED COMPENSATION AND _9

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Black-Scholes Option Pricing Model) (Details) - Employee stock option [Member]	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation and Benefit Plans
Risk-free interest rate	3.91%	1.61%
Expected life	6 years 6 months	6 years 6 months
Expected volatility	29.10%	28.50%
Expected dividend yield	0%	0%

SHARE-BASED COMPENSATION AND_10

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation and Benefit Plans
Weighted-average grant-date fair value of options awarded	$ 318.08	$ 217.68
Employee stock option [Member] \| Stock option [Member]
Share-Based Compensation and Benefit Plans
Compensation expense (benefit) for share-based compensation	$ 6,119	$ 5,301
Income tax benefit from compensation expense for share-based compensation	$ 1,534	$ 1,346

SHARE-BASED COMPENSATION AND_11

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Other Share-Based Compensation Activity) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee stock purchase plan [Member]
Share-Based Compensation and Benefit Plans
Compensation expense (benefit) for share-based compensation	$ 861	$ 793
Income tax benefit from compensation expense for share-based compensation	216	201
Restricted stock [Member]
Share-Based Compensation and Benefit Plans
Compensation expense (benefit) for share-based compensation	455	439
Income tax benefit from compensation expense for share-based compensation	$ 114	$ 112

COMMITMENTS (Commitments) (Narr

COMMITMENTS (Commitments) (Narrative) (Details) $ in Millions	Mar. 31, 2023 USD ($)
Renewable energy tax credit [Member]
Commitments
Purchase commitment	$ 300

EARNINGS PER SHARE (Computation

EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator (basic and diluted):
Net income	$ 516,885	$ 481,880
Denominator:
Denominator for basic earnings per share - weighted-average shares	61,840	66,572
Effect of stock options	558	618
Denominator for diluted earnings per share - weighted-average shares and assumed conversion	62,398	67,190
Earnings per share - basic	$ 8.36	$ 7.24
Earnings per share - assuming dilution	$ 8.28	$ 7.17
Antidilutive stock options	149	115
Weighted-average exercise price per share of antidilutive stock options	$ 725.14	$ 657.14