Presentation. Page 1

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1 Presentation Page 1

2 Forward Looking Statements The Company claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of The Company intends these forward-looking statements to speak only as of the time of the presentation and does not undertake to update or revise them, as more information becomes available. These statements discuss, among other things, expected growth, store development and expansion strategy, business strategies, future revenues and future performance. These forwardlooking 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, competition, product demand, the market for auto parts, the economy in general, inflation, consumer debt levels, governmental approvals, our ability to hire and retain qualified employees, risks associated with the integration of acquired businesses, weather, terrorist activities, war and the threat of war. Actual results may materially differ from anticipated results described in these forward-looking statements. Please refer to the Risk Factors section of the Company s Form 10-K for the year ended December 31, 2005, for more details. Page 2

3 Company Overview America s #3 retailer of automotive parts and accessories with 1,687 stores in 25 states as of March 31, 2007 Founded in 1957 by the O Reilly family Listed on NASDAQ: ORLY since 1993 Annual sales of $2.28 billion in 2006 with approximate 50/50 mix of DIY and DIFM sales Page 3

4 Industry Overview Page 4

5 Automotive Aftermarket Industry Overview $118 billion market (AAIA 2006E) Consumer DIY Growth is 3 to 5% Growth driven by: - $60 Billion Estimated Unperformed Maintenance - Vehicle Population Growth - Vehicle Average Age Growth - Increasing Annual Miles Driven $38 billion $80 billion Professional Installers ( DIFM ) Growth is 3 to 5% Source: 2006/2007 AAIA Factbook Page 5

6 $60 Billion Estimated Unperformed Maintenance Promote routine maintenance through advertising efforts Educate customers about unperformed maintenance $38 $60 Current DIY Current DIFM Estimated Unperformed Maintenance Note: Dollars in billions $80 Source: 2006/2007 AAIA Factbook and AASA. Page 6

7 Millions Vehicle Population Growth Source: 2006/2007 AAIA Factbook Page 7

8 Years Vehicle Average Age Growth Light Trucks Cars Source: 2006/2007 AAIA Factbook Page 8

9 Trillions of Miles Vehicle Miles Driven Growth Source: U.S. Department of Transportation. Page 9

10 Stable Marketplace With Room for Consolidation 35,800 35,600 35,400 35,200 35,000 34,800 34,600 34,400 34,200 34,000 35,590 35,632 35,405 35,357 35, E Top 10 Auto Parts Chains Make up an Estimated 38.9% of the Market Source: 2006/2007 AAIA Factbook and Company Estimates. Page 10

11 Stores Operated Industry Consolidation Industry s top 10 participants are increasing their share of the total stores operated in the industry 15,000 13,712 13,869 12,882 13,000 12,049 11,000 9,000 8,570 9,218 10,019 10,587 10,921 11,270 6,966 7,000 5,492 6,105 5, % 36.2% 38.9%E Page 11

12 Top 10 Auto Parts Chains 1. AutoZone Inc. (3,847) 2. Advance Auto Parts (3,150) 3. O Reilly Auto Parts (1,687) 4. General Parts Inc./CARQUEST (1,562) 5. CSK Auto Corporation (1,334) 6. Genuine Parts/NAPA (1,067) 7. Pep Boys (593) 8. Fisher Auto Parts (305) 9. Uni-Select Inc./Parts Plus IAPA (170) 10. Replacement Parts Inc./Crow-Burlingame Co. (154) Source: January 2007 Aftermarket Business Magazine or most recent SEC filing Page 12

13 O Reilly Strengths Page 13

14 Superior Customer Service Superior service provided by Professional Parts People Leading point-of-sale systems - Electronic cataloging - Proprietary Sourcing System - High-speed internal network Competitive pricing Broad inventory availability - Stores average 21,000 SKUs - Stores have overnight access to 107,000 SKUs Convenient store locations and modern, attractive store design Page 14

15 Professional Parts People Technically proficient store personnel - Average store has almost 80% of its employees full-time Provide expert assistance to professional installers - Enhances customer service to DIY customers Receive extensive and ongoing training - Intensive orientation program - On-Line automotive training system New Parts Specialists complete ASE certification - Involves successful completion of advanced training course Page 15

16 Strategic Distribution System Distribute to stores daily not weekly Stock over 107,000 SKUs more than competitors Computerized inventory management system Master Inventory Hub stores Fourteen strategically located distribution centers - Houston, TX - Des Moines, IA - Knoxville, TN - Springfield, MO - Dallas, TX - Mobile, AL - Oklahoma City, OK - Little Rock, AR - Atlanta, GA - Kansas City, MO - Nashville, TN - St. Paul, MN* - Billings, MT - Indianapolis, IN Two bulk warehouses - Springfield, MO - McAllen,TX * Significant Expansion Planned for Second Quarter Page 16

17 Inventory Focus on increasing inventory turnover / return on investment Powerful inventory management systems - Global inventory system - SCORE forecasting system - New store modeling system Vendor factoring program Improving vendor payment terms (A/P to Inventory Ratio) Page 17

18 Dual Market Strategy Established track record of serving both DIY customers and professional installers Greater market penetration and reduced vulnerability to competition Leverages our existing retail and distribution infrastructure Can profitably operate in large and small markets Enhances service levels offered to our DIY customers Significant barriers to success in professional installer market Page 18

19 Commercial Strategy O Reilly started exclusively in the commercial business in 1957 Unsurpassed availability of quality brand name parts through distribution system and hub store network National account supplier Strong commercial sales force through First Call program Sophisticated pricing system to maximize gross margin Full service provider of all business needs of professional installers Page 19

20 Expanding Footprint Now in Ohio! Twenty-Six States And Growing! Page 20

21 Growth Strategies Aggressively open new stores Continually enhance store design and location to drive comps Continue to expand margins through operating efficiencies Actively pursue acquisition of jobber and independently owned franchise stores Selectively pursue strategic acquisitions, such as Hi/LO, Midstate, Midwest and numerous independent parts stores Page 21

22 Consistent Growth Aggressively open new stores (190 to 195 new stores planned for 2007) Small acquisitions generally represent 10% to 20% of new store total Selectively pursue major acquisitions Expand in clusters around distribution centers and master inventory stores Major Acquisitions Internal Growth Note: Major Acquisitions: Hi/LO, Midstate, Midwest Page 22

23 Building the Brand Page 23

24 Sports Marketing Page 24

25 Sports Marketing Page 25

26 Sports Marketing Page 26

27 Television, Radio and Print Advertising Page 27

28 Reasons to Own Page 28

29 Reasons to Own Summary Best and most consistent track record in the auto parts retailing sector Proven dual market strategy with 50% professional installer sales #1 or #2 market position in existing markets Well positioned to capitalize on industry trends At least 80% of sales are non-discretionary Acquisition of independent parts stores is highly accretive Senior management has on average over 15 years industry experience Page 29

30 Uninterrupted EPS Growth $1.75 $ Guidance $1.73 to $1.80 (1) (1) With stock option expense $1.41 $1.55 $1.25 $1.09 $1.00 $0.92 $0.75 $0.63 $0.77 $0.50 $0.25 $0.20 $0.23 $0.27 $0.36 $0.46 $0.50 $0.42 $ YTD Comparable EPS for all periods presented Page 30

31 Product Sales ($ in millions) $2,400 $2,100 $1,800 $1, Guidance $2,500 to $2,600 $2,283 $2,045 $1,721 $1,512 $1,313 $1,200 $900 $600 $300 $202 $259 $316 $616 $754 $890 $1,092 $613 $ YTD Page 31

32 Operating Income ($ in millions) $300.0 $275.0 $250.0 $225.0 $200.0 $175.0 $150.0 $125.0 $100.0 $75.0 $50.0 $25.0 $0.0 $22.0 $28.9 $37.1 $56.9 $76.6 $90.0 $113.8 $138.3 $165.3 $190.5 $252.5 $ $ YTD Page 32

33 Net Income ($ in millions) $200.0 $180.0 $160.0 $164.3 $178.1 $140.0 $120.0 $100.0 $82.0 $100.1 $117.7 $80.0 $60.0 $40.0 $20.0 $14.1 $19.0 $23.1 $30.8 $45.6 $51.7 $66.4 $48.40 $ YTD Page 33

34 Same Store Sales 16% 14% 12% 11.4% 14.9% 14.4% 10% 8% 9.2% 8.9% 8.9% 6.8% 6.8% 9.6% 8.8% 7.8% 6.8% 7.5% 6.8% 6% 5.0% 4% 3.7% 3.3% 2% 0% YTD Same-store product sales data are calculated based on the change in product sales of stores open at least one year. Prior to 2000, same-store product sales data were calculated based on the change in product sales of only those stores open during both full periods being compared. Page 34

35 Capitalization ($ in millions) 12/31/04 12/31/05 12/31/06 3/31/07 Total Debt $100.9 $100.8 $110.5 $100.7 Shareholders Equity , , ,420.5 Total Capitalization $1,048.7 $1,246.6 $1,474.6 $1,521.2 Credit Ratios: Total Debt/Capitalization 9.6% 8.1% 7.5% 6.6% Total Debt/EBITDA (LTM) 0.4x 0.3x 0.3x 0.3x Page 35

36 Corporate Governance Company has active hands on Board of Directors Currently 5 outside, independent directors, 4 inside directors Audit, Compensation and Corporate Governance Committees Code of Ethics In compliance with all NASDAQ listing standards Clean reports for Sarbanes Oxley Section 404 Page 36

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