# TO OUR FELLOW
SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NASDAQ_ORLY_2022/NASDAQ_ORLY_2022.mmd` · pages 2-8_

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TO OUR FELLOW
SHAREHOLDERS:

On behalf of our over 85,000 dedicated team members, we are once again pleased to write to you, our shareholders, to report another year of record-breaking revenues and earnings. Our 2022 performance represents our 30th consecutive year of comparable store sales increases and profitable growth since we became a public company in April of 1993. 2022 also marked our 65th year since our founding, when Charles F. "C.F." and Charles H. "Chub" O'Reilly, along with 11 other dedicated men and women, made the difficult decision to set out on their own and form O'Reilly Auto Parts. These forward-thinking original Team Members were also shareholders in the new enterprise and established the O'Reilly Culture that is the very foundation for the incredibly successful Company we are today. We cannot think of a more appropriate way to summarize our many accomplishments over the past 65 years than by quoting Charlie O'Reilly, Chub's oldest son and our former Chief Executive Officer and Chairman of the Board Emeritus:

"Our journey and success can be directly attributed to the dedication and hard work of every single O'Reilly Team Member. Whether on the frontlines working in a store, in a support role in the field, or at an office or distribution center, the commitment and dedication of all our Team Members who help O'Reilly Auto Parts be the best auto parts company in the country has been and remains the key to our amazing success."

## FROM THE
BEGINNING

1957
Charles F. "C.F."
O'Reilly and
Charles H. "Chub"
O'Reilly open
O'Reilly Automotive.

1975
O'Reilly's first
distribution center
and corporate
office opens.

1989
O'Reilly opens
its 100th store in
Barling, AR.

1998
O'Reilly acquires
Hi/LO Auto Supply,
doubling the size of
the Company.

2008
O'Reilly acquires CSK
Auto, bringing the
Company to 3,200
stores in 38 states.

2016
O'Reilly acquires
Bond Auto Parts.

2018
O'Reilly acquires
Bennett Auto Parts.

2022
O'Reilly celebrates its
65th anniversary.
1964
O'Reilly Automotive
adds its first
branch store.

1978
The dual-market
strategy is born.

1993
O'Reilly is listed on
The Nasdaq
Stock Market.

2001
O'Reilly enters the
top five auto parts
chains in the U.S.
with the acquisition
of Mid-State
Automotive.

2012
O'Reilly moves into
the Northeast market
with the acquisition
of VIP Auto Parts.

2017
O'Reilly opens its
5,000th store in
Norwich, CT.

2019
O'Reilly takes
its operations
international with
the acquisition
of Mayoreo de
Autopartes y Aceites,
S.A. de C.V. ("Mayasa
Auto Parts").

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Lily Zarate, Store Manager, O'Reilly 4468-Plant City, FL

Our dedicated and hardworking Team Members in our stores, distribution centers and corporate offices across the country relentlessly focus on taking market share and executing on our mission to be the dominant auto parts supplier in all of our market areas. These technically proficient, knowledgeable and highly professional men and women remain our single greatest asset and the reason for our success, and their ongoing focus on perpetuating and growing the O'Reilly Culture continues to drive our record-breaking performance year after year. We would like to thank Team O'Reilly for their commitment to our Culture and to providing unsurpassed levels of service to our customers; you are our greatest competitive advantage, the reason for our past success and are the foundation upon which we will grow into the future.

We generated a very strong 6.4% increase in comparable storesales in 2022, on top of record-breaking comparable store sales growth of 13.3% in 2021, and 10.9% in 2020, resulting in an incredible three-year comparable store sales stacked increase of 30.6%. Our Team's unrelenting focus on profitable growth translated our strong top-line performance into diluted earnings per share of \(33.44, which represents an astonishing 87% three-year increase from the \)17.88 diluted earnings per share we delivered in 2019. The magnitude of these results cannot be minimized, as this unprecedented performance was achieved through hard won market share gains resulting from the relentless work of our dedicated Team. Team O'Reilly continues to execute our proven dual market strategy at an extremely high level, powered by industry-leading parts availability and our robust, strategic, tiered distribution network, which affords our customers same-day or overnight access to hundreds of thousands of critical, hard-to-find parts.

Our dedication to profitable growth and market share gains is further enhanced by the continued strength of long-term automotive aftermarket demand drivers. Consumers depend on their vehicles to conduct their day-to-day activities, resulting in over three trillion miles driven on cars and trucks every year and causing ongoing wear and tear on their vehicles. This stable utilization underpins the consistent cycles of vehicle maintenance and repair that drives demand for the parts we sell. In addition, due to the high quality of new vehicle engineering and manufacturing, the overall vehicle fleet continues to grow and gradually continues to age, supporting both short- and long-term demand and a positive outlook for our industry and our Company.

We are keenly aware that we will not achieve our long-term growth goals without effectively reinvesting in our business, and we are highly focused on effective execution of our capital allocation strategy. Our first

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priority for capital deployment is to invest in our existing business, to enhance the service and offerings we provide to our customers and drive market share gains. Next, we prioritize the expansion of our store base and distribution network, unlocking our Team's ability to grow our business in new and existing market areas. During 2022, we successfully opened 187 net, new stores throughout the U.S. and Mexico, primarily by identifying and constructing individual store locations, but also augmented by small, strategic acquisitions. We remain very pleased with the strong performance of our new stores and believe we have continued opportunities to expand in the future as we add stores in strategic backfill locations across our current footprint, and grow into new markets in the both the U.S. and Mexico.

After we have exhausted all opportunities to profitably reinvest in the growth of our business at a high rate of return, we return excess capital to you, our shareholders, through the consistent execution of our share repurchase program. Our Team's dedication to excellent customer service and profitable growth produced free cash flow of \(2.4 billion in 2022, achieved after investing over \)560 million of capital in our stores, distribution centers and corporate offices. We are very happy to report that in 2022, we were able to return excess capital of $3.3 billion through our share repurchase program. Since we began our program in 2011, we have returned over $20 billion through the repurchase of 91 million shares, at an average price of $221.25 per share, and we continue to view the disciplined execution of our share repurchase program as an effective means of returning excess capital to you. We remain deeply committed to maintaining an appropriate capital structure, which supports our investment-grade credit ratings and provides the flexibility to successfully execute on future growth opportunities.

As we look forward after a very successful year in 2022, and a tremendous legacy built over the past 65 years, we could not be more excited about the opportunities we see ahead for our Company. The strong foundation we have established, solidified by the unparalleled commitment, hard work, and professionalism of our over 85,000 dedicated Team Members, is a tremendous spring board for continued long-term profitable growth. Before we conclude our letter to you, our esteemed shareholders, we would once again like to express our deepest and most sincere gratitude to all of Team O'Reilly, whose relentless focus on consistently superior customer service has been the driver to our past success and will be the catalyst for all of our future

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Mo Byas, QA Fork Lift Operator, DC-Lebanon, TN

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GREG JOHNSON
Chief Executive Officer

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DOUG BRAGG
Executive Vice President of
Store Operations and Sales

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BRAD BECKHAM
Co-President

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JEREMY FLETCHER
Executive Vice President and
Chief Financial Officer

accomplishments. The O'Reilly Culture, forged by 13 visionary men and women 65 years ago and perpetuated and instilled into every member of our Team today, remains vibrant.

Thank you for the confidence you have placed in us to operate our Company over these many years. We remain steadfast in our commitment to expanding upon our industry-leading competitive advantages and leveraging the hard-fought market share gains we have earned in the past to extend our incredible success into 2023 and beyond.

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BRENT KIRBY
Co-President

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THOMAS MCFALL
Executive Vice President