What changed in O’Reilly Automotive's 2024 10-K compared to 2023?

Across the narrative sections we track, O’Reilly Automotive (ORLY) added 241 paragraphs, removed 234, and edited 208 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+208/−203), Item 1A. Risk Factors (+29/−27), Item 5. Market for Registrant's Common Equity (+3/−3).

Did O’Reilly Automotive add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 29 new/edited paragraphs and 27 removed paragraphs versus the 2023 10-K.

What changed in O’Reilly Automotive's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 208 new/edited paragraphs and 203 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did O’Reilly Automotive's Legal Proceedings (Item 3) change in 2024?

Item 3 shows 1 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this ORLY 10-K diff come from?

The source filings are O’Reilly Automotive's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in O’Reilly Automotive's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of O’Reilly Automotive's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+241 added−234 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in O’Reilly Automotive's 2024 10-K

241 paragraphs added · 234 removed · 208 edited across 4 sections

Item 7. Management's Discussion & Analysis+208 / −203 · 177 edited
Item 1A. Risk Factors+29 / −27 · 27 edited
Item 5. Market for Registrant's Common Equity+3 / −3 · 3 edited
Item 3. Legal Proceedings+1 / −1 · 1 edited

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+2 added−0 removed95 unchanged

2023 filing

2024 filing

Biggest changeA violation of, or change in, employment legislation and/or regulations could hinder our ability to control costs, which could have a material adverse effect on our business, results of operations, financial condition, and cash flows. New tax laws, statutes, rules, regulations, or ordinances could harm our business operations, results of operations, and financial condition, and existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us, which could adversely impact our costs directly or indirectly through our suppliers and have a material adverse effect on our business, results of operations, financial condition, and cash flows. Item 1B.

Biggest changeIn addition, existing laws, statutes, rules, regulations, or ordinances, including those related to tax, could be interpreted, changed, modified, or applied adversely to us, which could adversely impact our costs directly or indirectly through our suppliers and have a material adverse effect on our business, results of operations, financial condition, and cash flows. Item 1B.

Examples of such risks include the following: ● We may not be able to continue to identify suitable acquisition targets or to acquire additional companies at favorable prices or on other favorable terms. ● Our management’s attention may be distracted. ● We may fail to retain key personnel from acquired businesses. ● We may assume unanticipated legal liabilities and other problems. ● We may not be able to successfully integrate the operations (accounting and billing functions, for example) of businesses we acquire to realize economic, operational, and other benefits. We may fail, or be unable, to discover liabilities of businesses that we acquire for which we or the subsequent owner or operator may be liable. 22 Litigation, governmental proceedings, environmental, employment, and tax legislation and regulations may affect our business, financial condition, results of operations, and cash flows.

Examples of such risks include the following: 22 ● We may not be able to continue to identify suitable acquisition targets or to acquire additional companies at favorable prices or on other favorable terms. ● Our management’s attention may be distracted. ● We may fail to retain key personnel from acquired businesses. ● We may assume unanticipated legal liabilities and other problems. ● We may not be able to successfully integrate the operations (accounting and billing functions, for example) of businesses we acquire to realize economic, operational, and other benefits. We may fail, or be unable, to discover liabilities of businesses that we acquire for which we or the subsequent owner or operator may be liable. Litigation, governmental proceedings, environmental, employment, and tax legislation and regulations may affect our business, financial condition, results of operations, and cash flows.

For example, our level of indebtedness could, among other things, ● make it more difficult to satisfy our financial obligations, including those relating to the senior unsecured notes, commercial paper program, and our credit facility; ● increase our vulnerability to adverse economic and industry conditions; ● limit our flexibility in planning for, or reacting to, changes and opportunities in our industry, which may place us at a competitive disadvantage; ● require us to dedicate a substantial portion of our cash flows to service the principal and interest on our debt, reducing the funds available for other business purposes, such as working capital, capital expenditures, or other cash requirements; ● limit our ability to incur additional debt with acceptable terms, if at all; and 20 ● expose us to fluctuations in interest rates, including changes that may result from the implementation of new benchmark rates to SOFR. In addition, the terms of our financing obligations include restrictions, such as affirmative, negative and financial covenants, conditions on borrowing, and subsidiary guarantees.

For example, our level of indebtedness could, among other things, ● make it more difficult to satisfy our financial obligations, including those relating to the senior unsecured notes, commercial paper program, and our credit facility; ● increase our vulnerability to adverse economic and industry conditions; ● limit our flexibility in planning for, or reacting to, changes and opportunities in our industry, which may place us at a competitive disadvantage; ● require us to dedicate a substantial portion of our cash flows to service the principal and interest on our debt, reducing the funds available for other business purposes, such as working capital, capital expenditures, or other cash requirements; ● limit our ability to incur additional debt with acceptable terms, if at all; and ● expose us to fluctuations in interest rates, including changes that may result from the implementation of new benchmark rates to SOFR. In addition, the terms of our financing obligations include restrictions, such as affirmative, negative and financial covenants, conditions on borrowing, and subsidiary guarantees.

If third parties, on whom we rely for merchandise, are unable to overcome difficulties resulting from the deterioration in economic conditions, the cause of which could include a prolonged public health crisis or pandemic, and provide us with the merchandise we need, or if counterparties to our credit facilities do not perform their obligations, our business, results of operations, financial condition, and cash flows could be adversely affected. The automotive aftermarket business is highly competitive, and we may have to risk our capital to remain competitive, all of which could adversely impact our business, results of operations, financial condition, and cash flows.

If third parties, on whom we rely for merchandise, are unable to overcome difficulties resulting from the deterioration in economic conditions, the cause of which could include a prolonged public health crisis or pandemic, and provide us with the merchandise 18 we need, or if counterparties to our credit facilities do not perform their obligations, our business, results of operations, financial condition, and cash flows could be adversely affected. The automotive aftermarket business is highly competitive, and we may have to risk our capital to remain competitive, all of which could adversely impact our business, results of operations, financial condition, and cash flows.

These efforts can result in significant potential risks, including failure of the systems to operate as designed, potential loss or corruption of data, incurring more costs than expected, or implementation delays or errors, and may result in operational challenges, security control failures, reputational harm, and increased costs, all of which could have a material adverse impact on our results of operations, financial condition, and cash flows. A breach of customer, supplier, Team Member, or Company information could damage our reputation or result in substantial additional costs or litigation.

These efforts can result in significant potential risks, 21 including failure of the systems to operate as designed, potential loss or corruption of data, incurring more costs than expected, or implementation delays or errors, and may result in operational challenges, security control failures, reputational harm, and increased costs, all of which could have a material adverse impact on our results of operations, financial condition, and cash flows. A breach of customer, supplier, Team Member, or Company information could damage our reputation or result in substantial additional costs or litigation.

Failure to comply with ethical, social, product, labor, health and safety, accounting or environmental standards, or existing or future laws or regulations, as well as failure or perceived failure to achieve or make progress with environmental, social, and governance goals, could also jeopardize our reputation and 19 potentially lead to various adverse actions from consumer or environmental groups, employees or regulatory bodies, which could require us to incur substantial legal fees and costs.

Failure to comply with ethical, social, product, labor, health and safety, accounting or environmental standards, or existing or future laws or regulations, as well as failure or perceived failure to achieve or make progress with environmental, social, and governance goals, could also jeopardize our reputation and potentially lead to various adverse actions from consumer or environmental groups, employees, or regulatory bodies, which could require us to incur substantial legal fees and costs.

For further discussion on cybersecurity related risks, see the “Risk Factors” section of Item 1A of this annual report on Form 10-K. RISK MANAGEMENT AND STRATEGY We execute a holistic approach to our standards, policies, practices, and processes for identifying, assessing, managing, mitigating, and responding to material risks from cybersecurity threats, all of which are integrated into our overall risk management program.

For further discussion on cybersecurity related risks, see the “Risk Factors” section of Item 1A of this annual report on Form 10-K. 23 RISK MANAGEMENT AND STRATEGY We execute a holistic approach to our standards, policies, practices, and processes for identifying, assessing, managing, mitigating, and responding to material risks from cybersecurity threats, all of which are integrated into our overall risk management program.

Our comprehensive monitoring, analysis, response, and communication protocols are designed to ensure the highest level of management is informed of cybersecurity risks and that the Board has comprehensive oversight and information necessary to provide guidance on critical cybersecurity issues. 24 Our Compliance Committee members have decades of business and leadership experience managing risk, including cybersecurity risks, that collectively enables them to effectively oversee comprehensive cybersecurity risks.

Our comprehensive monitoring, analysis, response, and communication protocols are designed to ensure the highest level of management is informed of cybersecurity risks and that the Board has comprehensive oversight and information necessary to provide guidance on critical cybersecurity issues. Our Compliance Committee members have decades of business and leadership experience managing risk, including cybersecurity risks, that collectively enables them to effectively oversee comprehensive cybersecurity risks.

If similar litigation were initiated against us, it could result in substantial costs and a diversion of our management’s attention and resources, which could have an adverse effect on our business. RISKS RELATED TO OUR INDEBTEDNESS AND FINANCING Our debt levels could adversely affect our cash flow and prevent us from fulfilling our obligations.

If similar litigation were initiated against us, it could result in substantial costs and a diversion of our management’s attention and resources, which could have an adverse effect on our business. 20 RISKS RELATED TO OUR INDEBTEDNESS AND FINANCING Our debt levels could adversely affect our cash flow and prevent us from fulfilling our obligations.

Some key components of the Information Security Program include: ● Security awareness training for Team Members. ● A dedicated security operations team to monitor, analyze, and respond to security threats. ● Security governance to manage and maintain security processes. ● Intrusion, detection, and prevention systems. ● A vulnerability management program to identify and remediate security liabilities. 23 ● A configuration management program to harden systems based on industry standards. ● Industry-leading email security, endpoint detection, and response platforms. ● Threat intelligence from multiple resources to identify and anticipate emerging threats. ● Network and web application firewalls. ● Multi-factor authentication. ● Network segmentation to isolate and safeguard critical systems and sensitive data. On an ongoing basis we conduct cybersecurity risk assessments, including compiling, reviewing, and acting on information garnered from internal stakeholders, known security vulnerabilities, and data from external sources.

Some key components of the Information Security Program include: ● Security awareness training for Team Members. ● A dedicated security operations team to monitor, analyze, and respond to security threats. ● Security governance to manage and maintain security processes. ● Intrusion, detection, and prevention systems. ● A vulnerability management program to identify and remediate security liabilities. ● A configuration management program to harden systems based on industry standards. ● Industry-leading email security, endpoint detection, and response platforms. ● Threat intelligence from multiple resources to identify and anticipate emerging threats. ● Network and web application firewalls. ● Identity security to include multi-factor authentication. ● Network segmentation to isolate and safeguard critical systems and sensitive data. On an ongoing basis we conduct cybersecurity risk assessments, including compiling, reviewing, and acting on information garnered from internal stakeholders, known security vulnerabilities, and data from external sources.

Some online competitors may have a lower cost structure than we do, as a result of our strategy of 18 providing an exceptional in-store experience and superior parts availability supported by our extensive store network and robust, regional distribution footprint, which could also create pricing pressure.

Some online competitors may have a lower cost structure than we do, as a result of our strategy of providing an exceptional in-store experience and superior parts availability supported by our extensive store network and robust, regional distribution footprint, which could also create pricing pressure.

Such a disruption of these systems, and the response to remedy, could result in a negative impact on our business operations and increased costs, which could have an adverse effect on our results of operations, financial condition, and cash flows. Failure to protect our brand and reputation could have a material adverse effect on our brand name, business, results of operations, financial condition, and cash flows.

Such a disruption of these systems, 19 and the response to remedy, could result in a negative impact on our business operations and increased costs, which could have an adverse effect on our results of operations, financial condition, and cash flows. Failure to protect our brand and reputation could have a material adverse effect on our brand name, business, results of operations, financial condition, and cash flows.

The Audit Committee receives on a quarterly basis, or as needed, comprehensive updates from management on cybersecurity risks, including risk assessments, cybersecurity maturity assessments, progress of risk reduction initiatives, enhancements to cybersecurity programs and initiatives, business continuity planning, PCI compliance, any relevant internal or industry cybersecurity incidents, and compliance with regulatory requirements and industry standards, as applicable. Management’s Role A cross-functional Compliance Committee comprised of O’Reilly executive and senior leadership, including our Chief Information Officer (“CIO”), have responsibility for assessing and managing material cybersecurity risks and oversees our enterprise security, privacy, and risk priorities, including ensuring alignment on security decisions across the Company.

The Audit Committee receives on a quarterly basis, or as needed, comprehensive updates from management on cybersecurity risks, including risk assessments, cybersecurity maturity assessments, progress of risk reduction initiatives, enhancements 24 to cybersecurity programs and initiatives, business continuity planning, PCI compliance, any relevant internal or industry cybersecurity incidents, and compliance with regulatory requirements and industry standards, as applicable. Management’s Role A cross-functional Compliance Committee comprised of O’Reilly executive and senior leadership, including our Chief Information Officer (“CIO”), has responsibility for assessing and managing material cybersecurity risks and oversees our enterprise security, privacy, and risk priorities, including ensuring alignment on security decisions across the Company.

However, as we expand our geographic footprint, we will continue to evaluate our existing distribution system infrastructure and will adjust our distribution system capacity as needed to support our future growth. Our corporate office operations occur primarily in Springfield, Missouri, and as of December 31, 2023, the total square footage for our corporate office operations was 0.6 million square feet, substantially all of which was owned.

However, as we expand our geographic footprint, we will continue to evaluate our existing distribution system infrastructure and will adjust our distribution system capacity as needed to support our future growth. Our corporate office operations occur primarily in Springfield, Missouri, and as of December 31, 2024, the total square footage for our corporate office operations was 0.6 million square feet, substantially all of which was owned.

Our ability to accomplish our growth objectives is dependent, in part, on matters beyond our control, such as weather conditions, zoning, and other issues related to new store site development, the availability of qualified management personnel, and general business and economic conditions. We cannot be sure that our growth plans for 2024 and beyond will be achieved.

The methods used to obtain unauthorized access are constantly evolving and may be difficult to anticipate or detect for long periods of 21 time.

The methods used to obtain unauthorized access are constantly evolving and may be difficult to anticipate or detect for long periods of time.

We have entered into separate master lease agreements with each of the affiliated entities for the occupancy of the stores covered thereby. Such master lease agreements with three of the five affiliated entities have been modified to extend the term of the lease agreement for specific stores.

We have entered into separate master lease agreements with each of the affiliated entities for the occupancy of the stores covered thereby. Such master lease agreements with two of the five affiliated entities have been modified to extend the term of the lease agreement for specific stores.

Our cybersecurity program is informed by industry-wide recognized standards, such as The National Institute of Standards and Technology (NIST) Cybersecurity Framework. We have implemented best practices and established numerous programs and controls to reduce cybersecurity risk. Our Information Security Program includes physical, administrative, and technical safeguards.

Our cybersecurity program is guided by industry-wide recognized standards, including The National Institute of Standards and Technology (NIST) Cybersecurity Framework. We have implemented best practices and established numerous programs and controls to reduce cybersecurity risk. Our Information Security Program includes physical, administrative, and technical safeguards.

The Audit Committee is composed of Board members with diverse expertise, including risk management, technology, and finance experience, which provides them with the necessary qualifications to effectively oversee cybersecurity risks.

The Audit Committee is composed of Board members with a broad range of expertise, including risk management, technology, and finance experience, which provides them with the necessary qualifications to effectively oversee cybersecurity risks.

The master lease agreements or modifications thereto expire on dates ranging from April 30, 2024, to December 31, 2029. We believe that the lease agreements with the affiliated entities are on terms comparable to those of third parties.

The master lease agreements or modifications thereto expire on dates ranging from February 28, 2025, to December 31, 2029. We believe that the lease agreements with the affiliated entities are on terms comparable to those of third parties.

To date, the Company is not aware of any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategies, results of operations, financial condition, or cash flows.

To date, the Company is not aware of risks from cybersecurity threats, including as a result of any previous cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategies, results of operations, financial condition, or cash flows.

Properties Stores, distribution centers, and other properties: Of the 6,157 stores we operated at December 31, 2023, 2,544 stores were owned, 3,543 stores were leased from unaffiliated parties, 50 of which were located in Mexico, and 70 stores were leased from entities that include one or more of our affiliated directors or members of their immediate family.

Properties Stores, Distribution Centers, and Other Properties: Of the 6,378 stores we operated at December 31, 2024, 2,658 stores were owned, 3,650 stores were leased from unaffiliated parties, and 70 stores were leased from entities that include one or more of our affiliated directors or members of their immediate family.

See Note 15 “Related Parties” to the Consolidated Financial Statements for further information on master lease agreements. The following table provides information regarding our regional DCs in operation as of December 31, 2023: Operating Square Footage (1) Principal Use Nature of Occupancy Number of Locations (in thousands) Distribution center Owned 22 9,727,584 Distribution center Leased (2) 8 2,853,583 Total 30 12,581,167 (1) DC operating square footage includes floor and mezzanine operating square footage and excludes subleased square footage.

See Note 17 “Related Parties” to the Consolidated Financial Statements for further information on master lease agreements. The following table provides information regarding our DCs in operation as of December 31, 2024: Operating Square Footage (1) Principal Use Nature of Occupancy Number of Locations (in thousands) Distribution center Owned 23 10,129 Distribution center Leased (2) 8 3,155 Total 31 13,284 (1) DC operating square footage includes floor and mezzanine operating square footage and excludes subleased square footage.

We are, and in the future may become, involved in lawsuits, regulatory inquiries, and governmental and other legal proceedings, arising out of the ordinary course of our business.

We are, and in the future may become, involved in lawsuits, including litigation relating to motor vehicle accidents incurred through the operation of our large vehicle fleet, regulatory inquiries, and governmental and other legal proceedings, arising out of the ordinary course of our business.

The ideal store servicing capability of our existing 29 U.S. DCs is approximately 6,125 stores; including our planned DC relocation projects discussed above, our total DC network provides a growth capacity of approximately 150 to 300 domestic stores. We believe the growth capacity in our DCs will provide us with the DC infrastructure needed for near-term expansion.

Including our planned DC expansion project discussed above, our total DC network provides a growth capacity of 25 approximately 500 to 650 domestic stores. We believe the growth capacity in our DCs will provide us with the DC infrastructure needed for near-term expansion.

Further enhancing our distribution capabilities in 2024, we plan to relocate our Springfield DC and Atlanta DC to larger, more efficient facilities that will increase store servicing capabilities. We believe that our present facilities are in good condition, are sufficiently insured, and are adequate for the conduct of our current operations.

Further enhancing our distribution capabilities, we plan to open a new DC in Stafford, Virginia in 2025, adding additional store servicing capabilities to our distribution network. We believe that our present facilities are in good condition, are sufficiently insured, and are adequate for the conduct of our current operations.

(2) Terms expiring on dates ranging from October 31, 2024, to June 30, 2035. In addition, we operate six satellite warehouses in Mexico; these facilities do not serve domestic stores and are immaterial in the aggregate.

(2) Terms expiring on dates ranging from December 31, 2027, to August 31, 2042. In addition, we operate 11 satellite warehouses in Mexico and Canada; these facilities do not provide regular stock order replenishment to stores and are immaterial in the aggregate.

Added

A violation of, or change in, employment legislation and/or regulations could hinder our ability to control costs, which could have a material adverse effect on our business, results of operations, financial condition, and cash flows. New laws, statutes, rules, regulations, or ordinances, including as a result of executive orders, could harm our business, results of operations, and financial condition.

Added

During 2024, we relocated our Springfield DC and Atlanta DC to larger more efficient facilities, which increased store servicing capabilities, and we completed the conversion of our North Little Rock DC facility into a large Hub.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed3 unchanged

2023 filing

2024 filing

Biggest changeAlthough 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. 25 Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed0 unchanged

2023 filing

2024 filing

Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common stock: Shares of the Company’s common stock are traded on The Nasdaq Global Select Market (“Nasdaq”) under the symbol “ORLY.” The Company’s common stock began trading on April 22, 1993; no cash dividends have been declared since that time, and the Company does not anticipate paying any cash dividends in the foreseeable future. As of February 15, 2023, the Company had approximately 1,024,000 shareholders of common stock based on the number of holders of record and an estimate of individual participants represented by security position listings. Sales of unregistered securities: There were no sales of unregistered securities during the year ended December 31, 2023. Issuer purchases of equity securities: The following table identifies all repurchases during the fourth quarter ended December 31, 2023, of any of the Company’s securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, by or on behalf of the Company or any affiliated purchaser (in thousands, except per share price data): Total Number of Maximum Dollar Value Total Average Shares Purchased as of Shares that May Yet Number of Price Paid Part of Publicly Be Purchased Under the Period Shares Purchased per Share Announced Programs Programs (1) October 1, 2023, to October 31, 2023 462 $ 910.21 462 $ 711,908 November 1, 2023, to November 30, 2023 68 965.09 68 2,646,346 December 1, 2023, to December 31, 2023 77 961.39 77 $ 2,572,201 Total as of December 31, 2023 607 $ 922.86 607 (1) The authorizations under the share repurchase program that currently have capacity are scheduled to expire on May 23, 2026, and November 16, 2026.

Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock: Shares of the Company’s common stock are traded on The Nasdaq Global Select Market (“Nasdaq”) under the symbol “ORLY.” The Company’s common stock began trading on April 22, 1993; no cash dividends have been declared since that time, and the Company does not anticipate paying any cash dividends in the foreseeable future. As of February 13, 2025, the Company had approximately 1,107,000 shareholders of common stock based on the number of holders of record and an estimate of individual participants represented by security position listings. Sales of Unregistered Securities: There were no sales of unregistered securities during the year ended December 31, 2024. Issuer Purchases of Equity Securities: The following table identifies all repurchases during the fourth quarter ended December 31, 2024, of any of the Company’s securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, by or on behalf of the Company or any affiliated purchaser (in thousands, except per share price data): Total Number of Maximum Dollar Value Total Average Shares Purchased as of Shares that May Yet Number of Price Paid Part of Publicly Be Purchased Under the Period Shares Purchased per Share Announced Programs Programs (1) October 1, 2024, to October 31, 2024 100 $ 1,177.24 100 $ 850,341 November 1, 2024, to November 30, 2024 156 1,201.48 156 2,663,071 December 1, 2024, to December 31, 2024 135 1,236.50 135 $ 2,495,691 Total as of December 31, 2024 391 $ 1,207.43 391 (1) The authorizations under the share repurchase program that currently have capacity are scheduled to expire on November 16, 2026, and November 22, 2027.

No other share repurchase programs existed during the twelve months ended December 31, 2023.

No other share repurchase programs existed during the twelve months ended December 31, 2024.

See Note 10 “Share Repurchase Program” to the Consolidated Financial Statements for further information on our share repurchases. 27 Stock performance graph: The graph below shows the cumulative total shareholder return assuming the investment of $100, on December 31, 2018, and the reinvestment of dividends thereafter, if any, in the Company’s common stock versus the Standard and Poor’s S&P 500 Retail Index (“S&P 500 Retail Index”) and the Standard and Poor’s S&P 500 Index (“S&P 500”). December 31, Company/Index 2018 2019 2020 2021 2022 2023 O’Reilly Automotive, Inc. $ 100 $ 127 $ 131 $ 205 $ 245 $ 276 S&P 500 Retail Index 100 126 183 217 141 199 S&P 500 $ 100 $ 129 $ 150 $ 190 $ 153 $ 190

See Note 12 “Share Repurchase Program” to the Consolidated Financial Statements for further information on our share repurchases. 27 Stock Performance Graph: The graph below shows the cumulative total shareholder return assuming the investment of $100, on December 31, 2019, and the reinvestment of dividends thereafter, if any, in the Company’s common stock versus the Standard and Poor’s S&P 500 Retail Index (“S&P 500 Retail Index”) and the Standard and Poor’s S&P 500 Index (“S&P 500”). December 31, Company/Index 2019 2020 2021 2022 2023 2024 O’Reilly Automotive, Inc. $ 100 $ 103 $ 161 $ 193 $ 217 $ 271 S&P 500 Retail Index 100 145 173 112 159 210 S&P 500 $ 100 $ 116 $ 148 $ 119 $ 148 $ 182

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

177 edited+31 added−26 removed129 unchanged

2023 filing

2024 filing

Biggest changeSee Note 1 for further information concerning the Company’s investment in tax credit funds. Income taxes have not been accrued by the Company for the unremitted earnings of its foreign subsidiaries because such earnings are intended to be reinvested in the subsidiaries indefinitely. Deferred income tax assets and liabilities: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and also include the tax effect of carryforwards. The following table identifies significant components of the Company’s net deferred tax liabilities included in “Deferred income taxes” on the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 2,430 $ 2,196 Other accruals 150,483 137,474 Operating lease liability 559,830 538,890 Other 18,102 17,115 Total deferred tax assets 730,845 695,675 Deferred tax liabilities: Inventories 142,578 104,572 Property and equipment 280,791 233,288 Operating lease asset 540,359 521,541 Other 62,588 81,621 Total deferred tax liabilities 1,026,316 941,022 Net deferred tax liabilities $ (295,471) $ (245,347) 70 Unrecognized tax benefits: The following table summarizes the changes in the gross amount of unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2023, 2022, and 2021 (in thousands): 2023 2022 2021 Unrealized tax benefit, balance at January 1, $ 24,798 $ 26,847 $ 30,967 Additions based on tax positions related to the current year 3,932 4,146 5,446 Payments related to items settled with taxing authorities — (1,000) (2,570) Reductions due to the lapse of statute of limitations and settlements (4,787) (5,195) (6,996) Unrealized tax benefit, balance at December 31, $ 23,943 $ 24,798 $ 26,847 For the year ended December 31, 2023, 2022, and 2021, the Company recorded a reserve in the amount of $21.9 million, $22.4 million and $24.2 million, respectively, for unrecognized tax benefits, including interest and penalties, net of federal benefits, which if recognized would affect the Company’s effective tax rate.

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, and five-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt.

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 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. See Note 2 for further information concerning the Company’s financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis. Property and equipment: Property and equipment are carried at cost.

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. See Note 4 for further information concerning the Company’s financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis. Property and Equipment: Property and equipment are carried at cost.

See Note 12 for further information concerning the Company’s revenue. Cost of goods sold and selling, general and administrative expenses: Below follows the primary costs classified in each major expense category. Cost of goods sold, including warehouse and distribution expenses: ● Total cost of merchandise sold, including freight expenses associated with acquiring merchandise and with moving merchandise inventories from the Company’s distribution centers to the stores and defective merchandise and warranty costs. ● Supplier allowances and incentives, including allowances that are not reimbursements for specific, incremental, and identifiable costs and cash discounts on payments to suppliers. ● Costs associated with the Company’s supply chain, including payroll and benefit costs, warehouse occupancy costs, transportation costs, depreciation, and inventory shrinkage. Selling general and administrative expenses: ● Payroll benefit costs for store and corporate Team Members; ● Occupancy costs of store and corporate facilities; ● All expenses associated with Hub stores; ● Depreciation and amortization related to store and corporate assets; ● Vehicle expenses for store and Hub delivery services; ● Self-insurance costs; ● Closed store expenses; and ● Other administrative costs, including accounting, legal, and other professional services; bad debt, banking, and credit card fees; supplies; travel; and advertising costs. Advertising expenses: Advertising expense consists primarily of expenses related to the Company’s integrated marketing program, which includes radio, in-store, digital, and social media promotions, as well as sports and event sponsorships and direct mail and newspaper promotional distribution.

See Note 14 for further information concerning the Company’s revenue. Cost of Goods Sold and Selling, General and Administrative Expenses: Below follows the primary costs classified in each major expense category. Cost of goods sold, including warehouse and distribution expenses: ● Total cost of merchandise sold, including freight expenses associated with acquiring merchandise and with moving merchandise inventories from the Company’s distribution centers to the stores and defective merchandise and warranty costs. ● Supplier allowances and incentives, including allowances that are not reimbursements for specific, incremental, and identifiable costs and cash discounts on payments to suppliers. ● Costs associated with the Company’s supply chain, including payroll and benefit costs, warehouse occupancy costs, transportation costs, depreciation, and inventory shrinkage. Selling general and administrative expenses: ● Payroll benefit costs for store and corporate Team Members; ● Occupancy costs of store and corporate facilities; ● All expenses associated with Hub stores; ● Depreciation and amortization related to store and corporate assets; ● Vehicle expenses for store and Hub delivery services; ● Self-insurance costs; ● Closed store expenses; and ● Other administrative costs, including accounting, legal, and other professional services; bad debt, banking, and credit card fees; supplies; travel; and advertising costs. Advertising Expenses: Advertising expense consists primarily of expenses related to the Company’s integrated marketing program, which includes radio, in-store, digital, and social media promotions, as well as sports and event sponsorships and direct mail and newspaper promotional distribution.

These better-engineered, more technically advanced vehicles require less frequent repairs, as the component parts are more durable and last for longer periods of time. The resulting decrease in repair frequency creates pressure on customer transaction counts; however, when repairs are needed, the cost of replacement parts is, on average, greater, which is a benefit to average ticket values.

These better-engineered, more technically advanced vehicles require less frequent repairs, as the component parts are more durable and last for longer periods of time. The resulting decrease in repair frequency creates pressure on customer transaction counts; however, when repairs are needed, the cost 32 of replacement parts is, on average, greater, which is a benefit to average ticket values.

Costs associated with the opening 55 of new distribution centers, which consist primarily of payroll and occupancy costs, are included in “Cost of goods sold, including warehouse and distribution expenses” on the accompanying Consolidated Statements of Income as incurred. Interest expense: The Company capitalizes interest costs as a component of construction in progress, based on the weighted-average interest rates incurred on its long-term borrowings.

Costs associated with the opening of new distribution centers, which consist primarily of payroll and occupancy costs, are included in “Cost of goods sold, including warehouse and distribution expenses” on the accompanying Consolidated Statements of Income as incurred. Interest Expense: The Company capitalizes interest costs as a component of construction in progress, based on the weighted-average interest rates incurred on its long-term borrowings.

See Note 8 for further information concerning the Company’s letters of credit commitments. Debt financing commitments: Each series of senior notes is redeemable in whole, at any time, or in part, from time to time, at the Company’s option upon not less than 30 nor more than 60 days notice at a redemption price, plus any accrued and unpaid interest to, but not including, the redemption date, equal to the greater of (i) 100% of the principal amount thereof or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semiannual basis at the applicable Treasury Yield plus basis points identified in the indenture governing such series of senior notes; provided, that on or after the date that is three months prior to the maturity date of the series of senior notes, such series of senior notes is redeemable at a redemption price equal to par plus accrued and unpaid interest to, but not including, the redemption date.

See Note 10 for further information concerning the Company’s letters of credit commitments. Debt Financing Commitments: Each series of senior notes is redeemable in whole, at any time, or in part, from time to time, at the Company’s option upon not less than 30 nor more than 60 days notice at a redemption price, plus any accrued and unpaid interest to, but not including, the redemption date, equal to the greater of (i) 100% of the principal amount thereof or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semiannual basis at the applicable Treasury Yield plus basis points identified in the indenture governing such series of senior notes; provided, that on or after the date that is three months prior to the maturity date of the series of senior notes, such series of senior notes is redeemable at a redemption price equal to par plus accrued and unpaid interest to, but not including, the redemption date.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management.

Financial Statements and Supplementary Data Index Page Management’s Report on Internal Control over Financial Reporting 42 Report of Independent Registered Public Accounting Firm : Internal Control over Financial Reporting (PCAOB ID: 42) 43 Report of Independent Registered Public Accounting Firm : Financial Statements (PCAOB ID: 42) 44 Consolidated Balance Sheets 46 Consolidated Statements of Income 47 Consolidated Statements of Comprehensive Income 48 Consolidated Statements of Shareholders’ Equity 49 Consolidated Statements of Cash Flows 50 Notes to Consolidated Financial Statements 51 41 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of O’Reilly Automotive, Inc. and Subsidiaries (the “Company”), under the supervision and with the participation of the Company’s principal executive officer and principal financial officer and effected by the Company’s Board of Directors, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15(f) or 15(d)-15(f) under the Securities Exchange Act of 1934, as amended.

Financial Statements and Supplementary Data Index Page Management’s Report on Internal Control over Financial Reporting 41 Report of Independent Registered Public Accounting Firm : Internal Control over Financial Reporting (PCAOB ID: 42) 42 Report of Independent Registered Public Accounting Firm : Financial Statements (PCAOB ID: 42) 44 Consolidated Balance Sheets 46 Consolidated Statements of Income 47 Consolidated Statements of Comprehensive Income 48 Consolidated Statements of Shareholders’ Equity 49 Consolidated Statements of Cash Flows 50 Notes to Consolidated Financial Statements 51 40 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of O’Reilly Automotive, Inc. and Subsidiaries (the “Company”), under the supervision and with the participation of the Company’s principal executive officer and principal financial officer and effected by the Company’s Board of Directors, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15(f) or 15(d)-15(f) under the Securities Exchange Act of 1934, as amended.

Credit losses are provided for in the Company’s consolidated financial statements and have consistently been within management’s expectations. 51 Amounts due to the Company from its Team Members are included in “Accounts receivable” on the accompanying Consolidated Balance Sheets. These amounts consist primarily of purchases of merchandise on Team Member accounts.

Credit losses are provided for in the Company’s consolidated financial statements and have consistently been within management’s expectations. Amounts due to the Company from its Team Members are included in “Accounts receivable” on the accompanying Consolidated Balance Sheets. These amounts consist primarily of purchases of merchandise on Team Member accounts.

(b) Comparable store sales are calculated based on the change in sales of U.S. stores open at least one year and excludes sales of specialty machinery, sales to independent parts stores, sales to Team Members, and sales from Leap Day during the years ended December 31, 2020 and 2016.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the annual report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023, which is available free of charge on the SEC’s website at www.sec.gov by searching with our ticker symbol “ORLY” or at our internet address, www.OReillyAuto.com, by clicking “Investor Relations” located at the bottom of the page. 35 Debt instruments: See Note 8 “Financing” to the Consolidated Financial Statements for information concerning the Company’s credit agreement, unsecured revolving credit facility, outstanding letters of credit, commercial paper program, and unsecured senior notes. Debt covenants: The indentures governing our senior notes contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things, create certain liens on assets to secure certain debt and enter into certain sale and leaseback transactions, and limit our ability to merge or consolidate with another company or transfer all or substantially all of our property, in each case as set forth in the indentures.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2024, which is available free of charge on the SEC’s website at www.sec.gov by searching with our ticker symbol “ORLY” or at our internet address, www.OReillyAuto.com, by clicking “Investor Relations” located at the bottom of the page. 35 Debt Instruments: See Note 10 “Financing” to the Consolidated Financial Statements for information concerning the Company’s credit agreement, unsecured revolving credit facility, outstanding letters of credit, commercial paper program, and unsecured senior notes. Debt Covenants: The indentures governing our senior notes contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things, create certain liens on assets to secure certain debt and enter into certain sale and leaseback transactions, and limit our ability to merge or consolidate with another company or transfer all or substantially all of our property, in each case as set forth in the indentures.

As of December 31, 2023 and 2022, the Company had no outstanding borrowings under its Revolving Credit Facility. 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, which will vary from 0.000% to 0.250% in the case of loans bearing interest at the Alternate Base Rate and 0.680% to 1.250% in the case of loans bearing interest at the Adjusted Term SOFR Rate, in each case based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to limited exceptions.

As of December 31, 2024 and 2023, the Company had no outstanding borrowings under its Revolving Credit Facility. 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, which will vary from 0.000% to 0.250% in the case of loans bearing interest at the Alternate Base Rate and 0.680% to 1.250% in the case of loans bearing interest at the Adjusted Term SOFR Rate, in each case based upon the better of the ratings assigned to our debt by Moody’s Investor Service, Inc. and Standard & Poor’s Rating Services, subject to limited exceptions.

Other sales and sales adjustments primarily includes sales to Team Members, wholesale sales to other retailers (“jobber sales”), equipment sales, discounts, rebates, deferred revenue 54 adjustments relating to the Company’s retail loyalty program, and adjustments to estimated sales returns allowances. Sales to Team Members are recorded when the Team Member takes possession of the merchandise.

Other sales and sales adjustments primarily includes sales to Team Members, wholesale sales to other retailers (“jobber sales”), equipment sales, discounts, rebates, deferred revenue adjustments relating to the Company’s retail loyalty program, and adjustments to estimated sales returns allowances. Sales to Team Members are recorded when the Team Member takes possession of the merchandise.

Allowances for doubtful accounts are determined based on historical experience and an evaluation of the current composition of accounts receivable. The Company grants credit to certain professional service provider and jobber customers who meet the Company’s pre-established credit requirements.

Allowances for doubtful accounts are determined based on historical experience and an evaluation of the current composition of accounts receivable. 51 The Company grants credit to certain professional service provider and jobber customers who meet the Company’s pre-established credit requirements.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the annual report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023, which is available free of charge on the SEC’s website at www.sec.gov by searching with our ticker symbol “ORLY” or at our internet address, www.OReillyAuto.com, by clicking “Investor Relations” located at the bottom of the page. LIQUIDITY AND CAPITAL RESOURCES Our long-term business strategy requires capital to maintain and enhance our existing stores, invest to open new stores, fund strategic acquisitions, expand distribution infrastructure, develop enhanced information technology systems and tools, and may include the opportunistic repurchase of shares of our common stock through our Board-approved share repurchase program.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the annual report on Form 10-K for the year ended December 31, 2023, filed with 33 the Securities and Exchange Commission (the “SEC”) on February 28, 2024, which is available free of charge on the SEC’s website at www.sec.gov by searching with our ticker symbol “ORLY” or at our internet address, www.OReillyAuto.com, by clicking “Investor Relations” located at the bottom of the page. LIQUIDITY AND CAPITAL RESOURCES Our long-term business strategy requires capital to maintain and enhance our existing stores, invest to open new stores, fund strategic acquisitions, expand distribution infrastructure, develop enhanced information technology systems and tools, and may include the opportunistic repurchase of shares of our common stock through our Board-approved share repurchase program.

As of December 31, 2023 and 2022, the Company did not have any material 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, unsecured revolving credit facility borrowings, and commercial paper program borrowings are included in “Long-term debt” on the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022. The table below identifies the estimated fair value of the Company’s senior notes, using the market approach.

As of December 31, 2024 and 2023, the Company did not have any material 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, unsecured revolving credit facility borrowings, and commercial paper program borrowings are included in “Long-term debt” on the accompanying Consolidated Balance Sheets as of December 31, 2024 and 2023. The table below identifies the estimated fair value of the Company’s senior notes, using the market approach.

The Company expensed matching contributions under the Deferred Compensation Plan in the amount of less than $0.1 million, $0.2 million, and $0.2 million for the for the year ended December 31, 2023, 2022, and 2021, respectively, which were included in “Selling, general and administrative expenses” on the accompanying 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.

The Company expensed matching contributions under the Deferred Compensation Plan in the amount of $0.1 million, less than $0.1 million, and $0.2 million for the for the year ended December 31, 2024, 2023, and 2022, respectively, which were included in “Selling, general and administrative expenses” on the accompanying 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.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Kansas City, Missouri February 28, 2024 43 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of O’Reilly Automotive, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of O’Reilly Automotive, Inc. and Subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 42 /s/ Ernst & Young LLP Kansas City, Missouri February 28, 2025 43 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of O’Reilly Automotive, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of O’Reilly Automotive, Inc. and Subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

Management’s Discussion and Analysis of Financial Condition and Results of Operations In Management’s Discussion and Analysis, we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity, and certain other factors that may affect our future results, including ● an overview of the key drivers and other influences on the automotive aftermarket industry; ● our results of operations for the years ended December 31, 2023 and 2022; ● our liquidity and capital resources; ● our critical accounting estimates; and ● recent accounting pronouncements that may affect our Company. The review of Management’s Discussion and Analysis should be made in conjunction with our consolidated financial statements, related notes and other financial information, forward-looking statements, and other risk factors included elsewhere in this annual report. OVERVIEW We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, and Mexico.

Management’s Discussion and Analysis of Financial Condition and Results of Operations In Management’s Discussion and Analysis, we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity, and certain other factors that may affect our future results, including ● an overview of the key drivers and other influences on the automotive aftermarket industry; ● our results of operations for the years ended December 31, 2024 and 2023; ● our liquidity and capital resources; ● our critical accounting estimates; and ● recent accounting pronouncements that may affect our Company. The review of Management’s Discussion and Analysis should be made in conjunction with our consolidated financial statements, related notes and other financial information, forward-looking statements, and other risk factors included elsewhere in this annual report. OVERVIEW We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, Mexico, and Canada.

Management does not believe there is a reasonable likelihood that the Company will be unable to collect the aggregate amounts receivable from suppliers, and the Company did not record a reserve for uncollectable amounts from suppliers in the consolidated financial statements as of December 31, 2023 or 2022. Inventory: Inventory, which consists of automotive hard parts, maintenance items, accessories, and tools, is stated at the lower of cost or market.

Management does not believe there is a reasonable likelihood that the Company will be unable to collect the aggregate amounts receivable from suppliers, and the Company did not record a reserve for uncollectable amounts from suppliers in the consolidated financial statements as of December 31, 2024 or 2023. Inventory: Inventory, which consists of automotive hard parts, maintenance items, accessories, and tools, is stated at the lower of cost or market.

As of December 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.

As of December 31, 2024, 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.

These covenants are, however, subject to a number of important limitations and exceptions. As of December 31, 2023, we were in compliance with the covenants applicable to our senior notes. The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00.

These covenants are, however, subject to a number of important limitations and exceptions. As of December 31, 2024, we were in compliance with the covenants applicable to our senior notes. The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00.

We compensate for such limitations by presenting, in the tables above, a reconciliation to the most directly comparable GAAP measures. Share repurchase program: See Note 10 “Share Repurchase Program” to the Consolidated Financial Statements for information on our share repurchase program. CRITICAL ACCOUNTING ESTIMATES The preparation of our financial statements in accordance with GAAP requires the application of certain estimates and judgments by management.

We compensate for such limitations by presenting, in the tables above, a reconciliation to the most directly comparable GAAP measures. Share Repurchase Program: See Note 12 “Share Repurchase Program” to the Consolidated Financial Statements for information on our share repurchase program. CRITICAL ACCOUNTING ESTIMATES The preparation of our financial statements in accordance with GAAP requires the application of certain estimates and judgments by management.

See Note 13 for further information concerning the Company’s benefit plans. 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.

See Note 15 for further information concerning the Company’s benefit plans. 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.

The remainder was included in “Other liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022. 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.

The remainder was included in “Other liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2024 and 2023. 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.

The Company did not establish a valuation allowance for deferred tax assets as of December 31, 2023 and 2022, as it was considered more likely than not that deferred tax assets were realizable through a combination of future taxable income, the realization of deferred tax liabilities and tax planning strategies. The Company regularly reviews its potential tax liabilities for tax years subject to audit.

The Company did not establish a valuation allowance for deferred tax assets as of December 31, 2024 and 2023, as it was considered more likely than not that deferred tax assets were realizable through a combination of future taxable income, the realization of deferred tax liabilities and tax planning strategies. The Company regularly reviews its potential tax liabilities for tax years subject to audit.

Accounts receivable due from Team Members was approximately $0.9 million and $0.8 million as of December 31, 2023 and 2022, respectively. Amounts receivable from suppliers: The Company receives concessions from its suppliers through a variety of programs and arrangements, including allowances for new stores and warranties, volume purchase rebates, and co-operative advertising.

Accounts receivable due from Team Members was approximately $0.8 million and $0.9 million as of December 31, 2024 and 2023, respectively. Amounts Receivable from Suppliers: The Company receives concessions from its suppliers through a variety of programs and arrangements, including allowances for new stores and warranties, volume purchase rebates, and co-operative advertising.

See Note 13 for further information concerning the Company’s share-based compensation and benefit plans. Pre-opening expenses: Costs associated with the opening of new stores, which consist primarily of payroll and occupancy costs, are charged to “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income as incurred.

See Note 15 for further information concerning the Company’s share-based compensation and benefit plans. Pre-Opening Expenses: Costs associated with the opening of new stores, which consist primarily of payroll and occupancy costs, are charged to “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income as incurred.

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.

The Credit Agreement includes a $200 million sub-limit 63 for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings under the Revolving Credit Facility.

The estimate is sensitive to assumptions such as the projected cost inflation, claim growth patterns and exposure forecasts. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design of controls over the Company’s self-insurance estimation process and tested the operating effectiveness of those controls including management’s controls over reviewing the appropriateness of assumptions and the completeness and accuracy of the data underlying the reserves. 44 To test the Company’s determination of the estimated self-insurance reserves, we performed audit procedures that included, among others, involving a specialist to assist in the development of an independent actuarial estimate for certain of the reserve balances based upon current industry and economic trends, comparing certain selected assumptions used by management to our independent estimates which were developed with the assistance of our specialists, testing the underlying data used by management in the development of the reserves and testing the mathematical accuracy of the calculations. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1992.

The estimate is sensitive to assumptions such as claim severity and duration, projected inflation, claim development patterns and exposure forecasts. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design of controls over the Company’s self-insurance estimation process and tested the operating effectiveness of those controls including management’s controls over reviewing the appropriateness of assumptions and the completeness and accuracy of the data underlying the reserves. 44 To test the Company’s determination of the estimated self-insurance reserves, we performed audit procedures that included, among others, involving a specialist to assist in the development of an independent actuarial estimate for certain of the reserve balances based upon current industry and economic trends, comparing selected assumptions and the estimate determined by management to our independent estimates which were developed with the assistance of our specialists, testing the underlying data used by management in the development of the reserves and testing the mathematical accuracy of the calculations. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1992.

Financial results for these acquired companies have been included in the Company’s consolidated financial statements from the dates of the acquisitions forward. (k) In 2019, the Company acquired Mayoreo de Autopartes y Aceites, S.A. de C.V. (“Mayasa”), which added 21 stores to the O’Reilly store count.

Financial results for these acquired companies have been included in the Company’s consolidated financial statements from the dates of the acquisitions forward. (j) In 2019, the Company acquired Mayoreo de Autopartes y Aceites, S.A. de C.V. (“Mayasa”), which added 21 stores to the O’Reilly store count.

Average ticket values benefited from inflationary increases in average selling prices, as compared to the same period in 2022. Average ticket values also continue to be positively impacted by the increasing complexity and cost of replacement parts necessary to maintain the current population of better-engineered and more technically advanced vehicles.

Average ticket values benefited from inflationary increases in average selling prices, as compared to the same period in 2023. Average ticket values also continue to be positively impacted by the increasing complexity and cost of replacement parts necessary to maintain the current population of better-engineered and more technically advanced vehicles.

When the implicit rate of a lease is available, the implicit rate is used in the calculation and not the Company’s incremental borrowing rate. NOTE 6 – GOODWILL AND OTHER INTANGIBLES Goodwill: Goodwill is reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.

When the implicit rate of a lease is available, the implicit rate is used in the calculation and not the Company’s incremental borrowing rate. NOTE 8 – GOODWILL AND OTHER INTANGIBLES Goodwill: Goodwill is reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.

See Note 4 for further information concerning the Company’s impairment of long-lived assets activities. Valuation of investments: The Company has an unsecured obligation to pay, in the future, the value of deferred compensation and a Company match relating to employee participation in the Company’s nonqualified deferred compensation plan (the “Deferred Compensation Plan”).

See Note 6 for further information concerning the Company’s impairment of long-lived assets activities. Valuation of Investments: The Company has an unsecured obligation to pay, in the future, the value of deferred compensation and a Company match relating to employee participation in the Company’s nonqualified deferred compensation plan (the “Deferred Compensation Plan”).

The Company did not make discretionary contributions to the Deferred Compensation Plan during the years ended December 31, 2023 or 2022.

The Company did not make discretionary contributions to the Deferred Compensation Plan during the years ended December 31, 2024, 2023, or 2022.

Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.

See Note 5 for further information concerning the Company’s operating leases. Impairment of long-lived assets: The Company reviews its long-lived assets, including its right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

See Note 7 for further information concerning the Company’s operating leases. Impairment of Long-Lived Assets: The Company reviews its long-lived assets, including its right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

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 65 vest 25% per year, over four years.

(2) See Note 14 “Commitments” and Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements for further information on our self-insurance reserves. Due to the absence of scheduled maturities, the nature of the account or the commitment’s cancellation terms, the timing of payments for certain deferred income taxes, uncertain tax positions, and commitments related to future payments under the Company’s nonqualified compensation plan cannot be determined and are therefore excluded from the above table, except for amounts estimated to be payable in 2024, which are included in “Current liabilities” on our Consolidated Balance Sheets. 34 Off-balance sheet arrangements are transactions, agreements, or other contractual arrangements with an unconsolidated entity, for which we have an obligation to the entity that is not recorded in our consolidated financial statements.

(2) See Note 16 “Commitments” and Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements for further information on our self-insurance reserves. Due to the absence of scheduled maturities, the nature of the account or the commitment’s cancellation terms, the timing of payments for certain deferred income taxes, uncertain tax positions, and commitments related to future payments under the Company’s nonqualified compensation plan cannot be determined and are therefore excluded from the above table, except for amounts estimated to be payable in 2025, which are included in “Current liabilities” on our Consolidated Balance Sheets. Off-balance sheet arrangements are transactions, agreements, or other contractual arrangements with an unconsolidated entity, for which we have an obligation to the entity that is not recorded in our consolidated financial statements.

The Company’s qualitative assessment found no evidence to suggest it is more likely than not that its fair value is less than its carrying amount, including goodwill, as of December 31, 2023 and 2022. As such, no goodwill impairment adjustment was required as of December 31, 2023 and 2022.

The Company’s qualitative assessment found no evidence to suggest it is more likely than not that its fair value is less than its carrying amount, including goodwill, as of December 31, 2024 and 2023. As such, no goodwill impairment adjustment was required as of December 31, 2024 and 2023.

See Note 8 for further information concerning the Company’s senior notes, unsecured revolving credit facility, and commercial paper program. The accompanying Consolidated Balance Sheets include other financial instruments, including cash and cash equivalents, accounts receivable, amounts receivable from suppliers, and accounts payable.

See Note 10 for further information concerning the Company’s senior notes, unsecured revolving credit facility, and commercial paper program. The accompanying Consolidated Balance Sheets include other financial instruments, including cash and cash equivalents, accounts receivable, amounts receivable from suppliers, and accounts payable.

As of December 31, 2023, we had no outstanding borrowings under our Revolving Credit Facility. We are subject to interest rate risk to the extent we issue short-term, unsecured commercial paper notes under our commercial paper program (the “Program”) with variable interest rates.

As of December 31, 2024, we had no outstanding borrowings under our Revolving Credit Facility. We are subject to interest rate risk to the extent we issue short-term, unsecured commercial paper notes under our commercial paper program (the “Program”) with variable interest rates.

AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business: O’Reilly Automotive, Inc. and Subsidiaries, collectively, “O’Reilly” or the “Company,” is a specialty retailer and supplier of automotive aftermarket parts.

AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business: O’Reilly Automotive, Inc. and Subsidiaries, collectively, “O’Reilly” or the “Company,” is a specialty retailer and supplier of automotive aftermarket parts.

Our comparable store sales increase for the year ended December 31, 2023, was driven by an increase in average ticket value for both professional service provider and DIY customers and positive transaction counts from professional service provider customers, partially offset by negative transaction counts from DIY customers.

Our comparable store sales increase for the year ended December 31, 2024, was driven by an increase in average ticket value for both professional service provider and DIY customers and positive transaction counts from professional service provider customers, partially offset by negative transaction counts from DIY customers.

Bank Trust Company as trustees. Interest on the senior notes, ranging from 1.750% to 5.750%, is payable semi-annually and is computed on the basis of a 360-day year. None of the Company’s subsidiaries is a guarantor under the senior notes.

Bank Trust Company, National Association as trustees. Interest on the senior notes, ranging from 1.750% to 5.750%, is payable semi-annually and is computed on the basis of a 360-day year. None of the Company’s subsidiaries is a guarantor under the senior notes.

(i) Free cash flow is calculated as net cash provided by operating activities less capital expenditures, excess tax benefit from share-based compensation payments, and investment in tax credit equity investments for the period. (j) In 2016 and 2018, the Company acquired materially all assets of Bond Auto Parts (“Bond”) and Bennett Auto Supply, Inc. (“Bennett”), respectively.

(h) Free cash flow is calculated as net cash provided by operating activities less capital expenditures, excess tax benefit from share-based compensation payments, and (return of)/investment in tax credit equity investments for the period. (i) In 2016 and 2018, the Company acquired materially all assets of Bond Auto Parts (“Bond”) and Bennett Auto Supply, Inc. (“Bennett”), respectively.

Finite-lived intangibles are carried at amortized cost and amortization is calculated using the straight-line method, generally over 52 the estimated useful lives of the intangibles. See Note 6 for further information concerning the Company’s goodwill and other intangibles. Leases: The Company leases certain office space, retail stores, distribution centers, and equipment under long-term, non-cancelable operating leases.

Finite-lived intangibles are carried at amortized cost and amortization is calculated using the straight-line method, generally over the estimated useful lives of the intangibles. See Note 8 for further information concerning the Company’s goodwill and other intangibles. Leases: The Company leases certain office space, retail stores, distribution centers, and equipment under long-term, non-cancelable operating leases.

See Note 16 for further information concerning the Company’s income taxes. Earnings per share: Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the fiscal period.

See Note 18 for further information concerning the Company’s income taxes. Earnings Per Share: Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the fiscal period.

All shares repurchased under the share repurchase program are retired and recorded under the par value method on the accompanying Consolidated Balance Sheets. See Note 10 for further information concerning the Company’s share repurchase program. Revenue recognition: The Company’s primary source of revenue is derived from the sale of automotive aftermarket parts and merchandise to its customers.

All shares repurchased under the share repurchase program are retired and recorded under the par value method on the accompanying Consolidated Balance Sheets. See Note 12 for further information concerning the Company’s share repurchase program. 54 Revenue Recognition: The Company’s primary source of revenue is derived from the sale of automotive aftermarket parts and merchandise to its customers.

Fletcher Chief Executive Officer Executive Vice President and February 28, 2024 Chief Financial Officer February 28, 2024 42 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of O’Reilly Automotive, Inc. Opinion on Internal Control Over Financial Reporting We have audited O’Reilly Automotive, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

Fletcher Chief Executive Officer Executive Vice President and February 28, 2025 Chief Financial Officer February 28, 2025 41 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of O’Reilly Automotive, Inc. Opinion on Internal Control Over Financial Reporting We have audited O’Reilly Automotive, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

For the year ended December 31, 2023, 2022, and 2021, the Company recorded aggregate amortization expense related to its intangible assets in the amounts of $3.0 million, $4.8 million and $4.9 million, respectively. Indefinite-lived intangible assets, such as trade names, are reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.

For the year ended December 31, 2024, 2023, and 2022, the Company recorded aggregate amortization expense related to its intangible assets in the amounts of $3.6 million, $3.0 million and $4.8 million, respectively. Indefinite-lived intangible assets, such as trade names, are reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.

See Note 9 for further information concerning the Company’s aggregate product warranty liabilities. Litigation accruals: The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business.

See Note 11 for further information concerning the Company’s aggregate product warranty liabilities. Litigation Accruals: The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business.

During the year ended December 31, 2023, 2022, and 2021, the Company recognized investment tax credits from association with these VIEs in the amounts of $0.5 million, $167.6 million and $177.1 million, respectively, all of which were realized through reductions in cash income taxes paid and were reflected as a component of the change in Income taxes payable on the accompanying Consolidated Statements of Cash Flows for the respective years. Self-insurance reserves: The Company uses a combination of insurance and self-insurance mechanisms to provide for potential liabilities for Team Member health care benefits, workers’ compensation, vehicle liability, general liability, and property loss.

During the year ended December 31, 2023, and 2022, the Company recognized investment tax credits from association with these VIEs in the amounts of $0.5 million and $167.6 million, respectively, all of which were realized through reductions in cash income taxes paid and were reflected as a component of the change in “Income taxes payable” on the accompanying Consolidated Statements of Cash Flows for the respective years. Self-Insurance Reserves: The Company uses a combination of insurance and self-insurance mechanisms to provide for potential liabilities for Team Member health care benefits, workers’ compensation, vehicle liability, general liability, and property loss.

See Note 2 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 $59.5 million and $49.4 million as of December 31, 2023 and 2022, respectively, which were included in “Other liabilities” on the accompanying Consolidated Balance Sheets.

See Note 4 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 $65.2 million and $59.5 million as of December 31, 2024 and 2023, respectively, which were included in “Other liabilities” on the accompanying Consolidated Balance Sheets.

ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 allows for early adoption and requires retrospective adoption. The Company will adopt this guidance beginning with its fourth quarter ending December 31, 2024.

ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 allows for early adoption and requires retrospective adoption. The Company adopted this guidance beginning with its fourth quarter ending December 31, 2024.

As of December 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.

As of December 31, 2024, the Company had invested in five 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.

Advertising expense, net of cooperative advertising allowances from suppliers that were incremental to the advertising program, specific to the product or event and identifiable for accounting purposes, were $85.7 million, $81.5 million and $72.5 million for the year ended December 31, 2023, 2022, and 2021, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income. Share-based compensation and benefit plans: The Company sponsors share-based compensation plans and benefit plans.

Advertising expense, net of cooperative advertising allowances from suppliers that were incremental to the advertising program, specific to the product or event and identifiable for accounting purposes, were $90.7 million, 55 $85.7 million and $81.5 million for the year ended December 31, 2024, 2023, and 2022, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income. Share-Based Compensation and Benefit Plans: The Company sponsors share-based compensation plans and benefit plans.

The investments in this plan were stated at fair value based on quoted market prices, were accounted for as trading securities, and were included in “Other assets, net” on the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022. See Note 2 for further information concerning the fair value measurements of the Company’s marketable securities.

The investments in this plan were stated at fair value based on quoted market prices, were accounted for as trading securities, and were included in “Other assets, net” on the accompanying Consolidated Balance Sheets as of December 31, 2024 and 2023. See Note 4 for further information concerning the fair value measurements of the Company’s marketable securities.

A 10% change in average exchange rates would not have had a material impact on our results of operations. 40 Item 8.

A 10% change in average exchange rates would not have had a material impact on our results of operations. 39 Item 8.

The Company did not make any discretionary contributions to the 401(k) Plan during the years ended December 31, 2023, 2022, or 2021.

The Company did not make any discretionary contributions to the 401(k) Plan during the years ended December 31, 2024, 2023, or 2022.

The Company recorded an increase in fair value related to its marketable securities in the amount of $8.4 million and a decrease in fair value to its related to its marketable securities in the amount of $8.3 million for the year ended December 31, 2023 and 2022, respectively, which were included in “Other income (expense)” on the accompanying Consolidated Statements of Income. 57 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 December 31, 2023 and 2022 (in thousands): December 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 $ 59,508 $ — $ — $ 59,508 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.

The Company recorded an increase in fair value related to its marketable securities in the amount of $7.1 million and $8.4 million for the year ended December 31, 2024 and 2023, respectively, which were included in “Other income (expense)” on the accompanying 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 December 31, 2024 and 2023 (in thousands): December 31, 2024 Quoted Priced in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 65,156 $ — $ — $ 65,156 December 31, 2023 Quoted Prices in Active Markets Significant Other Significant for Identical Instruments Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Marketable securities $ 59,508 $ — $ — $ 59,508 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.

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. The table below identifies the shares that have been authorized for issuance and the shares available for future issuance under the Company plans, as of December 31, 2023 (in thousands): December 31, 2023 Total Shares Authorized for Shares Available for Future Plans Issuance under the Plans Issuance under the Plans Incentive Plans 35,650 5,492 Employee Stock Purchase Plan 4,250 412 Profit Sharing and Savings Plan 4,200 349 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.

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. The table below identifies the shares that have been authorized for issuance and the shares available for future issuance under the Company plans, as of December 31, 2024 (in thousands): December 31, 2024 Total Shares Authorized for Shares Available for Future Plans Issuance under the Plans Issuance under the Plans Incentive Plans 35,650 5,420 Employee Stock Purchase Plan 4,250 388 Profit Sharing and Savings Plan 4,200 349 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.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of Self-insurance Reserves Description of the Matter At December 31, 2023, the Company’s self-insurance reserve was $214 million.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of Self-insurance Reserves Description of the Matter At December 31, 2024, the Company’s self-insurance reserve estimate was $268 million.

See Note 11 for further information concerning the Company’s accumulated other comprehensive income. Accounts receivable: The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments.

See Note 13 for further information concerning the Company’s accumulated other comprehensive income (loss). Accounts Receivable: The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments.

Original issuance discounts, net of accretion, totaled $7.1 million and $6.3 million as of December 31, 2023 and 2022, respectively. See Note 8 for further information concerning debt issuance costs and original issuance discounts associated with the Company’s issuances of long-term debt instruments. Income taxes: The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

Original issuance discounts, net of accretion, totaled $6.2 million and $7.1 million as of December 31, 2024 and 2023, respectively. See Note 10 for further information concerning debt issuance costs and original issuance discounts associated with the Company’s issuances of long-term debt instruments. Income Taxes: The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

The fair value of our fixed rate debt was estimated at $4.7 billion and $4.1 billion as of December 31, 2023 and 2022, respectively, which was determined by reference to quoted market prices. Cash equivalents risk: We invest certain of our excess cash balances in short-term, highly-liquid instruments with maturities of 90 days or less.

The fair value of our fixed rate debt was estimated at $5.2 billion and $4.7 billion as of December 31, 2024 and 2023, respectively, which was determined by reference to quoted market prices. Cash Equivalents Risk: We invest certain of our excess cash balances in short-term, highly-liquid instruments with maturities of 90 days or less.

During the year ended December 31, 2023, 2022, and 2021, the Company recognized $13.9 million, $12.2 million and $13.6 million, respectively, of revenue related to its loyalty program, which were included in “Sales” on the accompanying Consolidated Statements of Income. See Note 9 for information concerning the expected costs associated with the Company’s assurance warranty obligations. NOTE 13 – 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.

During the year ended December 31, 2024, 2023, and 2022, the Company recognized $17.3 million, $13.9 million and $12.2 million, respectively, of revenue related to its loyalty program, which were included in “Sales” on the accompanying Consolidated Statements of Income. See Note 11 for information concerning the expected costs associated with the Company’s assurance warranty obligations. NOTE 15 – 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.

Online sales, resulting from ship-to-home orders and pickup in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. We opened 186 and 187 net, new stores during the year ended December 31, 2023 and 2022, respectively.

Online sales, resulting from ship-to-home orders and pickup in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. We opened 198 and 186 net, new stores during the year ended December 31, 2024 and 2023, respectively.

Each of the senior notes is subject to certain customary covenants, with which the Company complied as of December 31, 2023. NOTE 9 – WARRANTIES The Company’s product warranty liabilities are included in “Other current liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022.

Each of the senior notes is subject to certain customary covenants, with which the Company complied as of December 31, 2024. NOTE 11 – WARRANTIES The Company’s product warranty liabilities are included in “Other current liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2024 and 2023.

See Note 8 for further information concerning the Company’s debt financing commitments. 68 Self-insurance reserves: The Company uses a combination of insurance and self-insurance mechanisms to provide for potential liabilities for Team Member health care benefits, workers’ compensation, vehicle liability, general liability, and property loss.

See Note 10 for further information concerning the Company’s debt financing commitments. 69 Self-Insurance Reserves: The Company uses a combination of insurance and self-insurance mechanisms to provide for potential liabilities for Team Member health care benefits, workers’ compensation, vehicle liability, general liability, and property loss.

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating leases was 9.4 years and 4.3%, respectively, as of December 31, 2023. The present value discount component of the future minimum lease payments under the Company’s operating leases, in the table above, was primarily calculated using the Company’s incremental borrowing rate based on information available at the lease commencement or modification date.

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating leases was 9.2 years and 4.5%, respectively, as of December 31, 2024. The present value discount component of the future minimum lease payments under the Company’s operating leases, in the table above, was primarily calculated using the Company’s incremental borrowing rate based on information available at the lease commencement or modification date.

Deferred debt issuance costs totaled $25.5 million and $24.7 million net of accumulated amortization, as of December 31, 2023 and 2022, respectively, of which $1.9 million and $2.6 million were included in “Other assets, net” as of December 31, 2023 and 2022, respectively, with the remainder included in “Long-term debt” on the accompanying Consolidated Balance Sheets. The Company issued its long-term unsecured senior notes and commercial paper program at a discount.

Deferred debt issuance costs totaled $24.0 million and $25.5 million net of accumulated amortization, as of December 31, 2024 and 2023, respectively, of which $1.1 million and $1.9 million were included in “Other assets, net” as of December 31, 2024 and 2023, respectively, with the remainder included in “Long-term debt” on the accompanying Consolidated Balance Sheets. The Company issued its long-term unsecured senior notes and commercial paper program at a discount.

The Company expensed matching contributions under the 401(k) Plan in the amounts of $48.6 million, $36.7 million and $32.5 million for 67 the year ended December 31, 2023, 2022, and 2021, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying 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 expensed matching contributions under the 401(k) Plan in the amounts of $52.6 million, $48.6 million and $36.7 million for 68 the year ended December 31, 2024, 2023, and 2022, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying 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.

See Note 12 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 Consolidated Balance Sheets as of December 31, 2023 and 2022.

See Note 15 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 Consolidated Balance Sheets as of December 31, 2024 and 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.

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 pertains to disclosure only.

Although unrecognized tax benefits for individual tax positions may increase or decrease during 2024, the Company expects a reduction of $7.3 million of unrecognized tax benefits during the one-year period subsequent to December 31, 2023, resulting from settlement or expiration of the statute of limitations. The Company’s United States federal income tax returns for tax years 2020 and beyond remain subject to examination by the Internal Revenue Service.

Although unrecognized tax benefits for individual tax positions may increase or decrease during 2025, the Company expects a reduction of $7.5 million of unrecognized tax benefits during the one-year period subsequent to December 31, 2024, resulting from settlement or expiration of the statute of limitations. The Company’s United States federal income tax returns for tax years 2021 and beyond remain subject to examination by the Internal Revenue Service.

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 grant-date fair value and the employee purchase price for the shares sold to employees. The table below summarizes activity related to the Company’s ESPP for the years ended December 31, 2023, 2022, and 2021 (in thousands, except per share data): For the Year Ended December 31, 2023 2022 2021 Compensation expense for shares issued under the ESPP $ 3,552 $ 3,238 $ 3,019 Income tax benefit from compensation expense related to shares issued under the ESPP $ 881 $ 806 $ 752 Shares issued under the ESPP 26 31 36 Weighted-average price of shares issued under the ESPP $ 766.11 $ 592.22 $ 473.22 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 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 grant-date fair value and the employee purchase price for the shares sold to employees. The table below summarizes activity related to the Company’s ESPP for the years ended December 31, 2024, 2023, and 2022 (in thousands, except per share data): For the Year Ended December 31, 2024 2023 2022 Compensation expense for shares issued under the ESPP $ 3,940 $ 3,552 $ 3,238 Income tax benefit from compensation expense related to shares issued under the ESPP $ 987 $ 881 $ 806 Shares issued under the ESPP 24 26 31 Weighted-average price of shares issued under the ESPP $ 929.82 $ 766.11 $ 592.22 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.

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Top changes in O’Reilly Automotive's 2024 10-K

Item 1A. Risk Factors

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

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