Company Update

February 2003

 $1 Billion IT software and services company

Serving automotive retailers for over 75 years
5000 associates with 65,000 person-years
automotive experience
Inquisitive, creative, innovative
Motivated to deliver results that matter
Uniquely positioned

 #1 in customer satisfaction
Over 200 integrated solutions
Dominant market share and
leadership position with auto
retailers and car companies
Largest services organization in the
industry offerings from process
consulting to distance learning

 Automotive retailing undergoing significant

change
Large, complex, disconnected industry
Relevant market for REY exceeds $7.5 billion
Well positioned with next generation
solutions and entry into select adjacent
markets

Automotive Retailing Profile

Dealerships:
Franchises:
New Vehicles:
Pre-owned:
Revenue:
Gross Profit:
Pre-tax Margins:
Employees:

25,000
53,000 / 2.1
750
600
$29 Million
$3.7 Million
1.9%
50

Pre-Owned Vehicles
28 % of revenues
4% of profits

Business Office
Finance & Insurance
2 % of revenues
35% of profits

Service & Parts

Body Shop

12 % of revenues
48% of profits
Opportunities

New Vehicle Sales

58 % of revenues
13% of profits

The Reynolds Generations Series

The first
complete
series of high
performance
products and
services
designed to
DRIVE RESULTS

Opportunities

The Reynolds Generations Series

$2.5B opportunity;
growing 3-5%
#1 provider

$5B opportunity;
growing 8-12%
Highly fragmented
market

Protect & Extend

Leverage market
leadership to
capture incremental
spending

Opportunities

 Automark Web Services

Added 138 dealerships in the quarter.
1945 dealerships now utilize the service.
Significant enhancements to be announced
at NADA convention
Value proposition and ROI continue
to strengthen
Customer Management
69 dealerships now utilizing application
MSN Autos Dealerpoint expands REYs
customer base
Value proposition and ROI continue
to strengthen

Adjacent Markets Update

Markets
Independent Pre-Owned
Vehicles

Market Size
55,000 retail points
$109B

Wins
ADESA
Enterprise Rental Car
Price 1
Thrifty Car Sales
Hertz Car Sales

Sports and Recreation

Vehicles

22,000
$60B

Harley Davidson
Brunswick
Mastercraft
MarineMax
Rick Case

Commercial Equipment

2,450
$85B

Karmak

Vehicle Care & Aftermarket

Parts Shops

100,000
$150B+

Collision-Repair Shops

53,000
$30B

Opportunities

Car Owner Benefits

EMERGENCY
Smart Roadside Assistance

or
kc
ar
Lo
Ja
c
On k
St
ar
Ala
rm

Transmits car performance and location

information over existing wireless
infrastructure
Installs easily under a cars dashboard

Ne
tw

The Networkcar CAReader

Emergency Assistance
Remote Door Unlock
SERVICE
Real-time Performance Monitoring
Real-time E-mail Problem Alerts
E-mail Alerts of Service Milestones
On-line Service Appointment Scheduling
Remote Auto Technician Assistance
Personal Website with Service
Records and Recalls
Concierge Assistance
EMISSION
Early Detection of Emission Problems
Remote Emissions Monitoring and
Certification
THEFT
Possible Theft Prevention
Stolen Vehicle Recovery
Cost

Opportunities

$$

$$ $$$$ $

Recurring revenue model

Attractive margins
Strong cash flow
Solid balance sheet

Financial Overview

6% CAGR

18% CAGR

Recurring Revenue Model

Recurring
Recurring

Margin Summary
$ in millions

2001

2002 *

Gross Margin

56%

58%

SG&A (% of revenues)
Operating Margin

39%
17%

39%
19%

Tax Rate

38%

38%

* Excluding Q2 special items.

Cash Flow Profile

$ in millions
.

2001

2002

Operating Cash Flow

$166

$158

Key Uses of Cash

Capital Expenditures-Net
Capitalized Software
Business Combinations
Dividends
Shares Repurchased
Shares Issued

$48
$20
$12
$32
$141
($44)

$37
$20
$6
$31
$125
($50)

Share Repurchase Profile

Dollars & Numbers in Millions

1997 - 2001

2002

Shares Repurchases
Shares Issued

$380
$81

$125
$50

Net

$299

$75

Share Repurchases
Shares Issued

19
8

Reduction in Shares Outstanding

11

3
2

Balance Sheet Profile

$ in millions

2001

2002

Cash
Debt*
Debt to Capitalization*

$111
$112
19%

$155
$114
20%

Net Current Assets (excludes cash & debt)

Property, Plant & Equipment
Software Licensed to Customers

$34
$160
$60

$21
$161
$82

* Excluding Financial Services debt

Backlog

FY03 Financial Outlook

EPS to be approximately $1.70
Operating margins to be approximately 19%
Return on equity to exceed 20%
CapEx and capitalized software to total approximately
$35M
Depreciation and amortization to total approximately
$40M
R&D expenses are expected to be approximately $70M
Share repurchases expected to continue
Fully diluted shares to calculate EPS approximately 71M

Serving Automotive Retailers Since 1927

#1 in Market Share and
Customer Satisfaction
Leveraging Leadership to Capture
Incremental Spend in $7.5B Industry
Strong Financial Model with
Recurring Revenues that Generates
Significant Cash Flow

Company Update

February 2003