AutoNation Inc. (NYSE:AN) Q3 2022 Results Conference Call October 27, 2022 9:00 AM ET Company Participants Derek Fiebig - Vice President of Investor Relations Mike Manley - Chief Executive Officer Joe Lower - Chief Financial Officer Conference Call Participants Rajat Gupta - JPMorgan Bret Jordan - Jefferies Daniel Imbro - Stephens Inc. John Murphy - Bank of America Merrill Lynch Operator Good morning. My name is Nadia, and I will be your conference operator today. At this time, I would like to welcome every ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) AutoNation's unaudited condensed consolidated financial statements show asset growth, increased revenue, and a significant rise in diluted EPS driven by share repurchases [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) AutoNation's balance sheet as of September 30, 2022, shows increased total assets to $9.42 billion and liabilities, while shareholders' equity decreased due to share repurchases Condensed Consolidated Balance Sheet Data (in millions) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $442.9 | $60.4 | | Inventory | $1,851.3 | $1,847.9 | | Total Current Assets | $3,075.0 | $2,811.7 | | Goodwill | $1,233.3 | $1,235.3 | | **Total Assets** | **$9,415.3** | **$8,943.6** | | **Liabilities & Equity** | | | | Vehicle floorplan payable | $1,624.8 | $1,457.6 | | Total Current Liabilities | $2,935.4 | $3,059.8 | | Long-Term Debt, Net | $3,532.8 | $2,846.2 | | **Total Liabilities** | **$7,160.1** | **$6,566.6** | | **Total Shareholders' Equity** | **$2,255.2** | **$2,377.0** | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 operations show a 4.5% revenue increase to $6.67 billion, modest gross profit growth, and a significant rise in diluted EPS to $6.31 despite a slight net income decrease Q3 and Nine Months Performance Summary (in millions, except EPS) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$6,666.0** | **$6,379.5** | **$20,288.0** | **$19,261.7** | | New Vehicle Revenue | $2,863.9 | $2,753.8 | $8,606.9 | $9,164.4 | | Used Vehicle Revenue | $2,401.7 | $2,323.2 | $7,494.5 | $6,295.2 | | Parts and Service Revenue | $1,032.1 | $943.7 | $3,072.3 | $2,745.5 | | **Total Gross Profit** | **$1,312.8** | **$1,271.9** | **$3,983.4** | **$3,631.0** | | **Operating Income** | **$522.5** | **$503.3** | **$1,599.6** | **$1,370.4** | | **Net Income** | **$352.6** | **$361.7** | **$1,091.0** | **$985.9** | | **Diluted EPS (Continuing Ops)** | **$6.31** | **$5.12** | **$18.53** | **$12.63** | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased to $2.26 billion by Q3 2022, primarily due to $1.21 billion in common stock repurchases offsetting net income - For the nine months ended September 30, 2022, the company repurchased common stock totaling **$1,213.1 million** (**$380.9 million** in Q1, **$403.9 million** in Q2, **$428.2 million** in Q3)[13](index=13&type=chunk) - Total shareholders' equity declined from **$2.38 billion** at the start of the year to **$2.26 billion** at the end of Q3 2022, mainly due to share buybacks[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine-month cash flow shows $1.44 billion from operations, $247.3 million used in investing, and $813.6 million used in financing, primarily for $1.18 billion in stock repurchases Cash Flow Summary (Nine Months Ended Sep 30, in millions) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,443.3 | $1,559.2 | | Net cash used in investing activities | ($247.3) | ($225.5) | | Net cash used in financing activities | ($813.6) | ($1,831.3) | | **Increase (Decrease) in Cash** | **$382.4** | **($497.6)** | - Financing activities in the first nine months of 2022 included **$1.18 billion** for stock repurchases and **$698.8 million** in proceeds from new 3.85% Senior Notes, offset by a **$340.0 million** net payment of commercial paper[20](index=20&type=chunk) [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail AutoNation's operations, segment revenue, $700 million senior notes issuance, ongoing share repurchases, and the strategic acquisition of CIG Financial - As of September 30, 2022, the company operated **336 new vehicle franchises**, **56 collision centers**, and **12 AutoNation USA used vehicle stores**[22](index=22&type=chunk) - In February 2022, the company issued **$700 million** of 3.85% Senior Notes due 2032[62](index=62&type=chunk) - As of September 30, 2022, **$681.5 million** remained available for share repurchases. In October 2022, the Board increased this authorization by an additional **$1.0 billion**[73](index=73&type=chunk) - In October 2022, the company acquired CIG Financial, an auto finance company, marking an expansion of its business model[80](index=80&type=chunk) [Management's Discussion and Analysis (MD&A)](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights strong Q3 2022 operating income driven by high demand and record new vehicle gross profit, alongside strategic expansion and continued share repurchases [Results of Operations](index=24&type=section&id=MD%26A%20Results%20of%20Operations) Q3 2022 results show 4.5% revenue growth, record new vehicle gross profit per unit, declining used vehicle margins, and increased SG&A, leading to a 3.8% rise in operating income Key Performance Indicators (Q3 2022 vs Q3 2021) | Metric | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | New Vehicle GP per unit | $5,934 | $5,484 | 8.2% | | Used Vehicle GP per unit | $1,870 | $2,103 | (11.1%) | | F&I GP per unit | $2,755 | $2,569 | 7.2% | | New Vehicle Unit Sales | 55,565 | 58,277 | (4.7%) | | Used Vehicle Unit Sales | 75,355 | 77,553 | (2.8%) | - Market conditions in Q3 2022 continued to be defined by a shortage of new vehicles, leading to higher profitability on available units. U.S. industry retail new vehicle sales decreased **4% YoY**[127](index=127&type=chunk) - SG&A as a percentage of gross profit increased to **58.1%** in Q3 2022 from **56.9%** in Q3 2021, driven by acquisitions, strategic investments, and gross margin pressure[207](index=207&type=chunk)[208](index=208&type=chunk) [Segment Results](index=37&type=section&id=MD%26A%20Segment%20Results) Q3 2022 segment results show strong Premium Luxury growth, Domestic segment income decline due to margin pressure, and significant revenue and income drops in the Import segment from inventory shortages Segment Income (Q3 2022 vs Q3 2021, in millions) | Segment | Q3 2022 Income | Q3 2021 Income | % Change | | :--- | :--- | :--- | :--- | | Domestic | $142.7 | $149.1 | (4.3%) | | Import | $180.3 | $200.7 | (10.2%) | | Premium Luxury | $235.2 | $206.1 | 14.1% | - The Premium Luxury segment's strong performance was driven by acquisitions and a **13.6% increase** in new vehicle unit sales, benefiting from improving supply compared to other segments[197](index=197&type=chunk)[198](index=198&type=chunk) - The Import segment was most affected by supply chain issues, with new vehicle unit sales plummeting **20.2% YoY**, leading to lower revenue and income despite strong pricing[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) AutoNation maintains strong liquidity with $442.9 million cash and $1.76 billion credit, prioritizing share repurchases ($1.21 billion spent), and remains compliant with debt covenants Available Liquidity (as of Sep 30, 2022, in millions) | Source | Amount | | :--- | :--- | | Cash and cash equivalents | $442.9 | | Revolving credit facility | $1,760.2 | | Secured used vehicle floorplan facilities | $0.2 | Share Repurchases (Nine Months Ended Sep 30) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Shares repurchased (millions) | 10.9 | 19.2 | | Aggregate purchase price (billions) | $1.21 | $1.92 | | Average price per share | $110.96 | $100.13 | - The company is expanding its AutoNation USA used vehicle stores, targeting over **130 locations** with an estimated capital investment of **$10 million to $12 million per store**[228](index=228&type=chunk) - The company was in compliance with its debt covenants, with a leverage ratio of **1.54x** (vs. ≤ **3.75x** limit) and a capitalization ratio of **56.0%** (vs. ≤ **70.0%** limit)[236](index=236&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) AutoNation's primary market risk is interest rate exposure on its $1.6 billion variable-rate vehicle floorplan debt, with a 100 basis point increase impacting annual interest expense by $16.2 million - The company is exposed to interest rate risk on its **$1.6 billion** of variable-rate vehicle floorplan payable[254](index=254&type=chunk) - A **100 basis point** change in interest rates would change the annual floorplan interest expense by approximately **$16.2 million** as of September 30, 2022[254](index=254&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during Q3 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[256](index=256&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[257](index=257&type=chunk) PART II. OTHER INFORMATION [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight new exposures from the CIG Financial acquisition, including potential credit losses, funding reliance on securitization markets, and extensive regulatory oversight - A new risk factor has been introduced following the acquisition of CIG Financial in October 2022, related to originating and servicing auto finance loans[259](index=259&type=chunk) - Key risks from the new financing business include greater credit losses than anticipated, reliance on securitization markets for funding, and extensive government regulation of finance companies[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q3 2022, AutoNation repurchased 3.77 million shares for $428.2 million, with $681.5 million remaining under authorization, subsequently increased by $1.0 billion Share Repurchases (Q3 2022) | Period | Total Shares Purchased | Avg. Price Paid Per Share | | :--- | :--- | :--- | | July 2022 | 333,496 | $114.70 | | August 2022 | 983,569 | $123.10 | | September 2022 | 2,455,427 | $109.50 | | **Total Q3** | **3,772,492** | **N/A** | - As of September 30, 2022, **$681.5 million** remained available for share repurchases, and in October 2022, the Board of Directors increased the authorization by an additional **$1.0 billion**[264](index=264&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments, employment agreements, and CEO/CFO certifications - Filed exhibits include an amendment to the credit agreement, an employment letter agreement, and CEO/CFO certifications pursuant to Sarbanes-Oxley[265](index=265&type=chunk)

AutoNation, Inc. (NYSE:AN) Q2 2022 Earnings Conference Call July 21, 2022 9:00 AM ET Company Participants Ankur Shah - Director, IR Michael Manley - CEO Joe Lower - EVP and CFO Conference Call Participants Rajat Gupta - J.P. Morgan John Murphy - Bank of America Daniel Imbro - Stephens, Inc. Adam Jonas - Morgan Stanley Operator Good morning. My name is Candice and I'll be your conference operator today. At this time, I would like to welcome you to the AutoNation Second Quarter 2022 Earnings Conference Call. ...

Financial Performance - EPS reached an all-time record of $648, a 34% year-over-year increase, driven by operational effectiveness and capital allocation[8, 11] - Operating income reached an all-time record of $558 million, a 5% year-over-year increase, driven by strong business fundamentals and cost management[10, 11] - The company ended the quarter with $21 billion in total liquidity and a net leverage of 14x[8] - SG&A as a percentage of gross profit improved by 110 basis points year-over-year to 554%, reflecting expense discipline and technology leverage[10, 11] Capital Allocation - The company repurchased 37 million shares for an aggregate purchase price of $404 million, representing 6% of shares outstanding at the beginning of the quarter[9] - An additional $1 billion in repurchase authorization was approved by the Board of Directors in July 2022[9, 46] Business Operations - After-sales gross profit increased by 11% year-over-year, reflecting continued momentum in consumer demand and repair content[4, 35] - CFS PVR increased by 16% year-over-year due to increased penetration, product penetration, and margin improvement[5] - The company purchased over 31,750 vehicles directly from customers, self-sourcing over 90% of used vehicles acquired during the quarter[5] - New retail units declined 25% year-over-year due to manufacturer supply shortages[24]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents AutoNation, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, shareholders' equity, and cash flows, along with detailed notes, highlighting asset and debt increases, slight equity decrease, and significant diluted EPS growth due to share repurchases [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents AutoNation, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, shareholders' equity, and cash flows, along with detailed notes, highlighting asset and debt increases, slight equity decrease, and significant diluted EPS growth due to share repurchases [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets show total assets increased to $9,307.5 million, total liabilities increased to $6,982.5 million, and shareholders' equity slightly decreased to $2,325.0 million as of June 30, 2022 | Metric | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :--------------------------------- | :----------------------- | :--------------------------- | | Cash and cash equivalents | $336.5 | $60.4 | | Inventory | $1,905.3 | $1,847.9 | | Property and equipment, net | $3,466.3 | $3,419.5 | | Total Assets | $9,307.5 | $8,943.6 | | Vehicle floorplan payable - trade | $556.5 | $489.9 | | Vehicle floorplan payable - non-trade | $960.9 | $967.7 | | Commercial paper | — | $340.0 | | Total Current Liabilities | $2,780.0 | $3,059.8 | | Long-term debt, net of current maturities | $3,534.7 | $2,846.2 | | Total Liabilities and Shareholders' Equity | $9,307.5 | $8,943.6 | | Total Shareholders' Equity | $2,325.0 | $2,377.0 | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2022, total revenue slightly decreased to $6,869.2 million, total gross profit increased to $1,361.7 million, and diluted EPS significantly increased to $6.48 | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Total Revenue | $6,869.2 | $6,978.4 | $13,622.0 | $12,882.2 | | Total Gross Profit | $1,361.7 | $1,326.3 | $2,670.6 | $2,359.1 | | Operating Income | $558.1 | $530.2 | $1,077.1 | $867.1 | | Income from continuing operations before income taxes | $504.5 | $511.6 | $982.3 | $828.9 | | Net Income from continuing operations | $376.5 | $384.9 | $738.6 | $624.4 | | Diluted Earnings Per Share (Continuing operations) | $6.48 | $4.83 | $12.25 | $7.63 | | Weighted average common shares outstanding (Diluted) | 58.1 | 79.7 | 60.3 | 81.8 | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased to $2,325.0 million at June 30, 2022, primarily due to $784.8 million in common stock repurchases, partially offset by net income | Metric | December 31, 2021 (Millions) | March 31, 2022 (Millions) | June 30, 2022 (Millions) | | :------------------------------------------ | :--------------------------- | :------------------------ | :----------------------- | | Total Shareholders' Equity | $2,377.0 | $2,345.6 | $2,325.0 | | Net income (Six Months Ended June 30, 2022) | N/A | $362.1 (Q1) | $376.3 (Q2) | | Repurchases of common stock (Six Months Ended June 30, 2022) | N/A | ($380.9) (Q1) | ($403.9) (Q2) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to $895.0 million, investing activities used $148.5 million, and financing activities used $470.5 million for H1 2022 | Cash Flow Activity | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | | :-------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $895.0 | $930.3 | | Net cash used in investing activities | ($148.5) | ($8.5) | | Net cash used in financing activities | ($470.5) | ($1,431.8) | | Increase (decrease) in cash, cash equivalents, and restricted cash | $276.0 | ($510.0) | | Cash, cash equivalents, and restricted cash at end of period | $336.6 | $59.7 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for the financial statements, covering accounting policies, revenue, EPS, balance sheet components, debt, equity, acquisitions, cash flow, fair value, commitments, and segment information [1. INTERIM FINANCIAL STATEMENTS](index=8&type=section&id=1.%20INTERIM%20FINANCIAL%20STATEMENTS) AutoNation, a leading U.S. automotive retailer, operates 339 new vehicle franchises and diversified services, with financial statements prepared under GAAP reflecting management's estimates - AutoNation operates **339 new vehicle franchises**, 56 collision centers, 11 AutoNation USA used vehicle stores, 4 automotive auction operations, and 3 parts distribution centers as of June 30, 2022[20](index=20&type=chunk) - Core new vehicle brands (Toyota, Honda, Ford, Mercedes-Benz, BMW, GM, Stellantis, VW) represented approximately **89% of new vehicle sales** for the six months ended June 30, 2022[20](index=20&type=chunk) [2. REVENUE RECOGNITION](index=8&type=section&id=2.%20REVENUE%20RECOGNITION) Revenue is disaggregated by goods and services, with most from point-in-time transfers, and contract liabilities from VCP upfront payments, with $97.4 million expected in the next 12 months | Timing of Revenue Recognition | Three Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2022 (Millions) | | :-------------------------------------------- | :------------------------------------------ | :---------------------------------------- | | Goods and services transferred at a point in time | $6,088.5 | $12,095.9 | | Goods and services transferred over time | $780.7 | $1,526.1 | | **Total Revenue** | **$6,869.2** | **$13,622.0** | | Item | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :--------------------------------------- | :----------------------- | :--------------------------- | | Receivables from contracts with customers, net | $516.6 | $539.9 | | Contract Asset (Current) | $31.1 | $30.4 | | Contract Asset (Long-Term) | $8.7 | $14.2 | | Contract Liability (Current) | $34.2 | $33.6 | | Contract Liability (Long-Term) | $63.5 | $60.5 | - Revenue expected to be recognized from VCP contracts sold as of period end: **$97.4 million in the next 12 months**, $33.9 million in 13-36 months, and $46.3 million in 37-60 months[35](index=35&type=chunk) [3. EARNINGS PER SHARE](index=12&type=section&id=3.%20EARNINGS%20PER%20SHARE) Basic and diluted EPS significantly increased for Q2 and H1 2022, primarily due to a reduction in weighted average common shares outstanding | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income from continuing operations | $376.5 | $384.9 | $738.6 | $624.4 | | Basic EPS (Continuing operations) | $6.51 | $4.88 | $12.33 | $7.71 | | Diluted EPS (Continuing operations) | $6.48 | $4.83 | $12.25 | $7.63 | | Weighted average common shares outstanding (Basic) | 57.8 | 78.9 | 59.9 | 81.0 | | Weighted average common shares outstanding (Diluted) | 58.1 | 79.7 | 60.3 | 81.8 | [4. RECEIVABLES, NET](index=13&type=section&id=4.%20RECEIVABLES,%20NET) Receivables, net, decreased to $705.4 million at June 30, 2022, primarily due to reductions in contracts-in-transit and other receivables | Component | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :------------------------------------ | :----------------------- | :--------------------------- | | Contracts-in-transit and vehicle receivables | $328.0 | $347.4 | | Trade receivables | $157.7 | $162.6 | | Manufacturer receivables | $148.4 | $148.4 | | Income taxes receivable | $5.5 | — | | Other | $69.4 | $77.0 | | Less: allowances for expected credit losses | ($3.6) | ($5.4) | | **Receivables, net** | **$705.4** | **$730.0** | [5. INVENTORY AND VEHICLE FLOORPLAN PAYABLE](index=13&type=section&id=5.%20INVENTORY%20AND%20VEHICLE%20FLOORPLAN%20PAYABLE) Total inventory increased to $1,905.3 million, and vehicle floorplan payable increased to $1,517.4 million at June 30, 2022, with weighted-average interest rates rising | Component | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :------------------------ | :----------------------- | :--------------------------- | | New vehicles | $579.5 | $515.1 | | Used vehicles | $1,088.5 | $1,109.3 | | Parts, accessories, and other | $237.3 | $223.5 | | **Total Inventory** | **$1,905.3** | **$1,847.9** | | Component | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :---------------------------- | :----------------------- | :--------------------------- | | Vehicle floorplan payable - trade | $556.5 | $489.9 | | Vehicle floorplan payable - non-trade | $960.9 | $967.7 | | **Total Vehicle floorplan payable** | **$1,517.4** | **$1,457.6** | - Weighted-average interest rate for new vehicle floorplan outstanding increased to **3.2%** at June 30, 2022, from 1.6% at December 31, 2021[53](index=53&type=chunk) - For used vehicle floorplan, it increased to **3.4%** from 1.8%[54](index=54&type=chunk) [6. GOODWILL AND INTANGIBLE ASSETS, NET](index=14&type=section&id=6.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) Goodwill remained stable at $1,233.3 million, and other intangible assets, net, were $742.8 million at June 30, 2022, with no impairment charges from recent tests | Component | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :-------------------------- | :----------------------- | :--------------------------- | | Goodwill | $1,233.3 | $1,235.3 | | Franchise rights - indefinite-lived | $727.5 | $727.5 | | Other intangible assets, net | $742.8 | $743.5 | - No goodwill or franchise rights impairment charges resulted from tests as of April 30, 2022[57](index=57&type=chunk) [7. LONG-TERM DEBT AND COMMERCIAL PAPER](index=15&type=section&id=7.%20LONG-TERM%20DEBT%20AND%20COMMERCIAL%20PAPER) Long-term debt, net of current maturities, increased to $3,534.7 million at June 30, 2022, due to a $700 million senior note issuance, with no commercial paper outstanding | Debt Description | Maturity Date | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :---------------------------- | :-------------------- | :----------------------- | :--------------------------- | | 3.5% Senior Notes | Nov 15, 2024 | $450.0 | $450.0 | | 4.5% Senior Notes | Oct 1, 2025 | $450.0 | $450.0 | | 3.8% Senior Notes | Nov 15, 2027 | $300.0 | $300.0 | | 1.95% Senior Notes | Aug 1, 2028 | $400.0 | $400.0 | | 4.75% Senior Notes | Jun 1, 2030 | $500.0 | $500.0 | | 2.4% Senior Notes | Aug 1, 2031 | $450.0 | $450.0 | | 3.85% Senior Notes | Mar 1, 2032 | $700.0 | — | | Finance leases and other debt | Various | $324.4 | $330.6 | | Less: unamortized debt discounts and debt issuance costs | | ($27.9) | ($22.2) | | Less: current maturities | | ($11.8) | ($12.2) | | **Long-term debt, net of current maturities** | | **$3,534.7** | **$2,846.2** | - Issued **$700 million** aggregate principal amount of 3.85% Senior Notes due 2032 on February 28, 2022[62](index=62&type=chunk) - No commercial paper notes outstanding at June 30, 2022, compared to **$340.0 million** outstanding at December 31, 2021[70](index=70&type=chunk) [8. INCOME TAXES](index=16&type=section&id=8.%20INCOME%20TAXES) Income taxes receivable totaled $5.5 million at June 30, 2022, with tax years 2014-2019 currently under examination by certain U.S. state jurisdictions - Income taxes receivable totaled **$5.5 million** at June 30, 2022[71](index=71&type=chunk) - Tax years from **2014 to 2019** are under examination by certain U.S. state jurisdictions[71](index=71&type=chunk) [9. SHAREHOLDERS' EQUITY](index=16&type=section&id=9.%20SHAREHOLDERS'%20EQUITY) The company repurchased 7.2 million shares for $784.9 million in H1 2022, and in July 2022, the Board authorized an additional $1.0 billion for share repurchases | Period | Shares Repurchased (Millions) | Aggregate Purchase Price (Millions) | Average Purchase Price Per Share | | :-------------------------- | :---------------------------- | :---------------------------------- | :------------------------------- | | Three Months Ended June 30, 2022 | 3.7 | $403.9 | $109.22 | | Three Months Ended June 30, 2021 | 7.5 | $736.1 | $98.17 | | Six Months Ended June 30, 2022 | 7.2 | $784.9 | $109.62 | | Six Months Ended June 30, 2021 | 11.3 | $1,042.2 | $91.94 | - In July 2022, the Board of Directors increased the share repurchase authorization by **$1.0 billion**, with **$1.1 billion** remaining available as of July 20, 2022[73](index=73&type=chunk)[215](index=215&type=chunk) [10. ACQUISITIONS](index=17&type=section&id=10.%20ACQUISITIONS) No stores were purchased in H1 2022, but 2021 acquisitions contributed $261.7 million in Q2 2022 revenue, and an agreement to acquire CIG Financial was signed in July 2022 - No stores purchased during the six months ended June 30, 2022 and 2021[79](index=79&type=chunk) - Acquisitions completed in 2021 contributed **$261.7 million in revenue** and **$12.6 million in earnings** for the three months ended June 30, 2022[79](index=79&type=chunk) - Agreement signed in July 2022 to acquire CIG Financial, an auto finance company[80](index=80&type=chunk) [11. CASH FLOW INFORMATION](index=17&type=section&id=11.%20CASH%20FLOW%20INFORMATION) Total cash, cash equivalents, and restricted cash increased significantly to $336.6 million at June 30, 2022, with notable non-cash investing activities and substantial interest and income tax payments | Item | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :-------------------------------------------- | :----------------------- | :--------------------------- | | Cash and cash equivalents | $336.5 | $60.4 | | Restricted cash included in Other Current Assets | $0.1 | $0.2 | | **Total cash, cash equivalents, and restricted cash** | **$336.6** | **$60.6** | - Non-cash adjustments to right-of-use assets for the six months ended June 30, 2022, included **$23.1 million for operating lease liabilities** and **$12.5 million for finance lease liabilities**[85](index=85&type=chunk) - Interest payments (net) were **$62.0 million** and income tax payments (net) were **$252.0 million** for the six months ended June 30, 2022[86](index=86&type=chunk) [12. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS](index=18&type=section&id=12.%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS) Financial instruments are measured using a three-level hierarchy, with equity investments at $2.1 million and fixed rate long-term debt at $3,534.7 million carrying value and $3,300.0 million fair value - Equity investments with readily determinable fair values totaled **$2.1 million** at June 30, 2022[89](index=89&type=chunk) | Metric | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :-------------------- | :----------------------- | :--------------------------- | | Carrying value | $3,534.7 | $2,858.4 | | Fair value | $3,300.0 | $3,017.8 | - No impairment charges resulted from quantitative franchise rights impairment tests as of April 30, 2022[97](index=97&type=chunk) [13. COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in legal proceedings with no material additional loss expected as of June 30, 2022, and has $7 million in estimated lessee rental obligations and $106.5 million in surety bonds and letters of credit - No reasonable possibility of a **material additional loss** from legal proceedings as of June 30, 2022[103](index=103&type=chunk) - Estimated lessee rental payment obligations for assigned/sublet leases are approximately **$7 million** at June 30, 2022[106](index=106&type=chunk) - Surety bonds, letters of credit, and cash deposits totaled **$106.5 million** at June 30, 2022, including **$39.8 million in letters of credit**[107](index=107&type=chunk) [14. BUSINESS AND CREDIT CONCENTRATIONS](index=21&type=section&id=14.%20BUSINESS%20AND%20CREDIT%20CONCENTRATIONS) 62% of retail new vehicle unit sales for H1 2022 came from Florida, Texas, and California, with core brands accounting for 89% of new vehicle sales, and $148.4 million in manufacturer receivables - **62% of retail new vehicle unit sales** for the six months ended June 30, 2022, came from Florida, Texas, and California[108](index=108&type=chunk) - Core brands (Toyota, Honda, Ford, Mercedes-Benz, BMW, GM, Stellantis, VW) accounted for approximately **89% of new vehicle sales** for the six months ended June 30, 2022[108](index=108&type=chunk) - Receivables from manufacturers or distributors were **$148.4 million** at June 30, 2022[109](index=109&type=chunk) [15. SEGMENT INFORMATION](index=22&type=section&id=15.%20SEGMENT%20INFORMATION) AutoNation operates in Domestic, Import, and Premium Luxury segments, plus 'Corporate and other,' with total reportable segment income increasing 0.8% to $603.1 million for Q2 2022 - Reportable segments are Domestic (Ford, GM, Stellantis), Import (Toyota, Honda, Hyundai, Subaru, Nissan), and Premium Luxury (Mercedes-Benz, BMW, Lexus, Audi, Jaguar Land Rover)[111](index=111&type=chunk) - "Corporate and other" includes collision centers, AutoNation USA used vehicle stores, auction operations, and parts distribution centers[112](index=112&type=chunk) | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Total segment income for reportable segments | $603.1 | $598.4 | $1,168.2 | $1,001.3 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes AutoNation's financial condition and results for Q2 and H1 2022, covering market conditions, performance, strategic initiatives, inventory, accounting estimates, and segment results, highlighting supply chain impacts and capital allocation [Overview](index=23&type=section&id=Overview) AutoNation, a leading U.S. automotive retailer, operates 339 new vehicle franchises and diversified services; for H1 2022, new vehicle sales contributed 42% of revenue and parts and service 35% of gross profit - AutoNation operates **339 new vehicle franchises**, 56 collision centers, 11 AutoNation USA used vehicle stores, 4 automotive auction operations, and 3 parts distribution centers as of June 30, 2022[119](index=119&type=chunk) | Category | % of Total Revenue | % of Total Gross Profit | | :-------------------- | :----------------- | :---------------------- | | New vehicle sales | 42% | 26% | | Used vehicle sales | 37% | 11% | | Parts and service | 15% | 35% | | Finance and insurance | 5% | 27% | [Market Conditions](index=23&type=section&id=Market%20Conditions) U.S. retail new vehicle unit sales decreased 15% in Q2 2022 due to limited supply, with demand exceeding supply leading to higher profitability; rising interest rates and inflation pose future risks - U.S. industry retail new vehicle unit sales decreased **15% in Q2 2022** compared to Q2 2021, primarily due to limited supply[123](index=123&type=chunk) - Demand for vehicles continues to exceed supply, resulting in **higher profitability** for available new vehicles[123](index=123&type=chunk) - Reduced new vehicle availability is expected to continue throughout 2022; rising interest rates and high inflation could adversely impact consumer demand[123](index=123&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) In Q2 2022, net income was $376.5 million with diluted EPS of $6.48; total gross profit increased 2.7% driven by new vehicle and parts/service, while used vehicle gross profit declined 22.8% | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Change | | :---------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | Net income from continuing operations | $376.5 | $384.9 | (2.2%) | | Diluted EPS | $6.48 | $4.83 | 34.2% | | Total gross profit | $1,361.7 | $1,326.3 | 2.7% | | New vehicle gross profit | $353.5 | $320.5 | 10.3% | | Used vehicle gross profit | $156.5 | $202.7 | (22.8%) | | Parts and service gross profit | $481.7 | $432.5 | 11.4% | | SG&A expenses as % of gross profit | 55.4% | 56.5% | (1.1 pp) | [Strategic Initiatives](index=24&type=section&id=Strategic%20Initiatives) AutoNation agreed to acquire CIG Financial for $85 million plus assumed liabilities in July 2022, aiming to extend customer relationships and expected to close within 90 days - Agreement to acquire CIG Financial, an auto finance company, for **$85 million plus assumed liabilities**, expected to close within 90 days[126](index=126&type=chunk) - The acquisition aligns with AutoNation's strategic business model focused on personalized finance and mobility solutions[126](index=126&type=chunk) [Inventory Management](index=24&type=section&id=Inventory%20Management) New vehicle inventory units were 10,782 at June 30, 2022, significantly below historical levels with no write-downs; used vehicle and parts inventory had cumulative write-downs of $4.3 million and $6.3 million - New vehicle inventory units at June 30, 2022, were **10,782**, significantly lower than historical levels[127](index=127&type=chunk) - No new vehicle inventory write-downs at June 30, 2022[127](index=127&type=chunk) - Used vehicle inventory was net of cumulative write-downs of **$4.3 million** at June 30, 2022 (vs. $3.6 million at Dec 31, 2021)[128](index=128&type=chunk) - Parts, accessories, and other inventory was net of **$6.3 million in write-downs** (vs. $5.8 million at Dec 31, 2021)[128](index=128&type=chunk) [Critical Accounting Estimates](index=24&type=section&id=Critical%20Accounting%20Estimates) Financial statement preparation requires management estimates for goodwill, intangible assets, inventory, equity investments, and various accruals, where actual results may materially differ - Management's estimates and judgments affect goodwill, intangible asset valuations, inventory valuation, equity investment valuation, assets held for sale, variable consideration, chargebacks, self-insurance accruals, legal proceedings, income tax expense, deferred income taxes, expected credit losses, and performance-based compensation costs[23](index=23&type=chunk)[129](index=129&type=chunk) [Goodwill](index=24&type=section&id=Goodwill) Goodwill, totaling $1,233.3 million at June 30, 2022, was qualitatively assessed for impairment as of April 30, 2022, with no impairment deemed more likely than not - Qualitative assessment for goodwill impairment as of April 30, 2022, determined no impairment was more likely than not[131](index=131&type=chunk) | Reporting Unit | Goodwill (Millions) | | :---------------- | :------------------ | | Domestic | $228.7 | | Import | $517.9 | | Premium Luxury | $482.1 | | Collision Centers | $4.6 | [Other Intangible Assets](index=25&type=section&id=Other%20Intangible%20Assets) Indefinite-lived franchise rights, the principal intangible assets, were tested for impairment as of April 30, 2022, with no charges resulting, and fair values estimated using Level 3 inputs - Indefinite-lived franchise rights are tested annually for impairment as of April 30[133](index=133&type=chunk) - No impairment charges resulted from quantitative franchise rights impairment tests as of April 30, 2022[134](index=134&type=chunk) - A hypothetical **10% decrease in fair value estimates** for franchise rights would not have resulted in impairment as of April 30, 2022[134](index=134&type=chunk) [Reported Operating Data](index=26&type=section&id=Reported%20Operating%20Data) For Q2 2022, total revenue decreased 1.6% to $6,869.2 million, total gross profit increased 2.7% to $1,361.7 million, and operating income rose 5.3% to $558.1 million | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total revenue | $6,869.2 | $6,978.4 | (1.6%) | | Total gross profit | $1,361.7 | $1,326.3 | 2.7% | | New vehicle gross profit | $353.5 | $320.5 | 10.3% | | Used vehicle gross profit | $156.5 | $202.7 | (22.8%) | | Parts and service gross profit | $481.7 | $432.5 | 11.4% | | Operating income | $558.1 | $530.2 | 5.3% | | SG&A expenses as % of total gross profit | 55.4% | 56.5% | (1.1 pp) | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Total revenue | $13,622.0 | $12,882.2 | 5.7% | | Total gross profit | $2,670.6 | $2,359.1 | 13.2% | | New vehicle gross profit | $698.5 | $510.5 | 36.8% | | Used vehicle gross profit | $293.1 | $342.9 | (14.5%) | | Parts and service gross profit | $942.8 | $821.5 | 14.8% | | Operating income | $1,077.1 | $867.1 | 24.2% | | SG&A expenses as % of total gross profit | 56.0% | 59.2% | (3.2 pp) | [Same Store Operating Data](index=28&type=section&id=Same%20Store%20Operating%20Data) Same store total revenue decreased 5.4% to $6,582.5 million for Q2 2022, with total gross profit down 1.1%; for H1 2022, total revenue increased 1.8% to $13,065.9 million and gross profit rose 9.4% | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total revenue | $6,582.5 | $6,958.8 | (5.4%) | | Total gross profit | $1,305.6 | $1,319.7 | (1.1%) | | New vehicle gross profit | $341.4 | $320.4 | 6.6% | | Used vehicle gross profit | $149.7 | $202.5 | (26.1%) | | Parts and service gross profit | $461.0 | $426.7 | 8.0% | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Total revenue | $13,065.9 | $12,839.7 | 1.8% | | Total gross profit | $2,565.1 | $2,345.6 | 9.4% | | New vehicle gross profit | $674.8 | $510.0 | 32.3% | | Used vehicle gross profit | $280.7 | $342.3 | (18.0%) | | Parts and service gross profit | $902.9 | $809.9 | 11.5% | [New Vehicle](index=30&type=section&id=New%20Vehicle) Same store new vehicle revenue decreased 17.4% for Q2 2022 due to lower unit volume, despite a 13.9% increase in revenue PVR and a 47.0% increase in gross profit PVR to $6,109 | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Variance | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenue (Millions) | $2,829.5 | $3,425.7 | (17.4%) | | Gross profit (Millions) | $341.4 | $320.4 | 6.6% | | Retail vehicle unit sales | 55,889 | 77,081 | (27.5%) | | Revenue per vehicle retailed | $50,627 | $44,443 | 13.9% | | Gross profit per vehicle retailed | $6,109 | $4,157 | 47.0% | | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Variance | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | | Revenue (Millions) | $5,536.9 | $6,403.0 | (13.5%) | | Gross profit (Millions) | $674.8 | $510.0 | 32.3% | | Retail vehicle unit sales | 110,428 | 146,293 | (24.5%) | | Revenue per vehicle retailed | $50,140 | $43,768 | 14.6% | | Gross profit per vehicle retailed | $6,111 | $3,486 | 75.3% | - Net new vehicle inventory carrying benefit decreased by **$6.5 million** for Q2 2022 and **$5.8 million** for the first six months of 2022, primarily due to decreased floorplan assistance[152](index=152&type=chunk)[153](index=153&type=chunk) [Used Vehicle](index=32&type=section&id=Used%20Vehicle) Same store used vehicle revenue increased 8.0% for Q2 2022 due to higher revenue PVR, despite lower unit volume, but gross profit PVR decreased 14.5% to $1,916 due to margin pressure | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Variance | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | | Total revenue (Millions) | $2,397.0 | $2,220.3 | 8.0% | | Total gross profit (Millions) | $149.7 | $202.5 | (26.1%) | | Retail vehicle unit sales | 73,211 | 80,452 | (9.0%) | | Revenue per vehicle retailed | $30,668 | $25,896 | 18.4% | | Gross profit per vehicle retailed | $1,916 | $2,240 | (14.5%) | | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Variance | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | | Total revenue (Millions) | $4,850.1 | $3,966.0 | 22.3% | | Total gross profit (Millions) | $280.7 | $342.3 | (18.0%) | | Retail vehicle unit sales | 149,152 | 152,018 | (1.9%) | | Revenue per vehicle retailed | $30,347 | $24,498 | 23.9% | | Gross profit per vehicle retailed | $1,738 | $2,006 | (13.4%) | - Used vehicle inventory days supply increased to **40 days** at June 30, 2022, from 34 days at June 30, 2021[140](index=140&type=chunk) [Parts and Service](index=34&type=section&id=Parts%20and%20Service) Same store parts and service gross profit increased 8.0% for Q2 2022, driven by customer-pay service and vehicle preparation, and rose 11.5% for H1 2022 from similar factors | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Revenue | $995.9 | $937.0 | 6.3% | | Gross Profit | $461.0 | $426.7 | 8.0% | | Gross profit as % of revenue | 46.3% | 45.5% | 0.8 pp | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :-------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Revenue | $1,962.2 | $1,773.8 | 10.6% | | Gross Profit | $902.9 | $809.9 | 11.5% | | Gross profit as % of revenue | 46.0% | 45.7% | 0.3 pp | - For Q2 2022, customer-pay service gross profit increased by **$17.3 million** and vehicle preparation for sale gross profit increased by **$9.1 million**[163](index=163&type=chunk) [Finance and Insurance](index=35&type=section&id=Finance%20and%20Insurance) Same store F&I revenue and gross profit decreased 4.7% for Q2 2022 due to lower unit volume, partially offset by a 16.2% increase in F&I gross profit PVR, while H1 2022 saw a 3.1% increase | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Variance | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenue and gross profit (Millions) | $351.2 | $368.7 | (4.7%) | | Gross profit per vehicle retailed | $2,720 | $2,340 | 16.2% | | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Variance | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | | Revenue and gross profit (Millions) | $702.2 | $681.2 | 3.1% | | Gross profit per vehicle retailed | $2,705 | $2,284 | 18.4% | - Increase in F&I gross profit PVR was primarily due to higher realized margins on vehicle service contracts, increased product penetration, and higher amounts financed per transaction[168](index=168&type=chunk)[169](index=169&type=chunk) [Segment Results](index=36&type=section&id=Segment%20Results) Total segment income for reportable segments increased 0.8% to $603.1 million for Q2 2022, with Premium Luxury showing the largest gain, while Domestic and Import segments decreased | Segment | Three Months Ended June 30, 2022 Revenue (Millions) | Three Months Ended June 30, 2022 Segment Income (Millions) | Six Months Ended June 30, 2022 Revenue (Millions) | Six Months Ended June 30, 2022 Segment Income (Millions) | | :-------------- | :------------------------------------------ | :------------------------------------------- | :---------------------------------------- | :--------------------------------------- | | Domestic | $2,040.9 | $153.1 | $4,075.3 | $302.5 | | Import | $1,949.7 | $192.5 | $3,923.8 | $378.7 | | Premium Luxury | $2,616.6 | $257.5 | $5,095.3 | $487.0 | | Corporate and other | $262.0 | ($50.8) | $527.6 | ($102.1) | [Domestic](index=37&type=section&id=Domestic) Domestic revenue decreased 3.9% for Q2 2022 due to lower unit volume, and segment income decreased 9.4% from reduced used vehicle and F&I gross profit, while H1 2022 saw revenue and income increases | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total Revenue | $2,040.9 | $2,124.8 | (3.9%) | | Segment income | $153.1 | $169.0 | (9.4%) | | Retail new vehicle unit sales | 16,760 | 21,459 | (21.9%) | | Retail used vehicle unit sales | 25,180 | 28,056 | (10.3%) | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Total Revenue | $4,075.3 | $3,971.5 | 2.6% | | Segment income | $302.5 | $287.5 | 5.2% | | Retail new vehicle unit sales | 33,125 | 43,128 | (23.2%) | | Retail used vehicle unit sales | 51,776 | 52,535 | (1.4%) | [Import](index=38&type=section&id=Import) Import revenue decreased 10.4% for Q2 2022 due to lower unit volume, and segment income decreased 5.5% from reduced used vehicle and F&I gross profit, while H1 2022 saw a 14.9% increase in segment income | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total Revenue | $1,949.7 | $2,175.0 | (10.4%) | | Segment income | $192.5 | $203.7 | (5.5%) | | Retail new vehicle unit sales | 23,612 | 36,136 | (34.7%) | | Retail used vehicle unit sales | 25,786 | 27,128 | (4.9%) | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Total Revenue | $3,923.8 | $3,944.6 | (0.5%) | | Segment income | $378.7 | $329.6 | 14.9% | | Retail new vehicle unit sales | 48,148 | 66,979 | (28.1%) | | Retail used vehicle unit sales | 52,315 | 52,229 | 0.2% | [Premium Luxury](index=39&type=section&id=Premium%20Luxury) Premium Luxury revenue increased 6.0% for Q2 2022 due to acquisitions and higher PVR, despite lower unit volume; segment income increased 14.1% from improved new vehicle, parts/service, and F&I gross profit | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total Revenue | $2,616.6 | $2,468.5 | 6.0% | | Segment income | $257.5 | $225.7 | 14.1% | | Retail new vehicle unit sales | 17,518 | 19,569 | (10.5%) | | Retail used vehicle unit sales | 21,381 | 22,370 | (4.4%) | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Total Revenue | $5,095.3 | $4,572.0 | 11.4% | | Segment income | $487.0 | $384.2 | 26.8% | | Retail new vehicle unit sales | 33,059 | 36,418 | (9.2%) | | Retail used vehicle unit sales | 43,330 | 41,904 | 3.4% | [Corporate and other](index=40&type=section&id=Corporate%20and%20other) The 'Corporate and other' segment reported Q2 2022 revenue of $262.0 million, a 24.7% increase, with an income loss of $50.8 million; plans include expanding AutoNation USA used vehicle stores to over 130 by 2026 | Metric | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :-------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Revenue | $262.0 | $210.1 | 24.7% | | Income (loss) | ($50.8) | ($74.8) | N/A | | Metric | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :-------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Revenue | $527.6 | $394.1 | 33.9% | | Income (loss) | ($102.1) | ($150.2) | N/A | - Plan to expand AutoNation USA used vehicle stores to over **130 by the end of 2026**, with an initial capital investment of approximately **$10 million to $12 million per new store**[194](index=194&type=chunk)[218](index=218&type=chunk) [Selling, General, and Administrative Expenses](index=41&type=section&id=Selling,%20General,%20and%20Administrative%20Expenses) SG&A expenses increased 0.8% to $754.8 million for Q2 2022, primarily due to new stores, but decreased as a percentage of total gross profit to 55.4% from 56.5% | Component | Three Months Ended June 30, 2022 (Millions) | Three Months Ended June 30, 2021 (Millions) | % Variance | | :------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Compensation | $523.5 | $534.0 | 2.0% | | Advertising | $44.5 | $42.8 | (4.0%) | | Store and corporate overhead | $186.8 | $172.1 | (8.5%) | | **Total SG&A** | **$754.8** | **$748.9** | **(0.8%)** | | SG&A as a % of total gross profit | 55.4% | 56.5% | (1.1 pp) | | Component | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | % Variance | | :------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Compensation | $1,039.3 | $975.6 | (6.5%) | | Advertising | $84.4 | $79.5 | (6.2%) | | Store and corporate overhead | $372.5 | $341.7 | (9.0%) | | **Total SG&A** | **$1,496.2** | **$1,396.8** | **(7.1%)** | | SG&A as a % of total gross profit | 56.0% | 59.2% | (3.2 pp) | [Non-Operating Income (Expense)](index=41&type=section&id=Non-Operating%20Income%20(Expense)) Non-operating income and expenses include decreased floorplan interest, increased other interest due to higher debt, and a $14.1 million net loss from COLI changes for Q2 2022 - Floorplan interest expense decreased by **$0.8 million** for Q2 2022 and **$5.0 million** for the first six months of 2022, due to lower average vehicle floorplan balances, partially offset by higher average interest rates[200](index=200&type=chunk)[201](index=201&type=chunk) - Other interest expense increased by **$13.2 million** for Q2 2022 and **$21.6 million** for the first six months of 2022, driven by higher average debt balances, partially offset by lower average interest rates[203](index=203&type=chunk) - Net loss of **$14.1 million** for Q2 2022 and **$20.8 million** for the first six months of 2022 related to changes in cash surrender value of corporate-owned life insurance (COLI), largely offset by corresponding changes in deferred compensation obligations[204](index=204&type=chunk) [Floorplan Interest Expense](index=41&type=section&id=Floorplan%20Interest%20Expense) Floorplan interest expense decreased to $5.8 million for Q2 2022 and $11.0 million for H1 2022, primarily due to lower average vehicle floorplan balances | Period | 2022 (Millions) | 2021 (Millions) | Variance (Millions) | | :-------------------------- | :-------------- | :-------------- | :------------------ | | Three Months Ended June 30 | $5.8 | $6.6 | ($0.8) | | Six Months Ended June 30 | $11.0 | $16.0 | ($5.0) | [Other Interest Expense](index=42&type=section&id=Other%20Interest%20Expense) Other interest expense increased to $34.1 million for Q2 2022 and $63.7 million for H1 2022, driven by higher average debt balances, partially offset by lower average interest rates | Period | 2022 (Millions) | 2021 (Millions) | Variance (Millions) | | :-------------------------- | :-------------- | :-------------- | :------------------ | | Three Months Ended June 30 | $34.1 | $20.9 | $13.2 | | Six Months Ended June 30 | $63.7 | $42.1 | $21.6 | [Other Income (Loss), Net (included in Non-Operating Income)](index=42&type=section&id=Other%20Income%20(Loss),%20Net%20(included%20in%20Non-Operating%20Income)) A net loss of $14.1 million for Q2 2022 and $20.8 million for H1 2022 was recognized from COLI value changes, largely offset by deferred compensation changes, with Q1 2021 seeing equity investment gains - Net loss of **$14.1 million** for Q2 2022 and **$20.8 million** for the six months ended June 30, 2022, from changes in COLI cash surrender value[204](index=204&type=chunk) - Gains and losses related to COLI are substantially offset by corresponding changes in deferred compensation obligations, reflected in SG&A expenses[204](index=204&type=chunk) - In Q1 2021, a realized gain of **$7.5 million** from equity investment sales and an unrealized gain of **$3.4 million** were recorded[205](index=205&type=chunk) [Income Tax Provision](index=42&type=section&id=Income%20Tax%20Provision) The effective income tax rate was 25.4% for Q2 2022 and 24.8% for H1 2022, based on anticipated blended federal and state rates, adjusted for discrete tax matters and geographic revenue mix | Period | 2022 | 2021 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | 25.4% | 24.8% | | Six Months Ended June 30 | 24.8% | 24.7% | [Discontinued Operations](index=42&type=section&id=Discontinued%20Operations) Loss from discontinued operations, net of income taxes, was minimal at $0.2 million for both Q2 and H1 2022, relating to stores sold or terminated prior to 2014 with ongoing real estate carrying costs - Loss from discontinued operations, net of income taxes, was **($0.2) million** for both the three and six months ended June 30, 2022[9](index=9&type=chunk) - Discontinued operations relate to stores sold or terminated prior to January 1, 2014, primarily involving carrying costs for unsold real estate[207](index=207&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) AutoNation manages liquidity for operations and capital expenditures, with $336.5 million in cash and $1,760.2 million from its revolving credit facility at June 30, 2022; capital allocation focuses on long-term value, including a $1.0 billion share repurchase authorization in July 2022 - Liquidity sources include cash, funds from operations, revolving credit facility, commercial paper program, and secured used vehicle floorplan facilities[208](index=208&type=chunk) - Capital allocation strategy focuses on growing long-term value per share through investments in facilities, acquisitions, and share repurchases[213](index=213&type=chunk) - In July 2022, the Board of Directors increased the share repurchase authorization by **$1.0 billion**, with **$1.1 billion** remaining available as of July 20, 2022[215](index=215&type=chunk) [Available Liquidity Resources](index=43&type=section&id=Available%20Liquidity%20Resources) Available liquidity at June 30, 2022, included $336.5 million in cash, $1,760.2 million from the revolving credit facility, and $0.1 million from secured used vehicle floorplan facilities | Source | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :------------------------------------ | :----------------------- | :--------------------------- | | Cash and cash equivalents | $336.5 | $60.4 | | Revolving credit facility | $1,760.2 | $1,760.3 | | Secured used vehicle floorplan facilities | $0.1 | $0.1 | - No commercial paper notes outstanding at June 30, 2022[211](index=211&type=chunk) [Capital Allocation](index=43&type=section&id=Capital%20Allocation) The company's capital allocation strategy prioritizes growing long-term value per share through investments in facilities, new AutoNation USA stores, strategic acquisitions, and common stock or debt repurchases - Capital allocation strategy focuses on growing long-term value per share[213](index=213&type=chunk) - Capital is invested in maintaining/upgrading existing facilities, building new facilities for existing franchises and AutoNation USA stores, and for strategic/technology initiatives[213](index=213&type=chunk) - Capital is also deployed opportunistically for acquisitions, new franchises, and common stock/debt repurchases[213](index=213&type=chunk) [Share Repurchases](index=43&type=section&id=Share%20Repurchases) AutoNation repurchased 7.2 million shares for $784.9 million in H1 2022, and in July 2022, the Board authorized an additional $1.0 billion for share repurchases, bringing the total available authorization to $1.1 billion | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------- | :----------------------------- | :----------------------------- | | Shares repurchased (Millions) | 7.2 | 11.3 | | Aggregate purchase price (Millions) | $784.9 | $1,042.2 | | Average purchase price per share | $109.62 | $91.94 | - In July 2022, the Board of Directors increased the share repurchase authorization by **$1.0 billion**, with **$1.1 billion** remaining available as of July 20, 2022[215](index=215&type=chunk) [Capital Expenditures](index=44&type=section&id=Capital%20Expenditures) Capital expenditures for property and equipment totaled $156.9 million for H1 2022; the company plans to expand AutoNation USA used vehicle stores to over 130 by 2026 with an initial capital investment of $10-12 million per store | Period | 2022 (Millions) | 2021 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Three Months Ended June 30 | $106.1 | $74.3 | | Six Months Ended June 30 | $156.9 | $118.7 | - Company owns approximately **82% of its new vehicle franchise store locations**[218](index=218&type=chunk) - Plans to expand AutoNation USA used vehicle stores to over **130 by the end of 2026**, with an initial capital investment of approximately **$10 million to $12 million per new store**[218](index=218&type=chunk) [Acquisitions and Divestitures](index=44&type=section&id=Acquisitions%20and%20Divestitures) No stores were purchased or divested in H1 2022, but an agreement to acquire CIG Financial, an auto finance company, was entered into in July 2022 - No business acquisitions or divestitures (cash-based) during the six months ended June 30, 2022[220](index=220&type=chunk) - Agreement to acquire CIG Financial, an auto finance company, was entered into in July 2022[221](index=221&type=chunk) [Long-Term Debt and Commercial Paper](index=45&type=section&id=Long-Term%20Debt%20and%20Commercial%20Paper) Long-term debt, net of current maturities, increased to $3,534.7 million at June 30, 2022, due to a $700 million senior note issuance, with no commercial paper outstanding | Metric | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | | Long-term debt, net of current maturities | $3,534.7 | $2,846.2 | - Issued **$700 million** aggregate principal amount of 3.85% Senior Notes due 2032 on February 28, 2022[224](index=224&type=chunk) - No commercial paper notes outstanding at June 30, 2022, compared to **$340.0 million** at December 31, 2021[225](index=225&type=chunk) [Restrictions and Covenants](index=45&type=section&id=Restrictions%20and%20Covenants) The company's debt agreements contain financial and operating covenants, including a maximum leverage ratio of 3.75x and capitalization ratio of 70.0%, with AutoNation in compliance at June 30, 2022 - Debt agreements contain customary financial and operating covenants[226](index=226&type=chunk) | Covenant | Requirement | Actual | | :----------------- | :---------- | :----- | | Leverage ratio | ≤ 3.75x | 1.53x | | Capitalization ratio | ≤ 70.0% | 55.1% | - Failure to comply with covenants could result in acceleration of all indebtedness[228](index=228&type=chunk) [Vehicle Floorplan Payable](index=46&type=section&id=Vehicle%20Floorplan%20Payable) Total vehicle floorplan payable increased to $1,517.4 million at June 30, 2022, collateralized by vehicle inventories, and the company is transitioning from LIBOR with no material impact expected | Component | June 30, 2022 (Millions) | December 31, 2021 (Millions) | | :---------------------------- | :----------------------- | :--------------------------- | | Vehicle floorplan payable - trade | $556.5 | $489.9 | | Vehicle floorplan payable - non-trade | $960.9 | $967.7 | | **Total Vehicle floorplan payable** | **$1,517.4** | **$1,457.6** | - Vehicle floorplan facilities are due on demand and primarily collateralized by vehicle inventories[231](index=231&type=chunk) - Modifying floorplan agreements to replace LIBOR with an alternative reference rate, not expecting a material impact on annual floorplan interest expense[232](index=232&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) Net cash from operating activities decreased to $895.0 million, investing activities used $148.5 million, and financing activities used $470.5 million for H1 2022 | Activity | Six Months Ended June 30, 2022 (Millions) | Six Months Ended June 30, 2021 (Millions) | | :-------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $895.0 | $930.3 | | Net cash used in investing activities | ($148.5) | ($8.5) | | Net cash used in financing activities | ($470.5) | ($1,431.8) | [Cash Flows from Operating Activities](index=46&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net cash provided by operating activities decreased to $895.0 million for H1 2022, primarily due to increased working capital requirements, partially offset by increased earnings - Net cash provided by operating activities decreased to **$895.0 million** for the six months ended June 30, 2022, from $930.3 million in 2021, primarily due to increased working capital requirements[235](index=235&type=chunk) [Cash Flows from Investing Activities](index=46&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net cash used in investing activities increased to $148.5 million for H1 2022, due to decreased equity security proceeds and increased property and equipment purchases - Net cash used in investing activities increased to **$148.5 million** for the six months ended June 30, 2022, from $8.5 million in 2021, due to decreased equity security proceeds and increased property/equipment purchases[236](index=236&type=chunk) [Cash Flows from Financing Activities](index=47&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net cash used in financing activities decreased to $470.5 million for H1 2022, driven by $700.0 million in new senior notes, $340.0 million in commercial paper payments, and lower common stock repurchases - Issued **$700.0 million** aggregate principal amount of 3.85% Senior Notes due 2032 during the six months ended June 30, 2022[237](index=237&type=chunk) - Net payments of commercial paper totaled **$340.0 million** for the six months ended June 30, 2022 (vs. net proceeds of $200.0 million in 2021)[238](index=238&type=chunk) - Repurchased **7.2 million shares for $784.9 million** during the six months ended June 30, 2022 (vs. 11.3 million shares for $1.0 billion in 2021)[238](index=238&type=chunk) [Forward-Looking Statements](index=47&type=section&id=Forward-Looking%20Statements) This section highlights various risks and uncertainties that could materially affect AutoNation's business, including economic conditions, supply chain disruptions, strategic initiative success, regulatory changes, legal proceedings, and financial risks - Business is sensitive to changing economic conditions (unemployment, consumer confidence, fuel prices, interest rates, tariffs) and new/used vehicle sales levels[239](index=239&type=chunk) - New vehicle sales are impacted by manufacturer incentives and supply chain disruptions (e.g., COVID-19)[239](index=239&type=chunk) - Risks include the success of strategic initiatives (AutoNation USA expansion, CIG Financial acquisition), brand reputation, equity investment valuations, new laws/regulations (climate change), legal proceedings, information system security, debt covenants, interest rate risk, and goodwill/intangible asset impairment[241](index=241&type=chunk) [Additional Information](index=48&type=section&id=Additional%20Information) AutoNation communicates material financial information through its company and investor relations websites, SEC filings, press releases, public calls, webcasts, and Twitter feed, encouraging investors to review these channels - Material financial information is announced via company website, investor relations website, SEC filings, press releases, public conference calls, webcasts, and Twitter feed[243](index=243&type=chunk) - Information posted on websites and social media channels could be deemed material[243](index=243&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details AutoNation's market risk exposure, primarily interest rate risk, with $1.5 billion in variable rate vehicle floorplan payable and $3.5 billion in fixed rate long-term debt at June 30, 2022 [Interest Rate Risk](index=50&type=section&id=Interest%20Rate%20Risk) AutoNation is exposed to interest rate risk on $1.5 billion in variable rate vehicle floorplan payable, where a 100 basis point change would impact annual interest expense by $15.2 million - **$1.5 billion** of variable rate vehicle floorplan payable at June 30, 2022[247](index=247&type=chunk) - A **100 basis point change** in interest rates would result in an approximate **$15.2 million change** to annual floorplan interest expense at June 30, 2022[247](index=247&type=chunk) - Fixed rate long-term debt totaled **$3.5 billion** with a fair value of **$3.3 billion** as of June 30, 2022[248](index=248&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that AutoNation's disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=50&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, with CEO and CFO participation, evaluated and concluded that disclosure controls and procedures were effective as of June 30, 2022 - Disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2022[249](index=249&type=chunk) [Changes in Internal Control over Financial Reporting](index=50&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the last fiscal quarter - No material changes in internal control over financial reporting during the last fiscal quarter[250](index=250&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains other information not included in the financial statements, such as risk factors, unregistered sales of equity securities, and a list of exhibits [ITEM 1A. RISK FACTORS](index=51&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers readers to the comprehensive risk factors discussed in the company's most recent Annual Report on Form 10-K, which could materially affect the business - Readers are directed to the Annual Report on Form 10-K for a full discussion of risk factors[252](index=252&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2022, AutoNation repurchased 3,698,339 shares for $403.9 million, with $109.7 million remaining under the repurchase limit as of June 30, 2022, which was increased by $1.0 billion in July 2022 | Period | Total Shares Purchased | Avg. Price Paid Per Share | Total Shares Part of Publicly Announced Programs | Approximate Value That May Yet Be Purchased (Millions) | | :--------------------------- | :--------------------- | :------------------------ | :----------------------------------------------- | :----------------------------------------------------- | | April 1, 2022 - April 30, 2022 | 1,858,043 | $104.45 | 1,858,043 | $319.6 | | May 1, 2022 - May 31, 2022 | 1,658,948 | $114.89 | 1,658,948 | $129.0 | | June 1, 2022 - June 30, 2022 | 181,348 | $106.29 | 181,348 | $109.7 | | **Total** | **3,698,339** | | **3,698,339** | | - As of June 30, 2022, **$109.7 million** remained available under the stock repurchase limit[254](index=254&type=chunk) - In July 2022, the Board of Directors increased the authorization by **$1.0 billion**[254](index=254&type=chunk) [ITEM 6. EXHIBITS](index=51&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL taxonomy documents - Includes certifications from CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL related documents[255](index=255&type=chunk) [SIGNATURE](index=52&type=section&id=SIGNATURE) The report is signed on behalf of AutoNation, Inc. by Christopher Cade, Senior Vice President and Chief Accounting Officer, on July 21, 2022 - Report signed by Christopher Cade, Senior Vice President and Chief Accounting Officer, on July 21, 2022[257](index=257&type=chunk)

AutoNation, Inc. (NYSE:AN) Q1 2022 Earnings Conference Call April 21, 2022 10:00 AM ET Company Participants Ankur Shah - Manager of Investor Relations Mike Manley - Chief Executive Officer and Director Joe Lower - Executive Vice President and Chief Financial Officer Conference Call Participants Rajat Gupta - J.P. Morgan Adam Jonas - Morgan Stanley John Murphy - Bank of America Ethan Huntley - Jefferies Stephanie Moore - Truist Colin Langan - Wells Fargo David Whiston - Morningstar Disclaimer*: This transcri ...

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) For the transition period from to Commission File Number: 1-13107 AUTONATION, INC. (Exact name of registrant as specified in its charter) Delaware 73-1105145 (State or other jurisdiction of ...

AutoNation, Inc. (NYSE:AN) Q4 2021 Earnings Conference Call February 17, 2022 10:00 AM ET Company Participants Robert Quartaro - VP, IR Michael Manley - CEO Joe Lower - CFO Conference Call Participants Richard Nelson - Stephens Rajat Gupta - JPMorgan John Murphy - Bank of America Adam Jonas - Morgan Stanley Bret Jordan - Jefferies Stephanie Moore - Truist Colin Langan - Wells Fargo David Whiston - Morningstar Operator Good morning. My name is Charlie, and I will be your conference operator today. At this ti ...