Lithia Motors, Inc. (NYSE:LAD) Q4 2022 Earnings Conference Call February 15, 2023 10:00 AM ET Company Participants Amit Marwaha - Director, Investor Relations Bryan DeBoer - President and CEO Chris Holzshu - Executive Vice President and COO Tina Miller - Senior Vice President and CFO Chuck Lietz - Senior Vice President, Driveway Finance Conference Call Participants Daniel Imbro - Stephens Rajat Gupta - JPMorgan John Murphy - Bank of America Chris Bottiglieri - BNP Paribas Bret Jordan - Jefferies Colin Langa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-14733 Lithia Motors, Inc. (Exact name of registrant as specified in its charter) WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 Indicate by check mark whether the registrant (1) has filed all reports required to be ...

Lithia Motors, Inc. (NYSE:LAD) Q3 2022 Earnings Conference Call October 19, 2022 10:00 AM ET Company Participants Amit Marwaha - Director of IR Bryan DeBoer - President and CEO Chuck Lietz - VP, Driveway Finance Corporation Chris Holzshu - EVP and COO Tina Miller - SVP and CFO Conference Call Participants Joe Enderlin - Stephens Inc. John Murphy - Bank of America-Merrill Lynch Ryan Sigdahl - Craig-Hallum Capital Group Rajat Gupta - J.P. Morgan Ali Faghri - Guggenheim Partners Colin Langan - Wells Fargo Bret ...

N Y S E : L A D Investor Presentation OCTOBER 2022 2 N Y S E : L A D Disclosure Forward-Looking Statements Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as "project", "outlook", "target", "may", "will", "would", "should", "seek", "expect", "plan", ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (541) 776-6401 Registrant's telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-14733 Lithia Motors, Inc. (Exact name of regis ...

N Y S E : L A D Investor Presentation JULY 2022 2 N Y S E : L A D Disclosure Forward-Looking Statements Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as "project", "outlook", "target", "may", "will", "would", "should", "seek", "expect", "plan", "i ...

Lithia Motors, Inc. (NYSE:LAD) Q2 2022 Earnings Conference Call July 20, 2022 10:00 AM ET Company Participants Amit Marwaha - Director of IR Bryan DeBoer - President and CEO Chuck Lietz - VP, Driveway Finance Corporation Chris Holzshu - EVP and COO Tina Miller - SVP and CFO Conference Call Participants Daniel Imbro - Stephens Inc. Rajat Gupta - JPMorgan Chris Bottiglieri - BNP John Murphy - Bank of America Colin Langan - Wells Fargo Bret Jordan - Jefferies Ryan Sigdahl - Craig-Hallum Capital Michael Ward - ...

Commission file number: 001-14733 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ 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 Lithia Motors, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Oregon 93-0572810 (I.R.S. E ...

Lithia Motors, Inc. (NYSE:LAD) Q1 2022 Earnings Conference Call April 20, 2022 10:00 AM ET Company Participants Jack Evert - Director of Financial Planning and Analysis Bryan DeBoer - President & CEO Chuck Lietz - VP, Driveway Finance Corporation Chris Holzshu - EVP & COO Tina Miller - SVP & CFO Conference Call Participants Daniel Imbro - Stephens, Inc. Rajat Gupta - JPMorgan Chris Bottiglieri - Exane BNP Paribas John Murphy - Bank of America Bret Jordan - Jefferies Kate McShane - Goldman Sachs David Whisto ...

PART I [Business](index=3&type=section&id=Item%201.%20Business) Lithia Motors is a Fortune 500 automotive retailer with an omni-channel strategy and a disciplined acquisition approach - Lithia Motors is a rapidly growing Fortune 500 company (**231 in 2021**) operating **278 locations** with 40 brands across the U.S. and Canada[13](index=13&type=chunk) - The company's omni-channel strategy integrates physical stores with e-commerce solutions like **Driveway** and **GreenCars**[15](index=15&type=chunk)[17](index=17&type=chunk) - Lithia's acquisition strategy is disciplined, targeting a valuation multiple of **3x to 7x estimated annualized adjusted EBITDA** and investing **$2.3 billion** in 2021[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company's capital allocation strategy targets deploying free cash flow with **65% to acquisitions**, 25% to internal investment, and 10% to shareholders[27](index=27&type=chunk) - As of December 31, 2021, the company employed approximately **21,150** people, with a workforce comprised of about **18% female** employees and **44% minorities**[50](index=50&type=chunk) Annual Advertising Expense | Year | Total Advertising Expense (Net) | | :--- | :--- | | 2021 | $162.2 million | | 2020 | $97.4 million | | 2019 | $111.9 million | [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, technological, and regulatory risks impacting its operations and growth - The business is highly sensitive to **economic conditions**, consumer spending, credit availability, and fuel prices[56](index=56&type=chunk)[57](index=57&type=chunk) - Industry changes like **ride-sharing**, **EVs**, and **driverless technology** could adversely affect new vehicle sales and service revenues[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - The company depends on manufacturers for vehicle supply and incentives, with approximately **21% of FY2021 service revenue** from warranty work[74](index=74&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - Significant indebtedness, with **41% of total debt at a variable rate** as of December 31, 2021, exposes the company to interest rate risk[88](index=88&type=chunk)[95](index=95&type=chunk) - The growth strategy relies on **successfully acquiring and integrating** new dealerships[118](index=118&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) - **Cybersecurity breaches** or system failures could lead to misuse of customer data, resulting in litigation and reputational damage[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [Properties](index=20&type=section&id=Item%202.%20Properties) The company owns and leases numerous properties, including its headquarters, and engages in sustainability initiatives - The company owns its corporate headquarters and had **$592.9 million** in outstanding mortgage debt as of December 31, 2021[130](index=130&type=chunk) - Lithia is engaged in sustainability initiatives, with a **LEED-certified headquarters**, solar projects, and various energy-saving practices[131](index=131&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings from normal operations, none expected to be materially adverse - The company is party to numerous legal proceedings from its normal business operations but does not expect their resolution to have a **material adverse effect**[132](index=132&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (NYSE: LAD) outperformed benchmarks, and the board authorized significant share repurchases - On November 30, 2021, the Board authorized an additional **$750 million** for share repurchases, with **$722.8 million** remaining available at year-end[136](index=136&type=chunk) - Over five years, a **$100 investment** in LAD grew to **$320.87**, significantly outpacing the S&P 500 ($233.41) and its auto peer group ($224.47)[138](index=138&type=chunk)[139](index=139&type=chunk) Q4 2021 Share Repurchases | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October | — | $— | | November | 249,648 | $286.94 | | December | 507,269 | $282.18 | | **Total** | **756,917** | **$283.75** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company achieved significant revenue and profit growth in 2021, driven by acquisitions and strong market conditions [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenues and gross profit surged in 2021 due to acquisitions, higher vehicle prices, and improved operating leverage - On a same-store basis, total revenues grew **24.4%** and total gross profit increased by **38.0%** in 2021 compared to 2020[151](index=151&type=chunk) - **SG&A as a percentage of gross profit** improved significantly, decreasing from 64.2% in 2020 to **57.8%** in 2021[198](index=198&type=chunk) - **Operating margin** increased to **7.3%** in 2021 from 5.3% in 2020, driven by higher gross margins and improved SG&A leverage[205](index=205&type=chunk) Consolidated Results of Operations (2021 vs. 2020) | Metric | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $22,831.7M | $13,124.3M | +$9,707.4M | +74.0% | | **Total Gross Profit** | $4,259.0M | $2,225.6M | +$2,033.4M | +91.4% | | **Total Gross Margin** | 18.7% | 17.0% | +170 bp | - | | **Net Income** | $1,100.0M | $470.3M | +$629.7M | +133.9% | | **Diluted EPS** | $36.54 | $19.53 | +$17.01 | +87.1% | Average Gross Profit Per Retail Unit (2021 vs. 2020) | Vehicle Type | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | New Vehicle | $4,673 | $2,693 | +$1,980 | +73.5% | | Used Vehicle | $3,001 | $2,434 | +$567 | +23.3% | | Finance & Insurance | $1,961 | $1,636 | +$325 | +19.9% | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity of $1.5 billion, funding acquisitions through operations, debt, and equity offerings - In 2021, the company invested **$2.7 billion** in acquisitions (net of cash acquired) and **$260.4 million** in capital expenditures[231](index=231&type=chunk) - In May 2021, the company raised **$1.11 billion (net)** through a public offering of 3,571,428 shares of common stock[240](index=240&type=chunk) - The company maintains a **$3.75 billion syndicated credit facility** and was in compliance with all debt covenants as of December 31, 2021[245](index=245&type=chunk)[246](index=246&type=chunk)[249](index=249&type=chunk) Available Liquidity as of Dec 31 | Source (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Cash, restricted cash, and cash equivalents | $174.8 | $162.4 | | Unfinanced new vehicles | $0.0 | $113.4 | | Available credit on credit facilities | $1,344.8 | $1,237.1 | | **Total current available funds** | **$1,519.6** | **$1,399.5** | Summary of Cash Flows (in millions) | Cash Flow Activity | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $1,797.2 | $544.6 | $524.5 | | Net cash used in investing activities | $(2,890.4) | $(1,605.8) | $(463.0) | | Net cash provided by (used in) financing activities | $1,106.7 | $1,139.8 | $(9.1) | [Critical Accounting Policies and Estimates](index=53&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting estimates involve the valuation of goodwill, franchise value, and assets from business combinations - **Goodwill and franchise value** are considered critical accounting estimates and are tested for impairment annually on October 1[269](index=269&type=chunk)[270](index=270&type=chunk) - In 2021, a triggering event during Q3 led to a **$1.9 million impairment charge** for franchise value at a specific location[272](index=272&type=chunk)[274](index=274&type=chunk) - Accounting for acquisitions requires significant estimates to determine the **fair value** of assets acquired and liabilities assumed[277](index=277&type=chunk)[278](index=278&type=chunk) Goodwill and Franchise Value Balances | Intangible Asset | Balance as of Dec 31, 2021 | | :--- | :--- | | Goodwill | $977.3 million | | Franchise Value | $799.1 million | [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates, foreign currency exchange, and equity prices - The company has significant exposure to interest rate risk on its **$2.1 billion** in variable-rate debt as of December 31, 2021[282](index=282&type=chunk) - Foreign currency exchange risk exists due to Canadian operations; a **10% devaluation** of the Canadian dollar would have reduced 2021 revenues by **$32.3 million**[287](index=287&type=chunk) - The company is subject to equity price risk from its investment in Shift Technologies, Inc., which had a fair value of **$40.9 million** at year-end 2021[289](index=289&type=chunk) [Financial Statements and Supplementary Data](index=55&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and auditor's report located elsewhere in the filing - This item refers to the full consolidated financial statements and the independent auditor's report, which are located starting on page **F-1**[293](index=293&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of year-end - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2021[294](index=294&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective**, excluding 77 stores acquired during 2021[298](index=298&type=chunk)[299](index=299&type=chunk) - KPMG LLP issued an **unqualified attestation report** on the company's internal control over financial reporting as of December 31, 2021[299](index=299&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, officers, and governance is incorporated by reference from the 2022 Proxy Statement - Information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the forthcoming 2022 Proxy Statement[301](index=301&type=chunk) [Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive compensation are incorporated by reference from the company's 2022 Proxy Statement - Details on executive compensation are **incorporated by reference** from the forthcoming 2022 Proxy Statement[302](index=302&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=58&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides information on equity compensation plans and incorporates other ownership details by reference Equity Compensation Plan Information as of December 31, 2021 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by shareholders | 466,860 | — | 2,292,788 | | Not approved by shareholders | — | — | — | | **Total** | **466,860** | **—** | **2,292,788** | [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information on related party transactions and director independence is **incorporated by reference** from the forthcoming 2022 Proxy Statement[305](index=305&type=chunk) [Principal Accounting Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Details on fees paid to the independent auditor, KPMG LLP, are incorporated by reference from the 2022 Proxy Statement - The company's independent auditor is KPMG LLP; details on accounting fees and services are **incorporated by reference** from the 2022 Proxy Statement[306](index=306&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K - This item provides an index of all financial statements, schedules, and exhibits included in the **Form 10-K filing**[308](index=308&type=chunk)[309](index=309&type=chunk) - The Consolidated Financial Statements and the report from the independent auditor, KPMG LLP, begin on page **F-1** of the filing[308](index=308&type=chunk)