Slide 1: Fourth Quarter Earnings Release
Fourth Quarter Earnings Release February 13, 2024 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be dee
Slide 3: 4Q 2023 Overview
4Q 2023 Overview PERFORMANCE COMMENTS New Vehicle unit growth + 8% • Strong Import growth, seasonal benefit from Premium Luxury Used Vehicle unit sequential change ~ Mkt. • Continued focus on Share of Wallet Customer Financial Services #1 • AN Finance launched across franchise stores • Ongoing AN US
Slide 4: Financial Summary
4Q 2023 Financial Summary ($ in millions, except per share data) Q4 2022 Q4 2023 YoY COMMENTS New Vehicle and After-Sales offset lower Used Total Revenue $6,697 $6,767 1% Vehicle Revenue Gross Profit $1,282 $1,215 -5% 18% Gross Profit Margin Adj. SG&A Expense $752 $791 5% Stable core SG&A, plus grow
Slide 5: New Vehicles
4Q 2023 New Vehicles RETAIL UNITS GROSS PROFIT PVR NOTES 64,748 60,074 • Unit volume up 8%: Imports+16% Premium Luxury +3% $5,633 • Moderation of PVR rate of decline from Q3; key factors: • Brand Mix $3,653 • BEVs • ASP relative to Invoice • Continued improvement in vehicle supply 4Q 22 4Q 23 4Q 22
Slide 6: Used Vehicles
4Q 2023 Used Vehicles RETAIL UNITS GROSS PROFIT PVR NOTES 67,608 • Sequential unit decline in-line with 65,151 industry and normal seasonality $1,847 • Volume and PVR impacted by: $1,455 • Pricing band mix • Normalizing depreciation • Focused on purchasing and pricing proficiency and inventory veloc
Slide 7: Customer Financial Services
4Q 2023 Customer Financial Services GROSS PROFIT ($M) GROSS PROFIT PVR NOTES $345 $347 • Industry leading CFS performance continues • Increased product attachment and finance penetration for new vehicles $2,703 $2,674 • Modest affordability headwinds for used vehicles • Growth of AN Finance lending
Slide 8: After-Sales
4Q 2023 After-Sales REVENUE ($M) GROSS PROFIT ($M) NOTES $1,141 • Revenue growth 11%, gross profit $1,028 growth 13% • Value per repair order improving $540 $479 • Volume of repair orders improving • Increases in all major categories — Customer Pay, Internal, Warranty, and Collision • Gross Profit m
Slide 9: Operating Income
4Q 2023 Operating Income ADJ OPERATING INCOME MARGIN (%) NOTES • 150+ bps above pre-pandemic levels 7.1% • Moderation of vehicle gross profit and 5.4% growth investments • SG&A growth reflects: • Investments for growth • Advertising to support WBYC • Normalized SG&A / Gross Profit 4Q 22 4Q 23 Refer
Slide 10: Free Cash Flow — Full Year
4Q 2023 Free Cash Flow — Full Year Adj. FCF ($M) & CONVERSION % NOTES $1,518 • Normalization of absolute quantum consistent with EBITDA declines • Resilient business model delivering strong $969 conversion • Velocity in inventory and working capital 109% 94% • Meaningful capital investments to suppo
Slide 11: Capital Allocation
4Q 2023 Capital Allocation CAPITAL ALLOCATION (FY) NOTES $2.23B • Balanced mix of reinvestment and return M&A $192M 9% to shareholders CapEx $329M 15% $1.55B • Principal CapEx to support growth $271M 18% initiatives: • AN USA $410M 26% • Capacity Growth Share $1,710M 76% Repurchase • IT and Electrif
Slide 12: 2024 Commentary
4Q 2023 2024 Commentary • Vehicle supply and demand normalizing • Focused on managing controllable variables well • Strong cash flow generation will continue • Prudent capital deployment key tenant of model Resilient Business Model 12
Slide 13: AutoNation
4Q 2023 AutoNation Solid operating results in a normalizing environment Strong cash conversion and attractive capital deployment Continuing to invest for growth including processes and technology as well as CapEx Continued confidence in AutoNation team to deliver attractive returns to shareholders 1
Slide 14: Appendix
Appendix This presentation contains certain non-GAAP financial measures for which we have set forth below reconciliations to the most comparable GAAP measures. The Company believes that these measures improve the transparency of the Company’s disclosure, provide a meaningful presentation of the Comp
Slide 15: Global Financial Crisis to 2023
SELECT HISTORICAL DATA Global Financial Crisis to 2023 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Avg. SAAR (mm) 13.1 10.3 11.5 12.6 14.3 15.4 16.4 17.4 17.5 17.1 17.2 17.0 14.5 14.9 13.7 15.6 14.9 New Retail SAAR (mm) 10.6 8.6 9.2 10.3 11.7 12.8 13.6 14.2 14.2 1
Slide 16: Comparable Basis Reconciliations
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations Three Months Ended December 31, 2022, and December 31, 2023 Income from Continuing Diluted Earnings Per Operating Income Operations Before Income Tax Provision(1) Effective Tax Rate Net Income Share(2) Income Taxes 2022 2023 2022 2023 2022 20
Slide 17: Comparable Basis Reconciliations
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations Twelve Months Ended December 31, 2022 and December 31, 2023 Income from Continuing Operating Income Operations Before Income Tax Provision(1) Effective Tax Rate Net Income Diluted Earnings Per Share(2) Income Taxes 2022 2023 2022 2023 2022 20
Slide 18: Free Cash Flow Reconciliation
4Q 2023 Free Cash Flow Reconciliation ($ in millions) Full Year 2022 2023 Net cash provided by operating activities $1,668 $724 Change in Vehicle Floorplan – non-Trade 179 425 Auto loans receivable, net 230 Adj. cash provided by operating activities $1,847 $1,379 Less: Purchases of Property and Equi