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What changed in AUTONATION, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AUTONATION, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+283 added−296 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-17)

Top changes in AUTONATION, INC.'s 2023 10-K

283 paragraphs added · 296 removed · 226 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

57 edited+15 added−26 removed103 unchanged
Biggest changeThese segments are comprised of retail automotive franchises that sell the following new vehicle brands: Domestic Import Premium Luxury Buick Ford Acura Nissan Alfa Romeo Lexus Cadillac GMC Fiat Subaru Audi Maserati Chevrolet Jeep Genesis Toyota Bentley Mercedes-Benz Chrysler Lincoln Honda Volkswagen BMW MINI Dodge Ram Hyundai Volvo Jaguar Porsche Infiniti Land Rover Sprinter 1 Table of Contents The following table sets forth information regarding our new vehicle revenues and retail new vehicle unit sales for the year ended, and the number of franchises owned as of, December 31, 2022: New Vehicle Revenues (in millions) Retail New Vehicle Unit Sales % of Total Retail New Vehicle Units Sold Franchises Owned Domestic: Ford, Lincoln $ 1,236.1 24,048 10.5 35 Chevrolet, Buick, Cadillac, GMC 1,124.7 23,377 10.2 40 Chrysler, Dodge, Jeep, Ram 1,048.3 18,950 8.2 80 Domestic Total 3,409.1 66,375 28.9 155 Import: Toyota 1,734.2 47,487 20.6 19 Honda 795.7 22,824 9.9 24 Nissan 154.7 4,751 2.1 7 Hyundai 247.5 7,399 3.2 9 Subaru 240.4 6,935 3.0 7 Other Import 300.5 6,490 2.9 19 Import Total 3,473.0 95,886 41.7 85 Premium Luxury: Mercedes-Benz 1,786.4 23,878 10.4 38 BMW 1,565.6 22,803 9.9 17 Lexus 330.7 6,249 2.7 3 Audi 375.7 5,973 2.6 9 Jaguar Land Rover 361.2 4,103 1.8 21 Other Premium Luxury 452.7 4,704 2.0 15 Premium Luxury Total 4,872.3 67,710 29.4 103 $ 11,754.4 229,971 100.0 343 The franchises in each segment also sell used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products.
Biggest changeThese segments are comprised of retail automotive franchises that sell the following new vehicle brands: Domestic Import Premium Luxury Buick Ford Acura Mazda Alfa Romeo Land Rover Cadillac GMC Fiat Nissan Aston Martin Lexus Chevrolet Jeep Genesis Subaru Audi Maserati Chrysler Lincoln Honda Toyota Bentley Mercedes-Benz Dodge Ram Hyundai Volkswagen BMW MINI Infiniti Volvo Jaguar Porsche 1 Table of Contents The following table sets forth information regarding our new vehicle revenues and retail new vehicle unit sales for the year ended, and the number of franchises owned as of, December 31, 2023: New Vehicle Revenues (in millions) Retail New Vehicle Unit Sales % of Total Retail New Vehicle Units Sold Franchises Owned Domestic: Ford, Lincoln $ 1,367.7 25,859 10.6 35 Chevrolet, Buick, Cadillac, GMC 1,200.0 24,794 10.1 40 Chrysler, Dodge, Jeep, Ram 957.3 16,818 6.9 80 Domestic Total 3,525.0 67,471 27.6 155 Import: Toyota 1,819.0 47,467 19.4 19 Honda 1,085.0 30,968 12.7 24 Nissan 165.8 5,111 2.1 7 Hyundai 291.3 8,218 3.4 11 Subaru 305.6 8,810 3.6 8 Other Import 329.3 7,494 3.0 21 Import Total 3,996.0 108,068 44.2 90 Premium Luxury: Mercedes-Benz 1,848.1 22,485 9.2 38 BMW 1,663.2 22,928 9.4 16 Lexus 415.2 7,792 3.2 3 Audi 417.3 6,680 2.7 9 Jaguar Land Rover 413.6 4,278 1.7 22 Other Premium Luxury 489.0 4,844 2.0 16 Premium Luxury Total 5,246.4 69,007 28.2 104 $ 12,767.4 244,546 100.0 349 The franchises in each segment also sell used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our Investor Relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). 15 Table of Contents
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our Investor Relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). 14 Table of Contents
We expect that these partnerships, initiatives, and offerings will continue to expand and strengthen the AutoNation retail brand, improve the customer experience, provide new growth opportunities, and enable us to expand our footprint in our core and other markets. • Hire, train, and retain the best talent available to build dynamic teams to serve our customers.
We expect that these offerings, initiatives, partnerships, and acquisitions will continue to expand and strengthen the AutoNation retail brand, improve the customer experience, provide new growth opportunities, and enable us to expand our footprint in our core and other markets. • Hire, train, and retain the best talent available to build dynamic teams to serve our customers.
Our capital allocation decisions are based on factors such as the expected rate of return on our investment, the market price of our common stock versus our view of its intrinsic value, the market price of our debt, the potential impact on our capital structure, our ability to complete acquisitions that meet our market and vehicle brand criteria and/or return on investment threshold, and limitations set forth in our debt agreements.
Our capital allocation decisions are based on factors such as the expected rate of return on our investment, the market price of our common stock versus our view of its intrinsic value, the market price of our debt, the potential impact on our capital structure, our ability to complete acquisitions that meet our strategic objectives, market and vehicle brand criteria and/or return on investment threshold, and limitations set forth in our debt agreements.
Lower is responsible for overseeing the finance department and for all financial controls and external reporting, financial planning and analysis, and accounting, as well as the tax, internal audit, treasury, investor relations, and corporate real estate functions. He is also responsible for our shared service center in Irving, Texas. Prior to joining AutoNation, Mr.
Szlosek is responsible for overseeing the finance department and for all financial controls and external reporting, financial planning and analysis, and accounting, as well as the tax, internal audit, treasury, investor relations, and corporate real estate functions. He is also responsible for our shared service center in Irving, Texas. Prior to joining AutoNation, Mr.
Our Business and Our Customers We are proud to be America’s most recognized automotive retailer, and we strive to create transparency and establish unparalleled trust with our customers or others with whom we do business. • Ethical standards : We have a Code of Business Ethics in place to help support our commitment to business ethics and responsibility.
Our Business and Our Customers We are proud to be America’s most admired automotive retailer, and we strive to create transparency and establish unparalleled trust with our customers or others with whom we do business. • Ethical standards : We have a Code of Business Ethics in place to help support our commitment to business ethics and responsibility.
This Company-paid benefit is offered by fewer than 5% of companies nationally and it underscores our commitment to driving out cancer. 12 Table of Contents • Healthy living : We encourage our associates and their families to be mindful of their physical and mental health, and we offer programs that provide free and confidential support services for a multitude of issues, such as legal, family/marital, and stress/anxiety, among others.
This Company-paid benefit is offered by fewer than 5% of companies nationally and it underscores our commitment to driving out cancer. • Healthy living : We encourage our associates and their families to be mindful of their physical and mental health, and we offer programs that provide free and confidential support services for a multitude of issues, such as legal, family/marital, and stress/anxiety, among others.
We also maintain a 24-hour Alert-Line for associates to anonymously report any Company policy violations under our Business Ethics Program. • Customer satisfaction : We seek to deliver a consistently superior customer experience by offering a broad selection of inventory, customer-friendly, transparent sales and service processes, and competitive pricing in a clean and safe environment.
We also maintain a 24-hour Alert-Line for associates to anonymously report any Company policy violations under our Business Ethics Program. 11 Table of Contents • Customer satisfaction : We seek to deliver a consistently superior customer experience by offering a broad selection of inventory, customer-friendly, transparent sales and service processes, and competitive pricing in a clean and safe environment.
For additional financial information regarding our three reportable segments, refer to Note 23 of the Notes to Consolidated Financial Statements set forth in Part II, Item 8 of this Form 10-K.
For additional financial information regarding our three reportable segments, refer to Note 22 of the Notes to Consolidated Financial Statements set forth in Part II, Item 8 of this Form 10-K.
For convenience, the terms “AutoNation,” “Company,” and “we” are used to refer collectively to AutoNation, Inc. and its subsidiaries, unless otherwise required by the context. Our store operations are conducted by our subsidiaries. Reportable Segments As of December 31, 2022, we had three reportable segments: Domestic, Import, and Premium Luxury.
For convenience, the terms “AutoNation,” “Company,” and “we” are used to refer collectively to AutoNation, Inc. and its subsidiaries, unless otherwise required by the context. Our store and other operations are conducted by our subsidiaries. Reportable Segments As of December 31, 2023, we had three reportable segments: Domestic, Import, and Premium Luxury.
We seek to deliver a consistently superior customer experience by offering a broad selection of inventory, customer-friendly, transparent sales and service processes, and competitive pricing.
We seek to deliver a consistently superior customer experience by offering a broad selection of inventory, customer-friendly, transparent sales and service processes, vehicle financing, and competitive pricing.
Our stores, which we believe include some of the most recognizable and well-known in our key markets, sell 33 different new vehicle brands.
Our stores, which we believe include some of the most recognizable and well-known in our key markets, sell 34 different new vehicle brands.
A majority of our Board of Directors is independent, and each of the members of our audit, compensation, and corporate governance and nominating committees is independent. Each of our directors must stand for re-election annually and are elected by a majority of our shareholders. In addition, Rick L.
A majority of our Board of Directors is independent, and each of the members of our audit, compensation, and corporate governance and nominating committees is 12 Table of Contents independent. Each of our directors must stand for re-election annually and are elected by a majority of our shareholders. In addition, Rick L.
AutoNation’s dedication to fundamental principles of good corporate stewardship has been a cornerstone of our business. The Environment We are committed to managing our environmental impact and continually work to reduce it where practicable.
AutoNation’s dedication to fundamental principles of good corporate stewardship has been a cornerstone of our business. 10 Table of Contents The Environment We are committed to managing our environmental impact and continually work to reduce it where practicable.
We face competition from (i) several public companies that operate numerous automotive retail stores or collision centers on a regional or national basis, including franchised dealers that sell new and used vehicles, non-franchised dealers that sell only used vehicles, and manufacturers that sell directly to customers, (ii) private companies that operate automotive retail stores or collision centers in our markets, and (iii) online and mobile sales platforms.
We face competition from (i) several public companies that operate numerous automotive retail stores or collision centers on a regional or national basis, including franchised dealers that sell new and used vehicles, non-franchised dealers that sell only used vehicles, and manufacturers that sell directly to customers, (ii) private companies that operate automotive retail stores or collision centers in our markets, (iii) electric vehicle manufacturers who sell directly to consumers, and (iv) online and mobile sales platforms.
In addition, we have been able to increase our finance and insurance gross profit per vehicle retailed as we have increased the penetration of products sold per vehicle. Our capital allocation strategy is focused on growing long-term value per share.
In addition, we have been able to attain industry-leading finance and insurance gross profit per vehicle retailed as we have increased the penetration of products sold per vehicle. Our capital allocation strategy is focused on growing long-term value per share.
We continue to expand 8 Table of Contents our footprint and increase scope and scale through both the acquisition of new dealerships and franchises and through the expansion of our AutoNation USA used vehicle stores.
We continue to expand our footprint and increase scope and scale through both the acquisition of new dealerships and franchises and through the expansion of our AutoNation USA used vehicle stores.
The core brands of new vehicles that we sell, representing approximately 89% of the new vehicles that we sold in 2022, are manufactured by Toyota (including Lexus), Honda, BMW, Ford, Mercedes-Benz, General Motors, Stellantis, and Volkswagen (including Audi and Porsche).
The core brands of new vehicles that we sell, representing approximately 88% of the new vehicles that we sold in 2023, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche).
According to industry sources, as of December 31, 2022, there were approximately 16,800 franchised automotive dealerships, which sell both new and used vehicles, in the United States. In addition, we estimate that there were approximately twice as many independent used vehicle dealers in the United States.
According to industry sources, as of December 31, 2023, there were approximately 16,800 franchised automotive dealerships, which sell both new and used vehicles, in the United 8 Table of Contents States. In addition, we estimate that there were approximately twice as many independent used vehicle dealers in the United States.
In 2022, we launched our “Go Be Great” campaign which characterizes the collective drive, ambition, and determination of our associates to be the best each and every day, leading the way in customer service excellence.
In 2022, we launched our “Go Be Great” company-wide initiative, which characterizes the collective drive, ambition, and determination of our associates to be the best each and every day, leading the way in customer service excellence.
Vehicles sold at our AutoNation locations are fitted with a pink license plate frame as a symbol of our commitment to “driving out” cancer. Millions of pink license plate frames have been distributed to date.
Vehicles sold at our AutoNation locations are fitted with “DRV PNK” license plate frames as a symbol of our commitment to “driving out” cancer. Millions of “DRV PNK” license plate frames have been distributed to date.
ITEM 1. BUSINESS General AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States. As of December 31, 2022, we owned and operated 343 new vehicle franchises from 247 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region.
ITEM 1. BUSINESS General AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States. As of December 31, 2023, we owned and operated 349 new vehicle franchises from 252 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region.
Finally, we leverage our scale to reduce costs related to purchasing certain equipment, supplies, and services through national vendor relationships. Our business benefits from a well-diversified portfolio of automotive retail franchises. In 2022, approximately 43% of our segment income for reportable segments was generated by Premium Luxury franchises, approximately 32% by Import franchises, and approximately 25% by Domestic franchises.
Finally, we leverage our scale to reduce costs related to purchasing certain equipment, supplies, and services through national vendor relationships. Our business benefits from a well-diversified portfolio of automotive retail franchises. In 2023, approximately 44% of our segment income for reportable segments was generated by Premium Luxury franchises, approximately 34% by Import franchises, and approximately 22% by Domestic franchises.
Our integrated outreach team engages proactively with our stockholders by participating in activities such as quarterly financial results conference calls, industry conferences and events, and one-on-one meetings. 13 Table of Contents Information about our Executive Officers The following sets forth certain information regarding our executive officers as of February 17, 2023.
Our integrated outreach team engages proactively with our stockholders by participating in activities such as quarterly financial results conference calls, industry conferences and events, and one-on-one meetings. Information about our Executive Officers The following sets forth certain information regarding our executive officers as of February 16, 2024.
We sell the products on a commission basis, and we also participate in future underwriting profit for certain products pursuant to retrospective commission arrangements with the issuers of those products. 5 Table of Contents As of December 31, 2022, we operated stores in the following states: State Number of Retail Stores (1) Number of Franchises Number of Other Locations (2) % of Total Revenue Florida 48 59 20 25 Texas 44 62 17 20 California 37 50 3 18 Arizona 16 18 4 6 Colorado 19 31 1 6 Washington 14 19 3 5 Georgia 17 24 4 4 Nevada 12 13 1 4 Maryland 14 16 3 3 Illinois 7 8 1 2 Tennessee 8 12 1 2 South Carolina 9 13 1 1 Ohio 4 4 3 1 North Carolina 1 — — 1 Virginia 2 2 — 1 Alabama 3 6 — 1 Minnesota 1 1 — — New York (3) 3 5 — — Missouri (3) 1 — — — Total 260 343 62 100 (1) Includes franchised dealerships and AutoNation USA used vehicle stores.
We sell the products on a commission basis, and we also participate in future underwriting profit for certain products pursuant to retrospective commission arrangements with the issuers of those products. 5 Table of Contents As of December 31, 2023, we operated stores in the following states: State Number of Retail Stores (1) Number of Franchises Number of Other Locations (2) % of Total Revenue Florida 49 59 19 25 Texas 46 62 17 19 California 42 59 2 19 Colorado 20 31 1 6 Arizona 16 18 4 6 Washington 14 19 3 5 Georgia 17 24 4 4 Nevada 12 13 1 4 Maryland 14 16 3 3 Illinois 7 8 1 2 Tennessee 7 7 1 2 South Carolina 10 13 1 1 Ohio 4 4 3 1 North Carolina 1 — — 1 Virginia 2 2 — 1 Alabama 3 6 — 1 Minnesota (3) 1 1 — — New York (3) 3 6 — — New Mexico (3) 1 — — — Missouri (3) 1 — — — New Jersey (3) 1 1 — — Total 271 349 60 100 (1) Includes franchised dealerships and AutoNation USA used vehicle stores.
Human Capital Resources Purpose and Culture At AutoNation, our associates are our greatest asset. As of December 31, 2022, we employed approximately 23,600 full-time and part-time employees, whom we refer to as “associates,” approximately 175 of whom were covered by collective bargaining agreements.
Human Capital Resources Purpose and Culture At AutoNation, our associates are our greatest asset. As of December 31, 2023, we employed approximately 25,300 full-time and part-time employees, whom we refer to as “associates,” approximately 170 of whom were covered by collective bargaining agreements.
For the year ended December 31, 2022, Premium Luxury revenue represented 38% of total revenue, Domestic revenue represented 30% of total revenue, and Import revenue represented 28% of total revenue.
For the year ended December 31, 2023, Premium Luxury revenue represented 38% of total revenue, Import revenue represented 29% of total revenue, and Domestic revenue represented 28% of total revenue.
We also offer indirect financing on certain vehicles we sell, as well as on installment contracts acquired by our captive finance company through third-party independent dealers. The following charts present the contribution to total revenue and gross profit by each of new vehicle, used vehicle, parts and service, and finance and insurance sales in 2022.
We also offer indirect financing on certain vehicles we sell through our captive finance company. The following charts present the contribution to total revenue and gross profit by each of new vehicle, used vehicle, parts and service, and finance and insurance sales in 2023.
We continue to invest in strategic partnerships and broaden our offerings to evolve with the changing automotive retail industry and to 2 Table of Contents widen our access to new and expanding sales channels for vehicles, parts and service, financing, and personal transportation services. During 2022, we acquired CIG Financial, an auto finance company engaged in indirect lending.
We continue to invest in strategic partnerships and broaden our offerings to evolve with the changing automotive retail industry and to 2 Table of Contents widen our access to new and expanding sales channels for vehicles, parts and service, financing, and personal transportation services.
Manley was appointed to the Board of Directors of Dover Corporation (NYSE: DOV), a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services. Joseph T. Lower has served as our Executive Vice President and Chief Financial Officer since January 2020. Mr.
Mr. Manley currently serves on the Board of Directors of Dover Corporation (NYSE: DOV), a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services. Thomas A. Szlosek has served as our Executive Vice President and Chief Financial Officer since August 2023. Mr.
Among other things, the CFPB is authorized to take action to prevent auto finance companies from engaging in unfair, deceptive, or abusive acts and practices and to issue rules requiring enhanced disclosures concerning consumer financial products and services.
Further, our captive finance company operations are subject to regulations and supervision by the Consumer Financial Protection Bureau (the “CFPB”). Among other things, the CFPB is authorized to take action to prevent auto finance companies from engaging in unfair, deceptive, or abusive acts and practices and to issue rules requiring enhanced disclosures concerning consumer financial products and services.
As of December 31, 2022, we also owned and operated 55 AutoNation-branded collision centers, 13 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, and an auto finance company.
As of December 31, 2023, we also owned and operated 53 AutoNation-branded collision centers, 19 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, a mobile automotive repair and maintenance business, and an auto finance company.
Yearly, AutoNation celebrates Drive Pink Across America Day by providing our associates with opportunities to deliver thousands of “Totes for Hope” bags stuffed with comfort items for children and adults undergoing cancer care at hospitals in our markets.
Our presence is felt at local community-based cancer events, as teams of our associates represent AutoNation at runs, walks, and other fundraisers. Yearly, AutoNation celebrates Drive Pink Across America Day by providing our associates with opportunities to deliver thousands of “Totes for Hope” bags stuffed with comfort items for children and adults undergoing cancer care at hospitals in our markets.
This sector is primarily comprised of banks, captive finance divisions of new car manufacturers, credit unions, and independent finance companies. According to industry sources, this sector represented more than $1 trillion in outstanding receivables as of December 31, 2022.
This sector is primarily comprised of banks, captive finance divisions of new car manufacturers, credit unions, and independent finance companies. According to industry sources, this sector represented more than $1 trillion in outstanding receivables as of December 31, 2023. Our primary competitors in this sector are banks and credit unions that offer direct and indirect financing to customers purchasing vehicles.
Koehler was the Eastern Region President for our stores located in Alabama, Florida, Georgia, Illinois, Maryland, Minnesota, New York, Ohio, Tennessee, and Virginia from May 2019 to February 2022. Prior to being promoted to Eastern Region President in May 2019, Mr.
Koehler is responsible for overseeing AutoNation USA, AutoNation Mobile Service, AutoNation Auto Auctions, and the AutoNation Collision business. Previously, Mr. Koehler was the Eastern Region President for our stores located in Alabama, Florida, Georgia, Illinois, Maryland, Minnesota, New York, Ohio, Tennessee, and Virginia from May 2019 to February 2022.
Coleman Edmunds 58 Executive Vice President, General Counsel and Corporate Secretary 27 27 Lisa Esparza 53 Executive Vice President and Chief Human Resource Officer 1 1 Dave Koehler 54 Chief Operating Officer, Non-Franchise Business 11 30 Steve Kwak 50 Chief Operating Officer, Franchise Business 16 24 Michael Manley has served as our Chief Executive Officer and as a member of our Board since November 1, 2021.
Coleman Edmunds 59 Executive Vice President, General Counsel and Corporate Secretary 28 28 Lisa Esparza 54 Executive Vice President and Chief Human Resource Officer 2 2 Dave Koehler 55 Chief Operating Officer, Non-Franchise Business 12 31 Jeff Parent 59 Chief Operating Officer 1 26 Michael Manley has served as our Chief Executive Officer and as a member of our Board since November 1, 2021.
Lisa Esparza has served as our Executive Vice President and Chief Human Resource Officer since September 2022. Prior to joining AutoNation, Ms. Esparza served as Chief Human Resources Officer of Essilor North America, part of EssilorLuxottica, the global leader in the design, manufacture, and distribution of ophthalmic lenses, frames, and sunglasses, from July 2019 to June 2022.
Esparza served as Chief Human Resource Officer of Essilor North America, part of EssilorLuxottica, the global leader in the design, manufacture, and distribution of ophthalmic lenses, frames, and sunglasses, from July 2019 to June 2022. From 2017 to 2019, Ms. Esparza served as Chief Human Resources Officer at Par Pacific Holdings, Inc.
We offer AutoNation-branded Customer Financial Services products (including extended service and maintenance contracts and other vehicle protection products), AutoNation-branded parts and accessories, collision repair services at AutoNation-branded collision centers, and auction services at AutoNation-branded automotive auctions, as well as our One Price used vehicle centralized pricing and appraisal strategy, and our “We’ll Buy Your Car” program under which customers receive a guaranteed trade-in offer honored for 7 days or 500 miles at any of our locations. • Leverage our significant scale and cost structure to improve our operating efficiency .
We also offer our One Price used vehicle centralized pricing and appraisal strategy, and our “We’ll Buy Your Car” program under which customers receive a guaranteed trade-in offer honored for 7 days or 500 miles at any of our locations. • Leverage our significant scale and cost structure to improve our operating efficiency .
From 2017 to 2019, Ms. Esparza served as Chief Human Resources Officer at Par Pacific Holdings, Inc. (NYSE: PARR), which owns and operates market-leading energy and infrastructure businesses. In addition, Ms. Esparza has held various human resources leadership roles at Celanese, Flowserve, Ingersoll-Rand, and Eaton with global responsibilities.
(NYSE: PARR), which owns and operates market-leading energy and infrastructure businesses. In addition, Ms. Esparza has held various human resources leadership roles at Celanese, Flowserve, Ingersoll-Rand, and Eaton with global responsibilities. Dave Koehler has served as our Chief Operating Officer, Non-Franchised Business since March 2022. Mr.
We primarily arrange for our customers to finance vehicles through installment loans or leases with third-party lenders, including the vehicle manufacturers’ and distributors’ captive finance subsidiaries, and receive a commission payable to us from the lender. Our exposure to loss in connection with financing arrangements with third-party lenders generally is limited to the commissions that we receive.
We offer a wide variety of automotive finance and insurance products to our customers. We primarily arrange for our customers to finance vehicles through installment loans or leases with third-party lenders, including the vehicle manufacturers’ and distributors’ captive finance subsidiaries, and receive a commission payable to us from the lender.
Koehler held several key positions within AutoNation, including General Manager, Market President, and Senior Vice President of Sales between 2011 to 2019. Steve Kwak has served as our Chief Operating Officer, Franchised Business since March 2022. Mr.
Prior to being promoted to Eastern Region President in May 2019, Mr. Koehler held several key positions within AutoNation, including General Manager, Market President, and Senior Vice President of Sales between 2011 to 2019. Jeff Parent has served as our Chief Operating Officer since October 2023. Mr.
From October 2007 through March 2017, Mr. Edmunds served as our Senior Vice President, Deputy General Counsel and Assistant Secretary. He joined AutoNation in November 1996. Prior to joining AutoNation, Mr. Edmunds was in private practice with the international law firm of Baker & McKenzie.
Coleman Edmunds has served as our Executive Vice President, General Counsel and Corporate Secretary since April 2017. From October 2007 through March 2017, Mr. Edmunds served as our Senior Vice President, Deputy General Counsel and Assistant Secretary. He joined AutoNation in November 1996. Prior to joining AutoNation, Mr.
Through the combined efforts of our 23,600 associates, vendors, partners, customers, and executive leadership, we have raised and donated over $35 million to support the world-class AutoNation Institute for Breast Cancer Research and Care, the Moffitt Cancer Center, the Breast Cancer Research Foundation, Cleveland Clinic, and other leading cancer facilities. 11 Table of Contents Our presence is felt at local community-based cancer events, as teams of our associates represent AutoNation at runs, walks, and other fundraisers.
Through the combined efforts of our 25,300 associates, vendors, partners, customers, and executive leadership, we have raised and donated over $40 million to support the world-class AutoNation Institute for Breast Cancer Research and Care, the Moffitt Cancer Center, the Breast Cancer Research Foundation, Cleveland Clinic, and other leading cancer facilities.
AutoNation USA stores continue to leverage the AutoNation brand, scale, exceptional used vehicle sourcing capabilities, and proven customer-centric processes to differentiate our Company and capture a larger share of the used vehicle market. Beginning in the fourth quarter of 2022, we began offering indirect vehicle financing in our AutoNation USA stores.
AutoNation USA stores continue to leverage the AutoNation brand, scale, exceptional used vehicle sourcing capabilities, and proven customer-centric processes to differentiate our Company and capture a larger share of the used vehicle market. The AutoNation retail brand extends to other products and services, as well.
Camplone is responsible for overseeing the Company’s business strategy, corporate development, and Precision Parts teams. Prior to joining AutoNation, Mr. Camplone was a Senior Partner at McKinsey & Company, a global management consulting firm, from December 1996 to February 2022, where he was the leader in their Advanced Industries global practice and Private Equity Industrial practice in North America.
Camplone was a Senior Partner at McKinsey & Company, a global management consulting firm, from December 1996 to February 2022, 13 Table of Contents where he was the leader in their Advanced Industries global practice and Private Equity Industrial practice in North America. C.
We believe that our human capital management, which includes talent acquisition, development, and retention of a high-quality workforce, is critical to the success and growth of our business. Our Board of Directors and its Committees provide oversight on a broad range of human capital management topics, including corporate culture, diversity, inclusion, compensation, and benefits.
Our Board of Directors and its Committees provide oversight on a broad range of human capital management topics, including corporate culture, diversity, inclusion, compensation, and benefits.
For additional information regarding our capital allocation, refer to “Liquidity and Capital Resources – Capital Allocation” in Part II, Item 7 of this Form 10-K. 4 Table of Contents Operations Each of our stores acquires new vehicles for retail sale either directly from the applicable automotive manufacturer or distributor or through dealer trades with other stores of the same brand franchise.
Operations Each of our stores acquires new vehicles for retail sale either directly from the applicable automotive manufacturer or distributor or through dealer trades with other stores of the same brand franchise.
See “Corporate Social Responsibility – Our Workplace” below for more information on human capital measures and objectives that we focus on in managing the business.
We provide a range of formal and informal learning programs, which are designed to help our associates continuously grow and strengthen their skills throughout their careers. See “Corporate Social Responsibility – Our Workplace” below for more information on human capital measures and objectives that we focus on in managing the business.
We also recently acquired a minority ownership stake in TrueCar, Inc., a leading automotive digital marketplace that lets auto buyers and sellers connect to its nationwide network of certified dealers. Our investment in TrueCar signals our continued commitment to emerging technologies and our constant focus on providing peerless customer experiences.
Additionally, we have minority ownership stakes in Waymo, the self-driving technology company of Alphabet Inc., and TrueCar, Inc., a leading automotive digital marketplace that lets auto buyers and sellers connect to its nationwide network of certified dealers. These investments signal our continued commitment to emerging technologies that impact the automotive industry.
The automotive retail business is also subject to substantial risk of property loss due to the significant concentration of property values at store locations.
We could also be subject to fines and civil and criminal penalties in connection with alleged violations of federal and state laws or regulatory requirements. The automotive retail business is also subject to substantial risk of property loss due to the significant concentration of property values at store locations.
For example, liabilities may arise out of claims of employees, customers, or other third parties for personal injury or property damage occurring in the course of our operations. We could also be subject to fines and civil and criminal penalties in connection with alleged violations of federal and state laws or regulatory requirements.
Insurance and Bonding Our business exposes us to the risk of liabilities arising out of our operations. For example, liabilities may arise out of claims of employees, customers, or other third parties for personal injury or property damage occurring in the course of our operations.
Our parts and service departments also recondition used vehicles acquired by our used vehicle departments and perform preparatory work and accessory installation on new vehicles acquired by our new vehicle departments. In addition to our retail business, we also have wholesale parts operations, which sell automotive parts to both collision repair shops and independent vehicle repair providers.
Our parts and service departments also recondition used vehicles acquired by our used vehicle departments and perform preparatory work and accessory installation on new vehicles acquired by our new vehicle departments. We also offer product and accessory lines that are integrated into our parts and service operations.
Lower 56 Executive Vice President and Chief Financial Officer 3 3 Gianluca Camplone 53 Chief Operating Officer Precision Parts Business, and Executive Vice President, Head of Mobility, Business Strategy, and Development 1 25 Marc Cannon 61 Executive Vice President and Chief Customer Experience Officer 25 36 C.
Name Age Position Years with AutoNation Years in Automotive Industry Michael Manley 59 Chief Executive Officer and Director 3 36 Thomas A. Szlosek 60 Executive Vice President and Chief Financial Officer 1 1 Gianluca Camplone 54 Chief Operating Officer, Precision Parts Business, and Executive Vice President, Head of Mobility, Business Strategy, and Development 2 26 C.
Our BRGs provide employees with the opportunity to engage with colleagues based on shared interests such as ethnic backgrounds, gender, and sexual orientation. 10 Table of Contents Talent Acquisition, Development, and Retention Creating opportunities for employee recognition, mentoring, and advancement is a key initiative in our human resources efforts.
AutoNation provides comprehensive benefits packages, extensive on-the-job training, and opportunities for career growth, inspiring employees to “Go Be Great.” Talent Acquisition, Development, and Retention Creating opportunities for employee recognition, mentoring, and advancement is a key initiative in our human resources efforts.
Through this acquisition, we will further extend our relationship with our customers beyond the car-buying experience, particularly for our used vehicle business. In January 2023, we acquired RepairSmith, a mobile solution for automotive repair and maintenance that offers customers the convenience of services and repairs at their home, workplace, or on-site for fleet vehicles.
AutoNation Mobile Service, our mobile solution for automotive repair and maintenance services, offers customers the convenience of services and repairs at their home, workplace, or on-site for fleet vehicles. In 2023, we launched AutoNationParts.com, a new e-commerce website enabling customers to purchase high-quality automotive parts and accessories at competitive prices, shipped directly to their homes.
See the risk factor “ A failure of our information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on our business” in Part I, Item 1A of this Form 10-K.
See the risk factor “ We are subject to various risks associated with originating and servicing auto finance loans through indirect lending to customers, any of which could have an adverse effect on our business ” in Part I, Item 1A of this Form 10-K for additional information.
In addition, among other finance positions, Mr. Lower spent six years with Credit Suisse in various investment banking roles, including positions in mergers and acquisitions and corporate finance. Gianluca Camplone has served as our Chief Operating Officer Precision Parts Business, and Executive Vice President, Head of Mobility, Business Strategy, and Development since March 2022. Mr.
Szlosek served as the Senior Vice President and Chief Financial Officer of Honeywell International, a diversified technology and manufacturing company, from April 2014 to August 2018. Gianluca Camplone has served as our Chief Operating Officer, Precision Parts Business, and Executive Vice President, Head of Mobility, Business Strategy, and Development since March 2022. Mr.
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RepairSmith expands AutoNation’s ability to penetrate the extensive After-Sales service market and conveniently responds to our customers’ needs by broadening the reach of our existing After-Sales network. AutoNation will also utilize RepairSmith as a resource for reconditioning and internal services to increase our speed to frontline readiness and expedite vehicle delivery to customers.
Added
AutoNation Finance, our captive auto finance company, provides financing to qualified retail customers on certain new and used vehicles we sell. Through AutoNation Finance, we have further extended our relationship with our customers beyond the car-buying experience.
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We also have a minority ownership stake in Waymo, the self-driving technology company of Alphabet Inc., with whom we have also partnered to support Waymo’s autonomous vehicle program by providing vehicle maintenance and repairs on certain fleets in certain markets. Additionally, we are investing in the development of mobility solutions to expand our customer offerings.
Added
In September 2023, we discontinued acquiring installment contracts from third-party independent dealers and are now exclusively focused on increasing finance penetration in our stores. We also pursue opportunities to penetrate the extensive After-Sales service market and respond to our customers’ needs by broadening the reach of our existing After-Sales network.
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The AutoNation retail brand extends to other products and services, as well.
Added
We also continue to actively pursue acquisitions and new store opportunities that meet our strategic and financial objectives.
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We also offer AutoNation PrecisionParts and AutoNation AutoGear, product and accessory lines that are integrated into our parts and service operations. We offer a wide variety of automotive finance and insurance products to our customers.
Added
We offer AutoNation-branded Customer Financial Services products (including extended service and maintenance contracts and other vehicle protection products), parts and accessories, and vehicle financing, as well as collision repair services at AutoNation-branded collision centers, and auction services at AutoNation-branded automotive auctions.
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Following the acquisition of CIG Financial in the fourth quarter of 2022, we also started to originate and service consumer auto finance loans.
Added
For additional information 4 Table of Contents regarding our capital allocation, refer to “Liquidity and Capital Resources – Capital Allocation” in Part II, Item 7 of this Form 10-K.
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Further, following our acquisition of CIG Financial, our captive finance company, in October 2022, our operations are now subject to regulations and supervision by the Consumer Financial Protection Bureau (the “CFPB”).
Added
In 2023, we launched AutoNationParts.com, a new e-commerce website enabling customers to purchase high-quality automotive parts and accessories at competitive prices, shipped directly to their homes. In addition to our retail business, we also have wholesale parts operations, which sell automotive parts to both collision repair shops and independent vehicle repair providers.
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New vehicle unit volume has been impacted by a limited supply of new vehicles to sell driven largely by disruptions in the manufacturers’ supply chains. We expect that reduced levels of new vehicle availability will continue into 2023. We have prioritized our capital expenditures towards opportunities with the greatest return potential.
Added
Our exposure to loss in connection with financing arrangements with third-party lenders generally is limited to the commissions that we receive. We also originate and service consumer auto finance loans through our captive finance company.
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Our primary competitors in this sector are banks and credit unions that offer direct and indirect financing to customers purchasing used cars. Insurance and Bonding Our business exposes us to the risk of liabilities arising out of our operations.
Added
New vehicle unit volume benefited from increases in new vehicle inventory levels due to higher levels of manufacturer vehicle production. The increasing supply and availability of new vehicle inventory has adversely impacted market demand for used vehicles, particularly for higher-priced used vehicles.
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We seek to develop and foster a diverse and inclusive work environment based on ethics and integrity where all associates can devote their best efforts to their jobs and “Go Be Great!” Diversity and Inclusion We are committed to an inclusive and welcoming environment where each individual feels valued, respected, and heard.
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We believe our people are the foundation of our success as an organization at AutoNation, and we are committed to ensuring we create an environment where all associates feel valued, respected, and empowered to achieve their highest potential.
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In 2020, we launched ONE AutoNation, an employee-focused initiative designed to embrace diversity in thought and action, promote inclusion despite our differences, and foster ongoing opportunities for learning, growth, and leadership. Our ONE AutoNation mission is to keep driving forward towards a more inclusive world.
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The initiative focuses on multiple aspects of our talent efforts, including recruitment and retention in each of our markets from retail sales and service technicians to corporate positions.
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Our associates are guided by our policies, procedures, and training programs to ensure everyone is treated with respect and has opportunities to reach their full potential. Through ONE AutoNation, we established our Diversity & Inclusion Council in order to ensure a more diverse workforce and cultivate a culture of belonging at AutoNation.
Added
Szlosek served as Executive Vice President and Chief Financial Officer at Avantor, Inc., a leading global provider of mission-critical products and services to customers in the life sciences, education and government, advanced technologies, and applied materials industries, from December 2018 until August 2023. Prior to joining Avantor, Mr.
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Through ongoing education and collaboration, the Council is dedicated to enhancing the associate experience in an atmosphere that values, respects, and celebrates our differences. In addition, we support a number of employee business resource groups (“BRGs”) that are an integral part of our diversity and inclusion strategy.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have invested and will continue to invest substantial resources on offering our vehicles and services through digital channels. There can be no assurance that our initiatives and investments in digital channels will be successful or result in improved financial performance.
Biggest changeThere can be no assurance that our initiatives and investments in digital channels will be successful or result in improved financial performance. We face increased competition for market share from other automotive retailers and sales platforms, including electric vehicle manufacturers who sell directly to consumers, that have also invested substantial resources on offering their vehicles and services through digital channels.
An isolated business incident at a single store could materially adversely affect our other stores, retail brands, reputation, and sales channels, particularly if such incident results in adverse publicity, governmental investigations, or litigation.
In addition, an isolated business incident at a single store could materially adversely affect our other stores, retail brands, reputation, and sales channels, particularly if such incident results in adverse publicity, governmental investigations, or litigation.
In addition, our net new vehicle inventory carrying cost (new vehicle floorplan interest expense net of floorplan assistance that we receive from automotive manufacturers) may increase due to changes in interest rates, inventory levels, and manufacturer assistance.
In addition, our net new vehicle inventory carrying expense (new vehicle floorplan interest expense net of floorplan assistance that we receive from automotive manufacturers) may increase due to changes in interest rates, inventory levels, and manufacturer assistance.
For example: • We may have difficulty satisfying our debt service obligations and, if we fail to comply with these requirements, an event of default could result; 22 Table of Contents • We may be required to dedicate a substantial portion of our cash flow from operations to make required payments on indebtedness, thereby reducing the availability of cash flow for working capital, capital expenditures, acquisitions, strategic initiatives, investments, and other general corporate activities; • A downgrade in our credit ratings could negatively impact the interest rate payable on certain of our senior notes and could negatively impact our ability to issue, or the interest rates for, commercial paper notes; • Covenants relating to our indebtedness may limit our ability to obtain financing for working capital, capital expenditures, acquisitions, investments, originating auto loans receivable, and other general corporate activities; • Covenants relating to our indebtedness may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • We may be more vulnerable to the impact of economic downturns and adverse developments in our business; • We may be placed at a competitive disadvantage against any less leveraged competitors; • Our variable interest rate debt will fluctuate with changing market conditions and, accordingly, our interest expense will increase if interest rates rise; • An increase in our leverage ratio could negatively impact the applicable margins on interest rates charged for borrowings under our revolving credit facility; and • Future share repurchases may be limited by the maximum leverage ratio and/or maximum capitalization ratio described above.
For example: • We may have difficulty satisfying our debt service obligations and, if we fail to comply with these requirements, an event of default could result; • We may be required to dedicate a substantial portion of our cash flow from operations to make required payments on indebtedness, thereby reducing the availability of cash flow for working capital, capital expenditures, acquisitions, strategic initiatives, investments, and other general corporate activities; • A downgrade in our credit ratings could negatively impact the interest rate payable on certain of our senior notes and could negatively impact our ability to issue, or the interest rates for, commercial paper notes; • Covenants relating to our indebtedness may limit our ability to obtain financing for working capital, capital expenditures, acquisitions, investments, originating auto loans receivable, and other general corporate activities; • Covenants relating to our indebtedness may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • We may be more vulnerable to the impact of economic downturns and adverse developments in our business; 21 Table of Contents • We may be placed at a competitive disadvantage against any less leveraged competitors; • Our variable interest rate debt will fluctuate with changing market conditions and, accordingly, our interest expense will increase if interest rates rise; • An increase in our leverage ratio could negatively impact the applicable margins on interest rates charged for borrowings under our revolving credit facility; and • Future share repurchases may be limited by the maximum leverage ratio and/or minimum interest coverage ratio described above.
We cannot assure you that a significant increase in interest rates or decrease in manufacturer floorplan assistance would not have a material adverse effect on our business, financial condition, results of operations, or cash flows. Risks Relating to Accounting Matters Goodwill and other intangible assets comprise a significant portion of our total assets.
We cannot assure you that a significant increase in interest rates or inventory levels or decrease in manufacturer floorplan assistance would not have a material adverse effect on our business, financial condition, results of operations, or cash flows. Risks Relating to Accounting Matters Goodwill and other intangible assets comprise a significant portion of our total assets.
In addition, the growing use of social media by consumers increases the speed and extent that information and opinions can be shared, and negative posts or comments on social media about AutoNation or any of our stores could materially damage our retail brands, reputation, and sales channels.
The growing use of social media by consumers increases the speed and extent that information and opinions can be shared, and negative posts or comments on social media about AutoNation or any of our stores could materially damage our retail brands, reputation, and sales channels.
Approximately 13.9 million, 15.1 million, and 14.6 million new vehicles, including retail and fleet vehicles, were sold in the United States in 2022, 2021, and 2020, respectively. Our performance may differ from the performance of the automotive retail industry due to particular economic conditions and other factors in the geographic markets in which we operate.
Approximately 15.6 million, 13.9 million, and 15.1 million new vehicles, including retail and fleet vehicles, were sold in the United States in 2023, 2022, and 2021, respectively. Our performance may differ from the performance of the automotive retail industry due to particular economic conditions and other factors in the geographic markets in which we operate.
There may be future issuances of identical or similar equity securities by the same issuer that would result in observable price changes that could result in upward or downward adjustments to this equity investment. A material downward adjustment to or impairment of this equity investment could adversely impact our results of operations and financial condition.
There may be future issuances of identical or similar equity 22 Table of Contents securities by the same issuer that would result in observable price changes that could result in upward or downward adjustments to this equity investment. A material downward adjustment to or impairment of this equity investment could adversely impact our results of operations and financial condition.
However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition, cash flows, and prospects. 20 Table of Contents Our operations are subject to extensive governmental laws and regulations.
However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition, cash flows, and prospects. Our operations are subject to extensive governmental laws and regulations.
From time to time, we are precluded under agreements with certain manufacturers from acquiring additional franchises, or subject to other adverse actions, to the extent we are not 18 Table of Contents meeting certain performance criteria at our existing stores (with respect to matters such as sales volume, sales effectiveness, and customer satisfaction or loyalty) until our performance improves in accordance with the agreements, subject to applicable state franchise laws.
From time to time, we are precluded under agreements with certain manufacturers from acquiring additional franchises, or subject to other adverse actions, to the extent we are not meeting certain performance criteria at our existing stores (with respect to matters such as sales volume, sales effectiveness, and customer satisfaction or loyalty) until our performance improves in accordance with the agreements, subject to applicable state franchise laws.
Credit losses are an inherent risk of our auto loan portfolio, and changes in the availability or cost of financing, such as our securitized funding sources or warehouse facilities, to support the origination of auto loans receivable could adversely affect our results of operations.
Credit losses are an inherent risk of our auto loan portfolio, and changes in the availability or cost of financing, such as our securitized funding sources or warehouse facilities, to support the origination of auto loans receivable could adversely affect our results of 18 Table of Contents operations.
Our captive finance company may also be involved in litigation with dealers or other third-party service providers, which could materially adversely impact our business, operating results, and prospects. With respect to employment practices, we are subject to various laws and regulations, including complex federal, state, and local wage and hour and anti-discrimination laws.
Our captive finance company may also be involved in litigation with dealers or other third-party service providers, which could materially adversely impact our business, operating results, and prospects. With respect to employment practices, we are subject to various laws and 19 Table of Contents regulations, including complex federal, state, and local wage and hour and anti-discrimination laws.
Furthermore, we rely on the protection of state franchise laws in the states in which we operate and if those laws are repealed or weakened, our framework, franchise, and related agreements may become more susceptible to termination, non-renewal, or renegotiation.
Furthermore, we rely on the protection of state franchise laws in the states in 17 Table of Contents which we operate and if those laws are repealed or weakened, our framework, franchise, and related agreements may become more susceptible to termination, non-renewal, or renegotiation.
Under our credit agreement, we are required to remain in compliance with a maximum leverage ratio and a maximum capitalization ratio. See “Liquidity and Capital Resources — Restrictions and Covenants” in Part II, Item 7 of this Form 10-K. If our earnings decline, we may be unable to comply with the financial ratios required by our credit agreement.
Under our credit agreement, we are required to remain in compliance with a maximum leverage ratio and a minimum interest coverage ratio. See “Liquidity and Capital Resources — Restrictions and Covenants” in Part II, Item 7 of this Form 10-K. If our earnings decline, we may be unable to comply with the financial ratios required by our credit agreement.
Certain statements and information set forth in this Annual Report on Form 10-K, including, without limitation, statements regarding our strategic acquisitions, initiatives, partnerships, or investments, including the planned expansion of our AutoNation USA used vehicle stores and our investments in digital and online capabilities and mobility solutions; our expectations for the future performance of our business and the automotive retail industry; as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf that describe our objectives, goals, or plans constitute “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.
Certain statements and information set forth in this Annual Report on Form 10-K, including, without limitation, statements regarding our strategic acquisitions, initiatives, partnerships, or investments, including AutoNation USA, AutoNation Finance, and AutoNation Mobile Service; statements regarding our investments in digital and online capabilities and mobility solutions; statements regarding our expectations for the future performance of our business and the automotive retail industry; as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf that describe our objectives, goals, or plans constitute “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.
Risks Related to Strategic Initiatives We are investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA stores, and if they are not successful, we will have incurred significant expenses without the benefit of improved financial results.
Risks Related to Strategic Initiatives We are investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA stores, our AutoNation Finance business, and our AutoNation Mobile Service business, and if they are not successful, we will have incurred significant expenses without the benefit of improved financial results.
Gates III beneficially owns approximately 21% of the outstanding shares of our common stock, through holdings by Cascade Investment, L.L.C. (“Cascade”), which is solely owned by Mr. Gates.
Gates III beneficially owns approximately 23.7% of the outstanding shares of our common stock, through holdings by Cascade Investment, L.L.C. (“Cascade”), which is solely owned by Mr. Gates.
In addition, future share repurchases and fluctuations in the levels of ownership of our largest stockholders could impact the volume of trading, liquidity, and market price of our common stock. Based on filings made with the SEC through February 15, 2023, William H.
In addition, future share repurchases and fluctuations in the levels of ownership of our largest stockholders could impact the volume of trading, liquidity, and market price of our common stock. Based on filings made with the SEC through February 14, 2024, William H.
See Note 20 of the Notes to Consolidated Financial Statements for more information. 23 Table of Contents Our minority equity investments with readily determinable fair values are required to be measured at fair value each reporting period, which could adversely impact our results of operations and financial condition.
See Note 19 of the Notes to Consolidated Financial Statements for more information. Our minority equity investments with readily determinable fair values are required to be measured at fair value each reporting period, which could adversely impact our results of operations and financial condition.
In the aggregate, based on filings made with the SEC through February 15, 2023, William H. Gates III and ESL beneficially own approximately 33% of our outstanding shares. Future share repurchases by the Company, together with any future share purchases by our affiliates, will reduce our “public float” (shares owned by non-affiliate stockholders and available for trading).
In the aggregate, based on filings made with the SEC through February 14, 2024, William H. Gates III and ESL beneficially own approximately 34.3% of our outstanding shares. Future share repurchases by the Company, together with any future share purchases by our affiliates, will reduce our “public float” (shares owned by non-affiliate stockholders and available for trading).
In addition, as the assignee of consumer loans originated by third-party independent dealers, our captive finance company could be named as a co-defendant in litigation initiated by consumers primarily against a specific dealer.
In addition, as the assignee of consumer loans previously originated by third-party independent dealers prior to October 2023, our captive finance company could be named as a co-defendant in litigation initiated by consumers primarily against a specific dealer.
In addition, natural disasters and adverse weather events, including the effects of climate change, may adversely impact new vehicle production and the global automotive supply chain, which in turn could materially adversely impact our business, results of operations, financial conditions, and cash flows. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, natural disasters and adverse weather events, including the effects of climate change, may adversely impact new vehicle production and the global automotive supply chain, which in turn could materially adversely impact our business, results of operations, financial conditions, and cash flows.
Additionally, we collect, process, and retain sensitive and confidential customer information in the normal course of our business.
Additionally, we collect, process, and retain sensitive and confidential customer information in the normal course of our 20 Table of Contents business.
We are involved, and will continue to be involved, in numerous legal proceedings arising out of the conduct of our business, including litigation with customers, dealers (as a result of our acquisition of CIG Financial), wage and hour and other employment-related lawsuits, and actions brought by governmental authorities.
We are involved, and will continue to be involved, in numerous legal proceedings arising out of the conduct of our business, including litigation with customers, wage and hour and other employment-related lawsuits, and actions brought by governmental authorities.
First, we rely exclusively on the various vehicle manufacturers for our new vehicle inventory. Our ability to sell new vehicles is dependent on a vehicle manufacturer’s ability to design, manufacture, and allocate to our stores an attractive, high-quality, and desirable product mix at the right time and at the right price in order to satisfy customer demand.
Our ability to sell new vehicles is dependent on a vehicle manufacturer’s ability to design, manufacture, and allocate to our stores an attractive, high-quality, and desirable product mix at the right time and at the right price in order to satisfy customer demand.
Based on filings made with the SEC through February 15, 2023, ESL Investments, Inc. together with certain of its investment affiliates (collectively, “ESL”) beneficially owns approximately 12% of the outstanding shares of our common stock.
Based on filings made with the SEC through February 14, 2024, ESL Investments, Inc. together with certain of its investment affiliates (collectively, “ESL”) beneficially owns approximately 10.6% of the outstanding shares of our common stock.
Our business is dependent upon the efficient operation of our information systems. We rely on our information systems to manage, among other things, our sales, inventory, and service efforts, including through our digital channels, and customer information, as well as to prepare our consolidated financial and operating data.
We rely on our information systems to manage, among other things, our sales, inventory, and service efforts, including through our digital channels, and customer information, as well as to prepare our consolidated financial and operating data.
Regulation from the CFPB, other federal agencies, or state agencies could lead to significant changes in the manner that dealers are compensated for arranging customer financing, and while it is difficult to predict how any such changes might impact us, any adverse changes could have a material adverse impact on our finance and insurance business and results of operations. 21 Table of Contents Risks Related to Cybersecurity A failure of our information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on our business.
Regulation from the CFPB, other federal agencies, or state agencies could lead to significant changes in the manner that dealers are compensated for arranging customer financing, and while it is difficult to predict how any such changes might impact us, any adverse changes could have a material adverse impact on our finance and insurance business and results of operations.
If those manufacturers continue to use such incentive programs or if other manufacturers adopt similar incentive programs, our operating results could be adversely impacted. We are dependent upon the success and continued financial viability of the vehicle manufacturers and distributors with which we hold franchises. The success of our stores is dependent on vehicle manufacturers in several key respects.
If those manufacturers continue to use such incentive programs or if other manufacturers adopt similar incentive programs, our operating results could be adversely impacted. We are dependent upon the success and continued financial viability of the vehicle manufacturers and distributors with which we hold franchises. In addition, we rely on various third-party suppliers for key products and services.
We are subject to various risks associated with originating and servicing auto finance loans through indirect lending to customers, any of which could have an adverse effect on our business. Following our acquisition of CIG Financial in October 2022, we started to originate and service consumer auto finance loans.
We are subject to various risks associated with originating and servicing auto finance loans through indirect lending to customers, any of which could have an adverse effect on our business . We originate and service consumer auto finance loans through AutoNation Finance, our captive auto finance company.
As of December 31, 2022, we had $3.6 billion of total non-vehicle long-term debt, $2.1 billion of vehicle floorplan financing, and $181.8 million of non-recourse debt under our warehouse facilities. Our substantial indebtedness could have important consequences.
As of December 31, 2023, we had $4.0 billion of total non-vehicle long-term debt, $3.4 billion of vehicle floorplan financing, and $209.4 million of non-recourse debt under our warehouse facilities. Our substantial indebtedness could have important consequences.
Additionally, any such bankruptcy may result in us being required to incur impairment charges with respect to the inventory, fixed assets, and intangible assets related to certain franchises, which could adversely impact our results of operations and financial condition.
Additionally, any such bankruptcy may result in us being required to incur impairment charges with respect to the inventory, fixed assets, right-of-use assets, and intangible assets related to certain franchises, which could adversely impact our results of operations and financial condition. Further, we rely on various third-party suppliers for key products and services.
Economic conditions and the other factors described above may also materially adversely impact our sales of parts and 16 Table of Contents automotive repair and maintenance services and automotive finance and insurance products and our ability to approve/provide financing to customers. The COVID-19 pandemic disrupted, and may continue to disrupt, our business, results of operations, and financial condition going forward.
Economic conditions and the other factors described above may also materially adversely impact our sales of parts and 15 Table of Contents automotive repair and maintenance services and automotive finance and insurance products and our ability to approve/provide financing to customers.
We are also investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA used vehicle stores, our recently acquired auto finance company, and our recently acquired mobile solution for automotive repair and maintenance.
We are also investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA used vehicle stores, our AutoNation Finance business, and our AutoNation Mobile Service business.
We believe that we have built an excellent reputation as an automotive retailer in the United States. All of our Domestic and Import stores are unified under the AutoNation retail brand.
We have made significant investments to build an excellent reputation as an automotive retailer in the United States in a highly competitive industry. All of our Domestic and Import stores are unified under the AutoNation retail brand.
The effects of climate change may serve as a risk multiplier increasing the frequency, severity, and duration of natural disasters and adverse weather events that may affect our business operations.
The effects of climate change may serve as a risk multiplier increasing the frequency, severity, and duration of natural disasters and adverse weather events that may affect our business operations. In addition to business interruption, the automotive retail business is subject to substantial risk of property loss due to the significant concentration of property values at store locations.
In addition to business interruption, the automotive retail business is subject to substantial risk of property loss due to the significant concentration of property values at store locations. 24 Table of Contents We cannot assure you that we will not be exposed to uninsured or underinsured losses that could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
We cannot assure you that we will not be exposed to uninsured or underinsured losses that could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Consumers are increasingly shopping for new and used vehicles, automotive repair and maintenance services, and other automotive products and services online and through mobile applications, including through third-party online and mobile 19 Table of Contents sales platforms, with which we compete, that are designed to generate consumer sales leads that are sold to automotive dealers.
Consumers are increasingly shopping for new and used vehicles, automotive repair and maintenance services, and other automotive products and services online and through mobile applications, including through third-party online and mobile sales platforms, with which we compete. We have invested and will continue to invest substantial resources on offering our vehicles and services through digital channels.
Our business, results of operations, and financial condition could be materially adversely affected as a result of any event that has a material adverse effect on the vehicle manufacturers or distributors that are our primary franchisors. 17 Table of Contents The core brands of vehicles that we sell, representing approximately 89% of the new vehicles that we sold in 2022, are manufactured by Toyota (including Lexus), Honda, BMW, Ford, Mercedes-Benz, General Motors, Stellantis, and Volkswagen (including Audi and Porsche).
Our business, results of operations, and financial condition could be materially adversely affected as a result of any event that has a material adverse effect on the vehicle manufacturers or distributors that are our primary franchisors.
We face increased competition for market share from other automotive retailers and sales platforms that have also invested substantial resources on offering their vehicles and services through digital channels. If we fail to preserve the value of our retail brands, maintain our reputation, or attract consumers to our own digital channels, our business could be adversely impacted.
If we fail to preserve the value of our retail brands, maintain our reputation, or attract consumers to our own digital channels, our business could be adversely impacted.
Future epidemics, pandemics, and other outbreaks could disrupt and have a similar adverse impact on our business, results of operations, and financial condition. Risks Related to Vehicle Manufacturers Our new vehicle sales are impacted by the incentive, marketing, and other programs of vehicle manufacturers.
Risks Related to Vehicle Manufacturers and Other Third-Party Suppliers Our new vehicle sales are impacted by the incentive, marketing, and other programs of vehicle manufacturers.
Resolution of the microchip shortage should lead to an increase in the supply of new vehicles, which may adversely affect levels of profitability on both new and used vehicles. Our business could be materially adversely impacted by the bankruptcy of a major vehicle manufacturer or related lender.
In addition, vehicle recall campaigns could materially adversely affect our business, results of operations, and financial condition. 16 Table of Contents Our business could be materially adversely impacted by the bankruptcy of a major vehicle manufacturer or related lender.
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Future epidemics, pandemics, and other outbreaks could also disrupt our business, results of operations, and financial condition. The COVID-19 pandemic led to disruptions in each of our markets and the global economy. Throughout the COVID-19 pandemic, federal, state, and local governments implemented a number of countermeasures to mitigate the impact of the pandemic.
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The success of our stores is dependent on vehicle manufacturers in several key respects. First, we rely exclusively on the various vehicle manufacturers for our new vehicle inventory.
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As a result, we experienced significant declines in new and used vehicle unit sales and sales of our finance and insurance products, particularly during the first and second quarters of 2020.
Added
The core brands of vehicles that we sell, representing approximately 88% of the new vehicles that we sold in 2023, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche).
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In addition, our parts and service business operated below full capacity during 2020 as a result of the countermeasures discussed above and a decrease in the average miles being driven in our markets during the pandemic. Since the onset of the pandemic, we have experienced a shortage of available new vehicles for sale.
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If those suppliers fail to deliver products or services on a timely basis and at reasonable prices for any reason, we could face difficulties operating our business and our results of operations and financial condition could be adversely impacted.
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The reduced levels of new vehicle availability is currently expected to continue into 2023; however, there is still significant uncertainty as to when new vehicle availability will improve.
Added
In January 2024, the FTC published the Combatting Auto Retail Scams Final Rule (“CARS Rule”), which prohibits certain automotive sales and marketing practices and establishes significant new dealer disclosure and record-keeping requirements broadly applicable throughout the car-buying process.
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We may continue to experience significant adverse effects to our business as a result of the economic impact of the COVID-19 pandemic, including any economic recession or downturn and the impact of such a recession or downturn on unemployment levels, consumer confidence, levels of personal discretionary spending, rate of inflation, and credit availability.
Added
The FTC has since stayed the CARS Rule’s original July 30, 2024 effective date, pending resolution of a judicial challenge to the Rule. The ultimate probability of success, and the timing of the resolution of, the judicial challenge or other potential challenges to the CARS Rule’s implementation is uncertain.
Removed
In addition, vehicle recall campaigns could materially adversely affect our business, results of operations, and financial condition. Vehicle manufacturers worldwide have recently faced production disruptions caused by a shortage of automotive microchips. The shortage is reported to be due to the overall high demand for microchips in the global economy.
Added
To the extent that the CARS Rule ultimately becomes effective, it would introduce new administrative burdens that would likely increase our costs and could potentially expose us to significant damages, other penalties, and/or adverse publicity.
Removed
Prolonged shortages of new vehicle inventory could result in lower new vehicle sales volumes and a decrease in the total amount of gross profit we derive from new vehicle sales, which could adversely affect our business. Additionally, the shortage of new vehicles has increased market demand for used vehicles, increasing our costs of acquiring used vehicle inventory.
Added
Risks Related to Cybersecurity A failure of our information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on our business. Our business is dependent upon the efficient operation of our information systems.
Removed
During 2020, we recorded non-cash goodwill impairment charges of $318.3 million and non-cash franchise rights impairment charges of $57.5 million.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−1 removed1 unchanged
Biggest changeThese facilities are located in the following 19 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, Missouri, Nevada, New York, North Carolina, Ohio, South Carolina, Tennessee, Texas, Virginia, and Washington. These facilities consist primarily of automobile showrooms, display lots, service facilities, collision repair centers, parts distribution centers, supply facilities, automobile storage lots, parking lots, and offices.
Biggest changeThese facilities are located in the following 21 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, South Carolina, Tennessee, Texas, Virginia, and Washington.
Removed
We believe that our facilities are sufficient for our current needs and are in good condition in all material respects. ITEM 3. LEGAL PROCEEDINGS See Note 21 of the Notes to Consolidated Financial Statements for information about our legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 Table of Contents PART II
Added
These facilities consist primarily of automobile showrooms, display lots, service facilities, collision repair centers, parts distribution centers, supply facilities, automobile storage lots, parking lots, and offices. We believe that our facilities are sufficient for our current needs and are in good condition in all material respects.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8. Financial Statements 57
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 58 Item 8. Financial Statements and Supplementary Data 59

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−1 removed2 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1, 2022 – October 31, 2022 2,788,808 $ 102.57 2,788,808 $ 1,395.5 November 1, 2022 – November 30, 2022 1,096,350 $ 116.20 1,096,350 $ 1,268.1 December 1, 2022 – December 31, 2022 750,000 $ 111.60 750,000 $ 1,184.4 Total for three months ended December 31, 2022 4,635,158 4,635,158 Total for twelve months ended December 31, 2022 15,567,425 15,567,425 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1, 2023 – October 31, 2023 528,161 $ 128.70 528,161 $ 404.0 November 1, 2023 – November 30, 2023 356,492 $ 133.36 356,492 $ 356.4 December 1, 2023 – December 31, 2023 265,024 $ 134.64 265,024 $ 320.8 Total for three months ended December 31, 2023 1,149,677 1,149,677 Total for twelve months ended December 31, 2023 6,412,129 6,412,129 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
We do not currently anticipate paying cash dividends for the foreseeable future. Issuer Purchases of Equity Securities The table below sets forth information with respect to shares of common stock repurchased by AutoNation, Inc. during the three and twelve months ended December 31, 2022.
We do not currently anticipate paying cash dividends for the foreseeable future. Issuer Purchases of Equity Securities The table below sets forth information with respect to shares of common stock repurchased by AutoNation, Inc. during the three and twelve months ended December 31, 2023.
Our stock repurchase program does not have an expiration date. 26 Table of Contents Stock Performance Graph The following graph and table compare the cumulative total stockholder return on our common stock from December 31, 2017 through December 31, 2022 with the performance of: (i) the Standard & Poor’s (“S&P”) 500 Index and (ii) a self-constructed peer group consisting of other public companies in the automotive retail market, referred to as the “Public Auto Retail Peer Group.” The Public Auto Retail Peer Group consists of Asbury Automotive Group, Inc., CarMax, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc., and Sonic Automotive, Inc., and these companies are weighted by market capitalization.
Our stock repurchase program does not have an expiration date. 26 Table of Contents Stock Performance Graph The following graph and table compare the cumulative total stockholder return on our common stock from December 31, 2018 through December 31, 2023 with the performance of: (i) the Standard & Poor’s (“S&P”) 500 Index and (ii) a self-constructed peer group consisting of other public companies in the automotive retail market, referred to as the “Public Auto Retail Peer Group.” The Public Auto Retail Peer Group consists of Asbury Automotive Group, Inc., CarMax, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc., and Sonic Automotive, Inc., and these companies are weighted by market capitalization.
The graph and table assume that $100 was invested on December 31, 2017 in each of our common stock, the S&P 500 Index, and the Public Auto Retail Peer Group and that any dividends were reinvested.
The graph and table assume that $100 was invested on December 31, 2018 in each of our common stock, the S&P 500 Index, and the Public Auto Retail Peer Group and that any dividends were reinvested.
Comparison of Five-Year Cumulative Return for AutoNation, Inc., the S&P 500 Index, and the Public Auto Retail Peer Group Copyright© 2023 Standard & Poor's, a division of S&P Global.
Comparison of Five-Year Cumulative Return for AutoNation, Inc., the S&P 500 Index, and the Public Auto Retail Peer Group Copyright© 2024 Standard & Poor's, a division of S&P Global.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information, Holders, and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “AN.” As of February 15, 2023, there were 1,108 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information, Holders, and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “AN.” As of February 14, 2024, there were 1,058 holders of record of our common stock.
In 2022, all of our shares were repurchased under our stock repurchase program. As of February 15, 2023, $1.1 billion remained available under our stock repurchase limit.
In 2023, all of the shares that we repurchased were repurchased under our stock repurchase program. As of February 14, 2024, $320.8 million remained available under our stock repurchase limit.
Removed
All rights reserved. 12/2017 12/2018 12/2019 12/2020 12/2021 12/2022 AutoNation Inc. 100.00 69.55 94.74 135.96 227.64 209.04 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 Public Auto Retail Peer Group 100.00 90.04 135.45 170.20 229.91 166.50 27 Table of Contents
Added
All rights reserved. 12/2018 12/2019 12/2020 12/2021 12/2022 12/2023 AutoNation Inc. 100.00 136.22 195.49 327.31 300.56 420.67 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 Public Auto Retail Peer Group 100.00 150.43 189.02 255.33 184.91 258.16 27 Table of Contents

Item 7. Management's Discussion & Analysis

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

109 edited+33 added−34 removed45 unchanged
Biggest changeThe effect of a hypothetical 10% decrease in fair value estimates is not intended to provide a sensitivity analysis of every potential outcome. 31 Table of Contents Reported Operating Data Years Ended December 31, ($ in millions, except per vehicle data) 2022 vs. 2021 2021 vs. 2020 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 11,754.4 $ 12,081.7 $ (327.3) (2.7) $ 10,418.6 $ 1,663.1 16.0 Retail used vehicle 9,020.9 8,062.4 958.5 11.9 5,260.5 2,801.9 53.3 Wholesale 640.9 576.4 64.5 11.2 340.8 235.6 69.1 Used vehicle 9,661.8 8,638.8 1,023.0 11.8 5,601.3 3,037.5 54.2 Finance and insurance, net 1,437.3 1,384.5 52.8 3.8 1,059.3 325.2 30.7 Total variable operations (1) 22,853.5 22,105.0 748.5 3.4 17,079.2 5,025.8 29.4 Parts and service 4,100.6 3,706.6 394.0 10.6 3,257.4 449.2 13.8 Other 30.9 32.4 (1.5) 53.4 (21.0) Total revenue $ 26,985.0 $ 25,844.0 $ 1,141.0 4.4 $ 20,390.0 $ 5,454.0 26.7 Gross profit: New vehicle $ 1,366.6 $ 1,201.6 $ 165.0 13.7 $ 584.1 $ 617.5 105.7 Retail used vehicle 538.3 622.3 (84.0) (13.5) 414.5 207.8 50.1 Wholesale 14.8 65.8 (51.0) 44.5 21.3 Used vehicle 553.1 688.1 (135.0) (19.6) 459.0 229.1 49.9 Finance and insurance 1,437.3 1,384.5 52.8 3.8 1,059.3 325.2 30.7 Total variable operations (1) 3,357.0 3,274.2 82.8 2.5 2,102.4 1,171.8 55.7 Parts and service 1,900.3 1,672.7 227.6 13.6 1,460.8 211.9 14.5 Other 8.0 5.7 2.3 3.2 2.5 Total gross profit 5,265.3 4,952.6 312.7 6.3 3,566.4 1,386.2 38.9 Selling, general, and administrative expenses 3,026.1 2,876.2 (149.9) (5.2) 2,422.0 (454.2) (18.8) Depreciation and amortization 200.3 193.3 (7.0) 198.9 5.6 Goodwill impairment — — — 318.3 318.3 Franchise rights impairment — — — 57.5 57.5 Other (income) expense, net 14.4 (19.7) (34.1) 6.5 26.2 Operating income 2,024.5 1,902.8 121.7 6.4 563.2 1,339.6 237.9 Non-operating income (expense) items: Floorplan interest expense (41.4) (25.7) (15.7) (63.8) 38.1 Other interest expense (134.9) (93.0) (41.9) (93.7) 0.7 Other income (loss), net (14.7) 24.3 (39.0) 144.4 (120.1) Income from continuing operations before income taxes $ 1,833.5 $ 1,808.4 $ 25.1 1.4 $ 550.1 $ 1,258.3 228.7 Retail vehicle unit sales: New vehicle 229,971 262,403 (32,432) (12.4) 249,654 12,749 5.1 Used vehicle 299,806 304,364 (4,558) (1.5) 241,182 63,182 26.2 529,777 566,767 (36,990) (6.5) 490,836 75,931 15.5 Revenue per vehicle retailed: New vehicle $ 51,113 $ 46,043 $ 5,070 11.0 $ 41,732 $ 4,311 10.3 Used vehicle $ 30,089 $ 26,489 $ 3,600 13.6 $ 21,811 $ 4,678 21.4 Gross profit per vehicle retailed: New vehicle $ 5,942 $ 4,579 $ 1,363 29.8 $ 2,340 $ 2,239 95.7 Used vehicle $ 1,795 $ 2,045 $ (250) (12.2) $ 1,719 $ 326 19.0 Finance and insurance $ 2,713 $ 2,443 $ 270 11.1 $ 2,158 $ 285 13.2 Total variable operations (2) $ 6,309 $ 5,661 $ 648 11.4 $ 4,193 $ 1,468 35.0 (1) Total variable operations includes new vehicle, used vehicle (retail and wholesale), and finance and insurance results.
Biggest changeThe effect of a hypothetical 10% decrease in fair value estimates is not intended to provide a sensitivity analysis of every potential outcome. 31 Table of Contents Reported Operating Data Years Ended December 31, ($ in millions, except per vehicle data) 2023 vs. 2022 2022 vs. 2021 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 12,767.4 $ 11,754.4 $ 1,013.0 8.6 $ 12,081.7 $ (327.3) (2.7) Retail used vehicle 7,639.5 9,020.9 (1,381.4) (15.3) 8,062.4 958.5 11.9 Wholesale 559.0 640.9 (81.9) (12.8) 576.4 64.5 11.2 Used vehicle 8,198.5 9,661.8 (1,463.3) (15.1) 8,638.8 1,023.0 11.8 Finance and insurance, net 1,418.8 1,437.3 (18.5) (1.3) 1,384.5 52.8 3.8 Total variable operations (1) 22,384.7 22,853.5 (468.8) (2.1) 22,105.0 748.5 3.4 Parts and service 4,533.7 4,100.6 433.1 10.6 3,706.6 394.0 10.6 Other 30.5 30.9 (0.4) 32.4 (1.5) Total revenue $ 26,948.9 $ 26,985.0 $ (36.1) (0.1) $ 25,844.0 $ 1,141.0 4.4 Gross profit: New vehicle $ 1,061.8 $ 1,366.6 $ (304.8) (22.3) $ 1,201.6 $ 165.0 13.7 Retail used vehicle 493.1 538.3 (45.2) (8.4) 622.3 (84.0) (13.5) Wholesale 14.9 14.8 0.1 65.8 (51.0) Used vehicle 508.0 553.1 (45.1) (8.2) 688.1 (135.0) (19.6) Finance and insurance 1,418.8 1,437.3 (18.5) (1.3) 1,384.5 52.8 3.8 Total variable operations (1) 2,988.6 3,357.0 (368.4) (11.0) 3,274.2 82.8 2.5 Parts and service 2,139.3 1,900.3 239.0 12.6 1,672.7 227.6 13.6 Other 3.6 8.0 (4.4) 5.7 2.3 Total gross profit 5,131.5 5,265.3 (133.8) (2.5) 4,952.6 312.7 6.3 Selling, general, and administrative expenses 3,253.2 3,026.1 (227.1) (7.5) 2,876.2 (149.9) (5.2) Depreciation and amortization 220.5 200.3 (20.2) 193.3 (7.0) Other (income) expense, net 5.9 14.4 8.5 (19.7) (34.1) Operating income 1,651.9 2,024.5 (372.6) (18.4) 1,902.8 121.7 6.4 Non-operating income (expense) items: Floorplan interest expense (144.7) (41.4) (103.3) (25.7) (15.7) Other interest expense (181.4) (134.9) (46.5) (93.0) (41.9) Other income (loss), net 24.4 (14.7) 39.1 24.3 (39.0) Income from continuing operations before income taxes $ 1,350.2 $ 1,833.5 $ (483.3) (26.4) $ 1,808.4 $ 25.1 1.4 Retail vehicle unit sales: New vehicle 244,546 229,971 14,575 6.3 262,403 (32,432) (12.4) Used vehicle 274,019 299,806 (25,787) (8.6) 304,364 (4,558) (1.5) 518,565 529,777 (11,212) (2.1) 566,767 (36,990) (6.5) Revenue per vehicle retailed: New vehicle $ 52,209 $ 51,113 $ 1,096 2.1 $ 46,043 $ 5,070 11.0 Used vehicle $ 27,879 $ 30,089 $ (2,210) (7.3) $ 26,489 $ 3,600 13.6 Gross profit per vehicle retailed: New vehicle $ 4,342 $ 5,942 $ (1,600) (26.9) $ 4,579 $ 1,363 29.8 Used vehicle $ 1,800 $ 1,795 $ 5 0.3 $ 2,045 $ (250) (12.2) Finance and insurance $ 2,736 $ 2,713 $ 23 0.8 $ 2,443 $ 270 11.1 Total variable operations (2) $ 5,734 $ 6,309 $ (575) (9.1) $ 5,661 $ 648 11.4 (1) Total variable operations includes new vehicle, used vehicle (retail and wholesale), and finance and insurance results.
During the period that we hold our minority equity investments, unrealized gains and losses will be recorded as the fair market values of securities with readily determinable fair values change over time, or as observable price changes are identified for securities without readily determinable fair values. See Note 20 of the Notes to Consolidated Financial Statements for more information.
During the period that we hold our minority equity investments, unrealized gains and losses will be recorded as the fair market values of securities with readily determinable fair values change over time, or as observable price changes are identified for securities without readily determinable fair values. See Note 19 of the Notes to Consolidated Financial Statements for more information.
See Notes 5 and 10 of the Notes to Consolidated Financial Statements for more information on auto loans receivable, the related allowance for credit losses, and the related debt of our captive finance company. 45 Table of Contents Selling, General, and Administrative Expenses Our SG&A expenses consist primarily of compensation, including store and corporate salaries, commissions, and incentive-based compensation, as well as advertising (net of reimbursement-based manufacturer advertising rebates), and store and corporate overhead expenses, which include occupancy costs, outside service costs, information technology expenses, service loaner and rental inventory expenses, legal, accounting, and professional services, and general corporate expenses.
See Notes 5 and 10 of the Notes to Consolidated Financial Statements for more information on auto loans receivable, the related allowance for credit losses, and the related debt of our auto finance company. 47 Table of Contents Selling, General, and Administrative Expenses Our SG&A expenses consist primarily of compensation, including store and corporate salaries, commissions, and incentive-based compensation, as well as advertising (net of reimbursement-based manufacturer advertising rebates), and store and corporate overhead expenses, which include occupancy costs, outside service costs, information technology expenses, service loaner and rental inventory expenses, legal, accounting, and professional services, and general corporate expenses.
In the case of payments due upon the maturity of our debt instruments, we currently expect to be able to refinance such instruments in the normal course of business. 53 Table of Contents The table above excludes the non-recourse debt that relates to auto loans receivable funded through asset-backed term securitizations and/or warehouse facilities.
In the case of payments due upon the maturity of our debt instruments, we currently expect to be able to refinance such instruments in the normal course of business. 55 Table of Contents The table above excludes the non-recourse debt that relates to auto loans receivable funded through asset-backed term securitizations and/or warehouse facilities.
Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment for our annual impairment testing as of April 30, 2022 and 2021, and we determined that it was not more likely than not that the fair values of our reporting units were less than their carrying amounts.
Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment for our annual impairment testing as of April 30, 2023 and 2022, and we determined that it was not more likely than not that the fair values of our reporting units were less than their carrying amounts.
This section of this Form 10-K includes discussion of year-to-year comparisons between 2022 and 2021. Discussion of year-to-year comparisons between 2021 and 2020 can be found in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
This section of this Form 10-K includes discussion of year-to-year comparisons between 2023 and 2022. Discussion of year-to-year comparisons between 2022 and 2021 can be found in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Information about AutoNation, its business, and its results of operations may also be announced by posts on AutoNation’s Twitter feed ( www.twitter.com/autonation ). The information that we post on our website and social media channels could be deemed to be material information.
Information about AutoNation, its business, and its results of operations may also be announced by posts on AutoNation’s X feed ( www.x.com/autonation ). The information that we post on our website and social media channels could be deemed to be material information.
Therefore, the amounts presented in the year 2021 column that is being compared to the year 2022 column may differ from the amounts presented in the year 2021 column that is being compared to the year 2020 column. We believe the presentation of this information provides a meaningful comparison of period-over-period results of our operations.
Therefore, the amounts presented in the year 2022 column that is being compared to the year 2023 column may differ from the amounts presented in the year 2022 column that is being compared to the year 2021 column. We believe the presentation of this information provides a meaningful comparison of period-over-period results of our operations.
SG&A expenses increased largely due to newly acquired and opened stores and expenditures associated with investments in technology and strategic initiatives. Other interest expense increased due to higher average debt balances. Floorplan interest expense increased due to higher average interest rates.
SG&A expenses increased largely due to acquisitions and newly opened stores and expenditures associated with investments in technology and strategic initiatives. Floorplan interest expense increased due to higher average interest rates and higher average floorplan balances. Other interest expense increased due to higher average interest rates and higher average debt balances.
Our parts, accessories, and other inventory balance was net of cumulative write-downs of $7.4 million at December 31, 2022, and $5.8 million at December 31, 2021. Critical Accounting Estimates We prepare our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S.
Our parts, accessories, and other inventory balance was net of cumulative write-downs of $7.8 million at December 31, 2023, and $7.4 million at December 31, 2022. Critical Accounting Estimates We prepare our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S.
Off-Balance Sheet Arrangements As of December 31, 2022, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
We base our cash flow forecasts on our knowledge of the automotive industry, our recent performance, our expectations of our future performance, and other assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. 30 Table of Contents Actual future results may differ from those estimates.
We base our cash flow forecasts on our knowledge of the automotive industry, our recent performance, our expectations of our future performance, and other assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
AutoNation USA Stores During 2022, we opened four AutoNation USA used vehicle stores and currently have over 20 stores under development. These stores play an integral part of both our long-term growth plans and the achievement of scale, scope, and density in markets to better serve and meet the needs of customers.
AutoNation USA Stores During 2023, we opened six AutoNation USA used vehicle stores and currently have over 20 stores under development. These stores play an integral part of both our long-term growth plans and the achievement of scale, scope, and density in markets to better serve and meet the needs of customers.
Certain statements and information set forth in this Annual Report on Form 10-K, including, without limitation, statements regarding our strategic acquisitions, initiatives, partnerships, or investments, including the planned expansion of our AutoNation USA used vehicle stores and our investments in digital and online capabilities and mobility solutions; our expectations for the future performance of our business and the automotive retail industry; as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf that describe our objectives, goals, or plans constitute “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.
Certain statements and information set forth in this Annual Report on Form 10-K, including, without limitation, statements regarding our strategic acquisitions, initiatives, partnerships, or investments, including AutoNation USA, AutoNation Finance, and AutoNation Mobile Service; statements regarding our investments in digital and online capabilities and mobility solutions; statements regarding our expectations for the future performance of our business and the automotive retail industry; as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf that describe our objectives, goals, or plans constitute “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.
In addition, we use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under the commercial paper program. We had $50.0 million of commercial paper notes outstanding at December 31, 2022. See Note 10 of the Notes to Consolidated Financial Statements for additional information.
In addition, we use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under the commercial paper program. We had $440.0 million of commercial paper notes outstanding at December 31, 2023. See Note 10 of the Notes to Consolidated Financial Statements for additional information.
GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.
GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts 29 Table of Contents of revenue and expenses during the reporting period.
Our effective income tax rate was 24.9% in 2022 and 24.1% in 2021. Discontinued Operations Discontinued operations are related to stores that were sold or terminated prior to January 1, 2014.
Our effective income tax rate was 24.4% in 2023 and 24.9% in 2022. Discontinued Operations Discontinued operations are related to stores that were sold or terminated prior to January 1, 2014.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. 32 Table of Contents Years Ended December 31, 2022 (%) 2021 (%) 2020 (%) Revenue mix percentages: New vehicle 43.6 46.7 51.1 Used vehicle 35.8 33.4 27.5 Parts and service 15.2 14.3 16.0 Finance and insurance, net 5.3 5.4 5.2 Other 0.1 0.2 0.2 Total 100.0 100.0 100.0 Gross profit mix percentages: New vehicle 26.0 24.3 16.4 Used vehicle 10.5 13.9 12.9 Parts and service 36.1 33.8 41.0 Finance and insurance 27.3 28.0 29.7 Other 0.1 — — Total 100.0 100.0 100.0 Operating items as a percentage of revenue: Gross profit: New vehicle 11.6 9.9 5.6 Used vehicle-retail 6.0 7.7 7.9 Parts and service 46.3 45.1 44.8 Total 19.5 19.2 17.5 Selling, general, and administrative expenses 11.2 11.1 11.9 Operating income 7.5 7.4 2.8 Other operating items as a percentage of total gross profit: Selling, general, and administrative expenses 57.5 58.1 67.9 Operating income 38.4 38.4 15.8 December 31, 2022 2021 Days supply: New vehicle (industry standard of selling days) 19 days 9 days Used vehicle (trailing calendar month days) 31 days 40 days 33 Table of Contents Same Store Operating Data We have presented below our operating results on a same store basis to reflect our internal performance.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. 32 Table of Contents Years Ended December 31, 2023 (%) 2022 (%) 2021 (%) Revenue mix percentages: New vehicle 47.4 43.6 46.7 Used vehicle 30.4 35.8 33.4 Parts and service 16.8 15.2 14.3 Finance and insurance, net 5.3 5.3 5.4 Other 0.1 0.1 0.2 Total 100.0 100.0 100.0 Gross profit mix percentages: New vehicle 20.7 26.0 24.3 Used vehicle 9.9 10.5 13.9 Parts and service 41.7 36.1 33.8 Finance and insurance 27.6 27.3 28.0 Other 0.1 0.1 — Total 100.0 100.0 100.0 Operating items as a percentage of revenue: Gross profit: New vehicle 8.3 11.6 9.9 Used vehicle-retail 6.5 6.0 7.7 Parts and service 47.2 46.3 45.1 Total 19.0 19.5 19.2 Selling, general, and administrative expenses 12.1 11.2 11.1 Operating income 6.1 7.5 7.4 Other operating items as a percentage of total gross profit: Selling, general, and administrative expenses 63.4 57.5 58.1 Operating income 32.2 38.4 38.4 December 31, 2023 2022 Days supply: New vehicle (industry standard of selling days) 36 days 19 days Used vehicle (trailing calendar month days) 39 days 31 days 33 Table of Contents Same Store Operating Data We have presented below our operating results on a same store basis to reflect our internal performance.
The core brands of new vehicles that we sell, representing approximately 89% of the new vehicles that we sold in 2022, are manufactured by Toyota (including Lexus), Honda, BMW, Ford, Mercedes-Benz, General Motors, Stellantis, and Volkswagen (including Audi and Porsche).
The core brands of new vehicles that we sell, representing approximately 88% of the new vehicles that we sold in 2023, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche).
Non-recourse debt, net of unamortized debt discounts and issuance costs, totaled $323.6 million at December 31, 2022. See Note 5 and Note 10 to the Consolidated Financial Statements for more information. In the ordinary course of business, we are required to post performance and surety bonds, letters of credit, and/or cash deposits as financial guarantees of our performance.
Non-recourse debt, net of unamortized debt discounts and issuance costs, totaled $258.4 million at December 31, 2023. See Note 5 and Note 10 to the Consolidated Financial Statements for more information. In the ordinary course of business, we are required to post performance and surety bonds, letters of credit, and/or cash deposits as financial guarantees of our performance.
(2) Amounts for non-vehicle long-term debt obligations reflect principal payments and are not reduced for unamortized debt discounts of $5.5 million or debt issuance costs of $20.5 million. (3) Primarily represents scheduled fixed interest payments on our outstanding senior unsecured notes and finance leases.
(2) Amounts for non-vehicle long-term debt obligations reflect principal payments and are not reduced for unamortized debt discounts of $4.7 million or debt issuance costs of $17.2 million. (3) Primarily represents scheduled fixed interest payments on our outstanding senior unsecured notes and finance leases.
Gains and losses related to the COLI are substantially offset by corresponding increases and decreases, respectively, in the deferred compensation obligations, which are reflected in SG&A expenses. During 2022, we recorded an unrealized gain of $2.9 million related to changes in fair value of the underlying securities of certain of our minority equity investments.
Gains and losses related to the COLI are substantially offset by corresponding increases and decreases, respectively, in the deferred compensation obligations, which are reflected in SG&A expenses. During 2023 and 2022, we recorded a unrealized gain of $5.2 million and $2.9 million, respectively, related to the change in fair value of the underlying securities of our minority equity investments.
Other Income (Loss), Net During 2022 and 2021, we recognized a net loss of $19.4 million and a net gain of $12.7 million, respectively, related to changes in the cash surrender value of corporate-owned life insurance (“COLI”) for deferred compensation plan participants primarily as a result of changes in market performance of the underlying investments.
Other Income (Loss), Net During 2023 and 2022, we recognized a net gain of $16.4 million and a net loss of $19.4 million, respectively, related to changes in the cash surrender value of corporate-owned life insurance (“COLI”) for deferred compensation plan participants as a result of changes in market performance of the underlying investments.
AutoNation Finance operating results include the interest and fee income generated by auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated credit losses on the auto loans receivable originated or acquired, and direct expenses.
AutoNation Finance operating results include the interest and fee income generated by auto loans 46 Table of Contents receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated credit losses on the auto loans receivable originated or acquired, direct expenses, and gains or losses on the sale of loans receivable.
As of December 31, 2022, we owned and operated 343 new vehicle franchises from 247 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region. Our stores, which we believe include some of the most recognizable and well known in our key markets, sell 33 different new vehicle brands.
As of December 31, 2023, we owned and operated 349 new vehicle franchises from 252 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region. Our stores, which we believe include some of the most recognizable and well known in our key markets, sell 34 different new vehicle brands.
Other (Income) Expense, Net (Operating) Other (Income) Expense, Net includes the gains or losses associated with business/property divestitures, legal settlements, and asset impairments, among other items, and for 2022, the results of our recently acquired auto finance company, including net interest margin, the provision for expected credit losses, and direct expenses.
Other (Income) Expense, Net (Operating) Other (Income) Expense, Net includes the gains or losses associated with business/property divestitures, legal settlements, and asset impairments, among other items, and the results of our captive auto finance company, including net interest margin, the provision for expected credit losses, direct expenses, and gains or losses on the sale of loans receivable.
At December 31, 2022, surety bonds, letters of credit, and cash deposits totaled $109.6 million, of which $0.4 million were letters of credit. We do not currently provide cash collateral for outstanding letters of credit. We have negotiated a letter of credit sublimit as part of our revolving credit facility.
At December 31, 2023, surety bonds, letters of credit, and cash deposits totaled $142.2 million, of which $0.8 million were letters of credit. We do not currently provide cash collateral for outstanding letters of credit. We have negotiated a letter of credit sublimit as part of our revolving credit facility.
We are targeting to have over 130 stores throughout the country. A number of variables may impact the implementation of our expansion plans, including customer adoption, market conditions, availability of used vehicle inventory, availability and cost of building supplies and materials, and our ability to identify, acquire, and build out suitable locations in a timely manner.
A number of variables may impact the implementation of our expansion plans, including customer adoption, market conditions, availability of used vehicle inventory, availability and cost of building supplies and materials, and our ability to identify, acquire, and build out suitable locations in a timely manner.
Restrictions and Covenants Our credit agreement and the indentures for our senior unsecured notes contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness to create liens or other encumbrances, to sell (or otherwise dispose of) assets, and to merge or consolidate with other entities.
Restrictions and Covenants Our amended and restated credit agreement and the indentures for our senior unsecured notes contain customary covenants that place restrictions on us, including our ability to incur additional or guarantee other indebtedness, to create liens or other encumbrances, to engage in sale and leaseback transactions, to sell (or otherwise dispose of) assets, and to merge or consolidate with other entities.
Future epidemics, pandemics, and other outbreaks could also disrupt our business, results of operations, and financial condition. • Our new vehicle sales are impacted by the incentive, marketing, and other programs of vehicle manufacturers . 54 Table of Contents • We are dependent upon the success and continued financial viability of the vehicle manufacturers and distributors with which we hold franchises . • We are subject to restrictions imposed by, and significant influence from, vehicle manufacturers that may adversely impact our business, financial condition, results of operations, cash flows, and prospects, including our ability to acquire additional stores. • We are investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA stores, and if they are not successful, we will have incurred significant expenses without the benefit of improved financial results. • If we are not able to maintain and enhance our retail brands and reputation or to attract consumers to our own digital channels, or if events occur that damage our retail brands, reputation, or sales channels, our business and financial results may be harmed. • We are subject to various risks associated with originating and servicing auto finance loans through indirect lending to customers, any of which could have an adverse effect on our business. • New laws, regulations, or governmental policies in response to climate change, including fuel economy and greenhouse gas emission standards, or changes to existing standards, could adversely impact our business, results of operations, financial condition, cash flow, and prospects. • We are subject to numerous legal and administrative proceedings, which, if the outcomes are adverse to us, could materially adversely affect our business, results of operations, financial condition, cash flows, and prospects . • Our operations are subject to extensive governmental laws and regulations.
In addition, we rely on various third-party suppliers for key products and services. 56 Table of Contents • We are subject to restrictions imposed by, and significant influence from, vehicle manufacturers that may adversely impact our business, financial condition, results of operations, cash flows, and prospects, including our ability to acquire additional stores. • We are investing significantly in various strategic initiatives, including the planned expansion of our AutoNation USA stores, our AutoNation Finance business, and our AutoNation Mobile Service business, and if they are not successful, we will have incurred significant expenses without the benefit of improved financial results. • If we are not able to maintain and enhance our retail brands and reputation or to attract consumers to our own digital channels, or if events occur that damage our retail brands, reputation, or sales channels, our business and financial results may be harmed. • We are subject to various risks associated with originating and servicing auto finance loans through indirect lending to customers, any of which could have an adverse effect on our business. • New laws, regulations, or governmental policies in response to climate change, including fuel economy and greenhouse gas emission standards, or changes to existing standards, could adversely impact our business, results of operations, financial condition, cash flow, and prospects. • We are subject to numerous legal and administrative proceedings, which, if the outcomes are adverse to us, could materially adversely affect our business, results of operations, financial condition, cash flows, and prospects . • Our operations are subject to extensive governmental laws and regulations.
At December 31, 2022, surety bonds, letters of credit, and cash deposits totaled $109.6 million, including the $0.4 million of letters of credit issued under our revolving credit facility. We do not currently provide cash collateral for outstanding letters of credit.
At December 31, 2023, surety bonds, letters of credit, and cash deposits totaled $142.2 million, including the $0.8 million of letters of credit issued under our revolving credit facility. We do not currently provide cash collateral for outstanding letters of credit.
None of these properties are mortgaged or encumbered. We continue to expand our AutoNation USA used vehicle stores and are targeting to have over 130 stores.
None of these properties are mortgaged or encumbered. We continue to expand our AutoNation USA used vehicle stores.
Results of Operations We had net income of $1.4 billion and diluted earnings per share of $24.29 in 2022, as compared to net income of $1.4 billion and diluted earnings per share of $18.31 in 2021.
Results of Operations We had net income of $1.0 billion and diluted earnings per share of $22.74 in 2023, as compared to net income of $1.4 billion and diluted earnings per share of $24.29 in 2022.
A summary of shares repurchased under our share repurchase program authorized by our Board of Directors follows: (In millions, except per share data) 2022 2021 2020 Shares repurchased 15.6 22.3 7.2 Aggregate purchase price $ 1,710.2 $ 2,303.2 $ 382.3 Average purchase price per share $ 109.86 $ 103.18 $ 52.76 The decision to repurchase shares at any given point in time is based on such factors as the market price of our common stock versus our view of its intrinsic value, the potential impact on our capital structure (including compliance with our maximum leverage ratio and other financial covenants in our debt agreements as well as our available liquidity), and the expected return on competing uses of capital such as acquisitions or investments, capital investments in our current businesses, or repurchases of our debt. 48 Table of Contents As of February 15, 2023, and December 31, 2022, $1.1 billion and $1.2 billion, respectively, remained available under our stock repurchase limit most recently authorized by our Board of Directors.
A summary of shares repurchased under our share repurchase program authorized by our Board of Directors follows: (In millions, except per share data) 2023 2022 2021 Shares repurchased 6.4 15.6 22.3 Aggregate purchase price (1) $ 863.6 $ 1,710.2 $ 2,303.2 Average purchase price per share $ 134.68 $ 109.86 $ 103.18 (1) 2023 excludes excise tax accrual imposed under the Inflation Reduction Act of $8.1 million. 50 Table of Contents The decision to repurchase shares at any given point in time is based on such factors as the market price of our common stock versus our view of its intrinsic value, the potential impact on our capital structure (including compliance with our maximum leverage ratio and other financial covenants in our debt agreements as well as our available liquidity), and the expected return on competing uses of capital such as acquisitions or investments, capital investments in our current businesses, or repurchases of our debt.
The difference between reported amounts and same store amounts in the above tables of $134.6 million, $62.0 million, and $108.3 million in parts and service revenue and $68.3 million, $25.6 million, and $12.2 million in parts and service gross profit for 2022, 2021, and 2020, respectively, is related to acquisition and divestiture activity and the opening of AutoNation USA stores, as applicable in a given year. 2022 compared to 2021 During 2022, same store parts and service gross profit increased compared to the same period in 2021, primarily due to increases in gross profit associated with customer-pay service of $76.5 million and the preparation of vehicles for sale of $46.6 million.
The difference between reported amounts and same store amounts in the above tables of $101.9 million, $27.3 million, and $62.0 million in parts and service revenue and $41.4 million, $17.9 million, and $25.6 million in parts and service gross profit for 2023, 2022, and 2021, respectively, is related to acquisition and divestiture activity, as well as the opening of AutoNation USA stores, as applicable in a given year. 2023 compared to 2022 During 2023, same store parts and service revenue increased compared to the same period in 2022, primarily due to increases in revenue associated with customer-pay service of $157.6 million, the preparation of vehicles for sale of $84.3 million, and warranty service of $67.0 million.
We will make facility and infrastructure upgrades and improvements from time to time as we identify projects that are required to maintain our current business or that we expect to provide us with acceptable rates of return. 2022 compared to 2021 Net cash used in investing activities increased during 2022, as compared to 2021, primarily due to an increase in purchases of property and equipment, a decrease in proceeds from the sale of equity securities, an increase in net cash outflows related to auto loans receivable due to our recently acquired captive finance company, and a decrease in proceeds from the disposal of assets held for sale, partially offset by a decrease in cash used in acquisitions, net of cash acquired.
We will make facility and infrastructure upgrades and improvements from time to time as we identify projects that are required to maintain our current business or that we expect to provide us with acceptable rates of return. 53 Table of Contents 2023 compared to 2022 Net cash used in investing activities increased during 2023, as compared to 2022, primarily due to an increase in purchases of property and equipment, an increase in cash used in acquisitions, and a decrease in cash received from business divestitures, partially offset by an increase in proceeds from the sale of auto loans receivable and an increase in net cash inflows related to auto loans receivable acquired through third-party dealers.
Cash Flows The following table summarizes the changes in our cash provided by (used in) operating, investing, and financing activities: Years Ended December 31, (In millions) 2022 2021 2020 Net cash provided by operating activities $ 1,668.1 $ 1,627.7 $ 1,207.6 Net cash used in investing activities $ (479.3) $ (460.3) $ (73.7) Net cash used in financing activities $ (1,154.0) $ (1,676.5) $ (606.7) Cash Flows from Operating Activities Our primary sources of operating cash flows result from the sale of vehicles and finance and insurance products, collections from customers for the sale of parts and services, and proceeds from vehicle floorplan payable-trade.
Cash Flows The following table summarizes the changes in our cash provided by (used in) operating, investing, and financing activities: Years Ended December 31, (In millions) 2023 2022 2021 Net cash provided by operating activities $ 724.0 $ 1,668.1 $ 1,627.7 Net cash used in investing activities $ (569.9) $ (479.3) $ (460.3) Net cash used in financing activities $ (172.5) $ (1,154.0) $ (1,676.5) Cash Flows from Operating Activities Our primary sources of operating cash flows result from the sale of vehicles, finance and insurance products, and parts and automotive repair and maintenance services, proceeds from vehicle floorplan payable-trade, and collections on auto loans receivable for vehicles sold through our stores.
Estimates of future interest payments for vehicle floorplan payables and commercial paper are excluded due to the short-term nature of these facilities. (4) Amounts for operating lease commitments do not include certain operating expenses such as maintenance, insurance, and real estate taxes. In 2022, these charges totaled approximately $26 million.
Estimates of future interest payments for vehicle floorplan payables and commercial paper are excluded due to the short-term nature of these facilities. (4) Amounts for operating lease commitments do not include certain operating expenses such as maintenance, insurance, and real estate taxes. Additionally, operating leases that are on a month-to-month basis are not included.
As of December 31, 2022, we also owned and operated 55 AutoNation-branded collision centers, 13 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, and an auto finance company.
As of December 31, 2023, we also owned and operated 53 AutoNation-branded collision centers, 19 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, a mobile automotive repair and maintenance business, and an auto finance company.
Finance and insurance gross profit PVR also benefited from increases in amounts financed per transaction and gross profit per transaction associated with arranging customer financing. 40 Table of Contents Segment Results In the following table of financial data, revenue and segment income of our reportable segments are reconciled to consolidated revenue and consolidated operating income, respectively.
The increases in finance and insurance gross profit PVR were partially offset by a decrease in gross profit per transaction associated with arranging customer financing and a decrease in finance penetration. 41 Table of Contents Segment Results In the following table of financial data, revenue and segment income of our reportable segments are reconciled to consolidated revenue and consolidated operating income, respectively.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. 34 Table of Contents Years Ended December 31, Years Ended December 31, 2022 (%) 2021 (%) 2021 (%) 2020 (%) Revenue mix percentages: New vehicle 43.8 46.8 46.9 51.4 Used vehicle 35.5 33.5 33.4 27.6 Parts and service 15.2 14.2 14.2 15.6 Finance and insurance, net 5.3 5.4 5.4 5.2 Other 0.2 0.1 0.1 0.2 Total 100.0 100.0 100.0 100.0 Gross profit mix percentages: New vehicle 26.1 24.4 24.3 16.4 Used vehicle 10.5 13.9 13.9 12.9 Parts and service 36.0 33.5 33.5 40.8 Finance and insurance 27.3 28.1 28.1 29.8 Other 0.1 0.1 0.2 0.1 Total 100.0 100.0 100.0 100.0 Operating items as a percentage of revenue: Gross profit: New vehicle 11.6 10.0 9.9 5.6 Used vehicle-retail 6.0 7.7 7.7 7.9 Parts and service 46.2 45.2 45.2 46.0 Total 19.5 19.1 19.1 17.5 35 Table of Contents New Vehicle Years Ended December 31, ($ in millions, except per vehicle data) 2022 2021 2022 vs. 2021 2021 vs. 2020 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Reported: Revenue $ 11,754.4 $ 12,081.7 $ (327.3) (2.7) $ 10,418.6 $ 1,663.1 16.0 Gross profit $ 1,366.6 $ 1,201.6 $ 165.0 13.7 $ 584.1 $ 617.5 105.7 Retail vehicle unit sales 229,971 262,403 (32,432) (12.4) 249,654 12,749 5.1 Revenue per vehicle retailed $ 51,113 $ 46,043 $ 5,070 11.0 $ 41,732 $ 4,311 10.3 Gross profit per vehicle retailed $ 5,942 $ 4,579 $ 1,363 29.8 $ 2,340 $ 2,239 95.7 Gross profit as a percentage of revenue 11.6% 9.9% 5.6% Inventory days supply (industry standard of selling days) 19 days 9 days Years Ended December 31, 2022 2021 2022 vs. 2021 2021 2020 2021 vs. 2020 Variance Favorable / (Unfavorable) % Variance Variance Favorable / (Unfavorable) % Variance Same Store: Revenue $ 11,400.6 $ 12,034.9 $ (634.3) (5.3) $ 11,989.1 $ 10,400.6 $ 1,588.5 15.3 Gross profit $ 1,326.9 $ 1,198.0 $ 128.9 10.8 $ 1,190.3 $ 583.2 $ 607.1 104.1 Retail vehicle unit sales 223,479 261,556 (38,077) (14.6) 260,546 249,058 11,488 4.6 Revenue per vehicle retailed $ 51,014 $ 46,013 $ 5,001 10.9 $ 46,015 $ 41,760 $ 4,255 10.2 Gross profit per vehicle retailed $ 5,937 $ 4,580 $ 1,357 29.6 $ 4,568 $ 2,342 $ 2,226 95.0 Gross profit as a percentage of revenue 11.6% 10.0% 9.9% 5.6% The following discussion of new vehicle results is on a same store basis.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. 34 Table of Contents Years Ended December 31, Years Ended December 31, 2023 (%) 2022 (%) 2022 (%) 2021 (%) Revenue mix percentages: New vehicle 47.7 43.6 43.8 46.8 Used vehicle 30.1 35.8 35.5 33.5 Parts and service 16.8 15.2 15.2 14.2 Finance and insurance, net 5.3 5.3 5.3 5.4 Other 0.1 0.1 0.2 0.1 Total 100.0 100.0 100.0 100.0 Gross profit mix percentages: New vehicle 20.8 26.0 26.1 24.4 Used vehicle 9.8 10.5 10.5 13.9 Parts and service 41.7 36.0 36.0 33.5 Finance and insurance 27.6 27.3 27.3 28.1 Other 0.1 0.2 0.1 0.1 Total 100.0 100.0 100.0 100.0 Operating items as a percentage of revenue: Gross profit: New vehicle 8.3 11.6 11.6 10.0 Used vehicle-retail 6.5 6.0 6.0 7.7 Parts and service 47.3 46.2 46.2 45.2 Total 19.1 19.5 19.5 19.1 35 Table of Contents New Vehicle Years Ended December 31, ($ in millions, except per vehicle data) 2023 2022 2023 vs. 2022 2022 vs. 2021 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Reported: Revenue $ 12,767.4 $ 11,754.4 $ 1,013.0 8.6 $ 12,081.7 $ (327.3) (2.7) Gross profit $ 1,061.8 $ 1,366.6 $ (304.8) (22.3) $ 1,201.6 $ 165.0 13.7 Retail vehicle unit sales 244,546 229,971 14,575 6.3 262,403 (32,432) (12.4) Revenue per vehicle retailed $ 52,209 $ 51,113 $ 1,096 2.1 $ 46,043 $ 5,070 11.0 Gross profit per vehicle retailed $ 4,342 $ 5,942 $ (1,600) (26.9) $ 4,579 $ 1,363 29.8 Gross profit as a percentage of revenue 8.3% 11.6% 9.9% Inventory days supply (industry standard of selling days) 36 days 19 days Years Ended December 31, 2023 2022 2023 vs. 2022 2022 2021 2022 vs. 2021 Variance Favorable / (Unfavorable) % Variance Variance Favorable / (Unfavorable) % Variance Same Store: Revenue $ 12,572.1 $ 11,698.7 $ 873.4 7.5 $ 11,400.6 $ 12,034.9 $ (634.3) (5.3) Gross profit $ 1,048.4 $ 1,361.8 $ (313.4) (23.0) $ 1,326.9 $ 1,198.0 $ 128.9 10.8 Retail vehicle unit sales 240,327 229,098 11,229 4.9 223,479 261,556 (38,077) (14.6) Revenue per vehicle retailed $ 52,312 $ 51,064 $ 1,248 2.4 $ 51,014 $ 46,013 $ 5,001 10.9 Gross profit per vehicle retailed $ 4,362 $ 5,944 $ (1,582) (26.6) $ 5,937 $ 4,580 $ 1,357 29.6 Gross profit as a percentage of revenue 8.3% 11.6% 11.6% 10.0% The following discussion of new vehicle results is on a same store basis.
As of December 31, 2022, we have $236.3 million of goodwill related to the Domestic reporting unit, $518.7 million related to the Import reporting unit, $482.1 million related to the Premium Luxury reporting unit, $78.4 million related to the AutoNation Finance reporting unit, and $4.6 million related to the Collision Centers reporting unit.
As of December 31, 2023, we have $234.5 million of goodwill related to the Domestic reporting unit, $526.6 million related to the Import reporting unit, $482.1 million related to the Premium Luxury reporting unit, $139.6 million related to the Mobile Service reporting unit, $78.4 million related to the AutoNation Finance reporting unit, and $4.6 million related to the Collision Centers reporting unit.
The difference between reported amounts and same store amounts in the above tables of $353.8 million, $46.8 million, and $18.0 million in new vehicle revenue and $39.7 million, $3.6 million, and $0.9 million in new vehicle gross profit for 2022, 2021, and 2020, respectively, is related to acquisition and divestiture activity, as applicable in a given year. 2022 compared to 2021 Same store new vehicle revenue decreased during 2022, as compared to 2021, due to a decrease in same store unit volume, partially offset by an increase in same store revenue PVR.
The difference between reported amounts and same store amounts in the above tables of $195.3 million, $55.7 million, and $46.8 million in new vehicle revenue and $13.4 million, $4.8 million, and $3.6 million in new vehicle gross profit for 2023, 2022, and 2021, respectively, is related to acquisition and divestiture activity, as applicable in a given year. 2023 compared to 2022 Same store new vehicle revenue increased during 2023, as compared to 2022, due to increases in same store unit volume and same store revenue PVR.
Under the terms of our credit agreement, at December 31, 2022, our leverage ratio and capitalization ratio were as follows: December 31, 2022 Requirement Actual Leverage ratio ≤ 3.75x 1.62x Capitalization ratio ≤ 70.0% 59.9% Vehicle Floorplan Payable The components of vehicle floorplan payable are as follows: (In millions) 2022 2021 Vehicle floorplan payable - trade $ 946.6 $ 489.9 Vehicle floorplan payable - non-trade 1,162.7 967.7 Vehicle floorplan payable $ 2,109.3 $ 1,457.6 Vehicle floorplan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within several business days after the related vehicles are sold.
At December 31, 2023, our leverage and interest coverage ratios were as follows: December 31, 2023 Requirement Actual Leverage ratio ≤ 3.75x 2.19x Interest coverage ratio ≥ 3.00x 6.06x Vehicle Floorplan Payable The components of vehicle floorplan payable are as follows: (In millions) 2023 2022 Vehicle floorplan payable - trade $ 1,760.0 $ 946.6 Vehicle floorplan payable - non-trade 1,622.4 1,162.7 Vehicle floorplan payable $ 3,382.4 $ 2,109.3 Vehicle floorplan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within several business days after the related vehicles are sold.
Gross profit associated with the preparation of vehicles for sale also benefited from improved margin performance. 39 Table of Contents Finance and Insurance Years Ended December 31, ($ in millions, except per vehicle data) 2022 vs. 2021 2021 vs. 2020 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Reported: Revenue and gross profit $ 1,437.3 $ 1,384.5 $ 52.8 3.8 $ 1,059.3 $ 325.2 30.7 Gross profit per vehicle retailed $ 2,713 $ 2,443 $ 270 11.1 $ 2,158 $ 285 13.2 Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 2022 2021 Variance Favorable / (Unfavorable) % Variance 2021 2020 Variance Favorable / (Unfavorable) % Variance Same Store: Revenue and gross profit $ 1,388.3 $ 1,380.7 $ 7.6 0.6 $ 1,374.5 $ 1,057.4 $ 317.1 30.0 Gross profit per vehicle retailed $ 2,720 $ 2,445 $ 275 11.2 $ 2,449 $ 2,160 $ 289 13.4 Revenue on finance and insurance products represents commissions earned by us for the placement of: (i) loans and leases with financial institutions in connection with customer vehicle purchases financed, (ii) vehicle service contracts with third-party providers, and (iii) other vehicle protection products with third-party providers.
Revenue and gross profit associated with the preparation of vehicles for sale benefited from higher value repair orders and an increase in repair order volume. 40 Table of Contents Finance and Insurance Years Ended December 31, ($ in millions, except per vehicle data) 2023 vs. 2022 2022 vs. 2021 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Reported: Revenue and gross profit $ 1,418.8 $ 1,437.3 $ (18.5) (1.3) $ 1,384.5 $ 52.8 3.8 Gross profit per vehicle retailed $ 2,736 $ 2,713 $ 23 0.8 $ 2,443 $ 270 11.1 Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 2023 2022 Variance Favorable / (Unfavorable) % Variance 2022 2021 Variance Favorable / (Unfavorable) % Variance Same Store: Revenue and gross profit $ 1,385.5 $ 1,430.2 $ (44.7) (3.1) $ 1,388.3 $ 1,380.7 $ 7.6 0.6 Gross profit per vehicle retailed $ 2,749 $ 2,714 $ 35 1.3 $ 2,720 $ 2,445 $ 275 11.2 Revenue on finance and insurance products represents commissions earned by us for the placement of: (i) loans and leases with financial institutions in connection with customer vehicle purchases financed, (ii) vehicle service contracts with third-party providers, and (iii) other vehicle protection products with third-party providers.
The difference between reported amounts and same store amounts in the above tables of $383.0 million, $34.7 million, and $10.6 million in retail used vehicle revenue and $21.5 million, $2.3 million, and $0.8 million in retail used vehicle gross profit for 2022, 2021, and 2020, respectively, is related to acquisition and divestiture activity, as well as the opening of AutoNation USA stores, as applicable in a given year. 2022 compared to 2021 Same store retail used vehicle revenue increased during 2022, as compared to 2021, due to an increase in same store revenue PVR, partially offset by a decrease in same store unit volume of lower-priced entry-level vehicles.
The difference between reported amounts and same store amounts in the above tables of $253.9 million, $61.3 million, and $34.7 million in retail used vehicle revenue and $16.0 million, $2.2 million, and $2.3 million in retail used vehicle gross profit for 2023, 2022, and 2021, respectively, is related to acquisition and divestiture activity, as well as the opening of AutoNation USA stores, as applicable in a given year. 2023 compared to 2022 Same store retail used vehicle revenue decreased during 2023, as compared to 2022, due to a decrease in same store unit volume and a decrease in same store revenue PVR.
Cash flows from financing activities during 2022, reflect cash payments of $6.6 million for debt issuance costs associated with the senior notes issuance that are being amortized to interest expense over the term of the related senior notes.
Cash flows from financing activities during 2022 reflect cash payments of $6.6 million for debt issuance costs associated with the senior notes issuance that are being amortized to interest expense over the term of the related senior notes. 54 Table of Contents Material Cash Requirements The following table summarizes our current and long-term material cash requirements as of December 31, 2023.
Increases to Premium Luxury segment income were partially offset by an increase in SG&A expenses. 44 Table of Contents Corporate and other Corporate and other results included the following: Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: Used vehicle $ 487.0 $ 325.9 $ 161.1 49.4 $ 177.5 $ 148.4 83.6 Parts and service 508.4 502.3 6.1 1.2 496.5 5.8 1.2 Finance and insurance, net 29.1 24.8 4.3 17.3 32.4 (7.6) (23.5) Other 4.6 2.7 1.9 70.4 2.2 0.5 22.7 Revenue $ 1,029.1 $ 855.7 $ 173.4 20.3 $ 708.6 $ 147.1 20.8 Income (loss) $ (285.5) $ (270.8) $ (14.7) $ (720.4) $ 449.6 “Corporate and other” is comprised of our other businesses, including AutoNation USA used vehicle stores, collision centers, parts distribution centers, and auction operations, all of which generate revenues but do not meet the quantitative thresholds for reportable segments, as well as the results of our auto finance company, unallocated corporate overhead expenses, and other income items.
Decreases in Premium Luxury segment income were partially offset by increases in parts and service gross profit associated with customer-pay service and warranty service. 45 Table of Contents Corporate and other Corporate and other results included the following: Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: Used vehicle $ 568.4 $ 487.0 $ 81.4 16.7 $ 325.9 $ 161.1 49.4 Parts and service 605.8 508.4 97.4 19.2 502.3 6.1 1.2 Finance and insurance, net 50.5 29.1 21.4 73.5 24.8 4.3 17.3 Other 3.7 4.6 (0.9) (19.6) 2.7 1.9 70.4 Revenue $ 1,228.4 $ 1,029.1 $ 199.3 19.4 $ 855.7 $ 173.4 20.3 Income (loss) $ (379.7) $ (285.5) $ (94.2) $ (270.8) $ (14.7) “Corporate and other” is comprised of our other businesses, including AutoNation USA used vehicle stores, collision centers, parts distribution centers, auction operations, our mobile automotive repair and maintenance business, and our auto finance company, all of which do not meet the quantitative thresholds for reportable segments, as well as unallocated corporate overhead expenses and other income items.
See Note 6 of the Notes to Consolidated Financial Statements for more information on our vehicle floorplan payable.
Vehicle floorplan facilities are primarily collateralized by vehicle inventories and related receivables. See Note 6 of the Notes to Consolidated Financial Statements for more information on our vehicle floorplan payable.
Additionally, Import revenue benefited from the acquisitions we completed in 2021 and 2022. Import segment income increased during 2022, as compared to 2021, primarily due to increases in parts and service gross profit and new vehicle gross profit.
Additionally, Domestic revenue benefited from the acquisitions we completed in 2022 and 2023. Domestic segment income decreased during 2023, as compared to 2022, primarily due to decreases in new vehicle gross profit and finance and insurance gross profit.
Floorplan interest expense was $41.4 million in 2022 and $25.7 million in 2021. The increase in floorplan interest expense of $15.7 million in 2022, as compared to 2021, was the result of higher average interest rates, partially offset by lower average vehicle floorplan balances. Interest Expense Interest expense includes the interest related to non-vehicle long-term debt and finance lease obligations.
The increase in floorplan interest expense of $103.3 million in 2023, as compared to 2022, was the result of higher average interest rates and higher average vehicle floorplan balances. Interest Expense Interest expense includes the interest related to non-vehicle long-term debt and finance lease obligations. Other interest expense was $181.4 million in 2023 compared to $134.9 million in 2022.
Our used vehicle inventory balance was net of cumulative write-downs of $7.4 million at December 31, 2022, and $3.6 million at December 31, 2021. Parts, accessories, and other inventory are carried at the lower of cost or net realizable value. We estimate the amount of potentially damaged and/or obsolete inventory based upon historical experience, manufacturer return policies, and industry trends.
Parts, accessories, and other inventory are carried at the lower of cost or net realizable value. We estimate the amount of potentially damaged and/or obsolete inventory based upon historical experience, manufacturer return policies, and industry trends.
We had $50.0 million and $340.0 million of commercial paper notes outstanding as of December 31, 2022 and 2021, respectively. We also had $181.8 million of non-recourse debt outstanding under our warehouse facilities and $146.9 million of non-recourse debt under term securitizations of consolidated variable interest entities (“VIEs”) as of December 31, 2022.
We had non-recourse debt under our warehouse facilities of $209.4 million at December 31, 2023, and $181.8 million at December 31, 2022, and non-recourse debt under term securitizations of consolidated variable interest entities (“VIEs”) of $50.5 million at December 31, 2023, and $146.9 million at December 31, 2022.
During 2022, we recognized an initial credit loss expense of $34.2 million associated with the acquired loan portfolio of CIG Financial, the auto finance company we acquired in the fourth quarter of 2022. We also recognized a net gain of $16.3 million related to business/property divestitures and a gain on a legal settlement of $6.3 million.
During 2022, we recognized an initial credit loss expense of $34.2 million associated with the acquired loan portfolio of CIG Financial, the auto finance company we acquired in the fourth quarter of 2022.
We recondition the majority of used vehicles acquired for retail sale in our parts and service departments and capitalize the related costs to the used vehicle inventory. We monitor our used vehicle inventory values as compared to net realizable values. Typically, used vehicles that are not sold on a retail basis are sold at wholesale auctions.
We monitor our new vehicle inventory values as compared to net realizable values. We had no new vehicle inventory write-downs at December 31, 2023 and December 31, 2022. We recondition the majority of used vehicles acquired for retail sale in our parts and service departments and capitalize the related costs to the used vehicle inventory.
The difference between reported amounts and same store amounts in finance and insurance revenue and gross profit in the above tables of $49.0 million, $3.8 million, and $1.9 million for 2022, 2021, and 2020, respectively, is related to acquisition and divestiture activity, as well as the opening of new add-points and AutoNation USA stores, as applicable in a given year. 2022 compared to 2021 Same store finance and insurance revenue and gross profit was relatively flat during 2022, as compared to 2021, due to an increase in finance and insurance gross profit PVR, largely offset by a decrease in vehicle unit volume.
The difference between reported amounts and same store amounts in finance and insurance revenue and gross profit in the above tables of $33.3 million, $7.1 million, and $3.8 million for 2023, 2022, and 2021, respectively, is related to acquisition and divestiture activity, as well as the opening of AutoNation USA stores, as applicable in a given year.
We have typically not experienced significant losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices. We monitor our new vehicle inventory values as compared to net realizable values, and had no new vehicle inventory write-downs at December 31, 2022 or 2021.
Our new vehicle inventory units at December 31, 2023 and 2022, were approximately 35,300 and 18,100, respectively. We have typically not experienced significant losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices.
Our business and results of operations are substantially dependent on new and used vehicle sales levels in the United States and in our particular geographic markets, as well as the gross profit margins that we can achieve on our sales of vehicles, all of which are very difficult to predict . • The COVID-19 pandemic disrupted, and may continue to disrupt, our business, results of operations, and financial condition going forward.
Our business and results of operations are substantially dependent on new and used vehicle sales levels in the United States and in our particular geographic markets, as well as the gross profit margins that we can achieve on our sales of vehicles, all of which are very difficult to predict . • Our new vehicle sales are impacted by the incentive, marketing, and other programs of vehicle manufacturers . • We are dependent upon the success and continued financial viability of the vehicle manufacturers and distributors with which we hold franchises.
We believe that our cash and cash equivalents, funds generated through operations, and amounts available under our revolving credit facility, commercial paper program, and secured used vehicle floorplan facilities will be sufficient to fund our working capital requirements, service our debt, pay our tax obligations and commitments and contingencies, and meet any seasonal operating requirements for the foreseeable future. 47 Table of Contents Available Liquidity Resources We had the following sources of liquidity available for the years ended December 31, 2022 and 2021: (In millions) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 72.6 $ 60.4 Revolving credit facility $ 1,799.6 (1) $ 1,760.3 Secured used vehicle floorplan facilities (2) $ 0.3 $ 0.1 (1) At December 31, 2022, we had $0.4 million of letters of credit outstanding.
We believe that our cash and cash equivalents, funds generated through operations, and amounts available under our revolving credit facility, commercial paper program, and secured used vehicle floorplan facilities will be sufficient to fund our working capital requirements, service our debt, pay our tax obligations and commitments and contingencies, and meet any seasonal operating requirements for the foreseeable future.
On January 26, 2023, we closed on the acquisition of RepairSmith, a mobile solution for automotive repair and maintenance for approximately $190 million. 49 Table of Contents Debt The following table sets forth our non-vehicle long-term debt as of December 31, 2022 and 2021: (in millions) Debt Description Maturity Date Interest Payable 2022 2021 3.5% Senior Notes November 15, 2024 May 15 and November 15 $ 450.0 $ 450.0 4.5% Senior Notes October 1, 2025 April 1 and October 1 450.0 450.0 3.8% Senior Notes November 15, 2027 May 15 and November 15 300.0 300.0 1.95% Senior Notes August 1, 2028 February 1 and August 1 400.0 400.0 4.75% Senior Notes June 1, 2030 June 1 and December 1 500.0 500.0 2.4% Senior Notes August 1, 2031 February 1 and August 1 450.0 450.0 3.85% Senior Notes March 1, 2032 March 1 and September 1 700.0 — Revolving credit facility March 26, 2025 Monthly — — Finance leases and other debt Various dates through 2041 375.5 330.6 3,625.5 2,880.6 Less: unamortized debt discounts and debt issuance costs (26.0) (22.2) Less: current maturities (12.6) (12.2) Long-term debt, net of current maturities $ 3,586.9 $ 2,846.2 On February 28, 2022, we issued $700.0 million aggregate principal amount of 3.85% Senior Notes due 2032, which were sold at 99.835% of the aggregate principal amount.
(In millions) 2023 2022 2021 Cash used in business acquisitions, net (1) $ (271.4) $ (191.6) $ (432.7) Cash received from business divestitures, net $ 23.2 $ 55.2 $ 48.7 (1) Excludes finance leases. 51 Table of Contents Debt The following table sets forth our non-vehicle long-term debt as of December 31, 2023 and 2022: (in millions) Debt Description Maturity Date Interest Payable 2023 2022 3.5% Senior Notes November 15, 2024 May 15 and November 15 $ 450.0 $ 450.0 4.5% Senior Notes October 1, 2025 April 1 and October 1 450.0 450.0 3.8% Senior Notes November 15, 2027 May 15 and November 15 300.0 300.0 1.95% Senior Notes August 1, 2028 February 1 and August 1 400.0 400.0 4.75% Senior Notes June 1, 2030 June 1 and December 1 500.0 500.0 2.4% Senior Notes August 1, 2031 February 1 and August 1 450.0 450.0 3.85% Senior Notes March 1, 2032 March 1 and September 1 700.0 700.0 Revolving credit facility July 18, 2028 Monthly — — Finance leases and other debt Various dates through 2041 362.2 375.5 3,612.2 3,625.5 Less: unamortized debt discounts and debt issuance costs (21.9) (26.0) Less: current maturities (462.4) (12.6) Long-term debt, net of current maturities $ 3,127.9 $ 3,586.9 Our 3.5% Senior Notes due 2024 will mature on November 15, 2024, and were, therefore, reclassified to current during the fourth quarter of 2023.
Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by General Motors, Ford, and Stellantis. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, Hyundai, Subaru, and Nissan.
Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, Hyundai, Subaru, and Nissan. Our Premium Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Mercedes-Benz, BMW, Audi, Lexus, and Jaguar Land Rover.
(6) Our estimated chargeback obligations do not have scheduled maturities, however, the timing of future payments is estimated based on historical patterns. (7) Our estimated self-insurance obligations are based on management estimates and actuarial calculations. Although these obligations do not have scheduled maturities, the timing of future payments is estimated based on historical patterns.
(7) Our estimated self-insurance obligations are based on management estimates and actuarial calculations. Although these obligations do not have scheduled maturities, the timing of future payments is estimated based on historical patterns. (8) Primarily represents purchase orders and contracts in connection with real estate construction projects and information technology and communication systems.
As of December 31, 2022, we had 55 AutoNation-branded collision centers, 13 AutoNation USA stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, and an auto finance company that we acquired in the fourth quarter of 2022, referred to as AutoNation Finance.
As of December 31, 2023, we had 53 AutoNation-branded collision centers, 19 AutoNation USA stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, a mobile automotive repair and maintenance business, referred to as AutoNation Mobile Service, and an auto finance company, referred to as AutoNation Finance.
Same store gross profit PVR decreased during 2022, as compared to 2021, primarily due to margin pressure as a result of declining used vehicle values, which also adversely impacted used vehicle wholesale gross profit. 38 Table of Contents Parts & Service Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Reported: Revenue $ 4,100.6 $ 3,706.6 $ 394.0 10.6 $ 3,257.4 $ 449.2 13.8 Gross profit $ 1,900.3 $ 1,672.7 $ 227.6 13.6 $ 1,460.8 $ 211.9 14.5 Gross profit as a percentage of revenue 46.3% 45.1% 44.8% Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 2022 2021 Variance Favorable / (Unfavorable) % Variance 2021 2020 Variance Favorable / (Unfavorable) % Variance Same Store: Revenue $ 3,966.0 $ 3,644.6 $ 321.4 8.8 $ 3,635.0 $ 3,149.1 $ 485.9 15.4 Gross profit $ 1,832.0 $ 1,647.1 $ 184.9 11.2 $ 1,641.4 $ 1,448.6 $ 192.8 13.3 Gross profit as a percentage of revenue 46.2% 45.2% 45.2% 46.0% Parts and service revenue is primarily derived from vehicle repairs paid directly by customers or via reimbursement from manufacturers and others under warranty programs, as well as from wholesale parts sales, collision services, and the preparation of vehicles for sale.
The increase in gross profit PVR was partially offset by the shift in mix towards lower-priced entry-level vehicles, which have a lower average gross profit PVR, and continued normalization of used vehicle value trends. 39 Table of Contents Parts & Service Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Reported: Revenue $ 4,533.7 $ 4,100.6 $ 433.1 10.6 $ 3,706.6 $ 394.0 10.6 Gross profit $ 2,139.3 $ 1,900.3 $ 239.0 12.6 $ 1,672.7 $ 227.6 13.6 Gross profit as a percentage of revenue 47.2% 46.3% 45.1% Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 2023 2022 Variance Favorable / (Unfavorable) % Variance 2022 2021 Variance Favorable / (Unfavorable) % Variance Same Store: Revenue $ 4,431.8 $ 4,073.3 $ 358.5 8.8 $ 3,966.0 $ 3,644.6 $ 321.4 8.8 Gross profit $ 2,097.9 $ 1,882.4 $ 215.5 11.4 $ 1,832.0 $ 1,647.1 $ 184.9 11.2 Gross profit as a percentage of revenue 47.3% 46.2% 46.2% 45.2% Parts and service revenue is primarily derived from vehicle repairs paid directly by customers or via reimbursement from manufacturers and others under warranty programs, as well as from wholesale parts sales, collision services, and the preparation of vehicles for sale.
During 2021, we recognized a gain of $5.2 million related to a legal settlement and net gains of $17.6 million related to business/property divestitures, partially offset by asset impairments of $3.2 million. 46 Table of Contents Non-Operating Income (Expenses) Floorplan Interest Expense Floorplan interest rates are variable and, therefore, increase and decrease with changes in the underlying benchmark interest rates.
We also recognized a net gain of $16.3 million related to business/property divestitures. 48 Table of Contents Non-Operating Income (Expenses) Floorplan Interest Expense Floorplan interest rates are variable and, therefore, increase and decrease with changes in the underlying benchmark interest rates. Floorplan interest expense was $144.7 million in 2023 and $41.4 million in 2022.
Years Ended December 31, ($ in millions) 2022 2021 Variance 2022 vs. 2021 2020 Variance 2021 vs. 2020 Floorplan assistance $ 108.9 $ 121.4 $ (12.5) $ 110.7 $ 10.7 New vehicle floorplan interest expense (35.5) (22.3) (13.2) (58.0) 35.7 Net new vehicle inventory carrying benefit $ 73.4 $ 99.1 $ (25.7) $ 52.7 $ 46.4 2022 compared to 2021 The net new vehicle inventory carrying benefit decreased during 2022, as compared to the same period in 2021, due to an increase in floorplan interest expense and a decrease in floorplan assistance.
Years Ended December 31, ($ in millions) 2023 2022 Variance 2023 vs. 2022 2021 Variance 2022 vs. 2021 Floorplan assistance $ 125.8 $ 108.9 $ 16.9 $ 121.4 $ (12.5) New vehicle floorplan interest expense (132.1) (35.5) (96.6) (22.3) (13.2) Net new vehicle inventory carrying benefit (expense) $ (6.3) $ 73.4 $ (79.7) $ 99.1 $ (25.7) 2023 compared to 2022 During 2023, we had a net new vehicle inventory carrying expense of $6.3 million compared to a net new vehicle inventory carrying benefit of $73.4 million in 2022.
Additionally, operating leases that are on a month-to-month basis are not included. (5) Due to uncertainty regarding timing of payments expected beyond one year, long-term obligations for deferred compensation arrangements have been classified in the “More Than 5 Years” column.
(5) Due to uncertainty regarding timing of payments expected beyond one year, long-term obligations for deferred compensation arrangements have been classified in the “More Than 5 Years” column. (6) Our estimated chargeback obligations do not have scheduled maturities, however, the timing of future payments is estimated based on historical patterns.
Increases to Import segment income were partially offset by a decrease in used vehicle gross profit due to margin pressure as a result of a decline in used vehicle values, as well as an increase in SG&A expenses. 43 Table of Contents Premium Luxury The Premium Luxury segment operating results included the following: Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 4,872.3 $ 4,510.1 $ 362.2 8.0 $ 3,723.8 $ 786.3 21.1 Used vehicle 3,499.8 3,067.4 432.4 14.1 2,125.9 941.5 44.3 Parts and service 1,448.6 1,246.7 201.9 16.2 1,058.1 188.6 17.8 Finance and insurance, net 453.8 401.0 52.8 13.2 294.7 106.3 36.1 Other 3.6 4.7 (1.1) 0.3 4.4 Total Revenue $ 10,278.1 $ 9,229.9 $ 1,048.2 11.4 $ 7,202.8 $ 2,027.1 28.1 Segment income $ 969.1 $ 837.4 $ 131.7 15.7 $ 478.2 $ 359.2 75.1 Retail new vehicle unit sales 67,710 67,329 381 0.6 59,890 7,439 12.4 Retail used vehicle unit sales 83,858 83,447 411 0.5 66,611 16,836 25.3 2022 compared to 2021 Premium Luxury revenue increased during 2022, as compared to 2021, primarily due to the acquisitions we completed in 2021.
Decreases in segment income were partially offset by an increase in new vehicle unit volume and an increase in parts and service gross profit associated with customer-pay service and the preparation of vehicles for sale. 44 Table of Contents Premium Luxury The Premium Luxury segment operating results included the following: Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 5,246.4 $ 4,872.3 $ 374.1 7.7 $ 4,510.1 $ 362.2 8.0 Used vehicle 2,979.5 3,499.8 (520.3) (14.9) 3,067.4 432.4 14.1 Parts and service 1,593.1 1,448.6 144.5 10.0 1,246.7 201.9 16.2 Finance and insurance, net 446.2 453.8 (7.6) (1.7) 401.0 52.8 13.2 Other 1.2 3.6 (2.4) 4.7 (1.1) Total Revenue $ 10,266.4 $ 10,278.1 $ (11.7) (0.1) $ 9,229.9 $ 1,048.2 11.4 Segment income $ 836.5 $ 969.1 $ (132.6) (13.7) $ 837.4 $ 131.7 15.7 Retail new vehicle unit sales 69,007 67,710 1,297 1.9 67,329 381 0.6 Retail used vehicle unit sales 75,334 83,858 (8,524) (10.2) 83,447 411 0.5 2023 compared to 2022 Premium Luxury revenue decreased during 2023, as compared to 2022, primarily due to a decrease in used vehicle unit volume, due in part to a shift in mix from used vehicles to new vehicles and lower availability of lower-priced used vehicles, and a decrease in used vehicle revenue PVR, primarily due to a shift in mix towards lower-priced entry-level vehicles.
Cash flows from financing activities include changes in commercial paper notes outstanding totaling net payments of $290.0 million during 2022 compared to net proceeds of $340.0 million during 2021 and vehicle floorplan payable-non-trade totaling net proceeds of $178.6 million during 2022 compared to net repayments of $263.9 million during 2021. 52 Table of Contents Material Cash Requirements The following table summarizes our current and long-term material cash requirements as of December 31, 2022.
Cash flows from financing activities include changes in commercial paper notes outstanding totaling net proceeds of $390.0 million during 2023 compared to net repayments of $290.0 million during 2022 and changes in vehicle floorplan payable-non-trade totaling net proceeds of $425.3 million during 2023 compared to net proceeds of $178.6 million during 2022.
Our primary uses of cash from operating activities are repayments of vehicle floorplan payable-trade, purchases of inventory, personnel-related expenditures, and payments related to taxes and leased properties. 2022 compared to 2021 Net cash provided by operating activities increased during 2022, as compared to 2021, primarily due to an increase in earnings, partially offset by an increase in working capital requirements. 51 Table of Contents Cash Flows from Investing Activities Net cash flows from investing activities consist primarily of cash used in capital additions and activity from business acquisitions, business divestitures, property dispositions, originations and collections of auto loans receivable acquired through third-party dealers, and other transactions.
Our primary uses of cash from operating activities are repayments of vehicle floorplan payable-trade, purchases of inventory, personnel-related expenditures, originations of loans receivable for vehicles sold through our stores, and payments related to taxes and leased properties. 2023 compared to 2022 Net cash provided by operating activities decreased during 2023, as compared to 2022, primarily due to an increase in working capital requirements, a decrease in earnings, and an increase in originations of loans receivable for vehicles sold through our stores.
Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: Domestic $ 7,987.5 $ 7,959.9 $ 27.6 0.3 $ 6,490.6 $ 1,469.3 22.6 Import 7,690.3 7,798.5 (108.2) (1.4) 5,988.0 1,810.5 30.2 Premium Luxury 10,278.1 9,229.9 1,048.2 11.4 7,202.8 2,027.1 28.1 Total 25,955.9 24,988.3 967.6 3.9 19,681.4 5,306.9 27.0 Corporate and other 1,029.1 855.7 173.4 20.3 708.6 147.1 20.8 Total consolidated revenue $ 26,985.0 $ 25,844.0 $ 1,141.0 4.4 $ 20,390.0 $ 5,454.0 26.7 Segment income (1) : Domestic $ 565.3 $ 595.8 $ (30.5) (5.1) $ 355.2 $ 240.6 67.7 Import 734.2 714.7 19.5 2.7 386.4 328.3 85.0 Premium Luxury 969.1 837.4 131.7 15.7 478.2 359.2 75.1 Total 2,268.6 2,147.9 120.7 5.6 1,219.8 928.1 76.1 Corporate and other (285.5) (270.8) (14.7) (720.4) 449.6 Floorplan interest expense 41.4 25.7 (15.7) 63.8 38.1 Operating income $ 2,024.5 $ 1,902.8 $ 121.7 6.4 $ 563.2 $ 1,339.6 237.9 Retail new vehicle unit sales: Domestic 66,375 76,211 (9,836) (12.9) 80,687 (4,476) (5.5) Import 95,886 118,863 (22,977) (19.3) 109,077 9,786 9.0 Premium Luxury 67,710 67,329 381 0.6 59,890 7,439 12.4 229,971 262,403 (32,432) (12.4) 249,654 12,749 5.1 Retail used vehicle unit sales: Domestic 97,642 105,031 (7,389) (7.0) 83,406 21,625 25.9 Import 100,131 103,418 (3,287) (3.2) 82,841 20,577 24.8 Premium Luxury 83,858 83,447 411 0.5 66,611 16,836 25.3 281,631 291,896 (10,265) (3.5) 232,858 59,038 25.4 (1) Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense. 41 Table of Contents Domestic The Domestic segment operating results included the following: Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 3,409.1 $ 3,601.8 $ (192.7) (5.4) $ 3,411.1 $ 190.7 5.6 Used vehicle 3,022.3 2,875.0 147.3 5.1 1,781.4 1,093.6 61.4 Parts and service 1092.7 1007.6 85.1 8.4 891.5 116.1 13.0 Finance and insurance, net 460.3 469.1 (8.8) (1.9) 370.5 98.6 26.6 Other 3.1 6.4 (3.3) 36.1 (29.7) Total Revenue $ 7,987.5 $ 7,959.9 $ 27.6 0.3 $ 6,490.6 $ 1,469.3 22.6 Segment income $ 565.3 $ 595.8 $ (30.5) (5.1) $ 355.2 $ 240.6 67.7 Retail new vehicle unit sales 66,375 76,211 (9,836) (12.9) 80,687 (4,476) (5.5) Retail used vehicle unit sales 97,642 105,031 (7,389) (7.0) 83,406 21,625 25.9 2022 compared to 2021 Domestic revenue increased slightly during 2022, as compared to 2021, primarily due to increases in used vehicle revenue and parts and service revenue.
Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: Domestic $ 7,573.2 $ 7,987.5 $ (414.3) (5.2) $ 7,959.9 $ 27.6 0.3 Import 7,880.9 7,690.3 190.6 2.5 7,798.5 (108.2) (1.4) Premium Luxury 10,266.4 10,278.1 (11.7) (0.1) 9,229.9 1,048.2 11.4 Total 25,720.5 25,955.9 (235.4) (0.9) 24,988.3 967.6 3.9 Corporate and other 1,228.4 1,029.1 199.3 19.4 855.7 173.4 20.3 Total consolidated revenue $ 26,948.9 $ 26,985.0 $ (36.1) (0.1) $ 25,844.0 $ 1,141.0 4.4 Segment income (1) : Domestic $ 415.4 $ 565.3 $ (149.9) (26.5) $ 595.8 $ (30.5) (5.1) Import 635.0 734.2 (99.2) (13.5) 714.7 19.5 2.7 Premium Luxury 836.5 969.1 (132.6) (13.7) 837.4 131.7 15.7 Total 1,886.9 2,268.6 (381.7) (16.8) 2,147.9 120.7 5.6 Corporate and other (379.7) (285.5) (94.2) (270.8) (14.7) Floorplan interest expense 144.7 41.4 (103.3) 25.7 (15.7) Operating income $ 1,651.9 $ 2,024.5 $ (372.6) (18.4) $ 1,902.8 $ 121.7 6.4 Retail new vehicle unit sales: Domestic 67,471 66,375 1,096 1.7 76,211 (9,836) (12.9) Import 108,068 95,886 12,182 12.7 118,863 (22,977) (19.3) Premium Luxury 69,007 67,710 1,297 1.9 67,329 381 0.6 244,546 229,971 14,575 6.3 262,403 (32,432) (12.4) Retail used vehicle unit sales: Domestic 84,552 97,642 (13,090) (13.4) 105,031 (7,389) (7.0) Import 91,146 100,131 (8,985) (9.0) 103,418 (3,287) (3.2) Premium Luxury 75,334 83,858 (8,524) (10.2) 83,447 411 0.5 Other 22,987 18,175 4,812 12,468 5,707 274,019 299,806 (25,787) (8.6) 304,364 (4,558) (1.5) (1) Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense. 42 Table of Contents Domestic The Domestic segment operating results included the following: Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 3,525.0 $ 3,409.1 $ 115.9 3.4 $ 3,601.8 $ (192.7) (5.4) Used vehicle 2,428.4 3,022.3 (593.9) (19.7) 2,875.0 147.3 5.1 Parts and service 1,184.7 1,092.7 92.0 8.4 1,007.6 85.1 8.4 Finance and insurance, net 432.0 460.3 (28.3) (6.1) 469.1 (8.8) (1.9) Other 3.1 3.1 — 6.4 (3.3) Total Revenue $ 7,573.2 $ 7,987.5 $ (414.3) (5.2) $ 7,959.9 $ 27.6 0.3 Segment income $ 415.4 $ 565.3 $ (149.9) (26.5) $ 595.8 $ (30.5) (5.1) Retail new vehicle unit sales 67,471 66,375 1,096 1.7 76,211 (9,836) (12.9) Retail used vehicle unit sales 84,552 97,642 (13,090) (13.4) 105,031 (7,389) (7.0) 2023 compared to 2022 Domestic revenue decreased during 2023, as compared to 2022, primarily due to decreases in used vehicle unit volume and used vehicle revenue PVR.
(8) Primarily represents purchase orders and contracts in connection with real estate construction projects and information technology and communication systems. We expect that the amounts above will be funded through cash flows from operations or borrowings under our commercial paper program or credit agreement.
We expect that the amounts above will be funded through cash flows from operations or borrowings under our commercial paper program or credit agreement.
Decreases in segment income were partially offset by increases in parts and service gross profit associated with the preparation of vehicles for sale, customer-pay service, and wholesale parts sales.
The decreases in gross profit were partially offset by an increase in parts and service gross profit of 13%, as compared to 2022, due to increases in gross profit from customer-pay service, warranty service, and the preparation of vehicles for sale.
We also offer indirect financing on certain vehicles we sell, as well as on installment contracts acquired by our captive finance company through third-party independent dealers. As of December 31, 2022, we had three reportable segments: Domestic, Import, and Premium Luxury.
We also offer indirect financing on certain vehicles we sell through our captive finance company. As of December 31, 2023, we had three reportable segments: Domestic, Import, and Premium Luxury. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by General Motors, Ford, and Stellantis.
If the fair value of each of our franchise rights had been determined to be a hypothetical 10% lower as of the valuation dates of April 30, 2022 and 2021, no impairment would have resulted.
We elected to perform quantitative tests for our annual franchise rights impairment testing as of April 30, 2023 and 2022, and no impairment charges resulted from these quantitative tests. 30 Table of Contents If the fair value of each of our franchise rights had been determined to be a hypothetical 10% lower as of the valuation date of April 30, 2023, the resulting impairment charge would have been less than $0.5 million.
Additionally, Domestic segment income benefited from the acquisitions we completed in 2021 and 2022. 42 Table of Contents Import The Import segment operating results included the following: Years Ended December 31, 2022 vs. 2021 2021 vs. 2020 ($ in millions) 2022 2021 Variance Favorable / (Unfavorable) % Variance 2020 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 3,473.0 $ 3,969.8 $ (496.8) (12.5) $ 3,283.7 $ 686.1 20.9 Used vehicle 2,652.7 2,370.5 282.2 11.9 1,516.5 854.0 56.3 Parts and service 1,050.9 950.0 100.9 10.6 811.3 138.7 17.1 Finance and insurance, net 494.1 489.6 4.5 0.9 361.7 127.9 35.4 Other 19.6 18.6 1.0 14.8 3.8 Total Revenue $ 7,690.3 $ 7,798.5 $ (108.2) (1.4) $ 5,988.0 $ 1,810.5 30.2 Segment income $ 734.2 $ 714.7 $ 19.5 2.7 $ 386.4 $ 328.3 85.0 Retail new vehicle unit sales 95,886 118,863 (22,977) (19.3) 109,077 9,786 9.0 Retail used vehicle unit sales 100,131 103,418 (3,287) (3.2) 82,841 20,577 24.8 2022 compared to 2021 Import revenue decreased during 2022, as compared to 2021, primarily due to a decrease in new and used vehicle unit volume, partially offset by increases in new and used vehicle revenue PVR.
Decreases in segment income were partially offset by increases in parts and service gross profit associated with customer-pay service and warranty service. 43 Table of Contents Import The Import segment operating results included the following: Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 ($ in millions) 2023 2022 Variance Favorable / (Unfavorable) % Variance 2021 Variance Favorable / (Unfavorable) % Variance Revenue: New vehicle $ 3,996.0 $ 3,473.0 $ 523.0 15.1 $ 3,969.8 $ (496.8) (12.5) Used vehicle 2,222.2 2,652.7 (430.5) (16.2) 2,370.5 282.2 11.9 Parts and service 1,150.1 1,050.9 99.2 9.4 950.0 100.9 10.6 Finance and insurance, net 490.1 494.1 (4.0) (0.8) 489.6 4.5 0.9 Other 22.5 19.6 2.9 18.6 1.0 Total Revenue $ 7,880.9 $ 7,690.3 $ 190.6 2.5 $ 7,798.5 $ (108.2) (1.4) Segment income $ 635.0 $ 734.2 $ (99.2) (13.5) $ 714.7 $ 19.5 2.7 Retail new vehicle unit sales 108,068 95,886 12,182 12.7 118,863 (22,977) (19.3) Retail used vehicle unit sales 91,146 100,131 (8,985) (9.0) 103,418 (3,287) (3.2) 2023 compared to 2022 Import revenue increased during 2023, as compared to 2022, primarily due to an increase in new vehicle unit volume due to the increasing supply of new vehicle inventory and sustained consumer demand, as well as an increase in new vehicle revenue PVR, which benefited from increases in MSRP.
Net income during 2022 was adversely impacted by the recognition of an initial credit loss expense of $25.8 million (after-tax) associated with the auto loans receivable acquired as part of our acquisition of CIG Financial. During 2022 and 2021, net income benefited from after-tax gains related to business/property divestitures, net of asset impairments, of $11.1 million and $10.9 million, respectively.
Net income during 2023 was adversely impacted by an after-tax loss of $12.4 million from hailstorms and other natural catastrophes. Net income during 2022 was adversely impacted by the recognition of an initial credit loss expense of $25.8 million (after-tax) associated with the auto loans receivable acquired as part of our acquisition of a captive auto finance company.
Cash Flows from Financing Activities Net cash flows from financing activities primarily include repurchases of common stock, debt activity, changes in vehicle floorplan payable-non-trade, payments of tax withholdings for stock-based awards, and proceeds from stock option exercises. 2022 compared to 2021 During 2022, we repurchased 15.6 million shares of common stock for an aggregate purchase price of $1.7 billion (average purchase price per share of $109.86), including repurchases for which settlement occurred subsequent to December 31, 2022.
Cash Flows from Financing Activities Net cash flows from financing activities primarily include repurchases of common stock, debt activity, and changes in vehicle floorplan payable-non-trade. 2023 compared to 2022 During 2023, we repurchased 6.4 million shares of common stock for an aggregate purchase price of $863.6 million (average purchase price per share of $134.68), excluding the excise tax imposed under the Inflation Reduction Act.
During the fourth quarter of 2022, we recognized an initial credit loss expense of $34.2 million associated with the auto loans receivable portfolio we acquired as part of the acquisition of the auto finance company. AutoNation Finance results are included in Other (Income) Expense, Net in our Consolidated Income Statement.
In addition, the loss from “Corporate and other” in 2022 was adversely impacted by recognition of an initial credit loss expense of $34.2 million associated with the auto loans receivable portfolio we acquired as part of the auto finance company acquisition completed in the fourth quarter of 2022.
In addition, our failure to comply with the covenants contained in our credit agreement and the indentures for our senior unsecured notes could result in the acceleration of other indebtedness of AutoNation. 50 Table of Contents As of December 31, 2022, we were in compliance with the requirements of the financial covenants under our credit agreement and the indentures for our senior unsecured notes.
Our failure to comply with the covenants contained in our amended and restated credit agreement and the indentures for our senior unsecured notes could result in the acceleration of other indebtedness of AutoNation. Under our amended and restated credit agreement, we are required to remain in compliance with a maximum leverage ratio and a minimum interest coverage ratio.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed4 unchanged
Biggest changeWe had $2.1 billion of variable rate vehicle floorplan payable at December 31, 2022, and $1.5 billion at December 31, 2021. Based on these amounts, a 100 basis point change in interest rates would result in an approximate change to our annual floorplan interest expense of $21.1 million in 2022 and $14.6 million in 2021.
Biggest changeWe had $3.4 billion of variable rate vehicle floorplan payable at December 31, 2023, and $2.1 billion at December 31, 2022. Based on these amounts, a 100 basis point change in interest rates would result in an approximate change to our annual floorplan interest expense of $33.8 million in 2023 and $21.1 million in 2022.
Financing for these receivables was achieved through both variable- and fixed-rate non-recourse debt. Non-recourse debt includes warehouse facilities and asset-backed term securitizations. Borrowings under the warehouse facilities are variable-rate debt and are secured by the related auto loans receivable.
Financing for these receivables was achieved primarily through both variable- and fixed-rate non-recourse debt. Non-recourse debt includes warehouse facilities and asset-backed term securitizations. Borrowings under the warehouse facilities are variable-rate debt and are secured by the related auto loans receivable.
During the period that we hold this investment, unrealized gains and losses may be recorded if we identify observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The carrying amount of our equity investment without a readily determinable fair value was $56.7 million at December 31, 2022.
During the period that we hold this investment, unrealized gains and losses may be recorded if we identify observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The carrying amount of our equity investment without a readily determinable fair value was $56.7 million at December 31, 2023.
The selected 10% hypothetical change in equity prices is not intended to reflect a best or worst case scenario, as equity price changes could be smaller or larger due to the nature of equity markets. 56 Table of Contents
The selected 10% hypothetical change in equity prices is not intended to reflect a best or worst case scenario, as equity price changes could be smaller or larger due to the nature of equity markets. 58 Table of Contents
Our exposure to changes in interest rates with respect to total vehicle floorplan payable is partially mitigated by manufacturers’ floorplan assistance, which in some cases is based on variable interest rates. We had $50.0 million of commercial paper notes outstanding at December 31, 2022, and $340.0 million at December 31, 2021.
Our exposure to changes in interest rates with respect to total vehicle floorplan payable is partially mitigated by manufacturers’ floorplan assistance, which in some cases is based on variable interest rates. We had $440.0 million of commercial paper notes outstanding at December 31, 2023, and $50.0 million at December 31, 2022.
Based on the amount outstanding, a 100 basis point change in interest rates would result in an approximate change to our annual interest expense of $0.5 million in 2022 and $3.4 million in 2021.
Based on the amount outstanding, a 100 basis point change in interest rates would result in an approximate change to our annual interest expense of $4.4 million in 2023 and $0.5 million in 2022.
A hypothetical 10% change in the equity prices of these securities with readily determinable fair values would result in an approximate change to gain or loss of $1.5 million. We also have a minority equity investment without a readily determinable fair value.
A hypothetical 10% change in the equity prices of these securities with readily determinable fair values would result in an approximate change to gain or loss of $2.3 million. We also have a minority equity investment without a readily determinable fair value.
Our fixed rate senior unsecured notes totaled $3.2 billion and had a fair value of $2.8 billion as of December 31, 2022, and totaled $2.5 billion and had a fair value of $2.7 billion as of December 31, 2021. As of December 31, 2022, all auto loans receivable outstanding were fixed-rate installment contracts.
Our fixed rate senior unsecured notes totaled $3.2 billion and had a fair value of $3.0 billion as of December 31, 2023, and totaled $3.2 billion and had a fair value of $2.8 billion as of December 31, 2022. As of December 31, 2023, all auto loans receivable outstanding were fixed-rate installment contracts.
During the period that we hold these equity investments, unrealized gains and losses will be recorded as the fair market value of the securities change over time. The fair value of these equity investments was $15.4 million at December 31, 2022.
During the period that we hold these equity investments, unrealized gains and losses will be recorded as the fair market value of the securities change over time. The fair value of these equity investments was $22.8 million at December 31, 2023.

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