AutoNation, Inc. (AN) 2023年年度報告「NYSE」.pdf

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1、2023ANNUAL REPORTUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2023orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXC

2、HANGE ACT OF 1934 For the transition period from _ to _Commission File Number:1-13107AUTONATION,INC.(Exact name of registrant as specified in its charter)Delaware 73-1105145(State or other jurisdiction ofincorporation or organization)(I.R.S.Employer Identification No.)200 SW 1st Ave Fort Lauderdale,

3、Florida33301(Address of principal executive offices)(Zip Code)(954)769-6000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,Par Value$0.01 Per Share AN

4、New York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Secti

5、on 13 or Section 15(d)of the Exchange Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file

6、such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the prece

7、ding 12 months(or for such shorter period that the new registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the defini

8、tions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check

9、 mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its manageme

10、nts assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indica

11、te by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based

12、compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No As of June 30,2023,the last business day of the regist

13、rants most recently completed second fiscal quarter,the aggregate market value of the common stock of the registrant held by non-affiliates was approximately$4.7 billion based on the closing price of the common stock on the New York Stock Exchange on such date(for the purpose of this calculation,the

14、 registrant assumed that each of its directors,executive officers,and greater than 10%stockholders was an affiliate of the registrant as of June 30,2023).As of February 14,2024,the registrant had 41,660,637 shares of common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registr

15、ants Proxy Statement relating to its 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31,2023,are incorporated herein by reference in Part III.AUTONATION,INC.FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,2023 INDEXPART I P

16、ageItem 1.Business1Item 1A.Risk Factors15Item 1B.Unresolved Staff Comments23Item 1C.Cybersecurity24Item 2.Properties25Item 3.Legal Proceedings25Item 4.Mine Safety Disclosures25PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities26It

17、em 7.Managements Discussion and Analysis of Financial Condition and Results of Operations28Item 7A.Quantitative and Qualitative Disclosures About Market Risk58Item 8.Financial Statements and Supplementary Data59Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosu

18、re107Item 9A.Controls and Procedures107Item 9B.Other Information107Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections107PART IIIItem 10.Directors,Executive Officers and Corporate Governance108Item 11.Executive Compensation108Item 12.Security Ownership of Certain Beneficial O

19、wners and Management and Related Stockholder Matters108Item 13.Certain Relationships and Related Transactions,and Director Independence108Item 14.Principal Accounting Fees and Services108PART IVItem 15.Exhibit and Financial Statement Schedules109Item 16.Form 10-K Summary109PART IITEM 1.BUSINESSGener

20、alAutoNation,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.Our stores

21、,which we believe include some of the most recognizable and well-known in our key markets,sell 34 different new vehicle brands.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,Ge

22、neral Motors,BMW,Mercedes-Benz,Stellantis,and Volkswagen(including Audi and Porsche).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 mobil

23、e automotive repair and maintenance business,and an auto finance company.We offer a diversified range of automotive products and services,including new vehicles,used vehicles,“parts and service”(also referred to as“After-Sales”),which includes automotive repair and maintenance services as well as wh

24、olesale parts and collision businesses,and automotive“finance and insurance”products(also referred to as“Customer Financial Services”),which include vehicle service and other protection products,as well as the arranging of financing for vehicle purchases through third-party finance sources.We also o

25、ffer 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.For convenience,the terms“AutoNation,”

26、“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 SegmentsAs of December 31,2023,we had three reportable segments:Domestic,Import,and Premium Luxu

27、ry.These segments are comprised of retail automotive franchises that sell the following new vehicle brands:DomesticImportPremium LuxuryBuickFordAcuraMazdaAlfa RomeoLand RoverCadillacGMCFiatNissanAston MartinLexusChevroletJeepGenesisSubaruAudiMaseratiChryslerLincolnHondaToyotaBentleyMercedes-BenzDodg

28、eRamHyundaiVolkswagenBMWMINIInfinitiVolvoJaguarPorsche1The 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 VehicleRevenues(in millions)RetailNew VehicleUnit Sa

29、les%of Total Retail New VehicleUnits SoldFranchises OwnedDomestic: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

30、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 4,2

31、78 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.For the year ended Decem

32、ber 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.For additional financial information regarding our three reportable segments,refer to Note 22 of the Notes to Consolidated Financial

33、Statements set forth in Part II,Item 8 of this Form 10-K.Except to the extent that differences among reportable segments are material to an understanding of our business taken as a whole,the description of our business in this report is presented on a consolidated basis.Business StrategyWe seek to c

34、reate long-term value for our stockholders and to be the best-run,most profitable automotive retailer and provider of personalized transportation services in the United States.We believe that the significant scale of our operations,our digital customer experience,and the quality of our managerial ta

35、lent allow us to achieve efficiencies in our key markets.To achieve and sustain operational excellence,we are pursuing the following strategies:We strive to be the nations most comprehensive provider of transportation solutions to meet the mobility needs of our current and future customers through a

36、 comprehensive,unique suite of transportation solutions.We seek to maximize the performance and utilization of our assets through operational excellence and expand through the development and/or acquisition of key capabilities,products,and resources.We achieve this by both optimizing our existing bu

37、siness and capturing new and developing opportunities.We continue to invest in strategic partnerships and broaden our offerings to evolve with the changing automotive retail industry and to 2widen our access to new and expanding sales channels for vehicles,parts and service,financing,and personal tr

38、ansportation services.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.In September 20

39、23,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

40、the reach of our existing After-Sales network.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 AutoNationP,a new e-commerce w

41、ebsite enabling customers to purchase high-quality automotive parts and accessories at competitive prices,shipped directly to their homes.Additionally,we have minority ownership stakes in Waymo,the self-driving technology company of Alphabet Inc.,and TrueCar,Inc.,a leading automotive digital marketp

42、lace 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.We also continue to actively pursue acquisitions and new store opportunities that meet our stra

43、tegic and financial objectives.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 mark

44、ets.Hire,train,and retain the best talent available to build dynamic teams to serve our customers.At AutoNation,nothing drives our success more than how we hire,train,and retain great people.We value the dignity of all employees and are committed to maintaining a work environment where all associate

45、s are valued and treated with respect.Our associates are at the core of our performance,by driving innovation and meeting the needs of our more than 11 million customers while protecting and enhancing AutoNations brand and reputation.See“Human Capital Resources”and“Corporate Social Responsibility Ou

46、r Workplace”below for more information about how we invest in our associates to help us prepare leaders with the vision,integrity,and expertise that enhance our operational excellence every day,drive store profitability,and create both positive employee and customer experiences.Continue to provide a

47、n industry-leading automotive retail customer experience in our stores and through our digital channels.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 competitiv

48、e pricing.We believe that this will benefit us by increasing customer loyalty and will encourage our customers to bring their vehicles to our stores for all of their vehicle service,maintenance,and collision repair needs and also by driving repeat and referral vehicle sales business.We continue to m

49、ake significant investments to provide a seamless,end-to-end customer experience in our stores and through our digital channels,and to improve our ability to generate business through those channels.We have enhanced the AutoNation Express experience-our integrated retailing solution that provides cu

50、stomers with a seamless and intuitive omnichannel vehicle shopping and purchase experience-by continuing to build omnichannel digital capabilities that provide a personalized digital customer experience online and in-store.Our customers are able to complete key automotive retail-and service-related

51、transactions online through our digital channels such as selecting a vehicle with a guaranteed price,scheduling a test drive,calculating payment options,receiving a certified trade-in or purchase offer for a vehicle that a customer wants to sell,applying for financing,selecting vehicle protection pr

52、oducts,scheduling in-store pick up or home delivery,arranging service appointments,receiving service updates,paying for maintenance and repair services,and signing paperwork 3electronically.We also utilize proprietary tools that leverage real-time customer data to guide and personalize the customer

53、experience.Continue to invest in the AutoNation retail brand to enhance our strong customer satisfaction and expand our market share.AutoNation is a brand that connects people and places.We continue to invest in the AutoNation retail brand,promoting personal transportation for Americas drivers,leadi

54、ng the charge to make transformational change in the automotive industry,and driving out cancer coast to coast.We are committed to delivering easy,transparent,and customer-centric services for our customers personal transportation needs.The AutoNation retail brand includes our AutoNation USA used ve

55、hicle stores.We continue to expand our AutoNation USA used vehicle store footprint throughout the country.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 sto

56、res 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.We of

57、fer 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 Aut

58、oNation-branded automotive auctions.We also offer our One Price used vehicle centralized pricing and appraisal strategy,and our“Well 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 a

59、nd cost structure to improve our operating efficiency.As one of the largest automotive retailers in the United States,we are uniquely positioned to leverage our significant scale so that we are able to achieve competitive operating margins by centralizing and streamlining various business processes.

60、We strive to manage our new and used vehicle inventories so that our stores supply and mix of vehicles are in line with seasonal sales trends and also minimize our carrying costs.We are able to self-source a significant portion of our used vehicle inventory through our“Well Buy Your Car”program,and

61、quickly make available such used vehicles through optimization of our reconditioning capabilities at our parts and service departments.Additionally,we are able to improve financial controls and lower servicing costs by maintaining many key store-level accounting and administrative activities in our

62、shared service center located in Irving,Texas.We also leverage our digital capabilities to drive cost reductions and increased efficiency for the long-term success of our business.Finally,we leverage our scale to reduce costs related to purchasing certain equipment,supplies,and services through nati

63、onal 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 f

64、ranchises.We believe that our business also benefits from diverse revenue streams generated by our new and used vehicle sales,parts and service business,and finance and insurance sales.Our higher-margin parts and service business has historically been less sensitive to macroeconomic conditions as co

65、mpared to new and used vehicle sales.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 i

66、nvest capital in our business to maintain and upgrade our existing facilities and to build new facilities for existing franchises and new AutoNation USA used vehicle stores,as well as for other strategic and technology initiatives.We also deploy capital opportunistically to complete acquisitions or

67、investments,build facilities for newly awarded franchises,and/or repurchase our common stock and/or debt.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

68、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.For additional information 4regarding our c

69、apital allocation,refer to“Liquidity and Capital Resources Capital Allocation”in Part II,Item 7 of this Form 10-K.OperationsEach 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 o

70、f the same brand franchise.We generally acquire used vehicles from customers,primarily through trade-ins and our“Well Buy Your Car”program,as well as through auctions,lease terminations,and other sources,and we generally recondition used vehicles acquired for retail sale in our parts and service dep

71、artments.Used vehicles that we do not sell at our stores generally are sold at wholesale prices through auctions.See also“Inventory Management”in Part II,Item 7 of this Form 10-K.Our stores provide a wide range of vehicle maintenance,repair,and collision repair services,including manufacturer recall

72、 repairs and other warranty work that can be performed only at franchised dealerships and customer-pay service work.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 acquir

73、ed by our new vehicle departments.We also offer product and accessory lines that are integrated into our parts and service operations.In 2023,we launched AutoNationP,a new e-commerce website enabling customers to purchase high-quality automotive parts and accessories at competitive prices,shipped di

74、rectly 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.We offer a wide variety of automotive finance and insurance products to our customers.We primarily arra

75、nge 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 arrangemen

76、ts 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.See the risk factor“We are subject to various risks associated with originating and servicing auto finance loans through i

77、ndirect 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.We also offer our customers various vehicle protection products,including extended service contracts,maintenance programs,guaranteed auto protection(k

78、nown as“GAP,”this protection covers the shortfall between a customers loan balance and insurance payoff in the event of a casualty),“tire and wheel”protection,and theft protection products,many of which are AutoNation-branded.These products are underwritten and administered by independent third part

79、ies,including the vehicle manufacturers and distributors captive finance subsidiaries.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.5As of Dece

80、mber 31,2023,we operated stores in the following states:StateNumber ofRetail Stores(1)Number ofFranchisesNumber of Other Locations(2)%of Total RevenueFlorida 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

81、 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 ve

82、hicle stores.(2)Includes collision centers,automotive auction operations,and parts distribution centers.(3)Revenue represented less than 1%of total revenue.Agreements with Vehicle ManufacturersFramework AgreementsWe have entered into framework and related agreements with most major vehicle manufactu

83、rers and distributors.These agreements,which are in addition to the franchise agreements described below,contain provisions relating to our management,operation,advertising and marketing,and acquisition and ownership structure of automotive stores franchised by such manufacturers.These agreements co

84、ntain certain requirements pertaining to our operating performance(with respect to matters such as sales volume,sales effectiveness,and customer satisfaction or loyalty),which,if we do not satisfy,adversely impact our ability to make further acquisitions of such manufacturers stores or could result

85、in us being compelled to take certain actions,such as divesting a significantly underperforming store,subject to applicable state franchise laws.Additionally,these agreements set limits(nationally,regionally,and in local markets)on the number of stores that we may acquire of the particular manufactu

86、rer and contain certain restrictions on our ability to name and brand our stores.Some of these framework agreements give the manufacturer or distributor the right to acquire at fair market value,or the right to compel us to sell,the automotive stores franchised by that manufacturer or distributor un

87、der specified circumstances in the event of a change in control of our Company(generally including certain material changes in the composition of our Board of Directors during a specified time period,the acquisition of 20%or more of the voting stock of our Company by another vehicle manufacturer or

88、distributor,or the acquisition of 50%or more of our voting stock by a person,entity,or group not affiliated with a vehicle manufacturer or distributor)or other extraordinary corporate transactions such as a merger or sale of all or substantially all of our assets.In addition,we have granted certain

89、manufacturers the right to acquire,at fair market value,our automotive dealerships franchised by such manufacturers in specified circumstances in the event of our default under certain of our debt agreements.6Franchise AgreementsWe operate each of our new vehicle stores under a franchise agreement w

90、ith a vehicle manufacturer or distributor.The franchise agreements grant the franchised automotive store a non-exclusive right to sell the manufacturers or distributors brand of vehicles and offer related parts and service within a specified market area.These franchise agreements grant our stores th

91、e right to use the relevant manufacturers or distributors trademarks in connection with their operations,and they also impose numerous operational requirements and restrictions relating to inventory levels,working capital levels,the sales process,marketing and branding,showroom and service facilitie

92、s,signage,personnel,changes in management,and monthly financial reporting,among other things.The contractual terms of our stores franchise agreements provide for various durations,ranging from one year to no expiration date,and in certain cases manufacturers have undertaken to renew such franchises

93、upon expiration so long as the store is in compliance with the terms of the agreement.We generally expect our franchise agreements to survive for the foreseeable future and,when the agreements do not have indefinite terms,anticipate routine renewals of the agreements without substantial cost or modi

94、fication.Our stores franchise agreements provide for termination of the agreement by the manufacturer or non-renewal for a variety of causes(including performance deficiencies in such areas as sales volume,sales effectiveness,and customer satisfaction or loyalty).However,in general,the states in whi

95、ch we operate have automotive dealership franchise laws that provide that,notwithstanding the terms of any franchise agreement,it is unlawful for a manufacturer to terminate or not renew a franchise unless“good cause”exists.It generally is difficult,outside of bankruptcy,for a manufacturer to termin

96、ate,or not renew,a franchise under these laws,which were designed to protect dealers.In addition,in our experience and historically in the automotive retail industry,dealership franchise agreements are rarely involuntarily terminated or not renewed by the manufacturer outside of bankruptcy.From time

97、 to time,certain manufacturers assert sales and customer satisfaction performance deficiencies under the terms of our framework and franchise agreements.We generally work with these manufacturers to address the asserted performance issues.For additional information,please refer to the risk factor ca

98、ptioned“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”in Part I,Item 1A of this Form 10-K.Regu

99、lationsWe operate in a highly regulated industry.A number of state and federal laws and regulations affect our business.In every state in which we operate,we must obtain various licenses in order to operate our businesses,including dealer,sales and finance,and insurance licenses issued by state regu

100、latory authorities.Numerous laws and regulations govern how we conduct our business,including those relating to our sales,operations,finance and insurance,advertising,indirect auto financing,origination and servicing of consumer auto finance loans,and employment practices.These laws and regulations

101、include state franchise laws and regulations,federal and state consumer protection laws and regulations,privacy laws,escheatment laws,anti-money laundering laws,and other extensive laws and regulations applicable to new and used motor vehicle dealers and auto finance companies,as well as a variety o

102、f other laws and regulations.These laws also include federal and state wage and hour,anti-discrimination,and other employment practices laws.See the risk factor“Our operations are subject to extensive governmental laws and regulations.If we are found to be in purported violation of or subject to lia

103、bilities under any of these laws or regulations,or if new laws or regulations are enacted that adversely affect our operations,our business,operating results,and prospects could suffer”in Part I,Item 1A of this Form 10-K.Automotive and Other Laws and RegulationsOur operations are subject to the Nati

104、onal Traffic and Motor Vehicle Safety Act,Federal Motor Vehicle Safety Standards promulgated by the United States Department of Transportation,and the rules and regulations of various state motor vehicle regulatory agencies.In addition,automotive dealers are subject to regulation by the Federal Trad

105、e Commission(the“FTC”).The imported automobiles,parts,and accessories we purchase are subject to United States customs duties and,in the ordinary course of our business we may,from time to time,be subject to claims for duties,penalties,liquidated damages,or other charges.Further,our captive finance

106、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

107、 enhanced disclosures concerning consumer financial products and services.In addition,state attorneys general have authority under their respective laws and regulations,and under the Dodd-Frank Wall Street Reform and Consumer Protection Act(the“Dodd-Frank Act”),enacted in 2010,to investigate and/or

108、regulate certain aspects of our operations.7Our financing activities with customers,including our origination and servicing activities through our captive finance company,are subject to the federal Truth-in-Lending Act,Consumer Leasing Act,Equal Credit Opportunity Act,Fair Credit Reporting Act,feder

109、al and state prohibitions against unfair,deceptive,and abusive acts and practices,and various other federal laws and regulations,as well as state and local motor vehicle finance laws,leasing laws,collection,repossession,and installment finance laws,usury laws,and other installment sales and leasing

110、laws and regulations.Among other things,these laws and regulations regulate finance and other fees and charges that may be imposed or received in connection with motor vehicle retail installment sales and leasing,require specific disclosures to consumers,define the rights to collect payments and rep

111、ossess and sell collateral,and govern the sale and terms of ancillary products.Claims arising out of actual or alleged violations of law or regulation may be asserted against us by individuals,a class of individuals,or governmental entities and may expose us to significant damages or other penalties

112、,including fines and revocation or suspension of our licenses to conduct our operations.See the risk factor“Our operations are subject to extensive governmental laws and regulations.If we are found to be in purported violation of or subject to liabilities under any of these laws or regulations,or if

113、 new laws or regulations are enacted that adversely affect our operations,our business,operating results,and prospects could suffer”in Part I,Item 1A of this Form 10-K for additional information.Environmental,Health,and Safety Laws and RegulationsOur operations involve the use,handling,storage,and c

114、ontracting for recycling and/or disposal of materials such as motor oil and filters,transmission fluids,antifreeze,refrigerants,paints,thinners,batteries,cleaning products,lubricants,degreasing agents,tires,and fuel.Consequently,our business is subject to a complex variety of federal,state,and local

115、 requirements that regulate the environment and public health and safety.Most of our stores utilize aboveground storage tanks and,to a lesser extent,underground storage tanks,primarily for petroleum-based products.Storage tanks are subject to periodic testing,containment,upgrading,and removal under

116、the Resource Conservation and Recovery Act and its state law counterparts.Clean-up or other remedial action may be necessary in the event of leaks or other discharges from storage tanks or other sources.In addition,water quality protection programs under the federal Water Pollution Control Act(commo

117、nly known as the Clean Water Act),the Safe Drinking Water Act,and comparable state and local programs govern certain discharges from some of our operations.Similarly,certain air emissions from operations,such as auto body painting,may be subject to the federal Clean Air Act and related state and loc

118、al laws.Certain health and safety standards promulgated by the Occupational Safety and Health Administration of the United States Department of Labor and related state agencies also apply.Some of our stores are parties to proceedings under the Comprehensive Environmental Response,Compensation,and Li

119、ability Act,or CERCLA,typically in connection with materials that were sent to former recycling,treatment,and/or disposal facilities owned and operated by independent businesses.The remediation or clean-up of facilities where the release of a regulated hazardous substance occurred is required under

120、CERCLA and other laws.We have a proactive strategy related to environmental,health,and safety laws and regulations,which includes contracting with third-party vendors to inspect our facilities routinely in an effort to ensure compliance.We incur significant costs to comply with applicable environmen

121、tal,health,and safety laws and regulations in the ordinary course of our business.We do not anticipate,however,that the costs of such compliance will have a material adverse effect on our business,results of operations,cash flows,or financial condition,although such outcome is possible given the nat

122、ure of our operations and the extensive environmental,health,and safety regulatory framework.We do not have any material known environmental commitments or contingencies.Markets and CompetitionWe operate in a highly competitive industry.We believe that the principal competitive factors in the automo

123、tive retail business are location,service,price,selection,and online and mobile offerings.Each of our markets includes a large number of well-capitalized competitors that have extensive automotive retail managerial experience and strong retail locations and facilities.New vehicle unit volume benefit

124、ed 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.According to industry sources,

125、as of December 31,2023,there were approximately 16,800 franchised automotive dealerships,which sell both new and used vehicles,in the United 8States.In addition,we estimate that there were approximately twice as many independent used vehicle dealers in the United States.We continue to expand our foo

126、tprint 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 face competition from(i)several public companies that operate numerous automotive retail stores or collision centers on a regional

127、 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

128、manufacturers who sell directly to consumers,and(iv)online and mobile sales platforms.We compete with dealers that sell the same vehicle brands that we sell,as well as dealers and certain manufacturers that sell other vehicle brands that we do not represent in a particular market.Our new vehicle sto

129、re competitors have franchise agreements with the various vehicle manufacturers and,as such,generally have access to new vehicles on the same terms as we have.We also compete with other dealers for qualified employees,including general managers and sales and service personnel.In general,the vehicle

130、manufacturers have designated marketing and sales areas within which only one franchised dealer of a given vehicle brand may operate.Under most framework agreements with vehicle manufacturers,the ability to acquire multiple dealers of a given vehicle brand within a particular market is limited.Deale

131、rs are also restricted by various state franchise laws from relocating stores or establishing new stores of a particular vehicle brand within any area that is served by another dealer of the same vehicle brand,and generally need the manufacturer to approve any relocation or the grant of a new franch

132、ise.However,to the extent that a market has multiple dealers of a particular vehicle brand,as most of our key markets do with respect to most vehicle brands we sell,we face significant intra-brand competition.We also compete with independent automobile service shops,service center chains,collision s

133、ervice operations,and wholesale parts outlets.We believe that the principal competitive factors in the parts and service business are price,location,expertise with the particular vehicle lines,and customer service.We also compete with a broad range of financial institutions in our finance and insura

134、nce business.We believe that the principal competitive factors in the finance and insurance business are product selection,convenience,price,contract terms,and the ability to finance vehicle protection and aftermarket products.We also operate in the auto finance sector of the consumer finance market

135、.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

136、 sector are banks and credit unions that offer direct and indirect financing to customers purchasing vehicles.Insurance and BondingOur 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 pa

137、rties 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.The automotive retail business is also subject to subst

138、antial risk of property loss due to the significant concentration of property values at store locations.In our case in particular,our operations are concentrated in states and regions in which natural disasters and severe weather events(such as hailstorms,hurricanes,earthquakes,fires,tornadoes,snows

139、torms,and landslides)may subject us to substantial risk of property loss and operational disruption.Under self-insurance programs,we retain various levels of aggregate loss limits,per claim deductibles,and claims-handling expenses as part of our various insurance programs,including property and casu

140、alty,automobile,workers compensation,and employee medical benefits.Costs in excess of this retained risk per claim may be insured under various contracts with third-party insurance carriers.We estimate the ultimate costs of these retained insurance risks based on actuarial evaluations and historical

141、 claims experience,adjusted for current trends and changes in claims-handling procedures.The level of risk we retain may change in the future as insurance market conditions or other factors affecting the economics of our insurance purchasing change.Although we have,subject to certain limitations and

142、 exclusions,substantial insurance,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.9Provisions for retained losses and deductibles are made by charges

143、 to expense based upon periodic evaluations of the estimated ultimate liabilities on reported and unreported claims.The insurance companies that underwrite our insurance require that we secure certain of our obligations for deductible reimbursements with collateral.Our collateral requirements are se

144、t by the insurance companies and,to date,have been satisfied by posting surety bonds,letters of credit,and/or cash deposits.Our collateral requirements may change from time to time based on,among other things,our claims experience.SeasonalityIn a stable environment,our operations generally experienc

145、e higher volumes of vehicle unit sales in the second and third quarters of each year due in part to consumer buying trends and the introduction of new vehicle models.Also,demand for vehicles and light trucks is generally lower during the winter months than in other seasons,particularly in regions of

146、 the United States where stores may be subject to adverse winter conditions.However,we typically experience higher sales of Premium Luxury vehicles,which have higher average selling prices and gross profit per vehicle retailed,in the fourth quarter.Revenue and operating results may be impacted signi

147、ficantly from quarter to quarter by changing economic conditions,vehicle manufacturer incentive programs,and actual or threatened severe weather events.TrademarksWe own a number of registered service marks and trademarks,including,among other marks,AutoNation and AutoNation USA.Pursuant to agreement

148、s with vehicle manufacturers,we have the right to use and display manufacturers trademarks,logos,and designs at our stores and in our advertising and promotional materials,subject to certain restrictions.We also have licenses pursuant to various agreements with third parties authorizing the use and

149、display of the marks and/or logos of such third parties,subject to certain restrictions.The current registrations of our service marks and trademarks are effective for varying periods of time,which we may renew periodically,provided that we comply with all applicable laws.Human Capital ResourcesPurp

150、ose and CultureAt 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.We believe our people are the founda

151、tion 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.Our Board of Directors and its Committees provide oversight on a broad range of human capital man

152、agement topics,including corporate culture,diversity,inclusion,compensation,and benefits.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 ser

153、vice excellence.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.AutoNation provides comprehensive benefits packages,extensive on-the-job training,and opportuni

154、ties for career growth,inspiring employees to“Go Be Great.”Talent Acquisition,Development,and RetentionCreating opportunities for employee recognition,mentoring,and advancement is a key initiative in our human resources efforts.We provide a range of formal and informal learning programs,which are de

155、signed 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.Corporate Social ResponsibilityAs one o

156、f the largest automotive retailers in the United States and one of Americas most admired companies,AutoNation was founded on the values of honesty,respect,and responsibility,which we believe extend to our stakeholders,which include our stockholders,our customers,our associates,and the communities in

157、 which we operate.AutoNations dedication to fundamental principles of good corporate stewardship has been a cornerstone of our business.10The EnvironmentWe are committed to managing our environmental impact and continually work to reduce it where practicable.The following highlights some of our envi

158、ronmental stewardship initiatives:Driving Electrified:As America transitions increasingly toward electric vehicles(“EV”),we have added and continue to add EV charging capabilities at many of our locations,many of which offer EV charging free of charge to customers.In addition,given the growing popul

159、arity of EVs,we have also created a“Driving Electrified”section of our purchasing website to help customers shop and compare different vehicles.Product offering:We offer a wide variety of environmentally friendly vehicles,including electric and hybrid vehicles.We expect our manufacturer partners to

160、continue to enhance their offerings of these types of vehicles.Building and maintenance:As we build new facilities and expand our AutoNation USA network,we take various measures to reduce our environmental impact,such as improving energy efficiency,reducing water consumption,sourcing materials local

161、ly,improving air quality,and pursuing alternative energy sources for our facilities.Our corporate headquarters building in Fort Lauderdale,Florida,is LEED Gold Certified,and is one of several LEED certified properties that we occupy.Recycling:In addition to adhering to recycling statutes,we try to m

162、aximize our recycling efforts where practicable,whether water,oil,tire rubber,scrap metal,paper,plastic,car batteries,radiator cores,or other materials.Stewardship:We have implemented an Environmental,Health and Safety Compliance Program,which includes training and consulting support at our dealersh

163、ips and other operating entities.Our CommunitiesWe are committed to supporting the communities in which we operate.We encourage our associates to be active members in the communities where they live and work through volunteerism and charitable giving.Cancer touches nearly everyone and that is why su

164、pporting cancer research and treatment is so important to us.We have transformed our brand through our“Drive Pink”initiative.More than a charitable focus on cancer research and treatment,Drive Pink is a core element of our corporate culture and has impacted customers,associates,and our communities i

165、n meaningful ways.We fund national cancer research and treatment facilities from coast to coast through our philanthropic activities.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 wor

166、ld-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.Our presence is felt at local community-based cancer events,as teams of our associates represent AutoNation at runs,w

167、alks,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.Vehicles sold at our

168、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.Our Business and Our CustomersWe are proud to be Americas most admired automotive retailer,and we strive to cre

169、ate 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 Code describes our standards of business conduct and the step

170、s AutoNation takes to ensure that our standards are understood and followed.Each AutoNation associate throughout the organization is expected to comply with the standards set forth in the Code.We also maintain a 24-hour Alert-Line for associates to anonymously report any Company policy violations un

171、der our Business Ethics Program.11 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 measure customer sat

172、isfaction and loyalty on a regular basis with a mission to deliver a peerless customer experience.Supplier relationships and sustainable procurement:We purchase products and services at a fair value regardless of the manufacturer or provider,while conducting our operations according to high standard

173、s of business conduct and all applicable legal requirements.We are also a member of an affiliate of the National Minority Supplier Development Council,which focuses on advancing business opportunities for certified minority business enterprises.Our WorkplaceAutoNation values the dignity of all emplo

174、yees and is committed to maintaining a work environment where all associates are valued and treated with respect.Respect in the Workplace:At AutoNation,we provide equal employment and promotional opportunities for all associates,as well as any individual applying for employment without regard to rac

175、e,religion,sex,sexual orientation,gender identity or expression,national origin,age,disability,or any other protected characteristic as defined by applicable federal,state,or local law.We are committed to maintaining a work environment free from sexual and other harassment.Diversity:We endeavor to a

176、ttract and retain diverse and talented people throughout our Company by engaging in diversity and inclusion initiatives,including our ONE AutoNation Program and other programs specifically designed to develop diverse groups of leaders and to recruit current and former military personnel,among others

177、.Training:We offer job-specific training programs,such as our General Management University,which is aimed at developing our existing and future leaders,and other training programs designed for high-potential associates to facilitate development of our up-and-coming talent.We offer e-commerce traini

178、ng,webinar events that present opportunities for associates to learn actionable tips on innovative ways to get results on the job,and individual development plans to target the specific needs of our associates.These types of courses help foster our culture of continual learning and growth,which in t

179、urn enriches the work environment for all our associates.Employee benefits:We offer a variety of employee benefits,such as competitive salaries/compensation plans,incentive compensation potential,and health and welfare benefits.Many of the valuable benefits we offer are free to our associates,includ

180、ing an innovative“Drive Pink”-inspired,Company-paid cancer insurance plan that provides financial assistance to associates and their eligible dependents who are diagnosed with cancer.This Company-paid benefit is offered by fewer than 5%of companies nationally and it underscores our commitment to dri

181、ving 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 pro

182、vide a complimentary biometric screening for our associates and their spouses to raise their awareness of certain factors that can affect their health and increase the risk for heart disease,diabetes,or stroke.In addition,employees are eligible to receive annual company contributions to a health sav

183、ings account from the company based on the type of coverage selected.Corporate GovernanceOur Board of Directors is committed to sound corporate governance principles and practices,which are set forth in our Corporate Governance Guidelines that serve as a framework within which our Board conducts its

184、 operations.The Corporate Governance and Nominating Committee of our Board is charged with reviewing annually,or more frequently as appropriate,the Guidelines and recommending to our Board appropriate changes in light of applicable laws and regulations,the governance standards identified by leading

185、governance authorities,and our Companys evolving needs.Our Board of Directors consists of a diverse group of leaders.Many of them have experience serving as executive officers or on boards and board committees of major companies.Many of them also have extensive corporate finance and investment banki

186、ng experience as well as a broad understanding of capital markets.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 12independent.Each of our directors must stand for re-election annually and ar

187、e elected by a majority of our shareholders.In addition,Rick L.Burdick,one of our independent directors,currently serves as our Chairman of the Board.Investor RelationsOur relationship with our shareholders is an important part of AutoNations success.We have an investor outreach program committed to

188、 engaging with current and prospective stockholders and obtaining their perspectives.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.Info

189、rmation about our Executive OfficersThe following sets forth certain information regarding our executive officers as of February 16,2024.NameAgePositionYears withAutoNationYears inAutomotiveIndustryMichael Manley59Chief Executive Officer and Director336Thomas A.Szlosek60Executive Vice President and

190、Chief Financial Officer11Gianluca Camplone54Chief Operating Officer,Precision Parts Business,and Executive Vice President,Head of Mobility,Business Strategy,and Development226C.Coleman Edmunds59Executive Vice President,General Counsel and Corporate Secretary2828Lisa Esparza54Executive Vice President

191、 and Chief Human Resource Officer22Dave Koehler55Chief Operating Officer,Non-Franchise Business1231Jeff Parent 59Chief Operating Officer126Michael Manley has served as our Chief Executive Officer and as a member of our Board since November 1,2021.Prior to joining AutoNation,Mr.Manley served as Head

192、of Americas and as a member of the Group Executive Council for Stellantis N.V.,one of the largest automotive original equipment manufacturers in the world,from January 2021 until October 2021.From July 2018 until January 2021,he served as Chief Executive Officer of Fiat Chrysler Automobiles N.V.(“FC

193、A”),a predecessor to Stellantis N.V.Mr.Manley joined DaimlerChrysler(a predecessor to FCA)in 2000 and,prior to becoming FCAs Chief Executive Officer,served in a number of management-level roles with increasing responsibility overseeing various aspects of FCAs operations,including as Executive Vice P

194、resident-International Sales&Marketing,Business Development and Global Product Planning Operations,Chief Executive Officer of Jeep,Chief Executive Officer of Ram,Chief Operating Officer for the Asia Pacific region,and FCA Global Executive Council member.Mr.Manley currently serves on the Board of Dir

195、ectors 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 Chie

196、f Financial Officer since August 2023.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

197、.He is also responsible for our shared service center in Irving,Texas.Prior to joining AutoNation,Mr.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

198、and government,advanced technologies,and applied materials industries,from December 2018 until August 2023.Prior to joining Avantor,Mr.Szlosek served as the Senior Vice President and Chief Financial Officer of Honeywell International,a diversified technology and manufacturing company,from April 2014

199、 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.Camplone is responsible for overseeing the Companys business strategy,corporate development,and Par

200、ts teams.Prior to joining AutoNation,Mr.Camplone was a Senior Partner at McKinsey&Company,a global management consulting firm,from December 1996 to February 2022,13where he was the leader in their Advanced Industries global practice and Private Equity Industrial practice in North America.C.Coleman E

201、dmunds 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 AutoNat

202、ion,Mr.Edmunds was in private practice with the international law firm of Baker&McKenzie.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 Resource Officer of Essilor North Americ

203、a,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.(NYSE:PARR),which owns and operates market-l

204、eading 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.Koehler

205、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 Virgi

206、nia from May 2019 to February 2022.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

207、Officer since October 2023.Mr.Parent oversees AutoNations day-to-day operations and works as part of the leadership team to execute the companys strategic vision and drive operational excellence.Prior to joining AutoNation,Mr.Parent served as President and General Manager of Gulf States Toyota,Inc.,

208、one of the worlds largest independent distributors of Toyota vehicles and parts,from February 2017 until October 2023.Prior to joining Gulf States Toyota as a Senior Vice President in 2010,Mr.Parent held various senior executive positions at Nissan Canada Inc.,Volkswagen of America,Inc.,and VW Credi

209、t,Inc.Available InformationOur website is located at ,and our Investor Relations website is located at .The information on or accessible through our websites and social media channels is not incorporated by reference in this Annual Report on Form 10-K.Our Annual Report on Form 10-K,Quarterly Reports

210、 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 su

211、ch material with,or furnish it to,the Securities and Exchange Commission(the“SEC”).14ITEM 1A.RISK FACTORSOur business,financial condition,results of operations,cash flows,and prospects,and the prevailing market price and performance of our common stock may be adversely affected by a number of factor

212、s,including the matters discussed below.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 Mobi

213、le 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

214、 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.All statements other than st

215、atements of historical fact,including statements that describe our objectives,plans or goals are,or may be deemed to be,forward-looking statements.Words such as“anticipate,”“expect,”“intend,”“goal,”“target,”“project,”“plan,”“believe,”“continue,”“may,”“will,”“could,”and variations of such words and s

216、imilar expressions are intended to identify such forward-looking statements.Our forward-looking statements reflect our current expectations concerning future results and events,and they involve known and unknown risks,uncertainties and other factors that are difficult to predict and may cause our ac

217、tual results,performance,or achievements to be materially different from any future results,performance,or achievements expressed or implied by these statements.These forward-looking statements speak only as of the date of this report,and we undertake no obligation to revise or update these statemen

218、ts to reflect subsequent events or circumstances.The risks,uncertainties,and other factors that our stockholders and prospective investors should consider include,but are not limited to,the following:Risks Related to Economic ConditionsThe automotive retail industry is sensitive to changing economic

219、 conditions and various other factors,including,but not limited to,unemployment levels,consumer confidence,fuel prices,interest rates,and tariffs.Our business and results of operations are substantially dependent on new and used vehicle sales levels in the United States and in our particular geograp

220、hic 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.We believe that many factors affect sales of new and used vehicles and automotive retailers gross profit margins in the United States and in our particular geograph

221、ic markets,including the economy,fuel prices,credit availability,interest rates,consumer confidence,consumer shopping preferences and the success of third-party online and mobile sales platforms,the level of personal discretionary spending,labor force participation and unemployment rates,the state o

222、f housing markets,vehicle production levels and capacity,auto emission and fuel economy standards,the rate of inflation,currency exchange rates,tariffs,manufacturer incentives(and consumers reaction to such offers),intense industry competition,the prospects of war,other international conflicts or te

223、rrorist attacks,global pandemics,severe weather events,product quality,affordability and innovation,the number of consumers whose vehicle leases are expiring,the length of consumer loans on existing vehicles,and the rise of ride-sharing applications.Changes in interest rates can significantly impact

224、 new and used vehicle sales and vehicle affordability due to the direct relationship between interest rates and monthly loan payments,a critical factor for many vehicle buyers,and the impact interest rates have on customers borrowing capacity and disposable income.Sales of certain vehicles,particula

225、rly trucks and sport utility vehicles that historically have provided us with higher gross profit per vehicle retailed,are sensitive to fuel prices and the level of construction activity.In addition,rapid changes in fuel prices can cause shifts in consumer preferences which are difficult to accommod

226、ate given the long lead-time of inventory acquisition.The imposition of new tariffs,quotas,duties,or other restrictions or limitations could increase prices for vehicles and/or parts imported into the United States and adversely impact demand for such vehicles and/or parts.Our vehicle sales,service,

227、and collision businesses could also be adversely affected by changes in the automotive industry driven by new technologies,distribution channels,or products,including ride-sharing applications,subscription services,autonomous and electric vehicles,and accident avoidance technology.Approximately 15.6

228、 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 g

229、eographic markets in which we operate.Economic conditions and the other factors described above may also materially adversely impact our sales of parts and 15automotive repair and maintenance services and automotive finance and insurance products and our ability to approve/provide financing to custo

230、mers.Risks Related to Vehicle Manufacturers and Other Third-Party SuppliersOur new vehicle sales are impacted by the incentive,marketing,and other programs of vehicle manufacturers.Most vehicle manufacturers from time to time establish various marketing and sales incentive programs designed to spur

231、consumer demand for their vehicles,particularly during periods of excess supply and/or in a flat or declining new vehicle sales market.These programs impact our operations,particularly our sales of new vehicles.Since these programs are often not announced in advance,they can be difficult to plan for

232、 when ordering inventory.Furthermore,manufacturers may modify and discontinue these marketing and incentive programs from time to time,which could have a material adverse effect on our results of operations and cash flows.In prior years,our new vehicle unit volume and new vehicle gross profit on a p

233、er vehicle retailed basis were adversely impacted by certain manufacturers disruptive marketing and sales incentive programs based upon store-level growth targets established by those manufacturers(commonly referred to as“stair-step”incentive programs),which result in multi-tier pricing and adversel

234、y impact our ability to compete with other dealers.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 ve

235、hicle manufacturers and distributors with which we hold franchises.In addition,we rely on various third-party suppliers for key products and services.The success of our stores is dependent on vehicle manufacturers in several key respects.First,we rely exclusively on the various vehicle manufacturers

236、 for our new vehicle inventory.Our ability to sell new vehicles is dependent on a vehicle manufacturers 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.Second,ma

237、nufacturers generally support their franchisees by providing direct financial assistance in various areas,including,among others,floorplan assistance and advertising assistance.Third,manufacturers provide product warranties and,in some cases,service contracts to customers.Our stores perform warranty

238、 and service contract work for vehicles under manufacturer product warranties and service contracts,and direct bill the manufacturer as opposed to invoicing the store customer.At any particular time,we have significant receivables from manufacturers for warranty and service work performed for custom

239、ers.In addition,we rely on manufacturers to varying extents for original equipment manufactured replacement parts,training,product brochures and point of sale materials,and other items for our stores.Our business,results of operations,and financial condition could be materially adversely affected as

240、 a result of any event that has a material adverse effect on the vehicle manufacturers or distributors that are our primary franchisors.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,Fo

241、rd,General Motors,BMW,Mercedes-Benz,Stellantis,and Volkswagen(including Audi and Porsche).We are subject to a concentration of risk in the event of adverse events or financial distress,including bankruptcy,impacting one or more of these manufacturers.Vehicle manufacturers may be adversely impacted b

242、y economic downturns or recessions,significant declines in the sales of their new vehicles,natural disasters,increases in interest rates,adverse fluctuations in currency exchange rates,declines in their credit ratings,liquidity concerns,labor strikes or similar disruptions(including within their maj

243、or suppliers),supply shortages or rising raw material costs,rising employee benefit costs,vehicle recall campaigns,adverse publicity that may reduce consumer demand for their products(including due to bankruptcy),product defects,litigation,poor product mix or unappealing vehicle design,governmental

244、laws and regulations(including fuel economy requirements),tariffs and other import product restrictions,the rise of ride-sharing applications,or other adverse events.These and other risks could materially adversely affect any manufacturer and impact its ability to profitably design,market,produce,or

245、 distribute new vehicles,which in turn could materially adversely affect our ability to obtain or finance our desired new vehicle inventories,our ability to take advantage of manufacturer financial assistance programs,our ability to collect in full or on a timely basis our manufacturer warranty and

246、other receivables,and/or our ability to obtain other goods and services provided by the impacted manufacturer.In addition,vehicle recall campaigns could materially adversely affect our business,results of operations,and financial condition.16Our business could be materially adversely impacted by the

247、 bankruptcy of a major vehicle manufacturer or related lender.For example,(i)a manufacturer in bankruptcy could attempt to terminate all or certain of our franchises,in which case we may not receive adequate compensation for our franchises,(ii)consumer demand for such manufacturers products could be

248、 materially adversely affected,(iii)a lender in bankruptcy could attempt to terminate our floorplan financing and demand repayment of any amounts outstanding,(iv)we may be unable to arrange financing for our customers for their vehicle purchases and leases through such lender,in which case we would

249、be required to seek financing with alternate financing sources,which may be difficult to obtain on similar terms,if at all,(v)we may be unable to collect some or all of our significant receivables that are due from such manufacturer or lender,and we may be subject to preference claims relating to pa

250、yments made by such manufacturer or lender prior to bankruptcy,and(vi)such manufacturer may be relieved of its indemnification obligations with respect to product liability claims.Additionally,any such bankruptcy may result in us being required to incur impairment charges with respect to the invento

251、ry,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.If those suppliers fail to deliver products or service

252、s 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.We are subject to restrictions imposed by,and significant influence from,vehicle manufacturers that may adve

253、rsely impact our business,financial condition,results of operations,cash flows,and prospects,including our ability to acquire additional stores.Vehicle manufacturers and distributors with whom we hold franchises have significant influence over the operations of our stores.The terms and conditions of

254、 our framework,franchise,and related agreements and the manufacturers interests and objectives may,in certain circumstances,conflict with our interests and objectives.For example,manufacturers can set performance standards with respect to sales volume,sales effectiveness,and customer satisfaction or

255、 loyalty,and can influence our ability to acquire additional stores,the naming and marketing of our stores,our digital channels,our selection of store management,product stocking and advertising spending levels,and the level at which we capitalize our stores.Manufacturers also impose minimum facilit

256、y requirements that can require significant capital expenditures.Manufacturers may also have certain rights to restrict our ability to provide guaranties of our operating companies,pledges of the capital stock of our subsidiaries,and liens on our assets,which could adversely impact our ability to ob

257、tain financing for our business and operations on favorable terms or at desired levels.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

258、 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.Manufacturers also have the right to establish new franchises or r

259、elocate existing franchises,subject to applicable state franchise laws.The establishment or relocation of franchises in our markets could have a material adverse effect on the financial condition,results of operations,cash flows,and prospects of our stores in the market in which the franchise action

260、 is taken.Our framework,franchise,and related agreements also grant the manufacturer the right to terminate or compel us to sell our franchise for a variety of reasons(including uncured performance deficiencies,any unapproved change of ownership or management,or any unapproved transfer of franchise

261、rights or impairment of financial standing or failure to meet capital requirements),subject to applicable state franchise laws.From time to time,certain major manufacturers assert sales and customer satisfaction performance deficiencies under the terms of our framework and franchise agreements.Addit

262、ionally,our framework agreements contain restrictions regarding a change in control,which may be outside of our control.See“Agreements with Vehicle Manufacturers”in Part I,Item 1 of this Form 10-K.While we believe that we will be able to renew all of our franchise agreements,we cannot guarantee that

263、 all of our franchise agreements will be renewed or that the terms of the renewals will be favorable to us.We cannot assure you that our stores will be able to comply with manufacturers sales,customer satisfaction,loyalty,performance,facility,and other requirements in the future,which may affect our

264、 ability to acquire new stores or renew our franchise agreements,or subject us to other adverse actions,including termination or compelled sale of a franchise,any of which could have a material adverse effect on our financial condition,results of operations,cash flows,and prospects.Furthermore,we re

265、ly on the protection of state franchise laws in the states in 17which 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.In addition,we have granted certain manufacturers the rig

266、ht to acquire,at fair market value,our automotive dealerships franchised by that manufacturer in specified circumstances in the event of our default under certain of our debt agreements.Risks Related to Strategic InitiativesWe are investing significantly in various strategic initiatives,including th

267、e 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.We have invested and will continue to invest substan

268、tial resources in marketing activities with the goals of,among other things,extending and enhancing the AutoNation retail brand and attracting consumers to our own digital channels.We are also investing significantly in various strategic initiatives,including the planned expansion of our AutoNation

269、USA used vehicle stores,our AutoNation Finance business,and our AutoNation Mobile Service business.These strategic initiatives may be impacted by a number of variables,including customer adoption,availability of used vehicle inventory,demand for our branded products,market conditions,and our ability

270、 to identify,acquire,and build out suitable locations in a timely manner.There can be no assurance that these initiatives will be successful or that the amount we invest in these initiatives will result in improved financial results.If our initiatives are not successful,we will have incurred signifi

271、cant expenses without the benefit of improved financial results,and we may be required to incur impairment charges.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,reputati

272、on,or sales channels,our business and financial results may be harmed.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 br

273、and.We believe that our continued success will depend on our ability to maintain and enhance the value of our retail brands across all of our sales channels,including in the communities in which we operate,and to attract consumers to our own digital channels.Consumers are increasingly shopping for n

274、ew 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 o

275、n 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.We face increased competition for market share from other automotive retailers and sales pla

276、tforms,including electric vehicle manufacturers who sell directly to consumers,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

277、digital channels,our business could be adversely impacted.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,

278、or litigation.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.We are su

279、bject 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.We are

280、subject to various risks in this business,including the risk that our borrowers do not repay their loans and that the vehicle collateral securing the payment of their loans may not be sufficient to ensure full repayment.Credit losses are an inherent risk of our auto loan portfolio,and changes in the

281、 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 18operations.In addition,finance companies are highly regulated by governmental authorities,as discussed in the

282、 risk factors under the heading,“Risks Related to Legal,Regulatory,and Compliance Matters.”Risks Related to Legal,Regulatory,and Compliance MattersNew laws,regulations,or governmental policies in response to climate change,including fuel economy and greenhouse gas emission standards,or changes to ex

283、isting standards,could adversely impact our business,results of operations,financial condition,cash flow,and prospects.Concerns over the long-term impacts of climate change have led and will continue to lead to governmental initiatives aimed to mitigate those impacts.Consumers may also change their

284、behavior as a result of these concerns.We will need to respond to new laws and regulations as well as consumer preferences resulting from climate change concerns which may affect vehicle manufacturers ability to produce cost effective vehicles.Laws and regulations enacted that directly or indirectly

285、 affect vehicle manufacturers(through an increase in the cost of production or their ability to produce satisfactory products)or our business(through an impact on our inventory availability,cost of sales,operations,or demand for the products we sell)could materially adversely impact our business,res

286、ults of operations,financial condition,cash flow,and prospects.In addition,vehicle manufacturers are subject to government-mandated fuel economy and greenhouse gas,or GHG,emission standards,which continue to change and become more stringent over time.Significant increases in fuel economy requirement

287、s or new federal or state restrictions on emissions of carbon dioxide that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles,annual miles driven,or the products we sell.We are subject to numerous legal and administrative proceedings,which,if the outcomes are

288、adverse to us,could materially adversely affect our business,results of operations,financial condition,cash flows,and prospects.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

289、and other employment-related lawsuits,and actions brought by governmental authorities.Some of these lawsuits purport or may be determined to be class or collective actions and seek substantial damages or injunctive relief,or both,and some may remain unresolved for several years.We do not believe tha

290、t the ultimate resolution of these matters will have a material adverse effect on our business,results of operations,financial condition,cash flows,or prospects.However,the results of these matters cannot be predicted with certainty,and an unfavorable resolution of one or more of these matters could

291、 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.If we are found to be in purported violation of or subject to liabilities under any of these laws or regulation

292、s,or if new laws or regulations are enacted that adversely affect our operations,our business,operating results,and prospects could suffer.The automotive retail and finance industry,including our facilities and operations,is subject to a wide range of federal,state,and local laws and regulations,suc

293、h as those relating to motor vehicle sales,retail installment sales,leasing,finance and insurance products,indirect auto financing,origination and servicing of consumer auto finance loans,vehicle protection products,advertising,licensing,consumer protection,consumer privacy,escheatment,anti-money la

294、undering,the environment,vehicle emissions and fuel economy,health and safety,and employment practices.With respect to motor vehicle sales,retail installment sales,leasing,finance and insurance products,vehicle protection products,and advertising,we are subject to various laws and regulations,the vi

295、olation of which could subject us to consumer class action or other lawsuits or governmental investigations and adverse publicity,in addition to administrative,civil,or criminal sanctions.With respect to our indirect auto financing and origination and servicing of consumer auto finance loans through

296、 our captive finance company,we are subject to extensive governmental laws and regulations relating to finance companies that could subject us to regulatory enforcement actions,including consent orders or similar orders where we may be required to revise the practices of our captive finance company,

297、remunerate customers,or pay fines.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.Our cap

298、tive 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 19regulations,including complex fed

299、eral,state,and local wage and hour and anti-discrimination laws.We are also subject to lawsuits and governmental investigations alleging violations of these laws and regulations,including purported class action lawsuits,which could result in significant liability,fines,and penalties.See the risk fac

300、tor“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”above.The violation of other laws and regulations to which we are subject also

301、 can result in administrative,civil,or criminal sanctions against us,which may include a cease and desist order against the subject operations or even revocation or suspension of our license to operate the subject business,as well as significant fines and penalties.We currently devote significant re

302、sources to comply with applicable federal,state,and local regulation of health,safety,environmental,zoning,and land use regulations,and we may need to spend additional time,effort,and money to keep our operations and existing or acquired facilities in compliance therewith.In addition,we may be subje

303、ct to broad liabilities arising out of contamination at our currently and formerly owned or operated facilities,at locations to which hazardous substances were transported from such facilities,and at such locations related to entities formerly affiliated with us.Although for some such liabilities we

304、 believe we are entitled to indemnification from other entities,we cannot assure you that such entities will view their obligations as we do or will be able to satisfy them.Failure to comply with applicable laws and regulations or the unfavorable resolution of one or more lawsuits,regulatory enforce

305、ment actions,or governmental investigations may have an adverse effect on our business,results of operations,financial condition,cash flows,and prospects.The Dodd-Frank Act established the CFPB,an independent federal agency funded by the United States Federal Reserve with broad regulatory powers and

306、 limited oversight from the United States Congress.Although automotive dealers are generally excluded from the Dodd-Frank Act,the CFPB could engage in additional,indirect regulation of automotive dealers,in particular,their sale and marketing of finance and insurance products,through its regulation

307、of automotive finance companies and other financial institutions.Further,the CFPB has supervisory authority over certain non-bank lenders,including automotive finance companies,such as our captive finance company.The CFPB can use this authority to conduct supervisory examinations or initiate enforce

308、ment actions and/or litigation to ensure compliance with various federal consumer protection laws.The CFPB,other federal agencies,state governmental authorities,and individuals could assert claims arising out of actual or alleged violations of law,which could expose us to significant damages or othe

309、r penalties,including revocation or suspension of the licenses necessary to conduct business and fines,in addition to adverse publicity.The Dodd-Frank Act also provided the FTC with new and expanded authority regarding automotive dealers,and the FTC has implemented an enforcement initiative relating

310、 to the advertising practices of automotive dealers.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 ap

311、plicable throughout the car-buying process.The FTC has since stayed the CARS Rules 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

312、to the CARS Rules implementation is uncertain.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.Regulation fr

313、om 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

314、 finance and insurance business and results of operations.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 efficien

315、t 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.The failure of our inform

316、ation systems to perform as designed or the failure to maintain and enhance or protect the integrity of these systems could disrupt our business operations,impact sales and results of operations,expose us to customer or third-party claims,or result in adverse publicity.Additionally,we collect,proces

317、s,and retain sensitive and confidential customer information in the normal course of our 20business.Despite the security measures we have in place and any additional measures we may implement in the future,our facilities and systems,and those of our third-party service providers,could experience sec

318、urity breaches,computer viruses,lost or misplaced data,programming errors,human errors,acts of vandalism,or other events.For example,several well-known retailers have disclosed high-profile security breaches involving sophisticated and highly targeted attacks on their companys infrastructure or thei

319、r customers data,which were not recognized or detected until after such retailers had been affected notwithstanding the preventative measures such retailers had in place.Any security breach or event resulting in the misappropriation,loss,or other unauthorized disclosure of confidential information,w

320、hether by us directly or our third-party service providers,could damage our reputation,expose us to the risks of litigation and liability,disrupt our business,or otherwise adversely affect our results of operations.Risks Relating to our IndebtednessOur debt agreements contain certain financial ratio

321、s and other restrictions on our ability to conduct our business,and our substantial indebtedness could adversely affect our financial condition and operations and prevent us from fulfilling our debt service obligations.The credit agreement governing our revolving credit facility and the indentures r

322、elating to our senior unsecured notes contain covenants that limit the discretion of our management with respect to various business matters.These covenants place restrictions on,among other things,our ability to incur additional indebtedness,to create liens or other encumbrances,to make investments

323、,and to sell or otherwise dispose of assets and to merge or consolidate with other entities.A failure by us to comply with the obligations contained in any of our debt agreements could result in an event of default,which could permit acceleration of the related debt as well as acceleration of debt u

324、nder other debt agreements that contain cross-acceleration or cross-default provisions.If any debt is accelerated,our liquid assets may not be sufficient to repay in full such indebtedness and our other indebtedness.Additionally,we have granted certain manufacturers the right to acquire,at fair mark

325、et value,our automotive stores franchised by those manufacturers in specified circumstances in the event of our default under our debt agreements.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 C

326、apital 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.In such case,we would seek an amendment or waiver of a covenant of our credit agreement or consider other opti

327、ons,such as raising capital through an equity issuance to pay down debt,which could be dilutive to stockholders.There can be no assurance that our lenders would agree to an amendment or waiver of a covenant of our credit agreement.In the event we obtain an amendment or waiver of a covenant of our cr

328、edit agreement,we would likely incur additional fees and higher interest expense.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 indebtednes

329、s could have important consequences.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 paym

330、ents 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 sen

331、ior 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 g

332、eneral 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;21We may be

333、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 sh