Carvana Co at Wolfe Research Consumer Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Thanks, Greg. I'm going to stay on some of these acquisition-related questions for a little bit, and then maybe we'll circle back to some of the current environment as well. But -- so you mentioned the acquisition could unlock 2 million units of additional capacity once all the locations are converted. So could you provide some -- just some more qualitative color on what exactly needs to happen to get those ADESA locations converted to a Carvana IRC?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Got you. That makes sense. And I know you said that's kind of a multiyear process to get those all converted over, but is there any more color you can give on that time line? And maybe how we would compare versus if you have done this on a greenfield basis? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2022 / 6:40PM, CVNA.N - Carvana Co at Wolfe Research Consumer Conference (Virtual)

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : That's it. That makes sense. Okay. So I guess how did you think about structuring the debt financing for this deal? Did you consider other alternatives? And then 2, why take on the additional sort of $1 billion of capital for the capital improvements? Why take that on today if the upgrades are a multiyear process?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Got you. So I mean, just talking about all the additional debt that you're going to be taking on for the deal, I mean, does that change the way you need to prioritize sort of growth versus margins in the near term? And then we just had a related investor question come in, like are you -- sort of more broadly, are you happy with your liquidity position sort of post deal? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2022 / 6:40PM, CVNA.N - Carvana Co at Wolfe Research Consumer Conference (Virtual)

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : So I think just because you kind of opened the door to it there, and then I want to make sure we circle back on GPUs before we run out of time here, but how should we think about the pace of sort of Carvana built-out IRC openings in the near term, while the -- just given the ADESA acquisition and outside ramps?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Okay. That makes sense. Okay. So before we run out of time here, I want to circle back and touch on used vehicle pricing. I'm not asking you to predict what happens with used vehicle pricing, but -- from here. But if we were to see that normalize, how do you think about managing gross profit per unit in a declining price environment?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Got you. And then kind of along those lines, we had an investor e-mail in a question asking about sort of, if you were saying you noticed increase discounting on the website, I was wondering if you had any sort of comment on why that might be?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Absolutely. Understood. So I guess just one last one to finish up here. Like how do you think about sort of ADESA as an auction business or an earnings stream from here? I know you mentioned it's kind of business as usual in the near term. But do you see risk to maybe share loss? Are your competitor dealers maybe going to want to use Manheim instead of ADESA? And then what about nondealer customers? Because I think the OPENLANE business was put out from ADESA, right?

Question: Jacob Nelson Moser - Wolfe Research, LLC - Analyst : Well, thank you, guys, so much for the time. I think we're just about out of time here, so I'll turn it back to Greg. Thanks.