10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______

Commission File Number: 001-38073

CARVANA CO.

(Exact name of registrant as specified in its charter)

Delaware			81-4549921
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
300 E. Rio Salado Parkway	Tempe	Arizona	85281
(Address of principal executive offices)			(Zip Code)

(602) 852-6604

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, Par Value $0.001 Per Share	CVNA	New York Stock Exchange
Preferred Stock Purchase Rights	—	New York Stock Exchange

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 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 preceding 12 months (or for such shorter period that the 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 definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes  ☒No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

As of July 17, 2023, the registrant had 106,543,855 shares of Class A common stock outstanding and 82,900,276 shares of Class B common stock outstanding.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	2
	Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three and Six Months Ended June 30, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	59
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	63

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

CARVANA CO. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except number of shares, which are reflected in thousands, and par values)

	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	541	$	434
Restricted cash	136		194
Accounts receivable, net	335		253
Finance receivables held for sale, net	1,098		1,334
Vehicle inventory	1,302		1,876
Beneficial interests in securitizations	335		321
Other current assets, including $5 and $6, respectively, due from related parties	165		182
Total current assets	3,912		4,594
Property and equipment, net	3,126		3,244
Operating lease right-of-use assets, including $12 and $14, respectively, from leases with related parties	489		536
Intangible assets, net	61		70
Other assets, including $2 and $1, respectively, due from related parties	261		254
Total assets	$	7,849	$	8,698
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities, including $6 and $16, respectively, due to related parties	$	739	$	777
Short-term revolving facilities	1,161		1,534
Current portion of long-term debt	199		201
Other current liabilities, including $3 and $4, respectively, from leases with related parties	80		80
Total current liabilities	2,179		2,592
Long-term debt, excluding current portion	6,542		6,574
Operating lease liabilities, excluding current portion, including $8 and $9, respectively, from leases with related parties	466		507
Other liabilities	68		78
Total liabilities	9,255		9,751
Commitments and contingencies (Note 17)
Stockholders' deficit:
Preferred stock, $0.01 par value - 50,000 shares authorized; none issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Class A common stock, $0.001 par value - 500,000 shares authorized; 106,469 and 106,037 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	—		—
Class B common stock, $0.001 par value - 125,000 shares authorized; 82,900 shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Additional paid-in capital	1,597		1,558
Accumulated deficit	(2,294)		(2,076)
Total stockholders' deficit attributable to Carvana Co.	(697)		(518)
Non-controlling interests	(709)		(535)
Total stockholders' deficit	(1,406)		(1,053)
Total liabilities & stockholders' deficit	$	7,849	$	8,698

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

CARVANA CO. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except number of shares, which are reflected in thousands, and per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Sales and operating revenues:
Retail vehicle sales, net	$	1,961	$	2,962	$	3,788	$	5,694
Wholesale sales and revenues, including $5, $7, $10 and $21, respectively, from related parties	777		704		1,395		1,279
Other sales and revenues, including $33, $50, $69 and $98, respectively, from related parties	230		218		391		408
Net sales and operating revenues	2,968		3,884		5,574		7,381
Cost of sales, including $1, $9, $2 and $18, respectively, to related parties	2,469		3,488		4,734		6,687
Gross profit	499		396		840		694
Selling, general and administrative expenses, including $10, $7, $18 and $13, respectively, to related parties	452		721		924		1,448
Interest expense	155		116		314		180
Other (income) expense, net	(3)		(3)		(5)		10
Net loss before income taxes	(105)		(438)		(393)		(944)
Income tax (benefit) provision	—		1		(2)		1
Net loss	(105)		(439)		(391)		(945)
Net loss attributable to non-controlling interests	(47)		(201)		(173)		(447)
Net loss attributable to Carvana Co.	$	(58)	$	(238)	$	(218)	$	(498)
Net loss per share of Class A common stock, basic and diluted	$	(0.55)	$	(2.35)	$	(2.05)	$	(5.20)
Weighted-average shares of Class A common stock outstanding, basic and diluted (1)	106,222		101,450		106,117		95,773

(1) Weighted-average shares of Class A common stock outstanding have been adjusted for unvested restricted stock awards.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

CARVANA CO. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

(In millions, except number of shares, which are reflected in thousands)

	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Non-controlling Interests		Total Stockholders' Equity
Balance, December 31, 2021	89,930	$	—	82,900	$	—	$	795	$	(489)	$	219	$	525
Net loss	—	—		—	—		—		(260)		(246)		(506)
Exchanges of LLC Units	27	—		—	—		1		—		(1)		—
Establishment of deferred tax assets related to increases in tax basis in Carvana Group	—	—		—	—		1		—		—		1
Establishment of valuation allowance related to deferred tax assets associated with increases in tax basis in Carvana Group	—	—		—	—		(1)		—		—		(1)
Contribution of Class A common stock from related party	(97)	—		—	—		—		—		—		—
Issuance of Class A common stock to settle vested restricted stock units	139	—		—	—		—		—		—		—
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	—	—		—	—		(12)		—		—		(12)
Options exercised	63	—		—	—		2		—		—		2
Equity-based compensation	—	—		—	—		43		—		—		43
Balance, March 31, 2022	90,062	$	—	82,900	$	—	$	829	$	(749)	$	(28)	$	52
Net loss	—	—		—	—		—		(238)		(201)		(439)
Issuance of Class A common stock, net of underwriters' discounts and commissions and offering expenses	15,625	—		—	—		1,227		—		—		1,227
Adjustments to the non-controlling interests related to equity offering	—	—		—	—		(554)		—		554		—
Exchanges of LLC Units	19	—		—	—		—		—		—		—
Establishment of deferred tax assets related to increases in tax basis in Carvana Group	—	—		—	—		21		—		—		21
Establishment of valuation allowance related to deferred tax assets associated with increases in tax basis in Carvana Group	—	—		—	—		(21)		—		—		(21)
Contribution of Class A common stock from related party	(2)	—		—	—		—		—		—		—
Issuance of Class A common stock to settle vested restricted stock units	48	—		—	—		—		—		—		—
Issuance of Class A common stock under ESPP	27	—		—	—		1		—		—		1
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	—	—		—	—		5		—		—		5
Options exercised	10	—		—	—		—		—		—		—
Equity-based compensation	—	—		—	—		18		—		—		18
Balance, June 30, 2022	105,789	$	—	82,900	$	—	$	1,526	$	(987)	$	325	$	864

3

CARVANA CO. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - (Continued)

(Unaudited)

(In millions, except number of shares, which are reflected in thousands)

	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Non-controlling Interests		Total Stockholders' Deficit
Balance, December 31, 2022	106,037	$	—	82,900	$	—	$	1,558	$	(2,076)	$	(535)	$	(1,053)
Net loss	—	—		—	—		—		(160)		(126)		(286)
Exchanges of LLC Units	14	—		—	—		1		—		(1)		—
Contribution of Class A common stock from related party	(16)	—		—	—		—		—		—		—
Issuance of Class A common stock to settle vested restricted stock units	39	—		—	—		—		—		—		—
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	(30)	—		—	—		—		—		—		—
Options exercised	3	—		—	—		—		—		—		—
Equity-based compensation	—	—		—	—		17		—		—		17
Balance, March 31, 2023	106,047	$	—	82,900	$	—	$	1,576	$	(2,236)	$	(662)	$	(1,322)
Net loss	—	—		—	—		—		(58)		(47)		(105)
Contribution of Class A common stock from related party	(16)	—		—	—		—		—		—		—
Issuance of Class A common stock to settle vested restricted stock units	415	—		—	—		—		—		—		—
Issuance of Class A common stock under ESPP	20	—		—	—		—		—		—		—
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	—	—		—	—		(2)		—		—		(2)
Options exercised	3	—		—	—		—		—		—		—
Equity-based compensation	—	—		—	—		23		—		—		23
Balance, June 30, 2023	106,469	$	—	82,900	$	—	$	1,597	$	(2,294)	$	(709)	$	(1,406)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

CARVANA CO. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, In millions)

	Six Months Ended June 30,
	2023		2022
Cash Flows from Operating Activities:
Net loss	$	(391)	$	(945)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	183		101
Equity-based compensation expense	34		42
Loss on disposal of property and equipment	6		2
Provision for bad debt and valuation allowance	25		8
Amortization and write-off of debt issuance costs	14		12
Unrealized loss on warrants to acquire Root's Class A common stock	—		5
Unrealized (gain) loss on beneficial interests in securitization	(5)		10
Changes in finance receivable related assets:
Originations of finance receivables	(2,913)		(3,960)
Proceeds from sale of finance receivables, net	3,118		3,921
Gain on loan sales	(214)		(235)
Principal payments received on finance receivables held for sale	132		113
Other changes in assets and liabilities:
Vehicle inventory	564		333
Accounts receivable	(86)		(29)
Other assets	4		(19)
Accounts payable and accrued liabilities	(24)		122
Operating lease right-of-use assets	47		(102)
Operating lease liabilities	(41)		140
Other liabilities	(10)		(6)
Net cash provided by (used in) operating activities	443		(487)
Cash Flows from Investing Activities:
Purchases of property and equipment	(50)		(361)
Proceeds from disposal of property and equipment	33		—
Payments for acquisitions, net of cash acquired	(7)		(2,189)
Principal payments received on and proceeds from sale of beneficial interests	30		25
Net cash provided by (used in) investing activities	6		(2,525)
Cash Flows from Financing Activities:
Proceeds from short-term revolving facilities	4,536		8,159
Payments on short-term revolving facilities	(4,909)		(9,094)
Proceeds from issuance of long-term debt	62		3,416
Payments on long-term debt	(85)		(66)
Payments of debt issuance costs	(2)		(65)
Net proceeds from issuance of Class A common stock	—		1,227
Proceeds from equity-based compensation plans	—		3
Tax withholdings related to restricted stock units and awards	(2)		(7)
Net cash (used in) provided by financing activities	(400)		3,573
Net increase in cash, cash equivalents and restricted cash	49		561
Cash, cash equivalents and restricted cash at beginning of period	628		636
Cash, cash equivalents and restricted cash at end of period	$	677	$	1,197

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — BUSINESS ORGANIZATION

Description of Business

Carvana Co. and its wholly-owned subsidiary Carvana Co. Sub LLC (collectively, "Carvana Co.", and, together with its consolidated subsidiaries, the "Company"), is the leading e-commerce platform for buying and selling used cars. The Company is transforming the used car sales experience by giving consumers what they want - a wide selection, great value and quality, transparent pricing, and a simple, no pressure transaction. Using the website, customers can complete all phases of a used vehicle transaction, including financing their purchase, trading in their current vehicle, and purchasing complementary products such as vehicle service contracts ("VSC"), auto insurance, and GAP waiver coverage. Each element of the Company's business, from inventory procurement to fulfillment and overall ease of the online transaction, has been built for this singular purpose.

Organization

Carvana Co. is a holding company that was formed as a Delaware corporation on November 29, 2016, for the purpose of completing its initial public offering ("IPO") and related transactions in order to operate the business of Carvana Group, LLC and its subsidiaries (collectively, "Carvana Group"). Substantially all of the Company's assets and liabilities represent the assets and liabilities of Carvana Group, except the Company's Senior Notes (as defined in Note 10 — Debt Instruments) which were issued by Carvana Co. and are guaranteed by its and Carvana Group's existing domestic restricted subsidiaries, excluding ADESA US Auction, LLC ("ADESA"), and its subsidiaries, which the Company designated as unrestricted subsidiaries under the Indentures (as defined below) in March 2023.

In accordance with Carvana Group, LLC's amended and restated limited liability company agreement (the "LLC Agreement"), Carvana Co. is the sole manager of Carvana Group and conducts, directs and exercises full control over the activities of Carvana Group. There are two classes of common ownership interests in Carvana Group, Class A common units (the "Class A Units") and Class B common units (the "Class B Units"). As further discussed in Note 11 — Stockholders' Equity (Deficit), the Class A Units and Class B Units (collectively, the "LLC Units") do not hold voting rights, which results in Carvana Group being considered a variable interest entity ("VIE"). Due to Carvana Co.'s power to control and its significant economic interest in Carvana Group, it is considered the primary beneficiary of the VIE and the Company consolidates the financial results of Carvana Group. As of June 30, 2023, Carvana Co. owned approximately 55.8% of Carvana Group and the LLC Unitholders (as defined in Note 11 — Stockholders' Equity (Deficit)) owned the remaining 44.2%.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K filed on February 23, 2023.

The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of June 30, 2023, results of operations and changes in stockholder's equity (deficit) for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations.

As discussed in Note 1 — Business Organization, Carvana Group is considered a VIE and Carvana Co. consolidates its financial results due to the determination that it is the primary beneficiary.

6

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Liquidity

Since inception, the Company has incurred losses, and expects to incur additional losses in the future as it shifts priorities to focus on driving profitability through operating efficiency and reducing expenses. Historically, the Company's capital and liquidity needs were primarily satisfied through its debt and equity financings, operating cash flows, floor plan facility, and Finance Receivable Facilities (as defined below), certain of which facilities expire within the next twelve months. The Company plans to extend the maturity date of these facilities within the next year by amending its existing facilities or by entering into new agreements. In January 2023, the Company amended its Master Purchase and Sale Agreement for the purchaser to purchase up to a maximum of $4.0 billion of the Company's finance receivables from the amendment date through January 2024, and such facility had approximately $2.3 billion of unused capacity as of June 30, 2023. In addition, the Company has a $2.0 billion floor plan facility through March 22, 2024, with such facility having approximately $1.4 billion of unused capacity as of June 30, 2023. Additionally, in May 2023, the Company entered into an agreement pursuant to which a lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until May 31, 2024. Management believes that current working capital, cash flows from operations, and expected continued or new financing arrangements will be sufficient to fund operations for at least one year from the financial statement issuance date.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company's assets and liabilities and the results of operations.

Recently Issued But Not Yet Adopted Accounting Standards

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. ASU 2023-01 clarifies the accounting for leasehold improvements associated with common control leases. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those years. The Company does not expect the update to have a material effect on its consolidated financial statements.

NOTE 3 — BUSINESS COMBINATIONS

Acquisition of ADESA U.S. Physical Auction Business

On May 9, 2022, the Company completed its acquisition of 100% of the equity interests in the U.S. physical auction business of ADESA from KAR Auction Services, Inc. for approximately $2.2 billion in cash (the "ADESA Acquisition"). Proceeds from the issuance and sale of the 2030 Notes (as defined below) were used to fund the acquisition. The acquisition included 56 auction sites throughout the U.S. with 6.5 million square feet of buildings on more than 4,000 acres of land, significantly expanding the Company's infrastructure and enhancing its customer offering by facilitating a broader selection of vehicles and faster delivery times.

7

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table summarizes the allocation of the purchase price consideration to identifiable assets acquired and liabilities assumed as of December 31, 2022:

	Purchase Price Allocation
	(in millions)
Assets Acquired
Current assets	$	208
Property and equipment	1,281
Operating lease right-of-use assets	188
Intangible assets	79
Other assets	1
Total Assets Acquired	1,757
Liabilities Assumed
Current liabilities	233
Operating lease liabilities	167
Total Liabilities Assumed	400
Net Assets Acquired	1,357
Purchase price consideration	2,195
Goodwill	$	838

Identifiable intangible assets acquired consist of the following:

	Fair Value		Useful Life
Customer relationships	$	50	10 years
Developed technology	$	29	3 years

Customer relationships were valued using the multi-period excess earnings method of the income approach. Developed technology was valued using the replacement cost method of the cost approach. Significant assumptions used in the valuations were forecasted revenues and attrition rate and are classified as Level 3 due to the lack of observable market data. No residual values were assigned to the customer relationships and developed technology intangible assets and they are amortized on an economic useful life basis commensurate with future anticipated cash flows and straight line, respectively. As of June 30, 2023, the remaining weighted-average amortization period for the intangible assets acquired was approximately 6.1 years.

Real property was valued using market comparable transactions of the market approach, for which the key assumption is the similarity of the acquired property to market comparable transactions. Personal property was valued using the replacement cost method of the cost approach, for which the key assumptions are the costs of similar personal property in new condition and economic obsolescence rates.

The acquisition resulted in the recognition of $838 million of goodwill, which is deductible for tax purposes and represents the future economic benefits expected to arise from anticipated synergies and intangible assets that do not qualify for separate recognition, including an assembled workforce, non-contractual relationships and other agreements.

For the three and six months ended June 30, 2023, the Company recognized $223 million and $434 million, respectively, of wholesale sales and revenues, $197 million and $382 million, respectively, of cost of sales, and a net loss of $18 million and $36 million, respectively, from ADESA operations, which includes $31 million and $62 million, respectively, of depreciation and amortization, including acquired intangible assets amortization expense of $3 million and $8 million, respectively.

8

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

For the three and six months ended June 30, 2022, the Company recognized $108 million of wholesale sales and revenues, $103 million of cost of sales, and a net loss of $21 million from ADESA operations, which includes $20 million of depreciation and amortization, including acquired intangible assets amortization expense of $4 million.

The following unaudited pro forma combined results of operations information for the three and six months ended June 30, 2022 have been prepared as if the ADESA Acquisition occurred on January 1, 2021:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Revenues	$	3,968	$	7,680
Net loss	(485)		(1,075)
Net loss attributable to non-controlling interests	(216)		(478)
Net loss attributable to Carvana Co.	$	(269)	$	(597)
Net loss per share of Class A common stock - basic and diluted	$	(2.54)	$	(5.65)
Weighted-average shares of Class A common stock - basic and diluted	105,743		105,731

The unaudited pro forma combined results of operations information reflect the following pro forma adjustments:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Interest expense	$	36	$	123
Lease expense	$	1	5
Depreciation and amortization expense	$	7	13
Intercompany revenues and cost of sales	$	(2)	$	(7)

The unaudited pro forma combined results of operations information is provided for informational purposes only and is not necessarily intended to represent the results that would have been achieved had the ADESA Acquisition been consummated on January 1, 2021 or indicative of the results that may be achieved in the future.

9

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 4 — PROPERTY AND EQUIPMENT, NET

The following table summarizes property and equipment, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Land and site improvements	$	1,331	$	1,331
Buildings and improvements	1,317		1,267
Transportation fleet	625		673
Software	284		245
Furniture, fixtures and equipment	140		158
Total property and equipment excluding construction in progress	3,697		3,674
Less: accumulated depreciation and amortization on property and equipment	(652)		(564)
Property and equipment excluding construction in progress, net	3,045		3,110
Construction in progress	81		134
Property and equipment, net	$	3,126	$	3,244

Depreciation and amortization expense on property and equipment was $99 million and $85 million for the three months ended June 30, 2023 and 2022, respectively, of which $42 million and $45 million were recorded to selling, general and administrative expense, respectively, $13 million and $12 million were capitalized to vehicle inventory, respectively, and $44 million and $28 million were recorded to cost of sales, respectively, including $18 million and $11 million previously capitalized to vehicle inventory, respectively.

Depreciation and amortization expense on property and equipment was $199 million and $138 million for the six months ended June 30, 2023 and 2022, respectively, of which $86 million and $81 million were recorded to selling, general and administrative expense, respectively, $25 million and $21 million were capitalized to vehicle inventory, respectively, and $88 million and $36 million were recorded to cost of sales, respectively, including $37 million and $18 million previously capitalized to vehicle inventory, respectively.

NOTE 5 — INTANGIBLE ASSETS

The following table summarizes intangible assets, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Intangible assets:
Customer relationships	$	50	$	50
Developed technology	41		41
Non-compete agreements	—		1
Intangible assets, acquired cost	91		92
Less: accumulated amortization	(30)		(22)
Intangible assets, net	$	61	$	70

Amortization expense was $4 million during each of the three months ended June 30, 2023 and 2022 and $9 million and $4 million during the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the remaining weighted-

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

average amortization period for definite-lived intangible assets was approximately 5.5 years. The anticipated annual amortization expense to be recognized in future years as of June 30, 2023, is as follows:

	Expected Future Amortization
	(in millions)
Remainder of 2023	$	9
2024	18
2025	14
2026	7
2027	5
Thereafter	8
Total	$	61

NOTE 6 — ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

The following table summarizes accounts payable and other accrued liabilities as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Accounts payable, including $6 and $16, respectively, due to related parties	$	255	$	232
Accrued interest expense	96		99
Sales taxes and vehicle licenses and fees	83		76
Accrued compensation and benefits	52		65
Reserve for returns and cancellations	58		60
Customer deposits	39		23
Accrued advertising costs	4		7
Accrued property and equipment	3		10
Other accrued liabilities	149		205
Total accounts payable and other accrued liabilities	$	739	$	777

NOTE 7 — RELATED PARTY TRANSACTIONS

Lease Agreements

In November 2014, the Company and DriveTime Automotive Group, Inc. (together with its consolidated affiliates, collectively, “DriveTime”), a related party of the Company due to Ernest Garcia II, Ernest Garcia III, and entities controlled by one or both of them (collectively the "Garcia Parties") controlling and owning substantially all of the interests in DriveTime, entered into a lease agreement (the "DriveTime Lease Agreement") that governs the Company’s access to and utilization of temporary storage, reconditioning, offices and parking space at various DriveTime facilities, including hubs and inspection and reconditioning centers. The DriveTime Lease Agreement was most recently amended in December 2018. The last hub facility lease remaining under the DriveTime Lease Agreement expired in April 2023, and the leases for the inspection and reconditioning centers expire between 2024 and 2026.

In March 2017, the Company and DriveTime entered into a lease agreement that governs the Company's access to and utilization of office and parking space at various DriveTime facilities (the "DriveTime Hub Lease Agreement"). The DriveTime

11

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Hub Lease Agreement was most recently amended in July 2021. The last facility remaining under the DriveTime Hub Lease Agreement expired in April 2023 and was not renewed.

Prior to expiration, the hub locations under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement both had cancellable lease terms of less than twelve months with rights to terminate at the Company's election with 60 days' prior written notice and certain one-year renewal options provided. At non-reconditioning locations, because it was not reasonably certain that the Company would exercise its options to extend the leases or abstain from exercising its termination rights within these lease agreements to create a lease term greater than one year, the Company accounted for them as short-term leases. For these locations, the Company made variable monthly lease payments based on its pro rata utilization of space at each facility plus a pro rata share of each facility’s actual insurance costs and real estate taxes. Management had determined that the costs allocated to the Company were based on a reasonable methodology. The DriveTime Lease Agreement also includes the Blue Mound and Delanco inspection and reconditioning centers. At both of these locations, the Company expects the lease to continue beyond twelve months, therefore, those locations are not considered short-term leases. The Company occupies all of the space at these inspection and reconditioning centers and makes monthly lease payments based on DriveTime's actual rent expense. In addition, the Company is responsible for the actual insurance costs and real estate taxes at these inspection and reconditioning centers locations.

At all locations, the Company is additionally responsible for paying for any tenant improvements it requires to conduct its operations. Management has determined that the costs allocated to the Company are based on a reasonable methodology.

In February 2017, the Company entered into a lease agreement with DriveTime for sole occupancy of a fully operational inspection and reconditioning center in Winder, Georgia. The lease has an initial term of eight years, subject to the Company's ability to exercise three renewal options of five years each.

Expenses related to these operating lease agreements are allocated based on usage to inventory and selling, general and administrative expenses in the accompanying unaudited condensed consolidated balance sheets and statements of operations. Costs allocated to inventory are recognized as cost of sales when the inventory is sold. Total costs related to these operating lease agreements, including those noted above, were $1 million during each of the three months ended June 30, 2023 and 2022, and $2 million during each of the six months ended June 30, 2023 and 2022, respectively, allocated between inventory and selling, general and administrative expenses.

Office Leases

In September 2016, the Company entered into a lease for office space in Tempe, Arizona. In connection with that lease, the Company entered into a sublease with DriveTime for the use of another floor in the same building. The lease and sublease each have a term of 83 months, subject to the right to exercise three five-year extension options. Pursuant to the sublease, the Company pays the rent equal to the amounts due under DriveTime's master lease directly to DriveTime's landlord. The rent expense incurred related to this first floor sublease was less than $1 million during each of the three and six months ended June 30, 2023 and 2022.

In December 2019, Verde Investments, Inc., an affiliate of DriveTime ("Verde"), purchased an office building in Tempe, Arizona that the Company leased from an unrelated landlord prior to Verde's purchase. In connection with the purchase, Verde assumed that lease. The lease has an initial term of ten years, subject to the right to exercise two five-year extension options. The rent expense incurred under the lease with Verde was less than $1 million during each of the three and six months ended June 30, 2023 and 2022.

Wholesale Sales and Revenues

DriveTime purchases and sells wholesale vehicles from and to the Company through competitive online auctions that are managed by an unrelated third party, and through the Company's wholesale marketplace platform. The Company recognized

12

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

$5 million and $7 million of wholesale sales and revenues from DriveTime during the three months ended June 30, 2023 and 2022, respectively, and $10 million and $21 million during the six months ended June 30, 2023 and 2022, respectively.

Retail Vehicle Acquisitions and Reconditioning

During the second quarter of 2021, the Company began acquiring reconditioned retail vehicles from DriveTime. The purchase price of each vehicle was equal to the wholesale price of the vehicle plus a fee for transportation and reconditioning services. In addition, DriveTime performs reconditioning services for the Company at DriveTime reconditioning centers. As of June 30, 2023 and 2022, less than $1 million and $3 million, respectively, related to vehicles and reconditioning services were included in vehicle inventory in the accompanying unaudited condensed consolidated balance sheets. The Company also recognized $1 million and $9 million of cost of goods sold during the three months ended June 30, 2023 and 2022, respectively, and $2 million and $18 million during the six months ended June 30, 2023 and 2022, respectively.

Master Dealer Agreement

In December 2016, the Company entered into a master dealer agreement with DriveTime (the "Master Dealer Agreement"), pursuant to which the Company may sell VSCs to customers purchasing a vehicle from the Company. The Company earns a commission on each VSC sold to its customers and DriveTime is obligated by and subsequently administers the VSCs. The Company collects the retail purchase price of the VSCs from its customers and remits the purchase price net of commission to DriveTime. During the three months ended June 30, 2023 and 2022, the Company recognized $33 million and $49 million, respectively, and during the six months ended June 30, 2023 and 2022, the Company recognized $68 million and $96 million, respectively, of commissions earned on VSCs sold to its customers and administered by DriveTime, net of a reserve for estimated contract cancellations. The commission earned on the sale of these VSCs is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations. In November 2018, the Company amended the Master Dealer Agreement to allow the Company to receive payments for excess reserves based on the performance of the VSCs versus the reserves held by the VSC administrator, once a required claims period for such VSCs has passed. In August 2020 and April 2021, the Company and DriveTime amended the Master Dealer Agreement to adjust excess reserve payment calculations and timing and the scope of DriveTime's after-sale administration services, respectively. The Company recognized less than $1 million and $1 million during the three months ended June 30, 2023 and 2022, respectively, and $1 million and $2 million during the six months ended June 30, 2023 and 2022, respectively, related to payments for excess reserves to which it expects to be entitled, which is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations.

Beginning in 2017, DriveTime also administers the Company's limited warranty provided to all customers and administered a portion of the Company's GAP waiver coverage under the Master Dealer Agreement. Since the first quarter of 2020, the Company's GAP waiver coverage sales have been administered by an unrelated third party. The Company pays a per-vehicle fee to DriveTime to administer the limited warranty included with every purchase and prior to the first quarter of 2020 paid a per-contract fee to DriveTime to administer a portion of the GAP waiver coverage it sells to its customers. The Company incurred $5 million and $9 million during each of the three and six months ended June 30, 2023 and 2022, respectively, related to the administration of limited warranty.

Profit Sharing Agreement

In June 2018, the Company entered into an agreement with an unaffiliated third party, pursuant to which the Company would sell certain Road Hazard ("RH") and Pre-Paid Maintenance ("PPM") contracts. Under this agreement, third parties would administer the RH and PPM contracts, including providing customer and administrative services, and pay a profit sharing component to the Company. In 2022, the Company began selling equivalent offerings from DriveTime, pursuant to the Master Dealer Agreement discussed above, and all rights and obligations in connection with existing RH and PPM contracts were transferred to DriveTime (the "Transferred Contracts"). Finally, in December 2022, the Company entered into a profit sharing agreement with DriveTime with regard to the Transferred Contracts (the "Profit Sharing Agreement"). During each of the three and six months ended June 30, 2023, the Company recognized less than $1 million in revenues under the Profit Sharing Agreement.

13

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Servicing and Administrative Fees

DriveTime provides servicing and administrative functions associated with the Company's finance receivables. The Company incurred expenses of $4 million and $2 million during the three months ended June 30, 2023 and 2022, respectively, and $8 million and $4 million during the six months ended June 30, 2023 and 2022, respectively, related to these services.

Aircraft Time Sharing Agreement

The Company entered into an agreement to share usage of two aircraft owned by Verde and operated by DriveTime on October 22, 2015, and the agreement was subsequently amended in 2017. Pursuant to the agreement, the Company agreed to reimburse DriveTime for actual expenses for each of its flights. The original agreement was for 12 months, with perpetual 12-month automatic renewals. Either the Company or DriveTime can terminate the agreement with 30 days’ prior written notice. The Company reimbursed DriveTime less than $1 million under this agreement during each of the three and six months ended June 30, 2023 and 2022.

Shared Services Agreement with DriveTime

In November 2014, the Company and DriveTime entered into a shared services agreement whereby DriveTime provided certain accounting and tax, legal and compliance, information technology, telecommunications, benefits, insurance, real estate, equipment, corporate communications, software and production, and other services primarily to facilitate the transition of these services to the Company on a standalone basis (the "Shared Services Agreement"). The Shared Services Agreement was most recently amended and restated in February 2021 and operates on a year-to-year basis, with the Company having the right to terminate any or all services with 30 days' prior written notice and DriveTime having the right to terminate any or all services with 90 days' prior written notice. Charges allocated to the Company are based on the Company’s actual use of the specific services detailed in the Shared Services Agreement. The Company incurred less than $1 million in expenses related to the Shared Services Agreement during each of the three and six months ended June 30, 2023 and 2022.

Accounts Payable Due to Related Party

As of June 30, 2023 and December 31, 2022, $6 million and $16 million, respectively, was due to related parties primarily related to the agreements mentioned above, and is included in accounts payable and accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

Contributions of Class A Common Stock From Ernest Garcia III

On January 5, 2022, in recognition of the Company selling its 1 millionth vehicle in the fourth quarter of 2021, the Company's CEO, Ernest Garcia III ("Mr. Garcia"), committed to giving then-current employees 23 shares of Class A common stock each from his personal shareholdings once employees reach their two-year employment anniversary ("CEO Milestone Gift" or "Gift"). As a result and during the three months ended March 31, 2022, the Company granted 23 restricted stock units ("RSUs") to each current employee, which vest after they complete their second year of employment, for a total of 435,035 RSUs granted during the period. For every gift that vests, and pursuant to a contribution agreement (the "Contribution Agreement") entered into by and between the Company and Mr. Garcia on February 22, 2022, Mr. Garcia contributes to the Company, at the end of each fiscal quarter, the number of shares of Class A common stock, granted pursuant to the CEO Milestone Gift, that have vested during such quarter. The shares contributed shall be shares of Class A common stock that Mr. Garcia individually owns, at no charge. The contribution is intended to fund RSU awards to certain employees of the Company upon their satisfying the applicable employment tenure requirements. During the three months ended June 30, 2023 and 2022, 15,778 and 14,099 RSUs, respectively, and during the six months ended June 30, 2023 and 2022, 31,625 and 113,206 RSUs, respectively, vested and were contributed by Mr. Garcia. Although the Company does not expect Mr. Garcia to incur any tax obligations related to the contribution, the Company has agreed to indemnify Mr. Garcia from any such obligations that may arise.

14

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 8 — FINANCE RECEIVABLE SALE AGREEMENTS

The Company originates loans for its customers and sells them to partners and investors pursuant to finance receivable sale agreements. Historically, the Company has sold loans through two types of arrangements: forward flow agreements and fixed pool loan sales, including securitization transactions.

Master Purchase and Sale Agreement

In December 2016, the Company entered into a master purchase and sale agreement (the "Master Purchase and Sale Agreement" or "MPSA") with Ally Bank and Ally Financial Inc. (collectively the "Ally Parties"). Pursuant to the MPSA, the Company sells finance receivables meeting certain underwriting criteria under a committed forward flow arrangement without recourse to the Company for their post-sale performance. The Company and the Ally Parties amended the MPSA at various times throughout 2021 and 2022, and on January 13, 2023 and January 20, 2023 the MPSA was further amended to extend the scheduled commitment termination date to January 12, 2024, and establish a commitment by the Ally Parties to purchase up to a maximum of $4.0 billion of principal balances of finance receivables between January 13, 2023 and the scheduled commitment termination date. Finally, the Company and the Ally Parties entered into additional amendments to the MPSA on March 24, 2023 and April 17, 2023 to broaden the scope of finance receivables eligible for sale to the Ally Parties and update account information.

During the three months ended June 30, 2023 and 2022, the Company sold $1.0 billion and $1.3 billion, respectively, in principal balances of finance receivables under the MPSA. During the six months ended June 30, 2023 and 2022, the Company sold $1.7 billion and $1.8 billion, respectively, in principal balances of finance receivables under the MPSA and had $2.3 billion of unused capacity as of June 30, 2023.

Securitization Transactions

The Company sponsors and establishes securitization trusts to purchase finance receivables from the Company. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that the Company sells to the securitization trusts. Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables. The net proceeds from the sales are the fair value of the assets obtained as part of the transactions and typically include cash and at least 5% of the beneficial interests issued by the securitization trusts to comply with the Risk Retention Rules (as defined below), as further discussed in Note 9 — Securitizations and Variable Interest Entities.

During the three months ended June 30, 2023 and 2022, the Company sold $0.9 billion and $0.6 billion, respectively, in principal balances of finance receivables through securitization transactions. During the six months ended June 30, 2023 and 2022, the Company sold $1.3 billion and $2.0 billion, respectively, in principal balances of finance receivables through securitization transactions.

Gain on Loan Sales

The total gain related to finance receivables sold to financing partners and pursuant to securitization transactions was $150 million and $130 million during the three months ended June 30, 2023 and 2022, respectively, and $214 million and $235 million during the six months ended June 30, 2023 and 2022, respectively, which is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations.

NOTE 9 — SECURITIZATIONS AND VARIABLE INTEREST ENTITIES

As noted in Note 8 — Finance Receivable Sale Agreements, the Company sponsors and establishes securitization trusts to purchase finance receivables from the Company. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that the Company sells to the securitization trusts. Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables. The net proceeds from the sales are the fair value of the assets obtained as part of the transactions and typically include cash and at least 5% of the beneficial interests issued by the securitization trusts to comply with Regulation RR of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Risk Retention Rules"). The beneficial interests retained by the Company include, but

15

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

are not limited to, rated notes and certificates of the securitization trusts. The holders of the certificates issued by the securitization trusts have rights to cash flows only after the holders of the notes issued by the securitization trusts have received their contractual cash flows. The securitization trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the securitization trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company are subject principally to the credit and prepayment risk stemming from the underlying finance receivables.

The securitization trusts established in connection with asset-backed securitization transactions are VIEs. For each VIE that the Company establishes in its role as sponsor of securitization transactions, it performs an analysis to determine whether or not it is the primary beneficiary of the VIE. The Company’s continuing involvement with the VIEs consists of retaining a portion of the securities issued by the VIEs and performing ministerial duties as the trust administrator. As of June 30, 2023, the Company is not the primary beneficiary of these securitization trusts because its retained interests in the VIEs do not have exposures to losses or benefits that could potentially be significant to the VIEs. As such, the Company does not consolidate the securitization trusts.

The assets the Company retains in the unconsolidated VIEs are presented as beneficial interests in securitizations on the accompanying unaudited condensed consolidated balance sheets, which as of June 30, 2023 and December 31, 2022 were $335 million and $321 million, respectively. The Company held no other assets or liabilities related to its involvement with unconsolidated VIEs as of June 30, 2023 and December 31, 2022.

The following table summarizes the carrying value and total exposure to losses of its assets related to unconsolidated VIEs with which the Company has continuing involvement, but is not the primary beneficiary at June 30, 2023 and December 31, 2022. Total exposure represents the estimated loss the Company would incur under severe, hypothetical circumstances, such as if the value of the interests in the securitization trusts and any associated collateral declined to zero. The Company believes the possibility of this is remote. As such, the total exposure presented below is not an indication of the Company's expected losses.

	June 30, 2023				December 31, 2022
	Carrying Value		Total Exposure		Carrying Value		Total Exposure
	(in millions)
Rated notes	$	266	$	266	$	252	$	252
Certificates and other assets	69		69		69		69
Total unconsolidated VIEs	$	335	$	335	$	321	$	321

The beneficial interests in securitizations are considered securities available for sale subject to restrictions on transfer pursuant to the Company’s obligations as a sponsor under Risk Retention Rules. As described in Note 10 — Debt Instruments, the Company has entered into secured borrowing facilities through which it finances certain of these retained beneficial interests in securitizations. These securities are interests in securitization trusts, thus there are no contractual maturities. The amortized cost and fair value of securities available for sale as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Rated notes	$	278	$	266	$	268	$	252
Certificates and other assets	54		69		43		69
Total securities available for sale	$	332	$	335	$	311	$	321

16

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 10 — DEBT INSTRUMENTS

Debt instruments, excluding finance leases, which are discussed in Note 16 — Leases, as of June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in millions)
Asset-based financing:
Floor plan facility	$	557	$	569
Finance receivable facilities	604		965
Financing of beneficial interest in securitizations	278		268
Notes payable	2		3
Real estate financing	484		486
Total asset-based financing	1,925		2,291
Senior notes	5,725		5,725
Total debt	7,650		8,016
Less: current portion	(1,270)		(1,638)
Less: unamortized debt issuance costs (1)	(75)		(82)
Total included in long-term debt, net	$	6,305	$	6,296

(1) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the accompanying unaudited condensed consolidated balance sheets. Unamortized debt issuance costs related to revolving debt arrangements are presented within other assets on the accompanying unaudited condensed consolidated balance sheets and not included here.

Short-Term Revolving Facilities

Floor Plan Facility

The Company previously entered into a floor plan facility with a lender to finance its vehicle inventory, which was secured by Carvana LLC's vehicle inventory, general intangibles, accounts receivable, and finance receivables. The facility was amended at various times and effective September 22, 2022, the Company amended and restated the facility to extend the maturity date, with a line of credit of $2.2 billion through September 22, 2023, and $2.0 billion through March 22, 2024, and tie the interest rate to a prime rate plus 1.00%. On May 31, 2023, the Company amended the facility to have a single line of credit of $2.0 billion through March 22, 2024.

Under the facility, repayment of amounts drawn for the purchase of a vehicle should generally be made within several days after selling or otherwise disposing of the vehicle. Outstanding balances related to vehicles held in inventory for more than 150 days require monthly principal payments equal to 10% of the original principal amount of that vehicle until the remaining outstanding balance is equal to the lesser of (i) 50% of the original principal amount or (ii) 50% of the wholesale value. Prepayments may be made without incurring a premium or penalty. Additionally, the Company is permitted to make prepayments to the lender to be held as principal payments under the facility and subsequently reborrow such amounts. The facility also requires monthly interest payments and that at least 12.5% of the total principal amount owed to the lender is held as restricted cash. The Company is also required to pay the lender an availability fee based on the average unused capacity during the prior calendar quarter under the facility.

As of June 30, 2023, the Company had $557 million outstanding under the facility, unused capacity of $1.4 billion, and held $70 million in restricted cash related to this facility. During the three months ended June 30, 2023, the Company's effective interest rate on the facility was approximately 8.00%.

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

As of December 31, 2022, the Company had $569 million outstanding under the facility, unused capacity of $1.6 billion, and held $71 million in restricted cash related to this facility. For the year ended December 31, 2022, the Company's effective interest rate on the facility was approximately 3.57%.

Active Finance Receivable Facilities

The Company has various short-term revolving credit facilities to fund certain finance receivables originated by the Company prior to selling them, which are typically secured by the finance receivables pledged to them (the "Finance Receivable Facilities").

In January 2020, the Company entered into an agreement pursuant to which a lender agreed to provide a revolving credit facility, which was subsequently increased to $500 million, to fund certain finance receivables originated by the Company. In June 2021, the Company amended its agreement to, among other things, extend the maturity date to January 24, 2023. In January 2023, the Company amended its agreement to, among other things, adjust the line of credit to $300 million, and extend the maturity date to January 24, 2024.

In February 2020, the Company entered into an agreement pursuant to which a second lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase the line of credit to $600 million, and extend the maturity date to December 8, 2023.

In April 2021, the Company entered into an agreement pursuant to which a third lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase this line of credit to $600 million. In September 2022, the Company amended its agreement to extend the maturity date to March 30, 2024.

In October 2021, the Company entered into an agreement pursuant to which a fourth lender agreed to provide a $350 million revolving credit facility to fund certain finance receivables originated by the Company. On May 8, 2023, the Company settled all outstanding amounts owed and terminated the agreement with the lender.

In March 2022, the Company entered into an agreement pursuant to which a fifth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until September 18, 2023.

In May 2023, the Company entered into an agreement pursuant to which a sixth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until May 31, 2024.

The Finance Receivable Facilities require that any undistributed amounts collected on the pledged finance receivables be held as restricted cash. The Finance Receivable Facilities require monthly payments of interest and fees based on usage and unused facility amounts. The Finance Receivable Facilities self-amortize from the end of the draw period until maturity, offer full prepayment rights, and have no credit sublimits or aging restrictions, subject to negotiated concentration limits. The subsidiaries that entered into these Finance Receivable Facilities are each wholly-owned, special purpose entities whose assets are not available to the general creditors of the Company. As of June 30, 2023 and December 31, 2022, the Company had $604 million and $965 million, respectively, outstanding under these Finance Receivable Facilities, unused capacity of $1.9 billion and $1.6 billion, respectively, and held $24 million and $36 million, respectively, in restricted cash related to these Finance Receivable Facilities. During the three months ended June 30, 2023, the Company's effective interest rate on these Finance Receivable Facilities was approximately 6.78%. For the year ended December 31, 2022, the Company's effective interest rate on these Finance Receivable Facilities was approximately 2.93%.

Long-Term Debt

Senior Unsecured Notes

The Company has issued various tranches of senior unsecured notes (collectively, the "Senior Notes") each under a separate indenture (collectively, the "Indentures"), as further described below.

18

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table summarizes components of the Company's senior unsecured notes:

	June 30, 2023		December 31, 2022		Interest Rate
	(in millions, except percentages)
2025 Senior Unsecured Notes due October 1, 2025 ("2025 Notes")	$	500	$	500	5.625	%
2027 Senior Unsecured Notes due April 15, 2027 ("2027 Notes")	600		600		5.500	%
2028 Senior Unsecured Notes due October 1, 2028 ("2028 Notes")	600		600		5.875	%
2029 Senior Unsecured Notes due September 1, 2029 ("2029 Notes")	750		750		4.875	%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes")	3,275		3,275		10.250	%
Total principal amount	5,725		5,725
Less: unamortized debt issuance cost	(70)		(76)
Total debt	$	5,655	$	5,649

Each of the 2025 Notes, the 2027 Notes, the 2028 Notes and the 2029 Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party thereto and U.S. Bank National Association, as trustee. The 2030 Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. Interest on each of the Senior Notes is payable semi-annually, beginning on April 1, 2021 for the 2025 Notes and 2028 Notes, October 15, 2021 for the 2027 Notes, March 1, 2022 for the 2029 Notes, and November 1, 2022 for the 2030 Notes. The Senior Notes mature as specified in the table above unless earlier repurchased or redeemed and are guaranteed by the Company's existing domestic restricted subsidiaries (other than the subsidiaries formed for inventory, finance receivables, securitization facilities, immaterial subsidiaries, or unrestricted subsidiaries). In March 2023, the Company designated ADESA and its subsidiaries as unrestricted subsidiaries under the

Indentures.

The Company may redeem some or all of each issuance of Senior Notes at redemption prices set forth in each respective indenture, plus any accrued and unpaid interest to the redemption date. Prior to those redemption dates, the Company may redeem up to 35% of the aggregate principal amount at a redemption price equal to 100% plus the respective interest rate specified in the table above, together with accrued and unpaid interest to, but not including, the date of redemption, with the net cash proceeds of certain equity offerings. With respect to the 2030 Notes, the Company may, at its option, redeem in the aggregate of up to 10% of the original aggregate principal amount of the 2030 Notes during the period from, and including, May 1, 2025 to, but excluding May 1, 2027, at a redemption price equal to 105.125% of the 2030 Notes to be redeemed, plus accrued and unpaid interest thereon to the relevant redemption rate. In addition, the Company may, at its option, redeem some or all of the Senior Notes prior to its redemption date, by paying a make-whole premium plus any accrued and unpaid interest to, but not including, the redemption date. If the Company experiences certain change of control events, it must make an offer to purchase all of the Senior Notes at 101% of the principal amount thereof, plus any accrued and unpaid interest, to the repurchase date.

The Indentures contain restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things and subject to certain exceptions, incur additional debt or issue preferred stock, create new liens, make intercompany payments, pay dividends and make other distributions in respect of the Company's capital stock, redeem or repurchase the Company’s capital stock or prepay subordinated indebtedness, make certain investments or certain other restricted payments, guarantee indebtedness, designate unrestricted subsidiaries, sell certain kinds of assets, enter into certain types of transactions with affiliates, and effect mergers or consolidations. Certain of these covenants may be suspended if any of the Senior Notes are assigned an investment grade rating from any two of Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, and Fitch Ratings.

As further described under Note 20 — Subsequent Events, on July 17, 2023, the Company entered into a transaction support agreement (the "Transaction Support Agreement") pursuant to which, among other transactions described in Note 20 — Subsequent Events, certain holders of the Senior Notes have agreed to support, approve, implement and enter into definitive documents with respect to certain transactions, including, but not limited to, (i) the exchange of Senior Notes for three tranches of senior secured notes due 2028, 2030 and 2031, respectively (such notes, the "New Secured Notes"), in an aggregate principal amount of up to $4.376 billion (the "Exchange Offers"), and (ii) the solicitation of consents from certain eligible holders of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Senior Notes to amend certain provisions in the Indentures to be conducted simultaneously with the Exchange Offers (the "Consent Solicitations").

Notes Payable

The Company has entered into promissory note and disbursement agreements to finance certain equipment for its transportation fleet and building improvements. The assets financed with the proceeds from these notes serve as the collateral for each note and certain security agreements related to these assets have cross collateralization and cross default provisions with respect to one another. The notes have a fixed annual interest rate, a term of 3.25 years and require monthly payments. As of June 30, 2023 and December 31, 2022, the outstanding principal of these notes had a weighted-average interest rate of 8.2% and 7.5%, respectively, and totaled $2 million and $3 million, respectively, net of unamortized debt issuance costs, of which $2 million and $1 million, respectively, was due within the next twelve months and is included in current portion of long-term debt in the accompanying unaudited condensed consolidated balance sheets.

Real Estate Financing

The Company finances certain purchases and construction of its property and equipment through various sale and leaseback transactions. As of June 30, 2023, none of these transactions have qualified for sale accounting due to meeting the criteria for finance leases, or forms of continuing involvement, such as repurchase options or renewal periods that extend the lease for substantially all of the asset's remaining useful life, and are therefore accounted for as financing transactions. These arrangements require monthly payments and have initial terms of 20 to 25 years. Some of the agreements are subject to renewal options of up to 25 years and some are subject to base rent increases throughout the term. As of June 30, 2023 and December 31, 2022, the outstanding liability associated with these sale and leaseback arrangements, net of unamortized debt issuance costs, was $482 million and $483 million, respectively, and was included in long-term debt in the accompanying unaudited condensed consolidated balance sheets.

Financing of Beneficial Interests in Securitizations

As discussed in Note 9 — Securitizations and Variable Interest Entities, the Company has retained certain beneficial interests in securitizations pursuant to the Company’s obligations as a sponsor under the Risk Retention Rules. Beginning in June 2019, the Company entered into secured borrowing facilities through which it finances certain retained beneficial interests in securitizations whereby the Company sells such interests and agrees to repurchase them for their fair value at a stated time of repurchase.

As of June 30, 2023 and December 31, 2022, the Company has pledged $278 million and $268 million, respectively, of its beneficial interests in securitizations as collateral under the repurchase agreements with expected repurchases ranging from September 2023 to June 2030. The securitization trusts distribute payments related to the Company's pledged beneficial interests in securitizations directly to the lenders, which reduces the beneficial interests in securitizations and the related debt balance. Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral, the repurchase price of the pledged collateral will be increased by the amount of the decline.

The outstanding balance of these facilities, net of unamortized debt issuance costs, was $275 million and $265 million as of June 30, 2023 and December 31, 2022, respectively, of which $106 million and $102 million, respectively, was included in current portion of long-term debt in the accompanying unaudited condensed consolidated balance sheets.

As of June 30, 2023, the Company was in compliance with all debt covenants.

NOTE 11 — STOCKHOLDERS' EQUITY (DEFICIT)

Organizational Transactions

Carvana Co.'s amended and restated certificate of incorporation, among other things, authorizes (i) 50 million shares of Preferred Stock, par value $0.01 per share, (ii) 500 million shares of Class A common stock, par value $0.001 per share, and (iii) 125 million shares of Class B common stock, par value $0.001 per share. Each share of Class A common stock generally

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

entitles its holder to one vote on all matters to be voted on by stockholders. Each share of Class B common stock held by the Garcia Parties generally entitles its holder to ten votes on all matters to be voted on by stockholders, for so long as the Garcia Parties maintain direct or indirect beneficial ownership of at least 25% of the outstanding shares of Carvana Co.'s Class A common stock determined on an as-exchanged basis assuming that all of the Class A Units and Class B Units were exchanged for Class A common stock. All other shares of Class B common stock generally entitle their holders to one vote per share on all matters to be voted on by stockholders. Holders of Class B common stock are not entitled to receive dividends and would not be entitled to receive any distributions upon the liquidation, dissolution or winding down of the Company. Holders of Class A and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by applicable law.

Carvana Group's amended and restated LLC Agreement provides for two classes of common ownership interests in Carvana Group: (i) Class A Units and (ii) Class B Units (together, the "LLC Units"). Carvana Co. is required to, at all times, maintain (i) a four-to-five ratio between the number of shares of Class A common stock issued and outstanding by Carvana Co. and the number of Class A Units owned by Carvana Co. (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities and subject to adjustment as set forth in the exchange agreement (the "Exchange Agreement") further discussed below, and taking into account Carvana Co. Sub LLC's 0.1% ownership interest in Carvana, LLC) and (ii) a four-to-five ratio between the number of shares of Class B common stock owned by the original holders of LLC units prior to the IPO (the "Original LLC Unitholders") and the number of Class A Units owned by the Original LLC Unitholders. The Company may issue shares of Class B common stock only to the extent necessary to maintain these ratios. Shares of Class B common stock are transferable only if an Original LLC Unitholder elects to exchange them, together with 1.25 times as many LLC Units, for consideration from the Company. Such consideration from the Company can be, at the Company’s election, either shares of Class A common stock or cash.

As of June 30, 2023 and December 31, 2022, there were 237 million and 236 million Class A Units and 2 million and 1 million Class B Units, respectively, (as adjusted for the participation thresholds and closing price of Class A common stock on June 30, 2023 and December 31, 2022) issued and outstanding. As discussed in Note 13 — Equity-Based Compensation, Class B Units were issued under the Company’s LLC Equity Incentive Plan (the "LLC Equity Incentive Plan") and are subject to a participation threshold, and are earned over the requisite service period.

Equity Offerings

On April 26, 2022, the Company completed a public offering of 15.625 million shares of its Class A common stock at an offering price of $80 for total net proceeds of $1.2 billion, after deducting underwriting discounts and offering expenses. The Garcia Parties purchased an aggregate of 5.4 million shares of the Class A common stock offered at the public offering price. The Company used the net proceeds to purchase 19.5 million newly-issued LLC Units in Carvana Group.

Exchange Agreement

Carvana Co. and the Original LLC Unitholders together with any holders of LLC Units issued subsequent to the IPO (together, the "LLC Unitholders") entered into an Exchange Agreement under which each LLC Unitholder (and certain permitted transferees thereof) may receive shares of the Company's Class A common stock in exchange for their LLC Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to (i) conversion ratio adjustments for stock splits, stock dividends, reclassifications and similar transactions, (ii) vesting for certain LLC Units, and (iii) the respective participation threshold for Class B Units. To the extent such owners also hold Class B common stock, they are required to deliver to Carvana Co. a number of shares of Class B common stock equal to the number of shares of Class A common stock being exchanged for. Any shares of Class B common stock so delivered are canceled. The number of exchangeable Class B Units is determined based on the value of Carvana Co.'s Class A common stock and the applicable participation threshold.

During the three months ended June 30, 2023 and 2022, certain LLC Unitholders exchanged zero and less than 1 million LLC Units and no shares of Class B common stock for zero and less than 1 million newly-issued shares of Class A common stock, respectively. During each of the six months ended June 30, 2023 and 2022, certain LLC Unitholders exchanged less than 1 million LLC Units and no shares of Class B common stock for less than 1 million newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, Carvana Co. received zero and less than 1 million LLC Units during the three months ended June 30, 2023 and 2022, respectively, and less than 1 million LLC Units during each of the six months ended June 30, 2023 and 2022, increasing its total ownership interest in Carvana Group for the three months ended June 30, 2022.

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Class A Non-Convertible Preferred Units

On October 2, 2018, Carvana Group, LLC amended its LLC Agreement to create a class of non-convertible preferred units (the "Class A Non-Convertible Preferred Units"), effective September 21, 2018. The Class A Non-Convertible Preferred Units were created in connection with Carvana Co.'s issuance of its Senior Notes, as discussed further and defined in Note 10 — Debt Instruments. On October 2, 2020, Carvana Group, LLC amended and restated its LLC Agreement to, among other things, authorize the issuance of 1.1 million Class A Non-Convertible Preferred Units to be sold to Carvana Co. in connection with the issuance of its 2025 and 2028 Notes and authorize the issuance of additional Class A Non-Convertible Preferred Units, in each case in consideration for the capital contribution made or deemed to have been made by Carvana Co. of the net proceeds of senior unsecured notes issuances. On March 29, 2021, Carvana Group, LLC issued 0.6 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2027 Notes. On August 16, 2021, Carvana Group, LLC issued 0.8 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2029 Notes. On May 6, 2022, Carvana Group, LLC issued 3.3 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2030 Notes. Carvana Co. used its net proceeds from certain Senior Unsecured Notes due 2023, (which have since been repurchased), the 2025 and 2028 Notes, the 2027 Notes, the 2029 Notes, and the 2030 Notes to purchase 0.6 million, 1.1 million, 0.6 million, 0.8 million, and 3.3 million, respectively, of Class A Non-Convertible Preferred Units.

When Carvana Co. makes payments on the Senior Notes, Carvana Group makes an equal cash distribution, as necessary, to the Class A Non-Convertible Preferred Units. For each $1,000 principal amount of Senior Notes that Carvana Co. repays or otherwise retires, one Class A Non-Convertible Preferred Unit is canceled and retired.

Tax Asset Preservation Plan

On January 16, 2023, the Company entered into a Section 382 Rights Agreement (the “Tax Asset Preservation Plan”) designed to preserve shareholder value and the value of certain tax assets primarily associated with federal net operating loss carryforwards and built-in losses under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). The Tax Asset Preservation Plan is intended to act as a deterrent to any person or group acquiring 4.9% or more of the Company's outstanding Class A common stock (any such person an “Acquiring Person”), without the approval of the Company’s board of directors (the "Board").

In connection therewith, the Board declared a dividend of one preferred share purchase right (a “Right”) for each share of Class A common stock, par value $0.001 per share, of the Company. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”) at a price of $50.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The Rights will separate and begin trading separately from the Class A common stock, and right certificates will be caused to evidence the Rights, on the earlier to occur of (i) the Close of Business (as such term is defined in the Tax Asset Preservation Plan) on the tenth day following a public announcement, or the public disclosure of facts indicating, that a Person (as such term is defined in the Tax Asset Preservation Plan) or group of affiliated or associated Persons has acquired Beneficial Ownership (as such term is defined in the Tax Asset Preservation Plan) of 4.9% or more of the outstanding Class A common stock (or, in the event that the Board determines to effect an exchange in accordance with Section 24 of the Tax Asset Preservation Plan and the Board determines that a later date is advisable, then such later date) and (ii) the close of business on the tenth business day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer the consummation of which would result in the Beneficial Ownership by a Person or group of 4.9% or more of the outstanding Class A common stock. If issued, each Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void) will become exercisable for Class A common stock having a value equal to two times the exercise price of the Right. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company, including without limitation any dividend, voting or liquidation rights.

On July 18, 2023, the Company amended and restated its Tax Asset Preservation Plan in order to adjust the definition of Beneficial Ownership to exclude derivatives that may be only settled in cash, do not confer voting rights, and lack other features consistent with beneficial ownership of shares of Class A common stock.

NOTE 12 — NON-CONTROLLING INTERESTS

As discussed in Note 1 — Business Organization, Carvana Co. consolidates the financial results of Carvana Group and reports a non-controlling interest related to the portion of Carvana Group owned by the LLC Unitholders. Changes in the

22

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

ownership interest in Carvana Group while Carvana Co. retains its controlling interest will be accounted for as equity transactions. Exchanges of LLC Units result in a change in ownership and reduce the amount recorded as non-controlling interests and increase additional paid-in capital.

Upon the issuance of shares of Class A common stock by Carvana Co. related to the Company’s equity compensation plans such as the exercise of options, issuance of restricted or non-restricted stock, payment of bonuses in stock or settlement of stock appreciation rights in stock, Carvana Group is required to issue to Carvana Co. a number of Class A Units equal to 1.25 times the number of shares of Class A common stock being issued in connection with the exercise of such options or issuance of other types of equity compensation, subject to adjustment for stock splits, stock dividends, reclassifications, and similar transactions. Activity related to the Company's equity compensation plans may result in a change in ownership which will impact the amount recorded as non-controlling interest and additional paid-in capital.

The non-controlling interest related to the Class B Units is determined based on the respective participation thresholds and the share price of Class A common stock on an as-converted basis. To the extent that the number of as-converted Class B Units change or Class B Units are forfeited, the resulting difference in ownership will be accounted for as equity transactions adjusting the non-controlling interest and additional paid-in capital.

During the six months ended June 30, 2023 and 2022, the total adjustments related to exchanges of LLC Units were a decrease in non-controlling interests and a corresponding increase in additional paid-in capital of $1 million each, which have been included in exchanges of LLC Units in the accompanying unaudited condensed consolidated statements of stockholders' equity (deficit).

As of June 30, 2023, Carvana Co. owned approximately 55.8% of Carvana Group with the LLC Unitholders owning the remaining 44.2%. The net loss attributable to the non-controlling interests on the accompanying unaudited condensed consolidated statements of operations represents the portion of the net loss attributable to the economic interest in Carvana Group held by the non-controlling LLC Unitholders calculated based on the weighted average non-controlling interests' ownership during the periods presented.

	Six Months Ended June 30,
	2023		2022
	(in millions)
Transfers from non-controlling interests:
Decrease as a result of issuances of Class A common stock	$	—	$	(554)
Increase as a result of exchanges of LLC Units	$	1	$	1
Total transfers from non-controlling interests	$	1	$	(553)

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 13 — EQUITY-BASED COMPENSATION

Equity-based compensation is recognized based on amortizing the grant-date fair value on a straight-line basis over the requisite service period, which is generally the vesting period of the award, less actual forfeitures. A summary of equity-based compensation recognized during the three and six months ended June 30, 2023 and 2022 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Restricted Stock Units and Awards excluding those granted in relation to the CEO Milestone Gift	$	19	$	8	$	33	$	17
Restricted Stock Units granted in relation to the CEO Milestone Gift	—		6		(1)		37
Options	4		4		8		7
Total equity-based compensation	23		18		40		61
Equity-based compensation capitalized to property and equipment	(3)		(2)		(5)		(4)
Equity-based compensation capitalized to inventory	(1)		(2)		(1)		(15)
Equity-based compensation, net of capitalized amounts	$	19	$	14	$	34	$	42

As of June 30, 2023, the total unrecognized compensation related to outstanding equity awards was $223 million, which the Company expects to recognize over a weighted-average period of approximately 3.1 years. Total unrecognized equity-based compensation will be adjusted for actual forfeitures.

2017 Omnibus Incentive Plan

In connection with the IPO, the Company adopted the 2017 Omnibus Incentive Plan (the "2017 Incentive Plan"). The number of shares authorized for issuance under the 2017 Incentive Plan is subject to an automatic annual increase of the lesser of two percent of the Company's outstanding common stock or an amount determined by the Compensation and Nominating Committee of the Board. While the Compensation and Nominating Committee determined not to increase the number of shares authorized for issuance in prior years, the automatic annual increase on January 1, 2023 was approved. As a result, in February 2023, the Company registered approximately 2 million additional shares (the "Automatic Increase"). In addition, on February 22, 2023, the Board approved an amendment, subject to stockholder approval, to increase the number of shares available under the 2017 Incentive Plan by 20 million shares (the "Amendment Increase"). On February 22, 2023, Ernest Garcia II also granted the Board an irrevocable proxy to vote the shares of Class A and Class B common stock directly held and beneficially owned by Mr. Garcia II in favor of the Amendment Increase. The Company's stockholders approved the Amendment Increase at the annual stockholder meeting on May 1, 2023. After taking into account the Automatic Increase and the Amendment Increase, approximately 36 million shares of Class A common stock are available for issuance under the 2017 Incentive Plan, which the Company may grant as stock options, stock appreciation rights, restricted stock, restricted stock units and other equity-based awards to employees, directors, officers and consultants. The majority of equity granted by the Company vests over four-year periods based on continued employment with the Company. As of June 30, 2023, approximately 17 million shares remain available for future equity-based award grants under this plan.

Employee Stock Purchase Plan

In May 2021, the Company adopted an employee stock purchase plan (the "ESPP"). On July 1, 2021, the ESPP went into effect. The ESPP allows substantially all employees, excluding members of senior management, to acquire shares of the Company’s Class A common stock through payroll deductions over six-month offering periods, commencing on January 1 and July 1 of each year. The per share purchase price is equal to 90% of the fair market value of a share of the Company’s Class A common stock on the last day of the offering period. Participant purchases are limited to maximums that may vary between

24

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

$10,000 and $25,000 of stock per calendar year. The Company is authorized to grant up to 0.5 million shares of Class A common stock under the ESPP.

During the six months ended June 30, 2023 and 2022, the Company issued 20,127 and 27,462 shares of Class A common stock, respectively, and recognized less than $1 million of equity-based compensation expense in each period. As of June 30, 2023, 391,027 shares remained available for future issuance.

Class A Units

During 2018, the Company granted certain employees Class A Units with service-based vesting over two- to four-year periods and a grant-date fair value of $18.58 per Class A Unit. The grantees entered into the Exchange Agreement under which each LLC Unitholder (and certain permitted transferees thereof) may receive shares of the Company's Class A common stock in exchange for their LLC Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting.

Class B Units

In March 2015, Carvana Group adopted the LLC Equity Incentive Plan. Under the LLC Equity Incentive Plan, Carvana Group could grant Class B Units to eligible employees, non-employee officers, consultants and directors with service-based vesting, typically four to five years. In connection with the completion of the IPO, Carvana Group discontinued the grant of new awards under the LLC Equity Incentive Plan, however the LLC Equity Incentive Plan will continue in connection with administration of existing awards that remain outstanding. Grantees may receive shares of the Company's Class A common stock in exchange for Class B Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting and the respective participation threshold for Class B Units. Class B Units do not expire. There were no Class B Units issued during the three and six months ended June 30, 2023 or 2022. As of June 30, 2023, outstanding Class B Units had participation thresholds between $0.00 to $12.00.

NOTE 14 — LOSS PER SHARE

Basic and diluted net loss per share is computed by dividing the net loss attributable to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive shares. For all periods presented, potentially dilutive shares are excluded from diluted net loss per share because they have an anti-dilutive impact. Therefore, basic and diluted net loss per share attributable to Class A common stockholders are the same for all periods presented. Net loss for all periods presented is attributable only to Class A common stockholders, due to no activity related to convertible preferred stock during those periods.

25

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table presents the calculation of basic and diluted net loss per share during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions, except number of shares, which are reflected in thousands, and per share amounts)
Numerator:
Net loss	$	(105)	$	(439)	$	(391)	$	(945)
Net loss attributable to non-controlling interests	(47)		(201)		(173)		(447)
Net loss attributable to Carvana Co. Class A common stockholders, basic and diluted	$	(58)	$	(238)	$	(218)	$	(498)
Denominator:
Weighted-average shares of Class A common stock outstanding	106,247		101,450		106,154		95,773
Nonvested weighted-average restricted stock awards	(25)		—		(37)		—
Weighted-average shares of Class A common stock outstanding, basic and diluted	106,222		101,450		106,117		95,773
Net loss per share of Class A common stock, basic and diluted	$	(0.55)	$	(2.35)	$	(2.05)	$	(5.20)

Shares of Class B common stock do not share in the losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net loss per share of Class B common stock under the two-class method has not been presented.

The following table presents potentially dilutive securities, as of the end of the period, excluded from the computations of diluted net loss per share of Class A common stock for the three and six months ended June 30, 2023 and 2022.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
	(in thousands)
Options (1)	4,029	1,281	4,029	1,281
Restricted Stock Units and Awards (1)	9,953	74	9,953	74
Class A Units (2)	82,963	82,963	82,963	82,963
Class B Units (2)	988	1,835	856	1,835

_________________________

(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

(2) Represents the weighted-average as-converted LLC units that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive.

NOTE 15 — INCOME TAXES

As described in Note 1 — Business Organization and Note 11 — Stockholders' Equity (Deficit), as a result of the IPO, Carvana Co. began consolidating the financial results of Carvana Group. Carvana Group is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Carvana Group is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Carvana Group is passed through to and included in the taxable income or loss of its members, including Carvana Co., based on its economic interest held in Carvana Group. Carvana Co. was formed on November 29, 2016 and did not engage in any operations prior to the IPO. Carvana Co. is taxed as a corporation and is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income or loss of Carvana Group, as well as any stand-alone income or loss generated by Carvana Co.

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CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

As described in Note 11 — Stockholders' Equity (Deficit), the Company acquired zero and less than 1 million LLC Units during the three months ended June 30, 2023, and 2022, respectively, and less than 1 million LLC Units during each of the six months ended June 30, 2023 and 2022 in connection with exchanges with LLC Unitholders. During the three months ended June 30, 2023, and 2022, the Company recorded a gross deferred tax asset of zero and $1 million, respectively, and less than $1 million and $1 million, respectively, during the six months ended June 30, 2023 and 2022 associated with the basis difference in its investment in Carvana Group related to the acquisition of the LLC Units which is reflected as an increase to additional paid-in capital in the accompanying unaudited condensed consolidated statements of stockholders' equity (deficit).

During the six months ended June 30, 2023, management performed an assessment of the recoverability of deferred tax assets. Management determined, based on the accounting standards applicable to such assessment, that there was sufficient evidence as a result of the Company’s cumulative losses to conclude it was more likely than not that its deferred tax assets would not be realized and has recorded a full valuation allowance against its deferred tax assets. In the event that management was to determine that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be made which would reduce the provision for income taxes.

The Company recognizes uncertain income tax positions when it is more-likely-than-not the position will be sustained upon examination. As of June 30, 2023 and December 31, 2022, the Company has not identified any uncertain tax positions and has not recognized any related reserves.

The Company's effective tax rate for the three months ended June 30, 2023 and 2022 was a benefit of 0.4% and an expense of 0.1%, respectively, and for the six months ended June 30, 2023 and 2022 was a benefit of 0.6% and an expense of 0.2%, respectively, related to its wholly-owned subsidiaries.

Tax Receivable Agreement

Carvana Co. expects to obtain an increase in its share of the tax basis in the net assets of Carvana Group when LLC Units are exchanged by the LLC Unitholders and other qualifying transactions. As described in Note 11 — Stockholders' Equity (Deficit), each change in outstanding shares of Class A common stock results in a corresponding increase or decrease in Carvana Co.'s ownership of LLC Units. The Company intends to treat any exchanges of LLC Units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Carvana Co. would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the IPO, the Company entered into a Tax Receivable Agreement (the "TRA"). Under the TRA, the Company generally will be required to pay to the LLC Unitholders 85% of the amount of cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes created as a result of any sales or exchanges (as determined for U.S. federal income tax purposes) to or with the Company of their interests in Carvana Group for shares of Carvana Co.'s Class A common stock or cash, including any basis adjustment relating to the assets of Carvana Group and (ii) tax benefits attributable to payments made under the TRA (including imputed interest). The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.

If the Internal Revenue Service or a state or local taxing authority challenges the tax basis adjustments that give rise to payments under the TRA and the tax basis adjustments are subsequently disallowed, the recipients of payments under the agreement will not reimburse the Company for any payments the Company previously made to them. Any such disallowance would be taken into account in determining future payments under the TRA and would, therefore, reduce the amount of any such future payments. Nevertheless, if the claimed tax benefits from the tax basis adjustments are disallowed, the Company’s payments under the TRA could exceed its actual tax savings, and the Company may not be able to recoup payments under the TRA that were calculated on the assumption that the disallowed tax savings were available.

The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur, (ii) there is a material breach of any material obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the

27

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any LLC Units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination.

As of June 30, 2023, the Company has concluded, based on applicable accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized; therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets. As of June 30, 2023, the total unrecorded TRA liability is approximately $1.6 billion. If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements of operations.

NOTE 16 — LEASES

The Company is party to various lease agreements for real estate and transportation equipment. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company also assesses whether each lease is an operating or finance lease at the lease commencement date. Rent expense of operating leases is recognized on a straight-line basis over the lease term and includes scheduled rent increases as well as amortization of tenant improvement allowances.

Operating Leases

As of June 30, 2023, the Company is a tenant under various operating leases related to certain of its hubs, vending machines, inspection and reconditioning centers, auction locations with reconditioning capacity, storage, parking and corporate offices. The initial terms expire at various dates between 2023 and 2038. Many of the leases include one or more renewal options ranging from one to twenty years and some contain purchase options.

The Company's operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities on the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 7 — Related Party Transactions for further discussion of operating leases with related parties.

Finance Leases

The Company has finance leases for certain equipment in its transportation fleet. The leases have initial terms of two to five years, some of which include extension options for up to four additional years, and require monthly payments. The Company's finance leases are included in long-term debt on the accompanying unaudited condensed consolidated balance sheets.

28

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Lease Costs and Activity

The Company's lease costs and activity during the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Lease costs:
Finance leases:
Amortization of finance lease assets	$	28	$	24	$	56	$	41
Interest obligations under finance leases	5		5		10		8
Total finance lease costs	$	33	$	29	$	66	$	49
Operating leases:
Fixed lease costs to non-related parties	$	17	$	27	$	35	$	52
Fixed lease costs to related parties	1		1		2		2
Total operating lease costs	$	18	$	28	$	37	$	54
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities to non-related parties					$	53	$	32
Operating lease liabilities to related parties					$	2	$	1
Interest payments on finance lease liabilities					$	10	$	8
Cash payments related to lease liabilities included in financing cash flows:
Principal payments on finance lease liabilities					$	64	$	65

29

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Maturity Analysis of Lease Liabilities

The following table summarizes maturities of lease liabilities as of June 30, 2023:

			Operating Leases (1)
	Finance Leases		Related Party (2)		Non-Related Party		Total Operating		Total
	(in millions)
Remainder of 2023	$	55	$	2	$	45	$	47	$	102
2024	101		4		93		97		198
2025	91		2		90		92		183
2026	75		2		87		89		164
2027	35		2		79		81		116
Thereafter	6		2		297		299		305
Total minimum lease payments	363		14		691		705		1,068
Less: amount representing interest	(36)		(2)		(177)		(179)		(215)
Total lease liabilities	$	327	$	12	$	514	$	526	$	853

_________________________

(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included.

(2) Related party lease payments exclude rent payments due under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets.

As of June 30, 2023 and December 31, 2022, none of the Company's lease agreements contain material residual value guarantees or material restrictive covenants.

Lease Terms and Discount Rates

The weighted-average remaining lease terms and discount rates as of June 30, 2023 and 2022 were as follows, excluding short-term operating leases:

	As of June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	8.1		8.9
Finance leases	3.8		4.5
Weighted-average discount rate
Operating leases	7.1	%	7.0	%
Finance leases	5.8	%	5.5	%

NOTE 17 — COMMITMENTS AND CONTINGENCIES

Accrued Limited Warranty

As part of its retail strategy, the Company provides a 100-day or 4,189-mile limited warranty to customers to repair certain broken or defective components of each retail vehicle sold. As such, the Company accrues for such repairs based on actual claims incurred to-date and repair reserves based on historical trends. The liability was $16 million and $19 million as of June 30, 2023 and December 31, 2022, respectively, and is included in accounts payable and other accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

30

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Purchase Obligations

The Company has purchase obligations for certain customary services related to operating a wholesale auction business of $155 million in aggregate over the next six years, as of June 30, 2023. These purchase obligations are recorded as liabilities when the services are rendered.

Legal Matters

From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business for a publicly traded auto retail and e-commerce company. For example, the Company is currently a party to legal and regulatory disputes, including putative class action and shareholder derivative lawsuits, alleging, among other things, the violation of federal securities and antitrust laws and state laws regarding consumer protection, stockholders' rights and the titling and registration of vehicles sold to its customers. These disputes include, but are not limited to, In re Carvana Co. Securities Litigation, United States District Court for the District of Arizona (Case No. CV-22-2126-PHX-MTL); City of Warwick Retirement System v. Carvana Co., et al., Maricopa County, Arizona Superior Court (Case No. CV2022-013054); In re Carvana Co. Stockholders Litigation, Delaware Chancery Court (Case No. 2020-0415-KSJM); Neal Vestal v. Carvana Co., et al., Delaware Chancery Court (Case No. 2022-0609-KSJM); Taiae Bradley v. Carvana, LLC, United States District Court for the Eastern District of Pennsylvania (Case No. 2:22-cv-02525-MMB); Dana Jennings, et al. v. Carvana, LLC, United States District Court for the Eastern District of Pennsylvania (Case No. 5:21-cv-05400-EGS); Mountaineer Motors of Lenoir, LLC v. Carvana, LLC, et al., United States District Court for the Western District of North Carolina (Case No. 5:22-cv-00171); Syretta Harvin et al. v. Carvana, LLC et al., United States District Court for the Eastern District of Pennsylvania (Case No. 2:23-cv-02068-MRP); and In re Carvana Co. Stockholders Litigation, Delaware Chancery Court (Case No. 2023-0600-KSJM). Brittany Fischer v. Carvana, LLC, Lee County, Florida Circuit Court (Case No. 2022-007133-CA-01) was settled for an immaterial amount in the second quarter of 2023.

The Company believes the claims in these matters are not material or are without merit and intends to defend the matters vigorously. The Company also continues to work closely with government agencies to respond to their requests. It is not possible to determine the probability of loss or estimate damages, if any, for any of the above matters, and therefore, the Company has not established reserves for any of these proceedings. If the Company determines that a loss is both probable and reasonably estimable, the Company will record a liability, and, if the liability is material, disclose the amount of the liability reserved. If an unfavorable ruling or development were to occur, there exists the possibility of a material adverse impact on the Company's business, results of operations, financial condition or cash flows.

Future litigation may be necessary to defend the Company and its partners by determining the scope, enforceability and validity of third party proprietary rights or to establish its proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

NOTE 18 — FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company holds certain assets that are required to be measured at fair value on a recurring basis, and beneficial interests in securitizations for which it elected the fair value option. A description of the fair value hierarchy and the Company's methodologies are included in Note 2 — Summary of Significant Accounting Policies in its most recent Annual Report on Form 10-K.

31

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following tables are a summary of fair value measurements and hierarchy level at June 30, 2023 and December 31, 2022:

	June 30, 2023
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	357	$	357	$	—	$	—
Beneficial interests in securitizations	335		—		—		335

	December 31, 2022
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	272	$	272	$	—	$	—
Beneficial interests in securitizations	321		—		—		321

_________________________

(1) Consists of highly liquid investments with original maturities of three months or less and classified in cash and cash equivalents and restricted cash in the accompanying unaudited condensed consolidated balance sheets.

As of June 30, 2023 and December 31, 2022, the Company has purchase price adjustment receivables of $14 million and $37 million, respectively, which are carried at fair value and classified as other assets in the accompanying consolidated balance sheets. Under the MPSA, the purchaser will make future cash payments to the Company based on the performance of the finance receivables sold. The fair value of the purchase price adjustment receivables are determined based on the extent to which the Company’s estimated performance of the underlying finance receivables exceeds a mutually agreed upon performance threshold of the underlying finance receivables as of measurement dates specified in the MPSA. The Company develops its estimate of future cumulative losses based on the historical performance of finance receivables it originated with similar characteristics as well as general macro-economic trends. The Company then utilizes a discounted cash flow model to calculate the present value of the expected future payment amounts. Due to the lack of observable market data these receivables are classified as Level 3. The adjustments to the fair value of the purchase price adjustment receivables were a gain of less than $1 million and $3 million during the three months ended June 30, 2023 and 2022, respectively, and a gain of $2 million and $6 million during the six months ended June 30, 2023 and 2022, respectively, and are reflected in other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations.

Beneficial Interests in Securitizations

Beneficial interests in securitizations include notes and certificates of the securitization trusts, the same securities as issued to other investors as described in Note 9 — Securitizations and Variable Interest Entities. Beneficial interests in securitizations are initially treated as Level 2 assets when the securitization transaction occurs in close proximity to the end of the period and there is a lack of observable changes in the economic inputs. When the securitization transaction does not occur in close proximity to the end of the period and there have been observable changes in the economic inputs, beneficial interests in securitizations are classified as Level 3.

The Company's beneficial interests in securitizations include rated notes and certificates and other assets, all of which are classified as Level 3 due to the lack of observable market data. The Company determines the fair value of its rated notes based on non-binding broker quotes. The non-binding broker quotes are based on models that consider the prevailing interest rates, recent market transactions, and current business conditions. The Company determines the fair value of its certificates and other assets using a combination of non-binding market quotes and internally developed discounted cash flow models. The discounted cash flow models use discount rates based on prevailing interest rates and the characteristics of the specific instruments. As of June 30, 2023 and December 31, 2022, the range of discount rates were 6.4% to 10.9% and 7.1% to 11.3%, respectively. Significant increases or decreases in the inputs to the models could result in a significantly higher or lower fair value measurement. The Company elected the fair value option on its beneficial interests in securitizations, which allows it to

32

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

recognize changes in the fair value of these assets in the period the fair value changes. Changes in the fair value of the beneficial interests in securitizations are reflected in other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations.

For beneficial interests in securitizations measured at fair value on a recurring basis, the Company's transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period on a quarterly basis. There were no transfers out of Level 3 during the three and six months ended June 30, 2023 or 2022.

In December 2021, the Company began selling certain of its beneficial interests in securitizations that meet the criteria for sale set forth in the Risk Retention Rules. For the three and six months ended June 30, 2023, the Company sold beneficial interests in securitizations for a purchase price totaling $8 million. For the three and six months ended June 30, 2022, the Company sold beneficial interests in securitizations for a purchase price totaling $2 million and $3 million, respectively.

The following table presents additional information about Level 3 beneficial interests in securitizations measured at fair value on a recurring basis for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Opening Balance	$	312	$	416	$	321	$	382
Received in securitization transactions	69		37		92		124
Payments received	(42)		(50)		(75)		(92)
Change in fair value	4		—		5		(10)
Sales of beneficial interests	(8)		(2)		(8)		(3)
Ending Balance	$	335	$	401	$	335	$	401

Fair Value of Financial Instruments

The carrying amounts of restricted cash, accounts receivable, accounts payable and accrued liabilities, and accounts payable to related party approximate fair value due to their respective short-term maturities. The carrying value of the short-term revolving facilities were determined to approximate fair value due to their short-term duration and variable interest rates that approximate prevailing interest rates as of each reporting period. The carrying value of notes payable and sale leasebacks were determined to approximate fair value as each of the transactions were entered into at prevailing interest rates during each respective period and they have not materially changed as of or during the periods ended June 30, 2023 and December 31, 2022. The carrying value of the financing of beneficial interests in securitizations was determined to approximate fair value because in the event of a decline in the fair value of the pledged collateral of the financing, the repurchase price of the pledged collateral will be increased by the amount of the decline.

The fair value of the Senior Notes, which are not carried at fair value on the accompanying unaudited condensed consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices for the identical liability. The fair value of the Senior Notes as of June 30, 2023 and December 31, 2022 was as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value, net of unamortized debt issuance costs	$	5,655	$	5,649
Fair value	4,186		2,533

The fair value of finance receivables, which are not carried at fair value on the accompanying unaudited condensed consolidated balance sheets, was determined utilizing the estimated sales price based on the historical experience of the

33

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Company. Such fair value measurement of the finance receivables, net is considered Level 2 under the fair value hierarchy. The carrying value and fair value of the finance receivables as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value	$	1,098	$	1,334
Fair value	1,181		1,437

Investment in Equity Securities

In October 2021, the Company purchased Series A convertible preferred shares in Root, Inc. ("Root"), an equity security that does not have a readily determinable fair value. The Company elected to measure this investment using a measurement alternative pursuant to the accounting standards and recorded the investment at its cost of $126 million which will subsequently be adjusted for observable price changes. The Company considered all relevant transactions since the date of its investment and has not recorded any impairments or upward or downward adjustments to the carrying amount of its investment in Root, as there have not been changes in the observable price of its equity interest through June 30, 2023. On August 12, 2022, Root effected a reverse stock split of its Class A common stock and Class B common stock at a ratio of 18:1, whereby each 18 shares of Root’s Class A common stock and Class B common stock were automatically combined into one share of Class A common stock or Class B common stock, respectively (the “Reverse Stock Split”). The shares of Root's Class A common stock issuable to the Company on the conversion of the Series A convertible preferred shares were adjusted proportionally.

Also in October 2021, the Company entered into a commercial agreement with Root, under which the Root auto insurance products were to be embedded into the Company's e-commerce platform. In accordance with the provisions of the commercial agreement, the Company received eight tranches of warrants to purchase shares of Root's Class A common stock (the "Warrants"). On September 1, 2022, the integrated auto insurance solution, which embedded into the Company's e-commerce platform (the "Integrated Platform"), was completed. One tranche of the Warrants, consisting of 2.4 million shares, as adjusted pursuant to the Reverse Stock Split, became exercisable upon completion of the Integrated Platform, and is considered a derivative instrument. The other tranches vest based on insurance product sales through the Integrated Platform and are considered derivative instruments. The Company used a Monte Carlo simulation to estimate the fair value of these Warrants, which are classified as Level 3. At contract inception, the Company recognized an asset of $30 million for the Warrants and deferred revenue, classified in other assets and other liabilities, respectively in the accompanying consolidated balance sheets. During 2022, the Company determined it was probable that the volume of insurance products required to earn the Warrants would be achieved and recorded an additional $75 million of Warrants and deferred revenue based on the contract inception date fair value as determined by the Monte Carlo simulation. The Warrants and deferred revenue are classified in other assets and other liabilities, respectively, in the accompanying unaudited condensed consolidated balance sheets.

The following table presents changes in the Company's Level 3 Warrants measured at fair value:

	2023
	(in millions)
Balance at December 31, 2022	$	2
Total unrealized loss (1)	(1)
Balance at June 30, 2023	$	1

(1) The Company recognized the decrease in fair value in relation to the Warrants to acquire Root's Class A common stock through other (income) expense, net in the accompanying consolidated statements of operations. The Company recognized a

34

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

decrease in fair value of zero and $1 million during the three and six months ended June 30, 2023, respectively, and less than $1 million and $5 million during the three and six months ended June 30, 2022, respectively.

Derivative Instruments

The Company utilizes non-designated cash flow hedges including interest rate cap agreements to minimize its exposure to interest rate fluctuations on variable rate debt borrowings. Interest rate caps provide that the counterparty will pay the purchaser at the end of each contractual period in which the index interest rate exceeds the contractually agreed upon cap rate.

In the first quarter of 2023, the Company entered into one interest rate cap agreement to limit exposure to interest rate risk on variable rate debt associated with finance receivables. The interest rate cap has a cap rate of 5.0% with a notional amount of $364 million, expiring in July 2027. In the second quarter of 2023, the Company entered into a second interest rate cap agreement to limit exposure to interest rate risk on variable rate debt associated with finance receivables. The interest rate cap has a cap rate of 5.0% and a notional amount of $236 million, expiring in April 2027.

The fair value of the Company's interest rate caps is impacted by the credit risk of both the Company and its counterparty. The Company has an agreement with its derivative financial instrument counterparty that contains provisions providing that if the Company defaults on the indebtedness associated with its derivative financial instrument, then the Company could also be declared in default on its derivative financial instrument obligation. In addition, the Company minimizes nonperformance risk on its derivative instrument by evaluating the creditworthiness of its counterparty, which is limited to major banks and financial institutions.

The Company does not apply hedge accounting to the interest rate caps and records all mark-to-market adjustments directly to other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations. The fair value of the interest rate caps is categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data. For the three and six months ended June 30, 2023, the Company recognized mark-to-market adjustments of $2 million and $1 million of income, respectively, within other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations. As of June 30, 2023, the fair value of the interest rate caps is recorded in the accompanying unaudited condensed consolidated balance sheets within other current assets and was $12 million.

NOTE 19 — SUPPLEMENTAL CASH FLOW INFORMATION

The following table summarizes supplemental cash flow information for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022
	(in millions)
Supplemental cash flow information:
Cash payments for interest	$	313	$	129
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	3	$	49
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	321
Property and equipment acquired under finance leases	$	36	$	232
Equity-based compensation expense capitalized to property and equipment	$	5	$	4
Fair value of beneficial interests received in securitization transactions	$	92	$	124
Reductions of beneficial interests in securitizations and associated long-term debt	$	53	$	70

35

CARVANA CO. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the accompanying unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the accompanying unaudited condensed consolidated statements of cash flows for all periods presented:

	June 30, 2023		December 31, 2022		June 30, 2022
	(in millions)
Cash and cash equivalents	$	541	$	434	$	1,047
Restricted cash	136		194		150
Total cash, cash equivalents and restricted cash	$	677	$	628	$	1,197

NOTE 20 — SUBSEQUENT EVENTS

Transaction Support Agreement

On July 17, 2023, the Company entered into a Transaction Support Agreement with an ad hoc group of holders of Senior Notes representing over 90% of the aggregate principal amount of outstanding Senior Notes (the "Ad Hoc Group"), Carvana Group, LLC, and the Garcia Parties.

Pursuant to the Transaction Support Agreement, subject to the terms and conditions set forth therein, the Ad Hoc Group has agreed to support, approve, implement and enter into definitive documents with respect to the following transactions: (i) the new issuance through one or more equity offerings for aggregate gross proceeds of at least $350 million of Class A and/or LLC Units (together the "New Equity"), (ii) the Exchange Offers; (iii) concurrently with, but separate from the Exchange Offers, the commencement by the Company of a cash tender offer to purchase certain 2025 Notes; (iv) the Consent Solicitations and (v) with respect to the Garcia Parties only, the purchase of their pro rata portion of any offering on New Equity (such commitment not to exceed $126 million); provided that such commitment shall automatically terminate on the date the Company raises $700 million of gross proceeds from the issuance of New Equity.

The Transaction Support Agreement may be terminated under various circumstances.

At-the-Market Offering Program

On July 19, 2023, the Company entered into an agreement (the "Distribution Agreement") with Citigroup Global Markets Inc. and Moelis & Company LLC (the "Sales Agents"), whereby the Company may sell up to the greater of (i) shares of Class A common stock representing an aggregate offering price of $1.0 billion, or (ii) an aggregate number of 35 million shares of Class A common stock, from time to time, through an "at the market offering" program.

36

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context requires otherwise, references in this report to "Carvana," the "Company," "we," "us," and "our" refer to Carvana Co. and its consolidated subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our most recent Annual Report filed on Form 10-K, as well as our unaudited condensed consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Form 10-Q.

Overview

Carvana is the leading e-commerce platform for buying and selling used cars. We are transforming the used car buying and selling experience by giving consumers what they want - a wide selection, great value and quality, transparent pricing, and a simple, no pressure transaction. Each element of our business, from inventory procurement to fulfillment and overall ease of the online transaction, has been built for this singular purpose.

Our business combines a comprehensive online sales experience with a vertically integrated supply chain that allows us to sell high-quality vehicles to our customers transparently and efficiently at a low price. Using our website, customers can complete all phases of a retail vehicle purchase transaction. Specifically, our online sales experience allows customers to:

•Purchase a retail vehicle.    As of June 30, 2023, we listed 37,570 total retail units on our website, where customers can select and purchase a vehicle, including arranging financing and signing contracts, directly from their desktop or mobile device. Selling vehicles to retail customers is the primary driver of our business. Selling retail vehicles generates revenue equal to the selling price of the vehicle, less an allowance for returns, and also enables multiple additional revenue streams, including vehicle service contracts ("VSCs"), GAP waiver coverage, other ancillary products, and trade-ins.

•Finance their purchase.    Customers can pay for their Carvana vehicle using cash, financing from other parties such as banks or credit unions, or financing with us using our proprietary loan origination platform. Customers who choose to apply for our in-house financing fill out a short prequalification form, select from a range of financing terms we provide and, if approved, apply the financing to their purchase in our online checkout process. We generally seek to sell the loans we originate to financing partners or pursuant to a securitization transaction and, in each case, we generally earn a premium upon sale.

•Protect their purchase.    Customers have the option to protect their vehicle with a VSC as part of our online checkout process. VSCs provide customers with protection against the costs of certain mechanical repairs after the expiration of their vehicle’s original manufacturer warranty. We earn a fee for selling VSCs on behalf of an affiliate of DriveTime Automotive Group, Inc. (together with its consolidated affiliates, collectively, “DriveTime”), which is the obligor under these VSCs. We generally have no contractual liability to customers for claims under these agreements. We also offer GAP waiver coverage to customers in most states in which we operate. We have also partnered with Root, Inc. ("Root") to offer an integrated auto insurance solution, through which customers in most states may conveniently access auto insurance directly from the Carvana e-commerce platform.

•Sell us their car.    We allow our customers to trade-in a vehicle and apply the trade-in value to their purchase, or to sell us a vehicle independent of a purchase. Using our digital appraisal tool, customers can receive a conditional offer for their vehicle nearly instantaneously from our site simply by answering a few questions about the vehicle condition and features. We generate trade-in offers using a proprietary valuation algorithm supported by extensive used vehicle market and customer-behavior data. When customers accept our offer, they can schedule a time to have the vehicle picked up at their home or elsewhere within one of our markets and receive payment, eliminating the need to visit a dealership or negotiate a private sale. We take their vehicles into inventory and sell them either at auction as a wholesale sale or through our website as a retail sale. Vehicles sold at auction typically do not meet the quality or condition standards required to be included in retail inventory displayed for sale on our website.

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To enable a seamless customer experience, we have built a vertically-integrated used vehicle supply chain, supported by proprietary software systems and data.

•Vehicle acquisition.    We primarily acquire our used vehicle inventory directly from customers when they trade in or sell us their vehicles and through the large and liquid national used car auction market. Acquiring directly from customers eliminates auction fees and provides more diverse vehicles. The remainder of our inventory is acquired from vehicle finance and leasing companies, rental car companies, and other suppliers, which suppliers may also provide reconditioning services. We use proprietary algorithms to determine which cars to bid on at auction and how much to bid. Our software sifts through over 100,000 vehicles per day and filters out vehicles with reported accidents, poor condition ratings, or other unacceptable attributes, and can evaluate the tens of thousands of potential vehicle purchases that remain per day, creating a competitive advantage versus in-person sourcing methods generally used by traditional dealerships. Once our algorithms have identified a suitable vehicle for purchase, bids are verified and executed by a centralized team of inventory-sourcing professionals. For vehicles sold to us through our website, we use proprietary algorithms to determine an appropriate offer. We assess vehicles on the basis of quality, inventory fit, consumer desirability, relative value, expected reconditioning costs, and vehicle location to identify what we believe represent the most in-demand and profitable vehicles to acquire for inventory. We utilize a broad range of data sources, including proprietary site data, and a variety of external data sources to support our assessments.

•Inspection and reconditioning.    Once we acquire a vehicle from a customer, we leverage our in-house logistics or a vendor to transport the vehicle to a greenfield inspection and reconditioning center or auction location with reconditioning capacity ("IRC"), at which point the vehicle is entered into our inventory management system. We then begin a 150-point inspection process covering controls, features, brakes, tires, and cosmetics. Each IRC includes trained technicians, vehicle lifts, paint-less dent repair, and paint capabilities and receives on-site support from vendors with whom we have integrated systems to ensure ready access to parts and materials. When an inspection is complete, we estimate the necessary reconditioning cost for accident-free vehicles to be deemed "Carvana Certified" and expected timing for that vehicle to be made available for sale on our website.

•Photography and merchandising.    To provide transparency to our customers, our patented, automated photo booths capture a 360-degree exterior and interior virtual tour of each vehicle in our website inventory. Our photo booths photograph the interior and exterior of the vehicle while technicians annotate material defects based on visibility-threshold category. We also feature integrations with various vehicle data providers for vehicle feature and option information. We have instituted a unified cosmetic standard across all IRCs and certain auction sites to better ensure a consistent customer experience.

•Transportation and fulfillment.    Third-party vehicle transportation is often slow, expensive, and unreliable. To address these challenges, we built an in-house auto logistics network backed by a proprietary transportation management system ("TMS") to transport our vehicles to customers in our markets. The system is based on a "hub and spoke" model, which connects all IRCs to vending machines and hubs via our owned and leased fleet of multi-car and single car haulers. Our TMS allows us to efficiently manage locations, routes, route capacities, trucks, and drivers while also dynamically optimizing for speed and cost. We store inventory primarily at the IRCs and other sites, and when a vehicle is sold, it is delivered directly to customers in our markets or transported to a vending machine or certain hubs for pick-up by the customer. Due to our robust and proprietary logistics infrastructure, we are able to offer our customers and operations team highly accurate predictions of vehicle availability, minimizing unanticipated delays and ensuring a seamless and reliable customer experience.

Retail Vehicle Unit Sales

Since launching to customers in Atlanta, Georgia in January 2013, we have historically experienced rapid growth in sales through our website www.carvana.com. Due to profitability initiatives and macroeconomic impacts, including rising interest rates during the first six months of 2023, the number of vehicles we sold to retail customers decreased by 34.9% to 76,530, in the three months ended June 30, 2023 compared to 117,564 in the three months ended June 30, 2022. During the six months

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ended June 30, 2023, the number of vehicles we sold to retail customers decreased by 30.1% to 155,770, compared to 222,749 in the six months ended June 30, 2022.

While our current focus is on profitability, we view the number of vehicles we sell to retail customers as the most important long-term measure of our performance, and we expect to continue to focus on building a scalable platform to efficiently increase our retail units sold. This focus on retail units sold is motivated by several factors:

•Retail units sold enable multiple revenue streams, including the sale of the vehicle itself, the sale of finance receivables originated to finance the vehicle, the sale of VSCs, GAP waiver coverage, other ancillary products, and the sale of vehicles acquired from customers.

•Retail units sold are the primary driver of customer referrals and repeat sales. Each time we sell a vehicle to a new customer, that customer may refer future customers and can become a repeat buyer in the future.

•Retail units sold are an important driver of the average number of days between when we acquire the vehicle and when we sell it. Reducing average days to sale impacts gross profit on our vehicles because used vehicles depreciate over time.

•Retail units sold allow us to benefit from economies of scale due to our centralized online sales model. We believe our model provides meaningful operating leverage in acquisition, reconditioning, transport, customer service, and delivery.

While our near-term objectives are geared towards a reduction in our selling, general and administrative ("SG&A") expenses, in the long-term, we plan to invest in technology and infrastructure to support efficient growth in retail units sold. This includes continued investment in our vehicle acquisition, reconditioning and logistics network, as well as continued investment in product development and engineering to deliver customers a best-in-class experience.

Markets and Population Coverage

Our historical growth in retail units sold has been driven by increased penetration in our existing markets and expansion into new markets. We define a market as a metropolitan area in which we have commenced local advertising and generally offer home delivery to customers with a Carvana employee in a branded delivery truck. We define our population coverage as the percentage of U.S. population that lives within those markets. Opening a new market involves hiring a team of customer advocates, connecting the market to our existing logistics network and initiating local advertising. As a market scales, we may elect to build a vending machine in the market to further increase customer awareness and enhance our fulfillment operations.

Our expansion model has historically enabled us to increase our number of markets, resulting in servicing more of the U.S. population, in each of the past ten years. We served 316 markets as of June 30, 2023, an increase from 315 markets as of June 30, 2022, serving 81.1% of the U.S. population. Over time, we have continually improved our market expansion playbook, which we believe provides us with the capability to efficiently execute our long-term growth plan. We continually evaluate consumer demand and our operational capacity and necessary efficiencies to determine our market opening and vending machine launch strategy.

When we open a market, we commence advertising using a blend of brand and direct advertising channels. Our advertising spend in each market is approximately proportionate to each market’s population, subject to adjustments based on specific characteristics of the market, used vehicle market seasonality, and special events such as vending machine openings. This historically has led to increased market penetration over time following the market opening. We also advertise on national television to increase brand awareness. 

Revenue and Gross Profit

We generate revenue on retail units sold from four primary sources: the sale of the retail vehicles, wholesale sales of vehicles we acquire from customers, including sales through our wholesale marketplace, gains on the sales of loans originated to finance the vehicles, and sales of ancillary products such as VSCs and GAP waiver coverage.

Our largest source of revenue, retail vehicle sales, totaled $2.0 billion and $3.0 billion during the three months ended June 30, 2023 and 2022, respectively, and $3.8 billion and $5.7 billion during the six months ended June 30, 2023 and 2022, respectively. We generally expect retail vehicle sales to trend proportionately with retail units sold, absent any material changes

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in macroeconomic conditions. We generate gross profit on retail vehicle sales from the difference between the retail selling price of the vehicle and our cost of sales associated with acquiring the vehicle and preparing it for sale.

Wholesale sales and revenues includes sales of trade-ins and other vehicles acquired from customers that do not meet the requirements for our retail inventory. Subsequent to our acquisition of the U.S. physical auction business of ADESA U.S. Auction, LLC ("ADESA") from KAR Auction Services, Inc. on May 9, 2022 (the "ADESA Acquisition"), we also include revenue earned from the sale of wholesale marketplace units by non-Carvana sellers through our wholesale marketplace platform, including auction fees and related service revenues, in wholesale sales and revenues. Wholesale sales and revenues totaled $777 million and $704 million during the three months ended June 30, 2023 and 2022, respectively, and $1.4 billion and $1.3 billion during the six months ended June 30, 2023 and 2022, respectively. We generally expect wholesale sales to trend proportionately with retail units sold through trade-ins and from customers who wish to sell us a car independent of a retail sale and with the movement of wholesale marketplace units. We generate gross profit on wholesale vehicle sales from the difference between the wholesale selling price of the vehicle and our cost of sales associated with acquiring the vehicle and preparing it for sale. We generate a gross profit on wholesale marketplace units from the difference between the revenue earned from the sale of wholesale marketplace units through our wholesale marketplace platform less our cost of sales associated with operating the wholesale marketplace platform.

Other sales and revenues, which primarily includes gains on the sales of finance receivables we originate, sales commissions on ancillary products such as VSCs, GAP waiver coverage, and auto insurance, totaled $230 million and $218 million during the three months ended June 30, 2023 and 2022, respectively, and $391 million and $408 million during the six months ended June 30, 2023 and 2022, respectively. We generally expect other sales and revenues to trend proportionately with retail units sold. We also expect other sales and revenues to increase as we improve our ability to monetize loans we originate, including through securitization transactions, and sell and offer attractive financing solutions and ancillary products to our customers, including products customarily sold by automotive retailers or insurance products customarily sold by traditional insurance companies, absent any material changes in macroeconomic conditions. Other sales and revenues are 100% gross margin products for which gross profit equals revenue.

During current macroeconomic uncertainty, our highest priority will continue to be providing exceptional customer experiences while improving efficiency, increasing our brand awareness and utilizing our infrastructure to support efficient growth in retail units sold, to help us move along the path to achieve profitability and positive free cash flow. Secondarily, we plan to pursue several strategies designed to increase our total gross profit per unit. These strategies may include the following:

•Increase the purchase of vehicles from customers. Over time, we plan to grow the number of vehicles that we purchase from our customers as trade-ins or independent of a retail sale. This will provide additional vehicles for our retail business, which on average are more profitable compared to the same vehicle acquired at auction, and expand our inventory selection. In addition, this in turn will grow our wholesale business.

•Reduce average days to sale. Our goal is generally to increase our sales at a faster rate than we increase our inventory size, which we believe would decrease average days to sale due to a relative increase in demand versus supply. Reductions in average days to sale lead to fewer vehicle price reductions, and therefore higher average selling prices, all other factors being equal. Higher average selling prices in turn lead to higher gross profit per unit sold, all other factors being equal.

•Leverage existing inspection and reconditioning infrastructure. As we scale, we intend to more fully utilize the capacity at our existing IRCs, which collectively have capacity to inspect and recondition approximately 1.1 million vehicles per year at full utilization. We also intend to use existing capacity in the facilities acquired in the ADESA Acquisition.

•Increase utilization of our logistics network. As we scale, we intend to more fully utilize our in-house logistics network to transport cars to our IRCs or other sites after acquisition from customers or wholesale auctions.

•Increase conversion on existing products. We plan to continue to improve our website to highlight the benefits of our complementary product offerings, including financing, VSCs, GAP waiver coverage, other ancillary products, and trade-ins.

•Add new products and services. We plan to utilize our online sales platform to offer additional complementary products and services to our customers.

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•Increase monetization of our finance receivables. We plan to continue selling finance receivables in securitization transactions and otherwise expand our base of financial partners who purchase the finance receivables originated on our platform to reduce our effective cost of funds.

•Optimize purchasing and pricing. We are constantly improving the ways in which we predict customer demand, value vehicles sight unseen and optimize what we pay to acquire those vehicles. We also regularly test different pricing of our products, including vehicle sticker prices, trade-in and independent vehicle offers, and ancillary product prices, and we believe we can improve by further optimizing prices over time.

Seasonality

Retail and wholesale used vehicle sales generally exhibit seasonality with sales peaking late in the first calendar quarter and diminishing through the rest of the year, with the lowest relative level of vehicle sales expected to occur in the fourth calendar quarter. Due to our historical rapid growth, our overall sales patterns in the past have not always reflected the general seasonality of the used vehicle industry. However, as our business and markets have and continue to mature, our results have become more reflective of typical market seasonality. Used vehicle prices also exhibit seasonality, with used vehicles depreciating at a faster rate in the last two quarters of each year and a slower rate in the first two quarters of each year, all other factors being equal. We expect to experience seasonal and other fluctuations in our quarterly operating results, including as a result of macroeconomic conditions, which may not fully reflect the underlying performance of our business.

Investment in Growth

We have historically aggressively invested in the growth of our business. Due to the current macroeconomic environment, we are focused on driving profitability through operating efficiency and reducing expenses. While we intend to become increasingly efficient over time, we also anticipate that our operating expenses will increase substantially in the long-term as we continue to expand our logistics network, increase our advertising spending, and serve more of the U.S. population. There is no guarantee that we will be able to realize the desired return on our investments.

Relationships with Related Parties

For discussion about our relationships with related parties, refer to Note 7 — Related Party Transactions of our accompanying unaudited condensed consolidated financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q.

Key Operating Metrics

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our progress and make strategic decisions. Our key operating metrics reflect the key drivers of our growth, including increasing brand awareness, enhancing the selection of vehicles we make available to our customers, and serving more of the U.S. population. Our key operating metrics also demonstrate our ability to translate these drivers into retail sales and to monetize these retail sales through a variety of product offerings.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Retail units sold	76,530		117,564		155,770		222,749
Average monthly unique visitors (in thousands)	14,552		23,547		14,623		24,138
Total website units	37,570		78,910		37,570		78,910
Total gross profit per unit	$	6,520	$	3,368	$	5,393	$	3,116
Total gross profit per unit, non-GAAP	$	7,030	$	3,683	$	5,893	$	3,354

Retail Units Sold

We define retail units sold as the number of vehicles sold to customers in a given period, net of returns under our seven-day return policy. We view retail units sold as a key measure of our growth for several reasons. First, retail units sold is the primary driver of our revenues and, indirectly, gross profit, since retail unit sales enable multiple complementary revenue streams, including financing, VSCs, GAP waiver coverage, other ancillary products, and trade-ins. Second, growth in retail units sold

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increases the base of available customers for referrals and repeat sales. Third, growth in retail units sold is an indicator of our ability to successfully scale our logistics, fulfillment, and customer service operations.

Average Monthly Unique Visitors

We define a monthly unique visitor as an individual who has visited our website within a calendar month, based on data provided by Google Analytics. We calculate average monthly unique visitors as the sum of monthly unique visitors in a given period, divided by the number of months in that period. We view average monthly unique visitors as a key indicator of the strength of our brand, the effectiveness of our advertising and merchandising campaigns, and consumer awareness of our brand.

Total Website Units

We define total website units as the number of vehicles listed on our website on the last day of a given reporting period, including vehicles available for sale, vehicles currently engaged in a purchase or reserved by a customer, and vehicles that can be reserved that generally have not yet completed the inspection and reconditioning process. We view total website units as a key measure of our growth. Growth in total website units increases the selection of vehicles available to our consumers, which we believe will allow us to increase the number of vehicles we sell over time. Moreover, growth in total website units indicates our ability to scale our vehicle purchasing, inspection and reconditioning operations. As part of our inventory strategy, over time we may choose not to expand total website units while continuing to grow sales, thereby improving other key operating metrics of the business.

Total Gross Profit per Unit

We define total gross profit per unit as the aggregate gross profit in a given period, divided by retail units sold in that period including gross profit generated from the sale of retail vehicles, gains on the sales of loans originated to finance the vehicles, commissions on sales of VSCs, GAP waiver coverage and other ancillary products, and gross profit generated from wholesale sales of vehicles. We operate an integrated business with the objective of increasing the number of retail units sold and total gross profit per unit. Gross profits generated from the sale of retail and wholesale units are interrelated. For example, our nationwide reconditioning and inspection centers are designed to produce vehicles for both retail and wholesale sales, our vehicle storage locations have shared parking for both retail and wholesale vehicles, and our integrated multi-vehicle logistics and last mile delivery network is operated in service of both retail and wholesale sales. Such interrelationships require us to share finite operational capacity and optimize joint decisions between retail and wholesale sales, in order to position us to achieve our objective of increasing total gross profit per unit. As a result, the inclusion of gross profit generated from wholesale sales of vehicles in total gross profit per unit reflects our integrated business model and the interrelationship between wholesale and retail vehicle sales. We believe the total gross profit per unit metrics provide investors with the greatest opportunity to view our performance through the same lens that our management does, and therefore assists investors to best evaluate our business and measure our progress.

We define total gross profit per unit, non-GAAP as the aggregate gross profit, non-GAAP in a given period, divided by retail units sold in that period. Gross profit, non-GAAP is defined as gross profit plus depreciation and amortization in cost of sales, share-based compensation including the CEO Milestone Gift in cost of sales, and restructuring costs, minus revenue related to our Root warrants. Refer to "Non-GAAP Financial Measures" for more information, including the reconciliation of non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures.

Components of Results of Operations

Retail Vehicle Sales

Retail vehicle sales represent the aggregate sales of used vehicles to customers through our website. Revenue from retail vehicles sales is recognized upon delivery to the customer or pick up of the vehicle by the customer, and is reported net of a reserve for expected returns. Factors affecting retail vehicle sales revenue include the number of retail units sold and the average selling price of these vehicles. Changes in retail units sold are a much larger driver of changes in revenue than are changes in average selling price.

The number of retail vehicles we sell depends on the volume of traffic to our website, our population coverage, our inventory selection, the effectiveness of our branding and marketing efforts, the quality of our customers' purchase experience, our volume of referrals and repeat customers, the competitiveness of our pricing, competition from other used car dealerships

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and general economic conditions. On a quarterly basis, the number of retail vehicles we sell is also affected by seasonality, with demand for retail vehicles generally reaching a seasonal high point late in the first quarter of each year, commensurate with the timing of tax refunds, and diminishing through the rest of the year, with the lowest relative level of retail vehicle sales generally expected to occur in the fourth calendar quarter. In 2022, heightened inflation and rising interest rates resulted in lower demand for used vehicles. These trends continued into the first half of 2023, in which retail vehicles sales were also affected by a lower inventory size, lower advertising expense, and a focus on profitability initiatives. These trends may continue through the remainder of the year.

Our retail average selling price depends on the mix of vehicles we acquire, retail prices in our markets, our pricing strategy, and our average days to sale. We may choose to shift our inventory mix to higher or lower cost vehicles, or to raise or lower our prices relative to market to take advantage of supply or demand imbalances, which could temporarily lead to average selling prices increasing or decreasing. We also generally expect lower average days to sale to be associated with higher retail average selling prices due to decreased vehicle depreciation prior to sale, all other factors being equal.

Wholesale Sales and Revenues

Wholesale sales and revenues includes the aggregate proceeds we receive on vehicles we acquire and sell to wholesalers, and beginning in 2022, wholesale marketplace revenues. The vehicles we sell to wholesalers are primarily acquired from customers who sell a vehicle to us without purchasing a retail vehicle and from our customers who trade-in their existing vehicles when making a purchase from us. Factors affecting wholesale sales and revenues include the number of wholesale units sold and the average wholesale selling price of these vehicles. The average selling price of our wholesale units is primarily driven by the mix of vehicles we sell to wholesalers, as well as general supply and demand conditions in the applicable wholesale vehicle market. Wholesale sales and revenues includes aggregate proceeds we receive on vehicles sold to DriveTime through competitive online auctions that are managed by an unrelated third party and through the Company's wholesale marketplace platform. Wholesale marketplace revenues include revenue earned from the sale of wholesale marketplace units by third-party sellers through our wholesale marketplace platform, including auction fees and related services revenue.

Other Sales and Revenues

We generate other sales and revenues primarily through the sales of loans we originate and sell in securitization transactions or to financing partners, reported net of a reserve for expected repurchases, commissions we receive on VSCs, sales of GAP waiver coverage, and commissions and warrants we receive on sales of auto insurance.

We generally seek to sell the loans we originate to securitization trusts we sponsor and establish or to financing partners. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that we sell to the securitization trusts. We also sell the loans we originate under committed forward-flow arrangements, including a master purchase and sale agreement, and through fixed pool loan sales, with financing partners who generally acquire them at premium prices without recourse to us for their post-sale performance. Factors affecting revenue from these sales include the number of loans we originate, the average principal balance of the loans, the credit quality of the portfolio, and the price at which we are able to sell them in securitization transactions or to financing partners.

The number of loans we originate is driven by the number of retail vehicles sold and the percentage of our sales for which we provide financing, which is influenced by the financing terms we offer our customers relative to alternatives available to the customer. The average principal balance is driven primarily by the mix of vehicles we sell, since higher average selling prices typically mean higher average balances. The price at which we sell the loan is driven by the terms of our securitization transactions and forward-flow arrangement, applicable interest rates, and whether or not the loan includes GAP waiver coverage.

In 2016, we entered into a master dealer agreement with DriveTime, pursuant to which we receive a commission for selling VSCs that DriveTime administers. The commission revenue we recognize on VSCs depends on the number of retail units we sell, the conversion rate of VSCs on these sales, commission rates we receive, VSC early cancellation frequency and product features. The GAP waiver coverage revenue we recognize depends on the number of retail units we sell, the number of customers that choose to finance their purchases with us, the frequency of GAP waiver coverage early cancellation, and the conversion rate of GAP waiver coverage on those sales.

In September 2022, we completed our integrated auto insurance solution with Root, through which customers may conveniently access auto insurance directly from the Carvana e-commerce platform. We receive commissions and Warrants to purchase shares of Root's Class A common stock based on the Root insurance policies sold through the Integrated Platform.

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The commission revenue we recognize depends on the number of retail units we sell, the conversion rate of auto policies on those sales, commission rates we receive, and forecasted attrition. The revenue we recognize from warrants as non-cash consideration depends on the probability of achieving certain auto policy sales thresholds within a specific timeline as well as our performance under the agreement.

Cost of Sales

Cost of sales includes the cost to acquire, recondition, and transport vehicles associated with preparing them for resale, and beginning in 2022, wholesale marketplace cost of sales. Vehicle acquisition costs are driven by the mix of vehicles we acquire, the source of those vehicles, and supply-and-demand dynamics in the vehicle market. Reconditioning costs consist of direct costs, including parts, labor, and third-party repair expenses directly attributable to specific vehicles, as well as indirect costs, such as IRC overhead. Transportation costs consist of costs incurred to transport the vehicles from the point of acquisition to the IRC or other site. Cost of sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value. Wholesale marketplace cost of sales include costs related to the sale of wholesale marketplace units by third-party sellers through our wholesale marketplace platform, including labor, rent, depreciation and amortization.

Retail Vehicle Gross Profit

Retail vehicle gross profit is the vehicle sales price minus our costs of sales associated with vehicles that we list and sell on our website. Retail vehicle gross profit per unit is our aggregate retail vehicle gross profit in any measurement period divided by the number of retail units sold in that period.

Wholesale Gross Profit

Wholesale gross profit is the vehicle sales price minus our cost of sales associated with vehicles we sell to wholesalers, and beginning in 2022, wholesale marketplace revenues less wholesale marketplace cost of sales. Factors affecting wholesale gross profit include the number of wholesale units sold, the average wholesale selling price of these vehicles, the average acquisition price associated with these vehicles, and the number of wholesale marketplace units sold.

Other Gross Profit

Other sales and revenues consist of 100% gross margin products for which gross profit equals revenue. Therefore, changes in gross profit and the associated drivers are identical to changes in revenues from these products and the associated drivers.

Selling, General and Administrative Expenses

SG&A expenses include expenses associated with advertising and providing customer service to customers, operating our vending machines, hubs, physical auctions, logistics and fulfillment network and other corporate overhead expenses, including expenses associated with information technology, product development, engineering, legal, accounting, finance, and business development. SG&A expenses exclude the costs of inspecting and reconditioning vehicles and transporting vehicles from the point of acquisition to the IRC, which are included in cost of sales, and payroll costs for our employees related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets.

Interest Expense

Interest expense includes interest incurred on our various tranches of senior unsecured notes (collectively the "Senior Notes"), our Floor Plan Facility, and our Finance Receivable Facilities (each as defined in Note 10 — Debt Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q), as well as our notes payable, finance leases, and long-term debt, which are used to fund general working capital, our inventory, our transportation fleet, and certain of our property and equipment. Interest expense excludes the interest incurred during various construction projects to build, upgrade or remodel certain facilities, which is capitalized to property and equipment and depreciated over the estimated useful lives of the related assets.

Other (Income) Expense, net

Other (income) expense, net includes changes in fair value on our beneficial interests in securitizations, purchase price adjustment receivables, and fair value adjustments related to our Warrants to acquire Root's Class A common stock as discussed

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in Note 18 — Fair Value of Financial Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q, along with other general expenses such as gains or losses from disposals of long-lived assets.

Income Tax (Benefit) Provision

Income taxes are recognized based upon our anticipated underlying annual blended federal and state income tax rates adjusted, as necessary, for any discrete tax matters occurring during the period. As the sole managing member of Carvana Group, LLC (“Carvana Group”), Carvana Co. consolidates the financial results of Carvana Group. Carvana Group is treated as a partnership and therefore not subject to U.S. federal and most applicable state and local income tax purposes. Any taxable income or loss generated by Carvana Group is passed through to and included in the taxable income or loss of its members, including Carvana Co., based on its economic interest held in Carvana Group. Carvana Co. is taxed as a corporation and is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income or loss of Carvana Group, as well as any stand-alone income or loss generated by Carvana Co. During the three and six months ended June 30, 2023, the Company generated an income tax benefit of less than $1 million and $2 million, respectively, compared to an income tax expense of $1 million during both the three and six months ended June 30, 2022.

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Results of Operations

	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022		Change	2023		2022		Change
	(in millions, except unit and per unit amounts)					(in millions, except unit and per unit amounts)
Net sales and operating revenues:
Retail vehicle sales, net	$	1,961	$	2,962	(33.8)%	$	3,788	$	5,694	(33.5)%
Wholesale sales and revenues (1)	777		704		10.4%	1,395		1,279		9.1%
Other sales and revenues (2)	230		218		5.5%	391		408		(4.2)%
Total net sales and operating revenues	$	2,968	$	3,884	(23.6)%	$	5,574	$	7,381	(24.5)%
Gross profit:
Retail vehicle gross profit (3)	$	204	$	133	53.4%	$	314	$	218	44.0%
Wholesale gross profit (1)	65		45		44.4%	135		68		98.5%
Other gross profit (2)	230		218		5.5%	391		408		(4.2)%
Total gross profit	$	499	$	396	26.0%	$	840	$	694	21.0%
Unit sales information:
Retail vehicle unit sales	76,530		117,564		(34.9)%	155,770		222,749		(30.1)%
Wholesale vehicle unit sales	46,453		55,299		(16.0)%	81,563		105,579		(22.7)%
Per unit selling prices:
Retail vehicles	$	25,624	$	25,195	1.7%	$	24,318	$	25,562	(4.9)%
Wholesale vehicles (4)	$	11,926	$	10,778	10.7%	$	11,782	$	11,091	6.2%
Per retail unit gross profit:
Retail vehicle gross profit (5)	$	2,666	$	1,131	135.7%	$	2,016	$	979	105.9%
Wholesale gross profit	849		383		121.7%	867		305		184.3%
Other gross profit	3,005		1,854		62.1%	2,510		1,832		37.0%
Total gross profit	$	6,520	$	3,368	93.6%	$	5,393	$	3,116	73.1%
Per wholesale unit gross profit:
Wholesale vehicle gross profit (6)	$	840	$	723	16.2%	$	1,018	$	597	70.5%
Wholesale marketplace: (7)
Wholesale marketplace units sold	227,698		111,883		NM	441,462		111,883		NM
Wholesale marketplace revenues	$	223	$	108	NM	$	434	$	108	NM
Wholesale marketplace gross profit (8)	$	26	$	5	NM	$	52	$	5	NM

(1) Includes $5, $7, $10 and $21, respectively, of wholesale sales and revenues from related parties.

(2) Includes $33, $50, $69 and $98, respectively, of other sales and revenues from related parties.

(3) Includes $0, $6, $0 and $14, respectively, of share-based compensation expense related to the CEO Milestone Gift.

(4) Excludes wholesale marketplace revenues and wholesale marketplace units sold.

(5) Includes $0, $51, $0 and $63, respectively, of share-based compensation expense related to the CEO Milestone Gift.

(6) Excludes wholesale marketplace gross profit and wholesale marketplace units sold.

(7) Represents results of ADESA and its subsidiaries, which the Company has designated as unrestricted subsidiaries. These amounts do not include units sold, revenues, or gross profit received from Company purchases and sales through the wholesale marketplace, which are eliminated in consolidation.

(8) Includes $26, $15, $52 and $15, respectively, of depreciation and amortization expense.

NM = Not Meaningful, for the three and six months ended June 30, 2022 only includes wholesale marketplace data from the date of the ADESA Acquisition of May 9, 2022.

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Retail Vehicle Sales

Three months ended June 30, 2023 versus 2022. Retail vehicle sales decreased by $1.0 billion to $2.0 billion during the three months ended June 30, 2023, compared to $3.0 billion during the three months ended June 30, 2022. The decrease in revenue was primarily due to a decrease in the number of retail vehicles sold to 76,530 from 117,564 during the three months ended June 30, 2023 and 2022, respectively. The decrease in retail units sold was driven by various macroeconomic factors including continued increased interest rates and inflation, leading to decreased vehicle affordability, as well as our continued increased focus on profitability initiatives, which have led to lower advertising levels and inventory size. This was partially offset by an increase in the average selling price of our retail units sold to $25,624 in the three months ended June 30, 2023 from $25,195 in the prior year, due primarily to improvements in the mix of retail vehicles sold and their respective turn times, despite overall depreciation in the used vehicle market compared to the three months ended June 30, 2022.

Six months ended June 30, 2023 versus 2022. Retail vehicle sales decreased by $1.9 billion to $3.8 billion during the six months ended June 30, 2023 compared to $5.7 billion during the six months ended June 30, 2022. The decrease in revenue was primarily due to a decrease in the number of retail vehicles sold to 155,770 from 222,749 during the six months ended June 30, 2023 and 2022, respectively. The decrease in retail units sold was driven by various macroeconomic factors including increased interest rates and inflation, leading to decreased vehicle affordability, as well as our increased focus on profitability initiatives, which have led to lower advertising levels and inventory size. In addition, the average selling price of our retail units sold decreased to $24,318 from $25,562 during the six months ended June 30, 2023 and 2022, respectively, due primarily to overall depreciation in the used vehicle market compared to the six months ended June 30, 2022.

Wholesale Sales and Revenues

Three months ended June 30, 2023 versus 2022. Wholesale sales and revenues increased by $73 million to $777 million during the three months ended June 30, 2023, compared to $704 million during the three months ended June 30, 2022. Wholesale marketplace revenues, which were only included in our results from operations subsequent to the ADESA Acquisition, were.higher on a pro rata basis during the three months ended June 30, 2023 at $223 million, compared to $108 million during the three months ended June 30, 2022, primarily due to a pro rata increase in wholesale marketplace units sold to 227,698 during the three months ended June 30, 2023, compared to 111,883 during the three months ended June 30, 2022. This was partially offset by a decrease in wholesale units sold that were acquired from customers on our website to 46,453 from 55,299 during the three months ended June 30, 2023 and 2022, respectively.

Six months ended June 30, 2023 versus 2022. Wholesale sales and revenues increased by $116 million to $1.4 billion during the six months ended June 30, 2023, compared to $1.3 billion during the six months ended June 30, 2022. Wholesale marketplace revenues, which were only included in our results from operations subsequent to the ADESA Acquisition, were higher on a pro rata basis during the six months ended June 30, 2023 at $434 million, compared to $108 million during the six months ended June 30, 2022, primarily due to a pro rata increase in wholesale marketplace units sold to 441,462 during the six months ended June 30, 2023, compared to 111,883 during the six months ended June 30, 2022. This was partially offset by a decrease in wholesale units sold that were acquired from customers on our website to 81,563 from 105,579 during the six months ended June 30, 2023 and 2022, respectively.

Other Sales and Revenues

Three months ended June 30, 2023 versus 2022. Other sales and revenues increased by $12 million to $230 million during the three months ended June 30, 2023, compared to $218 million during the three months ended June 30, 2022. The increase was primarily due to an increase in gain on loan sales as a result of more loan sales during the three months ended June 30, 2023. This increase was partially offset by the decrease in retail units sold during the three months ended June 30, 2023.

Six months ended June 30, 2023 versus 2022. Other sales and revenues decreased by $17 million to $391 million during the six months ended June 30, 2023, compared to $408 million during the six months ended June 30, 2022. The decrease was primarily due to a decrease in gain on loan sales as a result of fewer loan sales during the six months ended June 30, 2023. In addition, other sales and revenues were negatively impacted by the decrease in retail units sold during the six months ended June 30, 2023.

Retail Vehicle Gross Profit

Three months ended June 30, 2023 versus 2022. Retail vehicle gross profit increased by $71 million to $204 million during the three months ended June 30, 2023, compared to $133 million during the three months ended June 30, 2022. This increase was driven primarily by an increase in retail vehicle gross profit per unit to $2,666 for the three months ended June 30, 2023,

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compared to $1,131 for the three months ended June 30, 2022. The per unit increase was primarily driven by lower acquisition, reconditioning and inbound transport costs on retail vehicles sold during the three months ended June 30, 2023.

Six months ended June 30, 2023 versus 2022. Retail vehicle gross profit increased by $96 million to $314 million during the six months ended June 30, 2023, compared to $218 million during the six months ended June 30, 2022. This increase was driven primarily by an increase in retail vehicle gross profit per unit to $2,016 for the six months ended June 30, 2023 compared to $979 for the six months ended June 30, 2022. The per unit increase was primarily driven by lower acquisition, reconditioning and inbound transport costs on retail vehicles sold during the six months ended June 30, 2022.

Wholesale Gross Profit

Three months ended June 30, 2023 versus 2022. Wholesale gross profit increased by $20 million to $65 million during the three months ended June 30, 2023, compared to $45 million during the three months ended June 30, 2022. This increase was primarily driven by an increase in wholesale vehicle gross profit per wholesale unit to $840 from $723 for the three months ended June 30, 2023 and 2022, respectively, partially offset by a decrease in wholesale units sold to 46,453 from 55,299, respectively. The increase in wholesale vehicle gross profit per wholesale unit was primarily a result of lower acquisition costs of wholesale vehicles sold during the three months ended June 30, 2023. Wholesale gross profit includes $26 million of wholesale marketplace gross profit for the three months ended June 30, 2023, compared to $5 million for the three months ended June 30, 2022, which only included the results of ADESA subsequent to acquisition.

Six months ended June 30, 2023 versus 2022. Wholesale gross profit increased by $67 million to $135 million during the six months ended June 30, 2023, compared to $68 million during the six months ended June 30, 2022. This increase was primarily driven by an increase in wholesale vehicle gross profit per wholesale unit to $1,018 from $597 in the six months ended June 30, 2023, and 2022, respectively, partially offset by a decrease in wholesale units sold to 81,563 from 105,579, respectively. The increase in wholesale vehicle gross profit per wholesale unit was primarily a result of lower acquisition costs of wholesale vehicles sold during the six months ended June 30, 2023. Wholesale gross profit includes $52 million of wholesale marketplace gross profit for the six months ended June 30, 2023, compared to $5 million for the six months ended June 30, 2022 which only included the results of ADESA subsequent to acquisition.

Other Gross Profit

Other sales and revenues consist of 100% gross margin products for which gross profit equals revenue. Therefore, changes in other gross profit and the associated drivers are identical to changes in other sales and revenues and the associated drivers.

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Components of SG&A

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Compensation and benefits (1)	$	163	$	248	$	340	$	484
CEO Milestone Gift (2)	—		4		(1)		24
Advertising	57		131		113		286
Market occupancy (3)	18		24		39		47
Logistics (4)	29		71		64		127
Other (5)	185		243		369		480
Total	$	452	$	721	$	924	$	1,448

_________________________

(1) Compensation and benefits includes all payroll and related costs, including benefits, payroll taxes, and equity-based compensation, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets.

(2) CEO Milestone Gift includes all equity-based compensation and payroll tax costs associated with the Gift, except those Gift costs related to preparing vehicles for sale, which are included in cost of sales.

(3) Market occupancy costs includes occupancy costs of our vending machine and hubs. It excludes occupancy costs related to reconditioning vehicles which are included in cost of sales and the portion related to corporate occupancy which are included in other costs.

(4) Logistics includes fuel, maintenance and depreciation related to operating our own transportation fleet, and third-party transportation fees, except the portion related to inbound transportation, which is included in cost of sales.

(5) Other costs include all other selling, general and administrative expenses such as IT expenses, corporate occupancy, professional services and insurance, limited warranty, and title and registration.

Selling, general and administrative expenses decreased by $269 million to $452 million during the three months ended June 30, 2023, compared to $721 million during the three months ended June 30, 2022, and by $524 million to $924 million during the six months ended June 30, 2023, compared to $1.4 billion during the six months ended June 30, 2022. During 2022, we implemented a number of profitability initiatives to reduce selling, general and administrative expenses including reducing our employee headcount, integrating real estate acquired as part of the ADESA Acquisition and reducing our corporate office footprint, improving the targeting of our advertising spend and reducing other selling, general and administrative expenses. In addition, the reduction in retail units sold contributed to reductions in several categories of selling, general and administrative expenses.

During the three and six months ended June 30, 2023, we realized a benefit of less than $1 million and $1 million, respectively, of compensation expense related to the CEO Milestone Gift within selling, general and administrative expense, which is presented separately above, as a result of more forfeitures than employees continuing to vest, compared to an expense of $4 million and $24 million, respectively, in the three and six months ended June 30, 2022.

Interest Expense

Interest expense increased by $39 million to $155 million during the three months ended June 30, 2023, compared to $116 million during the three months ended June 30, 2022, and increased by $134 million to $314 million during the six months ended June 30, 2023, compared to $180 million during the six months ended June 30, 2022. The increases are primarily due to increased interest incurred on additional senior unsecured notes issued by the Company in May 2022, along with increased interest expense incurred on working capital financing compared to June 30, 2022, primarily due to rising interest rates and higher working capital financing.

Other (Income) Expense, Net

Other (income) expense, net remained flat at income of $3 million during the three months ended June 30, 2023 and 2022, and changed by $15 million to income of $5 million during the six months ended June 30, 2023 compared to an expense of $10 million during the six months ended June 30, 2022. The change during the six months ended June 30, 2023 is primarily due to

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fair value adjustments on our retained beneficial interests in securitizations and warrants to acquire Root's Class A common stock.

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we also present the following non-GAAP measures: Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A, non-GAAP; and Total SG&A per retail unit, non-GAAP.

Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A, non-GAAP; and Total SG&A per retail unit, non-GAAP

Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A, non-GAAP; and Total SG&A per retail unit, non-GAAP are supplemental measures of operating performance that do not represent and should not be considered an alternative to net loss, gross profit, or SG&A, as determined by U.S. GAAP.

Adjusted EBITDA is defined as net loss plus income tax expense, interest expense, other (income) expense, net, depreciation and amortization in cost of sales and SG&A, goodwill impairment, share-based compensation including the CEO Milestone Gift in cost of sales and SG&A, and restructuring costs, minus revenue related to our Root warrants. Following the ADESA Acquisition, we are also excluding depreciation and amortization in cost of sales, which was historically only a small component of cost of sales. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenues.

Gross profit, non-GAAP is defined as GAAP gross profit plus depreciation and amortization in cost of sales and share-based compensation including the CEO Milestone Gift in cost of sales, minus revenue related to our Root warrants. Total gross profit per retail unit, non-GAAP is Gross profit, non-GAAP divided by retail vehicle unit sales.

SG&A, non-GAAP is defined as GAAP SG&A minus depreciation and amortization in SG&A, share-based compensation including the CEO Milestone Gift in SG&A, and restructuring costs. Total SG&A per retail unit, non-GAAP is SG&A, non-GAAP divided by retail vehicle unit sales.

We use these non-GAAP measures to measure the operating performance of our business as a whole and relative to our total revenues and retail vehicle unit sales. We believe that these metrics are useful measures to us and to our investors because they exclude certain financial, capital structure, and non-cash items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. We believe that excluding these items enables us to more effectively evaluate our performance period-over-period and relative to our competitors. Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A, non-GAAP; and Total SG&A per retail unit, non-GAAP may not be comparable to similarly titled measures provided by other companies due to potential differences in methods of calculations.

A reconciliation of Adjusted EBITDA to net loss, Gross profit, non-GAAP to gross profit, and SG&A, non-GAAP to SG&A, which are the most directly comparable U.S. GAAP measures, and calculations of Adjusted EBITDA margin, Total gross profit per retail unit, non-GAAP, and Total SG&A per retail unit, non-GAAP is as follows:

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	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(dollars in millions)
Net loss	$	(105)		$	(439)		$	(391)		$	(945)
Income tax (benefit) provision	—			1			(2)			1
Interest expense	155			116			314			180
Other (income) expense, net	(3)			(3)			(5)			10
Depreciation and amortization expense in cost of sales	44			27			88			35
Depreciation and amortization expense in SG&A	46			49			95			86
Share-based compensation expense in cost of sales	—			6			—			14
Share-based compensation expense in SG&A	20			13			35			41
Root warrant revenue	(5)			—			(10)			—
Restructuring	3			14			7			14
Adjusted EBITDA	$	155		$	(216)		$	131		$	(564)
Total revenues	$	2,968		$	3,884		$	5,574		$	7,381
Net loss margin	(3.5)		%	(11.3)		%	(7.0)		%	(12.8)		%
Adjusted EBITDA margin	5.2		%	(5.6)		%	2.4		%	(7.6)		%
Gross profit	$	499		$	396		$	840		$	694
Depreciation and amortization expense in cost of sales	44			27			88			35
Share-based compensation expense in cost of sales	—			6			—			14
Root warrant revenue	(5)			—			(10)			—
Restructuring	—			4			—			4
Gross profit, non-GAAP	$	538		$	433		$	918		$	747
Retail vehicle unit sales	76,530			117,564			155,770			222,749
Total gross profit per retail unit	$	6,520		$	3,368		$	5,393		$	3,116
Total gross profit per retail unit, non-GAAP	$	7,030		$	3,683		$	5,893		$	3,354
SG&A	$	452		$	721		$	924		$	1,448
Depreciation and amortization expense in SG&A	46			49			95			86
Share-based compensation expense in SG&A	20			13			35			41
Restructuring	3			10			7			10
SG&A, non-GAAP	$	383		$	649		$	787		$	1,311
Retail vehicle unit sales	76,530			117,564			155,770			222,749
Total SG&A per retail unit	$	5,906		$	6,133		$	5,932		$	6,501
Total SG&A per retail unit, non-GAAP	$	5,005		$	5,520		$	5,052		$	5,886

Liquidity and Capital Resources

General

We generate cash from the sale of retail vehicles, the sale of wholesale vehicles, and proceeds from the sale of finance receivables originated in connection with the sale of retail vehicles. We generate additional cash flows through our financing activities including our short-term revolving inventory and finance receivable facilities and real estate and equipment financing,

51

and historically, the issuance of long-term notes and new issuances of equity. Historically, cash generated from financing activities has funded growth and expansion into new markets and strategic initiatives and we expect this to continue in the future. In response to the current macroeconomic environment, we have increased focus on driving profitability through initiatives to better conform our expense structure to unit volume levels. We expect our primary sources of cash to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months.

Our ability to service our debt and fund working capital, capital expenditures, and business development efforts in the long-term will depend on our ability to generate cash from operating and financing activities, which is subject to our future operating performance, as well as to general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. Our future capital requirements will depend on many factors, including our ability to refinance indebtedness, including through the launch and completion of the Exchange Offers and other transactions described below, our ability to obtain supplemental liquidity through additional debt, equity, including the issuance of New Equity described below, strategic relationships or other arrangements on terms available or acceptable to us, our rate of revenue growth, our construction of IRCs and vending machines, the timing and extent of our spending to support our technology and software development efforts, and increased population coverage. If we need to obtain supplemental liquidity, there can be no assurance that financing alternatives will be available in sufficient amounts or on terms acceptable to us in the future. In the first two quarters of 2023, the U.S. and global banking sector experienced increased volatility as a result of several distressed or closed banks and financial institutions in the first quarter of 2023. While we have not suffered any material effects as a result of the increased financial market volatility, we continue to monitor the situation and will take appropriate measures, as necessary, to minimize our potential risk exposure.

On July 17, 2023, to enhance our liquidity and reduce debt, we entered into a Transaction Support Agreement with the Ad Hoc Group representing over 90% of the aggregate principal amount of outstanding Senior Notes, Carvana Group, LLC, and the Garcia Parties.

Pursuant to the Transaction Support Agreement, subject to the terms and conditions set forth therein, the Ad Hoc Group has agreed to support, approve, implement and enter into definitive documents with respect to the following transactions: (i) the new issuance of New Equity, (ii) the Exchange Offers; (iii) concurrently with, but separate from the Exchange Offers, the commencement by the Company of a cash tender offer to purchase certain 2025 Notes; (iv) the Consent Solicitations and (v) with respect to the Garcia Parties only, the purchase of their pro rata portion of any offering on New Equity (such commitment not to exceed $126 million); provided that such commitment shall automatically terminate on the date the Company raises $700 million of gross proceeds from the issuance of New Equity.

The Transaction Support Agreement may be terminated under various circumstances.

In addition, on July 19, 2023, the Company entered into an agreement (the "Distribution Agreement") with Citigroup Global Markets Inc. and Moelis & Company LLC, pursuant to which the Company may offer and sell from time to time up to the greater of (i) shares of Class A common stock representing an aggregate offering price of $1.0 billion, or (ii) an aggregate number of 35 million shares of Class A common stock pursuant to one or more "at the market offerings," as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended.

There can be no assurance that the transactions contemplated by the Transaction Support Agreement will be completed and that we will obtain the benefits we expect from such transactions. In addition, there can be no assurance that we will sell any shares of Class A common stock through the at-the-market program, or otherwise.

In addition, we or our affiliates may, at any time, and from time to time, repurchase portions of our Class A common stock, our senior unsecured notes or any other securities we may issue, from time to time, in open market transactions, privately negotiated transactions, in exchange for property or other securities or otherwise. Any repurchase decisions will be made after consideration of market conditions and liquidity needs and will be upon such terms and at such prices as we determine appropriate. However, there is no guarantee that a repurchase will take place.

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Liquidity Resources

We had the following liquidity resources available as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Cash and cash equivalents	$	541	$	434
Availability under short-term revolving facilities (1)	964		1,314
Committed liquidity resources available	$	1,505	$	1,748
Unpledged real estate not included above (2)	1,985		1,971
Unpledged beneficial interests in securitizations	70		69
Total liquidity resources	$	3,560	$	3,788

_________________________

(1) Based on pledging all eligible vehicles and finance receivables under the available capacity in our floor plan and finance receivable facilities, excluding the impact to restricted cash requirements.

(2) Total unpledged gross real estate assets minus committed sale leasebacks. Includes $1.1 billion of ADESA unpledged real estate assets.

Our total liquidity resources are composed of cash and cash equivalents, availability under existing credit facilities, and additional unpledged assets, including vehicle inventory, finance receivables, real estate, and securities, on our balance sheet that can be financed using traditional asset-based financing sources.

Cash and cash equivalents includes cash deposits and highly liquid investment instruments with original maturities of three months or less, such as money market funds.

Availability under short-term revolving facilities is the available amount we can borrow under our existing vehicle inventory floor plan and finance receivable facilities based on the pledgeable value of vehicle inventory and finance receivables on our balance sheet on the period end date. Availability under short-term revolving facilities is distinct from the total commitment amount of these facilities because it represents the currently borrowable amount, rather than committed future amounts that could be borrowed to finance future additional assets.

As of June 30, 2023 and December 31, 2022, the short-term revolving facilities had a total commitment of $4.5 billion and $4.8 billion, an outstanding balance of $1.2 billion and $1.5 billion, and unused capacity of $3.3 billion and $3.2 billion, respectively.

Unpledged vehicle inventory and finance receivables is the value of vehicle inventory and finance receivables on our balance sheet on the period end date beyond that covered by committed financing agreements. On September 22, 2022, we entered into a vehicle inventory floor plan facility with a lender that has a $2.0 billion line of credit.

Unpledged real estate assets include real estate acquired as part of the ADESA Acquisition, and IRC, vending machine, and hub real estate assets that have not been sold and are not pledged on the period end date. Since our first sale-leaseback transaction in 2017, we have historically had flexible access to real estate financing and expect to continue to use various forms of real estate financing in the future.

Unpledged beneficial interests in securitizations includes retained beneficial interests in securitizations that have not been previously pledged or sold. We historically have financed the majority of our retained beneficial interests in securitizations and expect to continue to do so in the future.

Additionally, we amended our Master Purchase and Sale Agreement for the purchaser to purchase up to a maximum of $4.0 billion of our finance receivables through January 2024, and such facility had approximately $2.3 billion of unused capacity as of June 30, 2023.

To optimize our cost of capital, in any given period we may choose not to maximize borrowings on our short-term revolving facilities, maximize revolving commitment size, or immediately sale-leaseback or pledge real estate and retained

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beneficial interests in securitizations. This has the benefit of reducing interest expense and debt issuance costs and providing flexibility to minimize financing costs over time.

We consider our total liquidity resources as an input into our planning. In general, changes in total liquidity resources fall into two broad categories: changes due to current business operations and changes due to investments in automotive retail assets.

Changes in liquidity due to current business operations include Adjusted EBITDA, non-real estate capital expenditures, including technology, furniture, fixtures, and equipment, and changes in traditional working capital, including accounts receivable, accounts payable, accrued expenses, and other miscellaneous assets and liabilities.

In the ordinary course of business, we sponsor and engage in securitization transactions to sell our finance receivables to a diverse pool of investors. These securitizations involve unconsolidated variable interest entities in which we retain at least 5% of the credit risk of the underlying finance receivable by holding at least 5% of the notes and certificates issued by these entities. We are exposed to market risk in the securitization market. See Note 9 — Securitizations and Variable Interest Entities, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for further discussion regarding our transactions with unconsolidated variable interest entities.

In addition we also invest in and generate several types of assets, including vehicle inventory, finance receivables, retained beneficial interests in securitizations, and real estate. To maximize capital efficiency, we generally seek to finance these assets with matched sources of asset-based financing, including short-term revolving facilities for vehicle inventory and finance receivables, beneficial interests financing for retained beneficial interests in securitizations, and sale-leaseback or other real estate financing for IRCs and vending machines. We have historically used these sources of financing to finance our investment in these assets and expect to continue to do so in the future.

As of June 30, 2023 and December 31, 2022, our outstanding principal amount of indebtedness, including finance leases, was $8.0 billion and $8.4 billion, respectively, summarized in the table below. See Note 10 — Debt Instruments and Note 16 — Leases included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for further information on our debt and finance leases.

	June 30, 2023		December 31, 2022
	(in millions)
Asset-Based Financing:
Inventory	$	557	$	569
Finance receivables and beneficial interests	882		1,233
Transportation fleet(1)	327		375
Real estate(2)	486		489
Total asset-based financing	2,252		2,666
Senior Notes	5,725		5,725
Total debt	7,977		8,391
Less: unamortized debt issuance costs(3)	(75)		(82)
Total debt, net	$	7,902	$	8,309

_________________________

(1) Amount includes notes payable and finance leases.

(2) Amount includes real estate financing and notes payable.

(3) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on our unaudited condensed consolidated balance sheets. Unamortized debt issuance costs related to revolving debt agreements are presented within other assets on our unaudited condensed consolidated balance sheets and not included here.

On April 26, 2022, we completed an equity offering of 15.625 million shares of Class A common stock for net proceeds of $1.2 billion. Also, on May 6, 2022, we issued $3.275 billion in senior unsecured notes due 2030. We are using the net proceeds from the Class A common stock offering for general corporate purposes and to pay any costs, fees and expenses incurred by us in connection with the offering. We used the net proceeds from the issuance and sale of the 2030 Notes to finance the

54

$2.2 billion ADESA Acquisition and other ancillary transactions in connection therewith, and to pay related fees and expenses in connection therewith and for working capital, capital expenditures and other general corporate purposes.

Cash Flows

The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022
	(in millions)
Net cash provided by (used in) operating activities	$	443	$	(487)
Net cash provided by (used in) investing activities	6		(2,525)
Net cash (used in) provided by financing activities	(400)		3,573
Net increase in cash, cash equivalents and restricted cash	49		561
Cash, cash equivalents and restricted cash at beginning of period	628		636
Cash, cash equivalents and restricted cash at end of period	$	677	$	1,197

Operating Activities

Our primary sources of operating cash flows result from the sales of retail vehicles, wholesale vehicles, loans we originate, and ancillary products. Our primary uses of cash from operating activities are purchases of inventory, personnel-related expenses, and cash used to acquire customers. Cash provided by and used in operating activities was $443 million and $487 million during the six months ended June 30, 2023 and 2022, respectively, an increase of $930 million, primarily due to decreased vehicle inventory acquisitions, along with decreased selling, general and administrative expenses and reconditioning costs.

Investing Activities

Our primary use of cash for investing activities is purchases of property and equipment to expand our operations. Cash provided by and used in investing activities was $6 million and $2.5 billion during the six months ended June 30, 2023 and 2022, respectively, an increase of $2.5 billion, primarily driven by the $2.2 billion used for the ADESA Acquisition in May 2022 and decreased purchases of property and equipment as part of our effort to reduce our capital expenditures.

Financing Activities

Cash flows from financing activities primarily relate to our short and long-term debt activity, including paying down our short-term revolving facilities. Cash used in and provided by financing activities was $400 million and $3.6 billion during the six months ended June 30, 2023 and 2022, respectively, a decrease of $4.0 billion. In the six months ended June 30, 2022 we completed an equity offering for net proceeds of $1.2 billion and a notes offering of $3,275 billion as part of our financing for the ADESA Acquisition. The remaining change primarily relates to decreased net proceeds from short-term revolving facilities.

Contractual Obligations and Commitments

As of June 30, 2023, there have been no material changes to the contractual obligations or commitments previously disclosed in our most recent Annual Report on Form 10-K, filed February 23, 2023.

Fair Value Measurements

We report money market securities, certain receivables, Warrants to acquire Root's Class A common stock and beneficial interests in securitizations at fair value. See Note 18 — Fair Value of Financial Instruments, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

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Critical Accounting Estimates

There have been no material changes to our critical accounting estimates from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our most recent Annual Report on Form 10-K, filed on February 23, 2023.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and other similar expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:

•the transactions contemplated by the Transaction Support Agreement;

•short-term and long-term liquidity;

•expectations relating to the automotive market and our industry;

•macroeconomic conditions, economic slowdowns or recessions;

•future financial position;

•business strategy;

•budgets, projected costs, and plans;

•future industry growth;

•financing sources;

•potential sales of our Class A common stock using the at-the-market program;

•the impact of litigation, government inquiries, and investigations; and

•all other statements regarding our intent, plans, beliefs, or expectations or those of our directors or officers.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause

56

actual results and events to differ materially from those indicated in the forward-looking statements include, among others, the following:

•our inability to consummate the transactions contemplated by the Transaction Support Agreement as scheduled or at all;

•the impact on our business from the larger automotive ecosystem and macroeconomic conditions, including consumer demand, global supply chain challenges, heightened inflation and rising interest rates;

•our ability to raise additional capital, the quality of the financial markets, and our substantial indebtedness;

•our history of losses and ability to achieve or maintain profitability in the future;

•our ability to effectively manage our historical rapid growth;

•our ability to maintain customer service quality and reputational integrity and enhance our brand;

•the seasonal and other fluctuations in our quarterly operating results;

•our relationship with DriveTime and its affiliates;

•our management’s accounting judgments and estimates, as well as changes to accounting policies;

•our ability to compete in the highly competitive industry in which we participate;

•the changes in prices of new and used vehicles;

•our ability to acquire desirable inventory;

•our ability to sell our inventory expeditiously;

•our access to structured finance, securitization, or derivative markets at competitive rates and in sufficient amounts;

•our dependence on the sale of automotive finance receivables for a substantial portion of our gross profits;

•our exposure to credit losses and prepayments on our interests in automotive finance receivables;

•our reliance on credit data for the automotive finance receivables we sell;

•our ability to successfully market and brand our business;

•our reliance on internet searches to drive traffic to our website and mobile application;

•the volatility of the trading price of our Class A common stock, which can increase as a result of the issuance of the New Equity and the use of the at-the-market program;

•risks related to the actions of short sellers;

•our ability to comply with the laws and regulations to which we are subject;

•the changes in the laws and regulations to which we are subject;

•our ability to comply with the Telephone Consumer Protection Act of 1991;

•the evolution of regulation of the internet and e-commerce;

•our ability to grow complementary product and service offerings;

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•the geographic concentration where we provide services and recondition and store vehicle inventory;

•our ability to obtain affordable inventory insurance;

•our ability to maintain adequate relationships with the lenders that finance our vehicle inventory purchases;

•the representations we make with regard to our finance receivables we sell;

•our reliance on our proprietary credit scoring model in the forecasting of loss rates;

•our reliance on internal and external logistics to transport our vehicle inventory;

•risks associated with the construction and operation of our IRCs, hubs and vending machines, including our dependence on one supplier for construction and maintenance for our vending machines;

•our ability to finance IRCs and vending machines;

•our ability to protect the personal information and other data that we collect, process, and store;

•disruptions in availability and functionality of our website and mobile application;

•our ability to protect our intellectual property, technology, and confidential information;

•our ability to defend against claims that our employees, consultants or advisors have wrongfully used or disclosed trade secrets or intellectual property;

•our ability to defend against intellectual property disputes;

•our ability to comply with the terms of open source licenses;

•conditions affecting automotive manufacturers, including manufacturer recalls;

•our reliance on third party technology to complete critical business functions;

•our dependence on key personnel to operate our business;

•our ability to successfully integrate the operations of ADESA;

•our minority equity investment in Root, Inc.;

•the diversion of management's attention and other disruptions associated with potential future acquisitions;

•the restrictions that could limit the flexibility in operating our business imposed by the covenants contained in the indentures governing our Senior Notes and indentures governing future debt securities;

•the legal proceedings to which we may be subject in the ordinary course of business;

•risks relating to our corporate structure and tax receivable agreements;

•risks relating to our Section 382 Tax Asset Preservation Plan; and

•other factors disclosed in the section titled "Risk Factors" in our most recent Annual Report on Form 10-K and other filings we make with the Securities and Exchange Commission.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Report. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our quantitative and qualitative disclosures about market risk from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our most recent Annual Report on Form 10-K, filed on February 23, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal controls over financial reporting that occurred during the three months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity and capital resources.

Future litigation may be necessary to defend ourselves and our partners by determining the scope, enforceability and validity of third party proprietary rights or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. For more information, see “Legal Matters” in Note 17 — Commitments and Contingencies, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Other than as described below, there have been no material changes to the risk factors disclosed under the heading "Risk Factors" in our most recent Annual Report on Form 10-K, filed on February 23, 2023.

Risks Related to the Transaction Support Agreement and Related Transactions

If the Exchange Offers contemplated by the Transaction Support Agreement are launched and completed, the holders of the new secured notes offered thereby will have rights that are senior to the rights of holders of our Class A common stock and the documents governing such new secured notes will include certain restrictive covenants.

If the Exchange Offers contemplated by the Transaction Support Agreement are consummated, we expect that in the event of our bankruptcy, dissolution or liquidation, the holders of our New Secured Notes and our other indebtedness would be paid in full before any distributions can be made to the holders of our Class A common stock. As a result of these superior rights relative to our Class A common stock, the right of holders of our Class A common stock to receive distributions from us may be diluted and may be limited. Additionally, we also expect that the indenture governing the New Secured Notes will limit our ability to make certain restricted payments, including dividends, that could also affect the holders of our Class A common stock.

The transactions contemplated by the Transaction Support Agreement may not be consummated as scheduled or at all, and even if such transactions are consummated, we may not achieve their anticipated benefits.

We expect that the completion of the transactions contemplated by the Transaction Support Agreement, if consummated, will enhance its liquidity and reduce its debt. However, transactions contemplated by the Transaction Support Agreement are subject to the satisfaction of certain conditions and the Transaction Support Agreement may be terminated under certain circumstances, including if (i) the Exchange Offers are not launched by August 2, 2023; (ii) the New Secured Notes are not issued pursuant to the Exchange Offers; (iii) we fail to purchase in cash certain 2025 Notes that have been validly tendered and not withdrawn by the date that is no later than five business days after the date upon which the Exchange Offers are closed, (iv) we fail to launch at "at the market" offering or underwritten offering for the New Equity by no later than 8:00 a.m. (prevailing Eastern time) on the third business day following the date of our release of our financial statements for the fiscal quarter ended June 30, 2023; (v) we fail to raise aggregate gross proceeds of at least $350 million of New Equity by the 20th business day after we launch the Exchange Offers; or (vi) any of the Garcia Parties fail fulfill their purchase obligations related to the New Equity. In addition, if the closing date of the transactions contemplated by the Transaction Support Agreement does not occur prior to September 30, 2023, unless such date is extended in accordance with the terms of the Transaction Support Agreement, the Transaction Support Agreement will automatically terminate.

As a result, any or all of the transactions may not be consummated as originally scheduled or at all. Accordingly, we may not be able to realize the expected benefits from these transactions on a timely basis or at all. Even if we are successful in completing the transactions contemplated by the Transaction Support Agreement, we may not realize some or all of the expected benefits from such transactions. We have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the transactions contemplated by the Transaction Support Agreement, and these fees and costs are payable by us regardless of whether such transactions are consummated.

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Risks Related to the At-the-Market Offering Program

Holders of our Class A common stock will experience dilution as a result of any shares sold under the "at-the-market offering" program. You may also experience future dilution as a result of future equity offerings, including as the result of any issuance of the New Equity.

We expect to issue additional shares of Class A common stock through our at-the market offering program. We will have discretion, subject to market demand, to vary the timing, prices, and number of shares sold under the Distribution Agreement. Holders of our Class A common stock will experience dilution as a result of the issuance of any shares of Class A common stock under our at-the market offering program. In addition, in order to satisfy our obligation to issue the New Equity or in order to raise additional capital, we may in the future offer additional shares of our Class A common stock or other securities convertible into or exchangeable for our Class A common stock at various prices. Investors purchasing shares or other securities in the future could have rights superior to existing stockholders, and any future equity offerings will result in further dilution for our existing stockholders.

We have broad discretion in how we use the net proceeds from the at-the-market offering program, and we may not use the proceeds effectively or in ways with which our stockholders agree.

We have not designated any portion of the net proceeds from the at-the market offering program to be used for any particular purpose. Our management will have broad discretion as to the application of the net proceeds from the at-the market offering program and could use them for purposes other than those contemplated at the time of the execution of the Distribution Agreement. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not increase the market price of our Class A common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plan Elections

On June 9, 2023, Paul Breaux, the Company's Vice President, General Counsel, and Secretary terminated a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a "10b5-1 Plan"). Mr. Breaux's 10b5-1 Plan was adopted on June 11, 2022 and provided for the potential sale of up to 105,000 shares of Class A common stock, including shares obtained from the conversion of Carvana Group, LLC Class B common units (the "B Units") into shares of Class A common stock. Following the termination of the previous 10b5-1 Plan, on June 9, 2023. Mr. Breaux also entered into a new 10b5-1 Plan. Mr. Breaux's new 10b5-1 Plan provides for the potential sale of up to 445,000 shares of Class

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A common stock, including shares obtained from the exercise of vested stock options and the conversion of B Units covered by the 10b5-1 Plan, between September 8, 2023 and December 31, 2025.

On June 14, 2023, Daniel Gill, the Company's Chief Product Officer entered into a 10b5-1 Plan. Mr. Gill's 10b5-1 Plan provides for the potential sale of up to 432,522 shares of Class A common stock, including shares obtained from the exercise of vested stock options covered by the 10b5-1 Plan, between September 13, 2023 and August 31, 2025.

Amended and Restated Section 382 Rights Agreement

On July 18, 2023, the Company amended and restated its Tax Asset Preservation Plan in order to modify the definition of Beneficial Ownership to exclude derivatives that may be only settled in cash, do not confer voting rights and lack other features consistent with beneficial ownership of shares of Class A common stock.

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ITEM 6. EXHIBITS

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Carvana Co., dated April 27, 2017 (incorporated by reference to Exhibit 3.1 to Carvana Co.’s Current Report on Form 8-K filed with the SEC on May 3, 2017).
3.2	Amended and Restated Bylaws of Carvana Co., dated April 27, 2017 (incorporated by reference to Exhibit 3.2 to Carvana Co.’s Current Report on Form 8-K filed with the SEC on May 3, 2017).
3.3	Certificate of Designations of Series B Preferred Stock of Carvana Co., as filed with the Secretary of State of the State of Delaware on January 17, 2023 (incorporated by reference to Exhibit 3.1 to Carvana Co.'s Current Report on Form 8-K filed with the SEC on January 17, 2023).
10.1	Third Amendment to the Carvana Co. 2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Carvana Co.'s Current Report on Form 8-K filed with the SEC on May 3, 2023).
10.2	Fourth Amendment to the Second Amended and Restated Master Purchase and Sale Agreement, dated April 17, 2023, among Ally Bank, Ally Financial Inc. and Carvana Auto Receivables 2016-1 LLC (incorporated by reference to Exhibit 10.4 to Carvana Co.'s Quarterly Report on Form 10-Q filed with the SEC on May 4, 2023).
10.3	Transaction Support Agreement, dated as of July 17, 2023, by and among Carvana Co., Carvana Group, LLC, Ernest Garcia II, Ernest Garcia III, and each Initial Supporting Noteholder party thereto (incorporated by reference to Exhibit 10.1 to Carvana Co.'s Current Report on Form 8-K filed with the SEC on July 19, 2023).
10.4	Distribution Agreement, dated as of July 19, 2023, among Carvana Co., Carvana Group, LLC and Citigroup Global Markets Inc. and Moelis & Company, as sales agents (incorporated by reference to Exhibit 10.2 to Carvana Co.'s Current Report on Form 8-K filed with the SEC on July 19, 2023).
10.5	Amended and Restated Section 382 Rights Agreement, dated as of July 18, 2023, by and between Carvana Co. and Equiniti Trust Company, LLC, as rights agent.
31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.
31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, furnished herewith.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, furnished herewith.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	July 19, 2023		Carvana Co.
			(Registrant)
		By:	/s/ Mark Jenkins
			Mark Jenkins
			Chief Financial Officer
			(On behalf of the Registrant and as Principal Financial Officer)

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EX-10.5

Exhibit 10.5

AMENDED AND RESTATED

SECTION 382 RIGHTS AGREEMENT

Dated as of July 18, 2023

between

CARVANA CO.

and

EQUINITI TRUST COMPANY, LLC,

as Rights Agent

TABLE OF CONTENTS

			Page
Section	1.	Definitions	1
Section	2.	Appointment of Rights Agent	8
Section	3.	Issue of Right Certificates	8
Section	4.	Form of Right Certificates	10
Section	5.	Countersignature and Registration	10
Section	6.	Transfer, Split-up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	11
Section	7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	12
Section	8.	Cancellation and Destruction of Right Certificates	13
Section	9.	Status and Availability of Preferred Shares	14
Section	10.	Preferred Shares Record Date	14
Section	11.	Adjustment of Purchase Price, Number of Shares or Number of Rights	14
Section	12.	Certificate of Adjustment	21
Section	13.	Consolidation, Merger, Sale or Transfer of Assets or Earning Power	21
Section	14.	Fractional Rights and Fractional Shares	22
Section	15.	Rights of Action	23
Section	16.	Agreement of Right Holders	23
Section	17.	Right Certificate Holder Not Deemed a Stockholder	24
Section	18.	Concerning the Rights Agent	24
Section	19.	Merger or Consolidation or Change of Name of Rights Agent	25
Section	20.	Rights and Duties of Rights Agent	26
Section	21.	Change of Rights Agent	28
Section	22.	Issuance of New Right Certificates	29
Section	23.	Redemption	29
Section	24.	Exchange	30
Section	25.	Notice of Certain Events	32
Section	26.	Notices	32
Section	27.	Supplements and Amendments	33
Section	28.	Successors	34
Section	29.	Benefits of this Agreement	34
Section	30.	Severability	34
Section	31.	Governing Law	34
Section	32.	Counterparts	34
Section	33.	Descriptive Headings and Construction	35
Section	34.	Administration	35
Section	35.	Force Majeure	35
Section	36.	Process to Seek Exemption	35

AMENDED AND RESTATED SECTION 382 RIGHTS AGREEMENT

This Section 382 Rights Agreement (this “Agreement”), dated as of July 18, 2023, is between Carvana Co., a Delaware corporation (the “Company”), and Equiniti Trust Company, LLC, as successor in interest to American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as rights agent (the “Rights Agent”).

The Company and the Rights Agent previously entered into the Section 382 Rights Agreement, dated as of January 16, 2023 (the “Original Rights Agreement”).

The Company and certain of its Subsidiaries (as defined below) have generated certain Tax Attributes (as defined below) for United States federal income tax purposes and the Company therefore desires to avoid an “ownership change” within the meaning of Section 382 of the Code (as defined below), including for purposes of Section 383 of the Code, and to preserve the Company’s ability to utilize such Tax Attributes.

In connection with the Original Rights Agreement, the Board of Directors of the Company (the “Board of Directors”) authorized and declared a dividend of one preferred share purchase right (a “Right”) for each share of Class A Common Stock, par value $0.001 per share, of the Company outstanding on the Close of Business on January 27, 2023 (the “Record Date”) and authorized the issuance of one Right with respect to each additional Common Share (as defined below) issued by the Company between the Record Date and the earliest of (i) the Distribution Date, (ii) the Redemption Date, and (iii) the Final Expiration Date, and additional Common Shares that shall become outstanding after the Distribution Date as provided in Section 22 of the Original Rights Agreement, each Right initially representing the right to purchase one one-thousandth of a Preferred Share, subject to adjustment, upon the terms and subject to the conditions hereof.

Section 27 of the Original Rights Agreement permits the Company from time to time to supplement or amend the Original Rights Agreement as set forth therein.

Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties agree to amend and restate the Original Rights Agreement as follows:

Section 1.    Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

1.1    “Acquiring Person” means any Person (other than an Exempt Person) who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 4.9% or more of the Common Shares then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any entity holding Common Shares for or pursuant to the terms of any such employee benefit plan or (v) any Person who or which, together with all Affiliates and Associates of such Person, at the time of the first public announcement of this Agreement, is a Beneficial Owner of 4.9% or more of the Common Shares then outstanding (a “Grandfathered Stockholder”); provided, that if a Grandfathered Stockholder becomes, after such time, the Beneficial Owner (other than pursuant to the vesting or exercise of any equity awards issued to a member of the Board of Directors or pursuant to additional grants of any such equity awards to a member of the Board of Directors) of any additional Common Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of Common Shares then outstanding Beneficially Owned by such Grandfathered Stockholder) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such Person is not the Beneficial Owner of 4.9% or more of the Common Shares then outstanding; provided, further, that upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 4.9%, such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder and this clause (v) shall have no further force or effect with respect to such Person. For the avoidance of doubt, in the event that after the time of the first public announcement of this Agreement, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of Common Shares expires, is settled in whole or in part, terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement or understanding with respect to the same or different Common Shares that confers Beneficial Ownership of Common Shares shall be considered the acquisition of Beneficial Ownership of additional Common Shares by the Grandfathered Stockholder and render such Grandfathered Stockholder an Acquiring Person for purposes of this Agreement unless, upon such acquisition of Beneficial Ownership of

additional Common Shares, such Person is not the Beneficial Owner of 4.9% or more of the Common Shares then outstanding.

For the avoidance of doubt, in the event that after the time of the first public announcement of the Rights Agreement, any Person becomes, through the exchange of LLC Units (as defined below) for Common Shares, the Beneficial Owner of 4.9% or more of the Common Shares then outstanding (or, in the case of a Grandfathered Stockholder, the Beneficial Owner of any additional Common Shares), then such Person shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such Person is not the Beneficial Owner of 4.9% or more of the Common Shares then outstanding.

Notwithstanding the foregoing, no Person shall become an Acquiring Person as the result of an acquisition or redemption of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares Beneficially Owned by such Person to 4.9% (or such other percentage as would otherwise result in such Person becoming an Acquiring Person) or more of the Common Shares then outstanding; provided, that if a Person would, but for the provisions of this paragraph, become an Acquiring Person by reason of an acquisition or redemption of Common Shares by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares at any time such that the Person is or thereby becomes the Beneficial Owner of 4.9% (or such other percentage as would otherwise result in such Person becoming an Acquiring Person) or more of the Common Shares then outstanding (other than Common Shares acquired solely as a result of corporate action of the Company not caused, directly or indirectly, by such Person), then such Person shall be deemed to be an Acquiring Person.

Notwithstanding the foregoing, if the Board of Directors, with the concurrence of a majority of the members of the Board of Directors who are not, and are not representatives, nominees, Affiliates or Associates of, such Person or an Acquiring Person, determines in good faith that a Person that would otherwise be an Acquiring Person has become such inadvertently (including because (i) such Person was unaware that it Beneficially Owned a percentage of Common Shares that would otherwise cause such Person to be an Acquiring Person or (ii) such Person was aware of the extent of its Beneficial Ownership of Common Shares but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing, obtaining or influencing control of the Company, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person, then such Person shall not be deemed to have become an Acquiring Person. Notwithstanding the foregoing, if a bona fide swaps dealer who would otherwise be an Acquiring Person has become so as a result of its actions in the ordinary course of its business that the Board of Directors determines, in its sole discretion, were taken without the intent or effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to control or influence the management or policies of the Company, then, and unless and until the Board of Directors shall otherwise determine, such Person shall not be deemed to be an Acquiring Person.

Notwithstanding the foregoing, no Person shall become an Acquiring Person solely as a result of an Exempt Transaction.

Notwithstanding the foregoing, no regulated investment company under Section 851 of the Code shall be deemed to be an Acquiring Person, unless the Board of Directors determines, in its reasonable discretion, that such regulated investment company is deemed to Beneficially Own more than 4.9% or more of the Common Shares then outstanding under the applicable standards of Treasury Regulation 1.382-3(a). In determining whether any regulated investment company is an Acquiring Person, the filing of a statement under Section 13 of the Exchange Act with respect to such regulated investment company shall not be deemed to establish that such regulated investment company has acquired Beneficial Ownership of 4.9% or more of the Common Shares then outstanding; provided, that the Board of Directors shall be entitled to rely upon any such filing unless such regulated investment company provides information and diligence that permits the Board of Directors to conclude, in its reasonable discretion, that such regulated investment company has not acquired Beneficial Ownership of 4.9% or more of the Common Shares then outstanding pursuant to the standards of Treasury Regulation 1.382-3.

Notwithstanding the definition of Acquiring Person under this Agreement, the Board of Directors may also determine that any Person is an Acquiring Person under this Agreement if such Person becomes the Beneficial Owner of 4.9% (by value) or more of the Common Shares then outstanding (as the term “stock” is defined in Treasury Regulations Sections 1.382-2(a)(3) and 1.382-2T(f)(18)).

1.2    “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b‑2 promulgated under the Exchange Act, as in effect on the date of this Agreement.

1.3    A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own,” or have “Beneficial Ownership” of, any securities:

1.3.1    which such Person actually owns (directly or indirectly) or would be deemed to actually or constructively own pursuant to Section 382 of the Code and the Treasury Regulations promulgated thereunder (including any coordinated acquisition of securities by any Persons who have a formal or informal understanding with respect to such acquisition (to the extent that ownership of such securities would be attributed to such Persons under Section 382 of the Code and the Treasury Regulations promulgated thereunder));

1.3.2    which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated under the Exchange Act, as in effect on the date of this Agreement;

1.3.3    which such Person or any of such Person’s Affiliates or Associates has (i) the right or ability to vote, cause to be voted or control or direct the voting of pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (A) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (B) is not also then reportable on a statement on Schedule 13D under the Exchange Act (or any comparable or successor report) or (ii) the right or the obligation to become the Beneficial Owner (whether such right is exercisable or such obligation is required to be performed immediately or only after the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise) pursuant to any agreement, arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), written or otherwise, or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise, through conversion of a security, pursuant to the power to revoke a trust, discretionary account or similar arrangement, pursuant to the power to terminate a repurchase or similar so-called “stock-borrowing” agreement or arrangement, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, that a Person shall not be deemed to be the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act until such tendered securities are accepted for purchase or exchange;

1.3.4    which are Beneficially Owned (within the meaning of the preceding subsections of this Section 1.3), directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding, whether or not in writing, for the purpose of acquiring, holding, voting or disposing of any securities of the Company or cooperating in obtaining, changing, or influencing control of the Company; or

1.3.5    which are the subject of, or the reference securities for, or that underlie, any Derivative Position of such Person or any of such Person’s Affiliates or Associates, with the number of Common Shares deemed Beneficially Owned in respect of a Derivative Position being the notional or other number of Common Shares in respect of such Derivative Position (without regard to any short or similar position) that is specified in (i) one or more filings with the Securities and Exchange Commission by such Person or any of such Person’s Affiliates or Associates or (ii) the documentation evidencing such Derivative Position as the basis upon which the value or settlement amount of such Derivative Position, or the opportunity of the holder of such Derivative Position to profit or share in any profit, is to be calculated in whole or in part (whichever of (i) or (ii) is greater), or if no such number of Common Shares is specified in such filings or

documentation (or such documentation is not available to the Board of Directors), as determined by the Board of Directors in its reasonable discretion.

Notwithstanding anything in this definition of Beneficial Owner to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, means the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to Beneficially Own hereunder.

Notwithstanding anything in this Agreement to the contrary, a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, or to have Beneficial Ownership of, any Common Shares by virtue of (i) owning shares of Class B Common Stock, par value $0.001 per share, of the Company or any LLC Units or (ii) owning any interest in an Exempt Derivative Position.

1.4    “Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the state of New York are authorized or obligated by law or executive order to close.

1.5    “Close of Business” on any given date means 5:00 p.m., New York time, on such date; provided, that if such date is not a Business Day, it means 5:00 p.m., New York time, on the next succeeding Business Day.

1.6    “Code” means the Internal Revenue Code of 1986, as amended.

1.7    “Common Shares” means the shares of Class A Common Stock, par value $0.001 per share, of the Company. “Common Shares,” when used with reference to any Person other than the Company, means the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

1.8    “Common Stock Equivalents” has the meaning set forth in Section 11.1.3(ii)(C).

1.9    “Current Per Share Market Price” has the meaning set forth in Section 11.4.1.

1.10    “Current Value” has the meaning set forth in Section 11.1.3(i)(A).

1.11    “Derivative” has the meaning set forth in Section 1.12.

1.12    “Derivative Position” shall mean any option, warrant, convertible security, stock appreciation right, or other security, contract right or derivative position or similar right (including any “swap” transaction with respect to any security, other than a broad based market basket or index) (any of the foregoing, a “Derivative”), whether or not presently exercisable, that (i) has an exercise or conversion privilege or a settlement payment or mechanism at a price related to the value of the Common Shares or a value determined in whole or in part with reference to, or derived in whole or in part from, the value of the Common Shares and that increases in value as the market price or value of the Common Shares increases or that provides an opportunity, directly or indirectly, to profit or share in any profit derived from any increase in the value of the Common Shares and (ii) is capable of being settled, in whole or in part, through delivery of cash orCommon Shares (whether on a required or optional basis, and whether such settlement may occur immediately or only after the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise), in each case regardless of whether (A) it conveys any voting rights in such Common Shares to any Person or (B) any Person (including the holder of such Derivative Position) may have entered into other transactions that hedge its economic effect.

1.13    “Distribution Date” has the meaning set forth in Section 3.1.

1.14    “Earning Power” has the meaning set forth in Section 13.3.

1.15    “Equivalent Preferred Shares” has the meaning set forth in Section 11.2.

1.16     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.17    “Exchange Property” has the meaning set forth in Section 24.6.

1.18    “Exchange Ratio” has the meaning set forth in Section 24.1.

1.19    “Exchange Recipients” has the meaning set forth in Section 24.6.

1.20    “Exempt Derivative Position” shall mean any Derivative that would otherwise constitute a Derivative Position but where such Derivative (i) may solely be settled in cash and under no circumstances provides any party to the Derivative (including the counterparty) the right to receive Common Shares or to deliver Common Shares in respect of its obligations; (ii) does not require any party to the Derivative (including the counterparty) (or any of such party’s Affiliates) to own, place in trust or otherwise pledge or make available any Common Share in support of an obligation under the Derivative at any time; (iii) does not provide any party to the Derivative (including the counterparty) with the ability to exercise voting rights or receive stockholder notices with respect to Common Shares that are the subject of the Derivative; (iv) has a term no longer than five (5) years; and (v) does not include a separately stated charge to account for the cost of hedging the obligations of any party to the Derivative (including the counterparty) under the Derivative.

1.21    “Exempt Person” means any Person that the Board of Directors determines is exempt from this Agreement, which determination shall be made in the sole and absolute discretion of the Board of Directors; provided, that no Person shall qualify as an Exempt Person unless such determination is made prior to such time as any Person becomes an Acquiring Person; provided, further,that any Person will cease to be an Exempt Person if the Board of Directors makes a contrary determination with respect to such Person regardless of the reason therefor.

1.22    “Exempt Transaction” means any transaction that the Board of Directors determines is exempt from this Agreement, which determination shall be made in the sole and absolute discretion of the Board of Directors; provided, that no transaction shall qualify as an Exempt Transaction unless such determination is made prior to such time as any Person becomes an Acquiring Person.

1.23    “Exemption Request” has the meaning set forth in Section 36.

1.24    “Final Expiration Date” means the earliest to occur of (i) the date on which the Board of Directors determines in its sole discretion that (x) this Agreement is no longer necessary for the preservation of material valuable Tax Attributes or (y) the Tax Attributes have been fully utilized and may no longer be carried forward and (ii) the Close of Business on January 15, 2026.

1.25    “Grandfathered Stockholder” has the meaning set forth in Section 1.1.

1.26    “LLC Units” means the membership units in Carvana Group, LLC.

1.27    “NYSE” means the New York Stock Exchange.

1.28    “Person” means any individual, firm, corporation, partnership, limited partnership, limited liability partnership, business trust, limited liability company, unincorporated association or other entity, and shall include any successor (by merger or otherwise) of such entity.

1.29    “Preferred Shares” means shares of Series B Preferred Stock, par value $0.01 per share, of the Company having such rights and preferences as are set forth in the form of Certificate of Designations set forth as Exhibit A hereto, as the same may be amended from time to time.

1.30    “Purchase Price” has the meaning set forth in Section 7.2.

1.31    “Redemption Date” has the meaning set forth in Section 23.2.

1.32    “Redemption Price” has the meaning set forth in Section 23.1.

1.33“Requesting Person” has the meaning set forth in Section 36.

1.34    “Right Certificate” means a certificate evidencing a Right substantially in the form of Exhibit B hereto.

1.35    “Spread” has the meaning set forth in Section 11.1.3(i).

1.36    “Stock Acquisition Date” means the earlier of the date of (i) the public announcement by the Company or an Acquiring Person that an Acquiring Person has become such (which, for purposes of this definition, shall include a statement on Schedule 13D or Schedule 13G filed pursuant to the Exchange Act) and (ii) the public disclosure of facts by the Company or an Acquiring Person that reveals the existence of an Acquiring Person or indicating that an Acquiring Person has become an Acquiring Person.

1.37    “Subsidiary” of any Person means any Person of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

1.38    “Tax Attributes” means any net operating loss carryovers, capital loss carryovers, general business credit carryovers, Section 163(j) deferred interest carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any loss or deduction (whether actual or prospective) attributable to a “net unrealized built-in loss” within the meaning of Section 382 of the Code and the Treasury Regulations promulgated thereunder, of the Company or any of its Subsidiaries.

1.39    “Trading Day” means a day on which the principal national securities exchange on which a security is listed or admitted to trading is open for the transaction of business or, if a security is not listed or admitted to trading on any national securities exchange, a Business Day.

1.40    “Treasury Regulations” means final, temporary and proposed regulation of the Department of Treasury under the Code and any successor regulation, including any amendments thereto.

1.41    “Trust”has the meaning set forth in Section 24.6.

Section 2.    Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as rights agent for the Company in accordance with the express terms and conditions hereof (and no implied terms or conditions), and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable, upon ten days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-rights agent. In the event that the Company appoints one or more co-rights agents, the respective duties of the Rights Agent and any co-rights agent shall be as the Company shall reasonably determine, provided that such duties and determination are consistent with the terms and provisions of this Agreement and that contemporaneously with such appointment, if any, the Company shall notify the Rights Agent in writing thereof.

Section 3.    Issue of Right Certificates.

3.1    Until the earlier of (i) the Close of Business on the tenth day after the Stock Acquisition Date (or, in the event that the Board of Directors determines on or before such tenth day to effect an exchange in accordance with Section 24 and determines that a later date is advisable, such later date) and (ii) the Close of Business on the tenth Business Day (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, any entity holding Common Shares for or pursuant to the terms of any such benefit plan or any Exempt Person) of a tender or exchange offer the consummation of which would result in any Person becoming an Acquiring Person (such date being herein referred to as the “Distribution Date”) (provided, that if such tender or exchange offer is terminated prior to the occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange offer), (A) the Rights will be evidenced by the certificates (or other evidence of book-entry or other uncertificated ownership) for Common Shares registered in the names of the holders thereof (which shall also be deemed to be Right Certificates) and not by separate Right Certificates (provided, that each certificate (or other evidence of book-entry or other uncertificated ownership) representing Common Shares outstanding as of the Close of Business on the Record Date evidencing the Rights shall be deemed to incorporate by reference the terms of this Agreement, as amended from time to time), and (B) the right to

receive Right Certificates will be transferable only in connection with the transfer of Common Shares. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, at the expense of the Company and upon receipt of all relevant information, send) by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, substantially in the form of Exhibit B hereto, evidencing one Right for each Common Share so held, subject to adjustment as provided herein; provided, that the Rights may instead be recorded in book-entry or other uncertificated form, in which case such book-entries or other evidence of ownership shall be deemed to be Right Certificates for all purposes of this Agreement; provided, further, that all procedures relating to actions to be taken or information to be provided with respect to such Rights recorded in book-entry or other uncertificated forms, and all requirements with respect to the form of any Right Certificate set forth in this Agreement, may be modified as necessary or appropriate to reflect book-entry or other uncertificated ownership. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.

3.2    The Company shall provide the Rights Agent with written notice of the occurrence of the Final Expiration Date and the Rights Agent shall not be deemed to have knowledge of the occurrence of the Final Expiration Date, unless and until it shall have received such written notice.

3.3    Certificates for Common Shares which become outstanding (including reacquired Common Shares referred to in the last sentence of this Section 3.3) after the Record Date but prior to the earliest of (i) the Distribution Date, (ii) the Redemption Date, and (iii)the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

This certificate also evidences and entitles the holder hereof to certain Rights (as defined in the Rights Agreement) as set forth in a Section 382 Rights Agreement between Carvana Co. and Equiniti Trust Company, LLC, as successor in interest to American Stock Transfer & Trust Company, LLC, as Rights Agent (or any successor rights agent), dated as of January 16, 2023, as it may from time to time be amended or supplemented pursuant to its terms (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Carvana Co. and the office or offices of Equiniti Trust Company, LLC designated for such purpose. The Rights are not exercisable prior to the occurrence of certain events specified in the Rights Agreement. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced separately and will no longer be evidenced by this certificate. Carvana Co. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, Rights that are or were acquired or Beneficially Owned by an Acquiring Person (or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement)), including such Rights held by a subsequent holder, may become null and void.

Notwithstanding this Section 3.3, the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. If the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. Rights shall be issued in respect of all Common Shares issued or disposed of (including upon issuance or reissuance of Common Shares out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date, and the Final Expiration Date, or in certain circumstances provided in Section 22 hereof, after the Distribution Date.

Section 4.    Form of Right Certificates. Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement (but which do not affect the rights, duties, liabilities or responsibilities of the Rights Agent), or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the other provisions of this Agreement, the Right Certificates shall entitle the holders thereof to purchase such number

of one one-thousandths of a Preferred Share as shall be set forth therein at the Purchase Price, but the amount and type of securities purchasable upon exercise and the Purchase Price shall be subject to adjustment as provided herein.

Section 5.    Countersignature and Registration. Right Certificates shall be duly executed on behalf of the Company by any two authorized officers of the Company, including but not limited to its Chairman of the Board, its President, any of its Vice Presidents, its Treasurer, its Secretary or any of its Assistant Secretaries, either manually or by facsimile signature, and shall be attested by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, either manually or by facsimile signature or by other customary means of electronic transmission. Upon written request by the Company, the Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature or by other customary means of electronic transmission, by an authorized signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign all of the Right Certificates hereunder. No Right Certificate shall be valid for any purpose unless so countersigned, either manually or by facsimile or by other customary means of electronic transmission. If any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates nevertheless may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person that signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed on behalf of the Company by any Person that, at the actual date of the execution of such Right Certificate, is a proper officer of the Company to sign such Right Certificate, even if at the date of the execution of this Agreement such Person was not such an officer.

Following the Distribution Date, and receipt by the Rights Agent of written notice to that effect and all other relevant information referred to in this Agreement, the Rights Agent will keep or cause to be kept, at its office or offices designated for such purpose, books for registration of the transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates, and the date of each of the Right Certificates.

Section 6.    Transfer, Split-up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.

6.1    Subject to the provisions of Section 14, at any time after the Distribution Date, and prior to the earlier of the Redemption Date and the Final Expiration Date, any Right Certificate (other than a Right Certificate representing Rights that have become null and void pursuant to Section 11.1.2 or that have been exchanged pursuant to Section 24) may be transferred, split up, combined or exchanged for another Right Certificate, entitling the registered holder to purchase a like number of Preferred Shares as the Right Certificate surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender (together with any required form of assignment and certificate duly executed and properly completed) the Right Certificate to be transferred, split up, combined or exchanged at the office or offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder shall have properly completed and duly executed the certificate contained in the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Right Certificate or the Affiliates or Associates thereof, or of any other Person with which such Beneficial Owner or any of such Beneficial Owner’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of the Company, as the Company or the Rights Agent shall reasonably request. Thereupon, the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company or the Rights Agent may require payment from the holders of the Right Certificates of a sum sufficient for any tax or governmental charge that may be imposed in connection with any transfer, split-up, combination or exchange of Right Certificates. The Rights Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made.

6.2    Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate (other than any Right Certificate representing Rights that have become null and void pursuant to Section 11.1.2, that have been redeemed pursuant to Section 23 or that have been exchanged pursuant to Section 24), the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Right Certificate or the Affiliates or Associates thereof, or of any other Person with which such Beneficial Owner or any of such Beneficial Owner’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of the Company, as the Company or the Rights Agent shall request (including a signature guarantee and such other documentation as the Rights Agent may reasonably request) and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, at the Company’s or the Rights Agent’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and, in case of mutilation, upon surrender to the Rights Agent and cancellation of the Right Certificate, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

Section 7.    Exercise of Rights; Purchase Price; Expiration Date of Rights.

7.1    The registered holder of any Right Certificate (other than a holder whose Rights have become void pursuant to Section 11.1.2, have been redeemed pursuant to Section 23 or have been exchanged pursuant to Section 24) may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the appropriate form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at the offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request, together with payment of the Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right that is exercised is then exercisable and an amount equal to any applicable transfer tax or charges required to be paid pursuant to Section 9, prior to the earliest of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed pursuant to Section 23, and (iii) the time at which the Rights are exchanged pursuant to Section 24.

7.2    The purchase price to be paid upon the exercise of each Right to purchase one one-thousandth of a Preferred Share represented by a Right shall initially be $50.00 (the “Purchase Price”) and shall be payable in lawful money of the United States of America in accordance with Section 7.3. Each Right shall initially entitle the holder to acquire one one-thousandth of a Preferred Share upon exercise of the Right. The Purchase Price and the number of Preferred Shares or other securities for which a Right is exercisable shall be subject to adjustment from time to time as provided in Section 11 and Section 13.

7.3    Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and certificate properly completed and duly executed, accompanied by payment of the Purchase Price for the number of Rights exercised and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 by cash, certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly: (i)(A) requisition from any transfer agent of the Preferred Shares (or from the Company if there shall be no such transfer agent, or make available, if the Rights Agent is the transfer agent) certificates for the number of Preferred Shares to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from any depositary agent for the Preferred Shares depositary receipts representing such number of Preferred Shares as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent with the depositary agent), and the Company hereby directs any such depositary agent to comply with such request; (ii) when necessary to comply with this Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional Preferred Shares in accordance with Section 14 or Section 24; (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated in writing by such holder; and (iv) when necessary to comply with this Agreement, after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to this Agreement, the Company will make all arrangements necessary so that such other

securities, cash and/or other property are available for distribution by the Rights Agent, if and when necessary to comply with this Agreement.

7.4    If the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14.

7.5    Notwithstanding anything in this Agreement or the Right Certificate to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights or other securities of the Company upon the occurrence of any purported transfer or exercise as set forth in this Section 7 unless such registered holder shall have (i) properly completed and duly executed the certificate contained in the appropriate form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof, as the Company and the Rights Agent shall reasonably request.

Section 8.    Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or to any of its agents (other than the Rights Agent), be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. At the expense of the Company, the Rights Agent shall deliver all canceled Right Certificates which have been canceled by the Rights Agent to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

Section 9.    Status and Availability of Preferred Shares.

9.1    The Company covenants and agrees that it will cause to be reserved and kept available, out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury, the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7.

9.2    The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates (or entry in the book-entry account system of the Company) for such Preferred Shares (subject to payment of the Purchase Price and compliance with all other applicable provisions of this Agreement), be duly and validly authorized and issued and fully paid and non-assessable shares.

9.3    The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise, and shall not be required to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s and the Rights Agent’s reasonable satisfaction that no such tax is due.

Section 10.    Preferred Shares Record Date. Each Person in whose name any certificate (or entry in the book-entry account system of the Company) for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate or book-entry shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, that, if the

date of such surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

Section 11.    Adjustment of Purchase Price, Number of Shares or Number of Rights.

11.1    General.

11.1.1    In the event that the Company shall at any time after the date of this Agreement (i) declare a dividend on the Preferred Shares payable in Preferred Shares, (ii) subdivide the outstanding Preferred Shares, (iii) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (iv) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving Person), except as otherwise provided in this Section 11.1, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the Preferred Shares issuable upon exercise of one Right. If an event occurs that would require an adjustment under both this Section 11.1.1 and Section 11.1.2 hereof, the adjustment provided for in this Section 11.1.1 shall be in addition to, and shall be made prior to, the adjustment required pursuant to Section 11.1.2 hereof.

11.1.2    Subject to the second paragraph of this Section 11.1.2 and to Section 24, from and after the Stock Acquisition Date, each holder of a Right shall have a right to receive, upon exercise of each Right at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares as shall equal the result obtained by dividing (A) the product of (x) the current Purchase Price and (y) the number of one one-thousandths of a Preferred Share for which a Right is then exercisable by (B) 50% of the then Current Per Share Market Price of the Company’s Common Shares (determined pursuant to Section 11.4) on the Stock Acquisition Date.

From and after the Stock Acquisition Date, any Rights that are or were acquired or Beneficially Owned by (i) an Acquiring Person (or any Associate or Affiliate of such Acquiring Person), (ii) a transferee of any Acquiring Person (or of any such Associate or Affiliate) who becomes such a transferee after the Acquiring Person becomes an Acquiring Person or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes such a transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and who receives such Rights (A) with actual knowledge that the transferor is or was an Acquiring Person or (B) pursuant to either (x) a transfer (whether or not for consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person (or any such Associate or Affiliate) or to any Person with whom the Acquiring Person (or such Associate or Affiliate) has any continuing agreement, arrangement, understanding or relationship (whether or not in writing) regarding the transferred Rights or (y) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose or effect of the avoidance of this Section 11.1.2, (each such Person described in (i)-(iii) above, an “Excluded Person”) shall, in each such case, be null and void, and any holder of such Rights (whether or not such holder is an Acquiring Person or an Associate or Affiliate of an Acquiring Person) shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificates shall be issued pursuant to Section 3, Section 6, 7.4 or Section 11 or otherwise hereof that represents Rights that are or have become null and void pursuant to the provisions of this paragraph and any Right Certificate delivered to the Rights Agent that

represents Rights that are or have become null and void pursuant to the provisions of this paragraph shall, upon receipt of written notice directing it to do so, be canceled by the Rights Agent.

If any Person becomes an Acquiring Person, proper provision shall be made under that Fifth Amended and Restated Limited Liability Company Agreement of Carvana Group, LLC, dated October 2, 2020, by and among Carvana Group, LLC and its Members (as amended from time to time, the “LLC Agreement”) so that each holder of LLC Units, other than any holder of LLC Units who is an Acquiring Person or an Affiliate or Associate of an Acquiring Person, will be treated equitably vis-à-vis the holders of Common Shares under the Rights Agreement. For the avoidance of doubt, if any holder of LLC Units becomes an Acquiring Person (or is an Affiliate or Associate of a Person who becomes an Acquiring Person), then the proper provision under the LLC Agreement for the dilution of such Person, including such Person’s LLC Units, will be deemed to be equitable treatment. Holders of the Class B Common Stock, par value $0.001 per share, of the Company are not entitled to receive dividends and would not be entitled under the Rights Agreement to receive a Right or any other rights to purchase equity securities of the Company.

11.1.3    If there are not sufficient authorized but unissued Common Shares to permit the exercise in full of the Rights in accordance with Section 11.1.2 or the exchange of the Rights in accordance with Section 24, or should the Board of Directors so elect, the Company may with respect to such deficiency, (i) determine the excess (the “Spread”) of (A) the value of the Common Shares issuable upon the exercise of a Right as provided in Section 11.1.2 (the “Current Value”) over (B) the Purchase Price, and (ii) with respect to each Right, make adequate provision to substitute for such Common Shares, upon payment of the applicable Purchase Price, any one or more of the following having an aggregate value determined by the Board of Directors to be equal to the Current Value: (A) cash, (B) a reduction in the Purchase Price, (C) Common Shares or other equity securities of the Company (including shares, or units of shares, of preferred stock which the Board of Directors has determined to have the same value as Common Shares (“Common Stock Equivalents”)), (D) debt securities of the Company or (E) other assets, property or instruments. The Company shall provide the Rights Agent with prompt reasonably detailed written notice of any final determination under the previous sentence.

If the Board of Directors shall determine in good faith that additional Common Shares should be authorized for issuance upon exercise in full of the Rights, the Company may suspend the exercisability of the Rights in order to seek any authorization of additional shares, decide the appropriate form of distribution to be made, and determine the value thereof. If the exercisability of the Rights is suspended pursuant to this Section 11.1.3, the Company shall make a public announcement, and shall promptly deliver to the Rights Agent a statement, stating that the exercisability of the Rights has been temporarily suspended. When the suspension is no longer in effect, the Company shall make another public announcement, and promptly deliver to the Rights Agent a statement, so stating. For purposes of this Section 11.1.3, the value of the Common Shares shall be the Current Per Share Market Price of the Common Shares (as determined pursuant to Section 11.4.1) as of the Stock Acquisition Date, and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.

11.2    If the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred Shares”)) or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per Preferred Share or Equivalent Preferred Share (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Preferred Shares) less than the then Current Per Share Market Price of the Preferred Shares (as determined pursuant to Section 11.4.2) on such record date, the Purchase Price to be in effect after such record date shall be adjusted by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the numerator of which shall be (A) the number of Preferred Shares outstanding on such record date plus (B) the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares or Equivalent Preferred Shares to be offered (or the aggregate initial conversion price of the convertible securities to be offered) would purchase at such Current Per Share Market Price and (ii) the denominator of which shall be (A) the number of Preferred Shares outstanding on such record date plus (B) the number of additional Preferred Shares or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities to be offered are initially convertible); provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of

capital stock of the Company issuable upon exercise of one Right. If such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed. If such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.

11.3    If the Company fixes a record date for the making of a distribution to all holders of the Preferred Shares (including any distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving Person) or evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11.2), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the numerator of which shall be the then Current Per Share Market Price of the Preferred Shares (as determined pursuant to Section 11.4.2) on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the assets or evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to one Preferred Share and (ii) the denominator of which shall be the then Current Per Share Market Price of the Preferred Shares (as determined pursuant to Section 11.4.2); provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the Preferred Shares to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed. If such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.

11.4    Current Per Share Market Price.

11.4.1    For the purpose of any computation hereunder, the “Current Per Share Market Price” of any security on any date shall be deemed to be the average of the daily closing prices per share of such security for the 30 consecutive Trading Days immediately prior to such date; provided, that if the Current Per Share Market Price of the security is determined during a period (i) following the announcement by the issuer of such security of (A) a dividend or distribution on such security payable in shares of such security or other securities convertible into such shares, or (B) any subdivision, combination or reclassification of such security, and (ii) prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per share equivalent of such security. The closing price for each day shall be the last sale price or, if no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported by NYSE, or, if on any such date the security is not quoted by NYSE, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the security selected by the Board of Directors. If on any such date no such market maker is making a market in the security, the fair value of the security on such date as determined in good faith by the Board of Directors shall be used.

11.4.2    For the purpose of any computation hereunder, the “Current Per Share Market Price” of the Preferred Shares shall be determined in accordance with the method set forth in Section 11.4.1. If the Preferred Shares are not publicly traded, the “Current Per Share Market Price” of the Preferred Shares shall be conclusively deemed to be the Current Per Share Market Price of the Common Shares as determined pursuant to Section 11.4.1 (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof) multiplied by one thousand. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “Current Per Share Market Price” means the fair value per share as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

11.5    No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, that any adjustments which by reason of this Section 11.5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-thousandth of a Preferred Share or one one-thousandth of any other share or security, as the case may be. Notwithstanding the first sentence of this Section 11.5, any adjustment required by this Section 11 shall be made no later than three years from the date of the transaction which requires such adjustment.

11.6    If, as a result of an adjustment made pursuant to Section 11.1, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, the number of such other shares so receivable upon exercise of any Right shall thereafter be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11.1 through 11.3, inclusive, and the provisions of Section 7, Section 9, Section 10 and Section 13 with respect to the Preferred Shares shall apply on like terms to any such other shares.

11.7    All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of Preferred Shares purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

11.8    Unless the Company exercises its election as provided in Section 11.9, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11.2 and 11.3, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandth of a Preferred Share (calculated to the nearest one one-thousandth of a Preferred Share) obtained by (i) multiplying the number of one one-thousandth of a Preferred Share covered by a Right immediately prior to this adjustment by the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

11.9    The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights in substitution for any adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of Preferred Shares for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one one-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement (with prompt written notice thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. The record date may be the date on which the Purchase Price is adjusted or any day thereafter but, if the Right Certificates have been distributed, shall be at least ten days after the date of the public announcement. If Right Certificates have been distributed, upon each adjustment of the number of Rights pursuant to this Section 11.9, the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14, the additional Rights to which such holders shall be entitled as a result of such adjustment or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

11.10    Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of Preferred Shares which were expressed in the initial Right Certificates issued hereunder.

11.11    Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable Preferred Shares at such adjusted Purchase Price.

11.12    If this Section 11 requires that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may defer, until the occurrence of such event, issuing to the holder of any Right exercised after such record date Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring adjustment.

11.13    Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) combination or subdivision of the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the Current Per Share Market Price, (iii) issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares, or (v) issuance of any rights, options or warrants referred to in Section 11.2 made by the Company after the date of this Agreement to holders of its Preferred Shares shall not be taxable to such stockholders.

11.14    If, at any time after the date of this Agreement and prior to the Distribution Date, the Company (i) declares or pays any dividend on the Common Shares payable in Common Shares or (ii) effects a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise other than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such case (A) the number of one one-thousandths of a Preferred Share purchasable after such event upon exercise of each Right shall be determined by multiplying the number of one one-thousandths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11.14 shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is affected.

Section 12.    Certificate of Adjustment. Whenever an adjustment or any event affecting the Rights or their exercisability (including an event that causes Rights to become null and void) occurs or is made as provided in Section 11 and Section 13, the Company shall promptly (i) prepare a certificate setting forth such adjustment and a reasonably detailed statement of the facts, computation, methodology and accounting for such adjustment, (ii) promptly file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate, and (iii) if such adjustment occurs following a Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained and shall not be obligated or responsible for calculating any adjustment, nor shall the Rights Agent be deemed to have knowledge of such an adjustment or any such event, unless and until it shall have received such certificate. Notwithstanding the foregoing sentence, but without limiting any of the rights or immunities of the Rights Agent, the failure of the Company to make such certification or give such notice shall not affect the validity of, or the force or effect of, the requirement for such adjustment. Any adjustment to be made pursuant to Section 11 or Section 13 hereof shall be effective as of the date of the event giving rise to such adjustment. The Rights Agent shall be entitled to rely on any such certificate and on any adjustment or statement therein and shall have no duty or liability with respect thereto, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received such certificate.

Section 13.    Consolidation, Merger, Sale or Transfer of Assets or Earning Power.

13.1    If, at any time after a Stock Acquisition Date, (i) the Company consolidates with, or merges with and into, any other Person; (ii) any Person consolidates with the Company, or merges with and into the Company, and the Company is the continuing or surviving Person of such merger and, in connection with such merger, all or part of the Common Shares are or will be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property; or (iii) the Company sells or otherwise transfers (or one or more of its Subsidiaries sell or otherwise transfer), in one or more transactions, assets or Earning Power aggregating 50% or more of the assets or Earning Power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly owned Subsidiaries, then proper provision shall be made so that (A) each holder of a Right (except as otherwise provided herein) shall have the right to receive, upon the exercise of each Right at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving Person) equal to the result obtained by dividing (I) the product of (x) the then current Purchase Price and (y) the number of one one-thousandths of a Preferred Share for which a Right is then exercisable by (II) 50% of the then Current Per Share Market Price of the Common Shares of such other Person (determined pursuant to Section 11.4) on the date of consummation of such consolidation, merger, sale or transfer; (B) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such issuer; and (D) such issuer shall take steps (including the reservation of a sufficient number of shares of its common stock in accordance with Section 9) in connection with such consummation as may be necessary to ensure that the provisions hereof shall thereafter be applicable in relation to the common stock thereafter deliverable upon the exercise of the Rights.

13.2    The Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement providing for such issuer’s compliance with this Section 13. The Company shall not enter into any transaction of the kind referred to in this Section 13 if, at the time of such transaction, there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13 shall apply to successive mergers or consolidations or sales or other transfers.

13.3    For purposes of this Agreement, the “Earning Power” of the Company and its Subsidiaries shall be determined in good faith by the Company’s Board of Directors on the basis of the operating earnings of each business operated by the Company and its Subsidiaries during the three fiscal years preceding the date of such determination (or, in the case of any business not operated by the Company or any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Company or any Subsidiary).

Section 14.    Fractional Rights and Fractional Shares.

14.1    The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company may instead pay to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14.1, the current market value of a whole Right shall be the closing price of the Rights (as determined pursuant to the second sentence of Section 11.4.1) for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.

14.2    The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a Preferred Share) upon exercise of the Rights, to distribute certificates which evidence fractional Preferred Shares or to register fractional Preferred Shares in the Company’s share register (other than fractions which are integral multiples of one one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-thousandth of a Preferred

Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an agreement between the Company and a depositary selected by the Company; provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as Beneficial Owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth of a Preferred Share, the Company shall pay to each registered holder of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share as the fraction of one Preferred Share that such holder would otherwise receive upon the exercise of the aggregate number of rights exercised by such holder. For the purposes of this Section 14.2, the current market value of a Preferred Share shall be the closing price of a Preferred Share (pursuant toSection 11.4.1) for the Trading Day immediately prior to the date of such exercise.

14.3    For purposes of this Section 14, the closing price for any day shall be the last quoted price or, if not so quoted, the average of the high bid and low asked prices as reported by NYSE, or if on any such date the Rights or Preferred Shares, as applicable, are not listed on NYSE, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights or Preferred Shares, as applicable, selected by the Board of Directors. If on any such date no such market maker is making a market in the Rights or Preferred Shares, as applicable, the fair value of the Rights or Preferred Shares, as applicable, on such date as determined in good faith by the Board of Directors shall be used.

14.4    The holder of a Right by the acceptance of the Right expressly waives any right to receive fractional Rights or fractional shares upon exercise of a Right (except as provided in this Section 14).

14.5    Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under any section of this Agreement, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of, any payment for fractional Rights or fractional shares under any section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

Section 15.    Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18, are vested in the respective registered holders of the Right Certificates. Any registered holder of any Right Certificate may, without the consent of the Rights Agent or of the holder of any other Right Certificate, on such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement by the Company and will be entitled to specific performance of the obligations hereunder, and injunctive relief against actual or threatened violations of the obligations hereunder, of the Company.

Section 16.    Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

16.1    prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares;

16.2    after the Distribution Date, the Right Certificates are transferable only on the registry books maintained by the Rights Agent if surrendered at the office or offices of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer with the appropriate form of certification, properly completed and duly executed, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request;

16.3    the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate or, in the case of

uncertificated Common Shares, by the book-entry that evidences record ownership of such Common Shares) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Shares certificate or book-entry made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and

16.4    notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of the inability of the Company or the Rights Agent to perform any of its or their obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree, judgment or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation.

Section 17.    Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote or receive dividends, or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company that may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof.

Section 18.    Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in accordance with a fee schedule to be mutually agreed upon, and, from time to time, on demand of the Rights Agent, to reimburse the Rights Agent for all of its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, negotiation, administration, execution and amendment, of this Agreement and the exercise and performance of its duties hereunder. The Company also covenants and agrees to indemnify the Rights Agent for, and to hold it harmless against, any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject, without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent in connection with the execution, acceptance and, administration of, exercise and performance of its duties under this Agreement, including the costs and expenses of defending against any claim or liability arising therefrom or in connection therewith, directly or indirectly. The provisions under this Section 18 and Section 20 below shall survive the expiration of the Rights and the termination of this Agreement and the resignation, replacement or removal of the Rights Agent.

The Rights Agent shall be fully authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, in each case in reliance upon any Right Certificate or certificate for Preferred Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith, unless and until it has received such notice in writing.

Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 19.    Merger or Consolidation or Change of Name of Rights Agent. Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or other stockholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21. The purchase of all or substantially all of the Rights Agent’s assets employed in the performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 19. If, at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned. If, at that time, any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent. In all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

If, at any time, the name of the Rights Agent changes and any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned. If, at that time, any of the Right Certificates have not been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name. In all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

Section 20.    Rights and Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent. The Rights Agent shall perform its duties and obligations hereunder upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

20.1    The Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee or legal counsel of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of as to any action taken or omitted by it in the absence of bad faith and in accordance with such advice or opinion.

20.2    Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof is specifically prescribed herein) may be deemed to be conclusively proved and established by a certificate signed by a Person reasonably believed by the Rights Agent to be any one of the Chairman of the Board, the President, a Vice President, the Treasurer, the Secretary or an Assistant Secretary of the Company and delivered to the Rights Agent, and such certificate shall be full authorization to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in the absence of bad faith under the provisions of this Agreement in reliance upon such certificate. The Rights Agent shall have no duty to act without such a certificate as set forth in this Section 20.2.

20.3    The Rights Agent shall be liable to the Company and any other Person hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary, any liability of the Rights Agent under this Agreement will be limited to the amount of annual fees paid by the Company to the Rights Agent (but not including reimbursable expenses) during the 12 months immediately preceding the event for which recovery from the Rights Agent is being sought.

20.4    The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except as to its countersignature thereof) or be required to verify the same. All such statements and recitals are and shall be deemed to have been made by the Company only.

20.5    The Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the legality or validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any determination by the Board of Directors with respect to the Rights or breach by the Company of any covenant or failure by the Company to satisfy any condition contained in this Agreement or in any Right Certificate; nor shall it be liable or responsible for any modification by or order of any court, tribunal or governmental authority in connection with the foregoing, any change in the exercisability of the Rights or any adjustment required under the provisions of Section 11 or Section 13 or for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12 describing such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares will, when so issued, be validly authorized and issued, fully paid, and non-assessable.

20.6    The Company agrees that it will perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and delivered, all such further and other acts, instruments and assurances as may reasonably be required or reasonably requested by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

20.7    The Rights Agent is hereby authorized and directed to accept written instructions with respect to the performance of its duties hereunder and certificates delivered pursuant to any provision hereof from any Person reasonably believed by the Rights Agent to be any one of the Chairman of the Board, the President, a Vice President, the Treasurer, the Secretary or an Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties under this Agreement, and such advice or instructions shall provide full authorization and protection to the Rights Agent, and the Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with the written advice or instructions of any such officer or for any delay in acting while waiting for these instructions. The Rights Agent shall be fully authorized and protected in relying upon the most recent advice or instructions received by any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its duties or obligations under this Agreement.

20.8    The Rights Agent and any affiliate, stockholder, director, officer, agent, representative or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company, or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company, or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement, in each case in compliance with applicable laws. Nothing herein shall preclude the Rights Agent and such other Persons from acting in any other capacity for the Company or for any other legal entity.

20.9    The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents. The Rights Agent shall not be answerable or accountable for any act, omission, default, neglect, or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, omission, default, neglect or misconduct, absent gross negligence or bad faith in the selection and continued employment of such attorneys or agents thereof (which gross negligence or bad faith must be determined by a final, non-appealable judgment of a court of competent jurisdiction).

20.10    No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if the Rights Agent believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

20.11    The Rights Agent shall not be required to take notice or be deemed to have notice of any fact, event or determination (including any dates or events defined in this Agreement or the designation of any Person as an Acquiring Person, Affiliate or Associate) under this Agreement unless and until the Rights

Agent shall be specifically notified in writing by the Company of such fact, event or determination, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as specified in Section 26, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists.

20.12    The Rights Agent shall have no responsibility to the Company or any holders of the Right Certificates for interest or earnings on any moneys held by the Rights Agent pursuant to this Agreement.

Section 21.    Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company in accordance with Section 26 hereof, to each transfer agent of the Common Shares and the Preferred Shares in accordance with Section 26. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent in accordance with Section 26 hereof, as the case may be, and to each transfer agent of the Common Shares and the Preferred Shares by registered or certified mail, and, after the Distribution Date, to the holders of the Right Certificates by first-class mail. In the event that the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties as Rights Agent under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required notice. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then the incumbent Rights Agent or registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (i) a Person (other than a natural person) organized and doing business under the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws to exercise stock transfer powers, is subject to supervision or examination by federal or state authority, and has, along with its Affiliates, at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (ii) an Affiliate of a Person described in clause (i) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed, and the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and shall execute and deliver any further assurance, conveyance, act or deed necessary for the purpose but such predecessor Rights Agent shall not be required to make any additional expenditure or assume any additional liability in connection with the foregoing, and shall thereafter be discharged from all duties and obligations hereunder. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and the Preferred Shares, and, after the Distribution Date, mail a notice in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22.    Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Right Certificates to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company may, with respect to Common Shares so issued or sold, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or sale.

Section 23.    Redemption.

23.1    The Board of Directors may, at its option, at any time prior to the earlier to occur of (i) the Close of Business on the tenth day following the Stock Acquisition Date (or, if the tenth day following the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) and (ii) the Final Expiration Date, redeem all, but not less than all, of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”). The redemption of the Rights by the Board of

Directors may be made effective at such time, on such basis and subject to such conditions as the Board of Directors in its sole discretion may establish.

23.2    Immediately upon the time of the effectiveness of the redemption of the Rights or such earlier time as may be determined by the Board of Directors in the action ordering such redemption (although not earlier than the time of such action) (the “Redemption Date”), and without any further action and without any notice, the right to exercise the Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption (with prompt written notice to the Rights Agent); provided, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within ten Business Days after action of the Board of Directors ordering the redemption of the Rights, the Company shall mail, or cause the Rights Agent to mail (at the expense of the Company), a notice of redemption to the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. If the payment of the Redemption Price is not included with such notice, each such notice shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24, other than in connection with the purchase of Common Shares prior to the Distribution Date.

Section 24.    Exchange.

24.1    The Board of Directors may, at its option, at any time after a Stock Acquisition Date, mandatorily exchange all or part of the then outstanding and exercisable Rights (which excludes Rights that have become void pursuant to Section 11.1.2) for Common Shares at an exchange ratio of one Common Share per one one-thousandth of a Preferred Share represented by a Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Exchange Ratio”). From and after the occurrence of an event specified in Section 13.1, any Right that theretofore has not been exchanged pursuant to this Section 24 shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24. The exchange of the Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish.

24.2    Immediately upon the action of the Board of Directors ordering the exchange of any Rights pursuant to Section 24.1, and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give reasonably detailed written notice of any such exchange to the Rights Agent, and shall promptly give public notice of any such exchange; provided, that the failure to give, or any defect in, any such notice shall not affect the validity of such exchange. Within ten Business Days after action by the Board of Directors ordering the exchange of any Rights pursuant to Section 24.1, the Company shall mail, or cause the Rights Agent to mail, a notice of any such exchange to the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected prorata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11.1.2) held by each holder of Rights.

24.3    In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Shares or Common Stock Equivalents for Common Shares exchangeable for Rights, at the initial rate of one one-thousandth of a Preferred Share (or an appropriate number of Common Stock Equivalents) for each Common Share, as appropriately adjusted.

24.4    If there shall not be sufficient Common Shares, Preferred Shares or Common Stock Equivalents authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section

24, the Company shall use its reasonable efforts to authorize additional Common Shares, Preferred Shares or Common Stock Equivalents for issuance upon exchange of the Rights.

24.5    The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of issuing fractional Common Shares, the Company may instead pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current per share market value of a whole Common Share. For the purposes of this Section 24.5, the current per share market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11.4.1) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

24.6    Notwithstanding anything in this Section 24 to the contrary, the exchange of the Rights may be made effective at such time, on such basis and subject to such conditions as the Board of Directors in its sole discretion may establish. Without limiting the preceding sentence, the Board of Directors may (i) in lieu of issuing Common Shares or any other securities contemplated by this Section 24 to the Persons entitled thereto in connection with the exchange (such Persons, the “Exchange Recipients,” and such shares and other securities, together with any dividends or distributions made on such shares or other securities, the “Exchange Property”) issue, transfer or deposit the Exchange Property to or into a trust or other entity (the “Trust”) created upon such terms as the Board of Directors may determine to hold all or a portion of the Exchange Property for the benefit of the Exchange Recipients, (ii) permit the Trust to exercise all of the rights that a stockholder of record would possess with respect to any shares deposited in the Trust and (iii) direct that all holders of Rights entitled to receive Exchange Property shall be entitled to receive such Exchange Property only from the Trust and only upon compliance with the relevant terms and provisions of the Trust and subject to such conditions as the Board of Directors in its sole discretion may establish. Prior to effecting an exchange of Rights, the Company may require (or cause the trustee or other governing body of the Trust to require), as a condition thereof, that any Exchange Recipient provide evidence that it is not an Acquiring Person, including evidence of the identity of the current or former Beneficial Owners thereof and their Affiliates and Associates. If any Person shall fail to comply with any request to provide such evidence, the Company shall be entitled conclusively to deem the Rights held by such Person to be null and void pursuant to Section 11.1.2 and not transferable or exercisable or exchangeable in connection herewith. In the event that the Board of Directors determines, before the Distribution Date, to effect an exchange, the Board of Directors may delay the occurrence of the Distribution Date to such time as the Board of Directors deems advisable.

Section 25.    Notice of Certain Events.

25.1    If the Company shall after the Distribution Date propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make any other distribution to the holders of its Preferred Shares (other than a regular quarterly cash dividend); (ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options; (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares); (iv) to effect any consolidation or merger into or with any other Person, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or Earning Power of the Company and its Subsidiaries (taken as a whole) to any other Person; (v) to effect the liquidation, dissolution or winding-up of the Company; or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares, or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate and the Rights Agent, in accordance with Section 26, a reasonably detailed notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is to take place and the date of participation therein by the holders of the Common Shares or Preferred Shares or both, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least ten days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least ten days prior to the date of the taking of such proposed action or the date of

participation therein by the holders of the Common Shares or Preferred Shares or both, whichever shall be the earlier.

25.2    The Company shall, as soon as practicable after a Stock Acquisition Date, give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26, a notice that describes the transaction in which a Person became an Acquiring Person and the consequences of the transaction to holders of Rights under Section 11.1.2.

Section 26.    Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if in writing and when sent by overnight delivery service or first-class mail, postage prepaid, properly addressed (until another address is filed in writing with the Rights Agent) as follows:

Carvana Co.

300 E. Rio Salado Parkway

Tempe, AZ 85281

Attention: Paul Breaux

with a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, IL 60654

Telephone: (312) 862-2000

Attention: Robert M. Hayward, P.C.

Robert E. Goedert, P.C.

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be deemed given upon receipt and shall be sufficiently given or made if in writing when sent by overnight delivery service or registered or certified mail properly addressed (until another address is filed in writing with the Company) as follows:

Equiniti Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention: Corporate Trust Department

with a copy to:

Equiniti Trust Company, LLC

48 Wall Street, 23rd Floor

New York, New York 10005

Attention: Legal Department

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if in writing, when sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

Section 27.    Supplements and Amendments. The Company may from time to time, and the Rights Agent shall if the Company so directs in writing, supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any change to or delete any provision hereof or to adopt any other provisions with respect to the Rights which the Company may deem necessary or desirable; provided, that, at any time after the Close of Business on the tenth day following the Stock Acquisition Date (or, if the tenth day following the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date), this Agreement shall not be amended or supplemented in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person and its Affiliates and Associates). For the avoidance of doubt, the Company shall be entitled to adopt and implement such procedures and arrangements

(including with third parties) as it may deem necessary or desirable to facilitate the exercise, exchange, trading, issuance or distribution of the Rights (and Preferred Shares) as contemplated hereby and to ensure that an Excluded Person does not obtain the benefits thereof, and amendments in respect of the foregoing shall not be deemed to adversely affect the interests of the holders of Rights. Any supplement or amendment authorized by this Section 27 will be evidenced by a writing signed by the Company and the Rights Agent, subject to certification by any of the officers of the Company listed in Section 20.2 that any such supplement or amendment complies with this Section 27. Notwithstanding anything in this Agreement to the contrary, the Rights Agent shall not be required to execute any supplement or amendment to this Agreement that it has reasonably determined would adversely affect its own rights, duties, obligations or immunities hereunder. No supplement or amendment to this Agreement shall be effective unless duly executed by the Rights Agent.

Section 28.    Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

Section 29.    Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person or entity other than the Company, the Rights Agent and the registered holders of the Right Certificates any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates.

Section 30.    Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, that if such excluded provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately upon written notice to the Company.

Section 31.    Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts to be made and performed entirely within the State of Delaware; provided, that all provisions regarding the rights, duties, liabilities and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.

Section 32.    Counterparts. This Agreement may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature.

Section 33.    Descriptive Headings and Construction. Descriptive headings of the sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. In this Agreement, (i) the word “including” (in its various forms) means “including, without limitation,” and (ii) the words “hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement.

Section 34.    Administration. Other than with respect to rights, duties, obligations and immunities of the Rights Agent, the Board of Directors (or a duly authorized committee of the Board of Directors) shall have the exclusive power and authority to administer and interpret the provisions of this Agreement and to exercise all rights and powers specifically granted to the Board of Directors or the Company or as may be necessary or advisable in the administration of this Agreement. All such actions, calculations, determinations and interpretations which are done or made by the Board of Directors (or a duly authorized committee of the Board of Directors) in good faith shall be final, conclusive and binding on the Company, the Rights Agent, holders of the Rights and all other parties and shall not subject the Board of Directors (or a duly authorized committee of the Board of Directors) to any liability to the holders of the Rights. The Rights Agent is entitled always to assume that the Board of Directors (or a duly authorized committee of the Board of Directors) acted in good faith and shall be fully protected and incur no liability in reliance thereon.

Section 35.    Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including acts of God, terrorist acts, epidemics, pandemics, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of any utilities, communications, or computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, riot, rebellion, insurrection, fire, earthquake, storm, flood, strike, or civil unrest.

Section 36.    Process to Seek Exemption. Any Person who desires to effect any acquisition of Common Shares that might, if consummated, result in such Person Beneficially Owning 4.9% or more of the Common Shares then outstanding (such Person, a “Requesting Person”) may request that the Board of Directors grant an exemption with respect to such acquisition under this Agreement so that such Person would be deemed to be an Exempt Person for purposes of this Agreement (such request, an “Exemption Request”). An Exemption Request shall be in proper form and shall be delivered by registered mail, return receipt requested, to the Secretary of the Company at the principal executive office of the Company. The Exemption Request shall be deemed made upon receipt by the Secretary of the Company. To be in proper form, an Exemption Request shall set forth (i) the name and address of the Requesting Person, (ii) the number and percentage of Common Shares then Beneficially Owned by the Requesting Person, together with all Affiliates and Associates of the Requesting Person and (iii) a reasonably detailed description of the transaction or transactions by which the Requesting Person would propose to acquire Beneficial Ownership of Common Shares aggregating 4.9% or more of the Common Shares then outstanding and the maximum number and percentage of Common Shares that the Requesting Person proposes to acquire. The Board of Directors shall endeavor to respond to an Exemption Request within 20 Business Days after receipt of such Exemption Request; provided, that the failure of the Board of Directors to make a determination within 20 Business Days after receipt of an Exemption Request shall be deemed to constitute denial by the Board of Directors of the Exemption Request. The Requesting Person shall respond promptly to reasonable and appropriate requests for additional information from the Company or the Board of Directors and its advisors to assist the Board of Directors in making its determination. The Board of Directors shall only grant an exemption in response to an Exemption Request if it receives, at the request of the Board of Directors, a report from the Company’s advisors to the effect that the acquisition of Beneficial Ownership of Common Shares by the Requesting Person does not create a significant risk of material adverse tax consequences to the Company or the Board of Directors otherwise determines in its sole and absolute discretion that the exemption is in the best interests of the Company. Any exemption granted hereunder may be granted in whole or in part, and may be subject to limitations or conditions (including a requirement that the Requesting Person agree that it will not acquire Beneficial Ownership of Common Shares in excess of the maximum number and percentage of shares approved by the Board of Directors), in each case as and to the extent the Board of Directors shall determine necessary or desirable to provide for the protection of the Company’s Tax Attributes. Any Exemption Request may be submitted on a confidential basis and, except to the extent required by applicable law, the Company shall maintain the confidentiality of such Exemption Request and the determination of the Board of Directors with respect thereto, unless the information contained in the Exemption Request or the determination of the Board of Directors with respect thereto otherwise becomes publicly available. The Exemption Request shall be considered and evaluated by the directors who are independent of the Requesting Person and disinterested with respect to the Exemption Request and the action of a majority of such directors shall be deemed to be the determination of the Board of Directors for purposes of such Exemption Request. The Company shall notify the Rights Agent of any exemption granted under this Section 36.

[Signature Pages Follow]

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

CARVANA CO.

By: /s/ Paul Breaux

Name: Paul Breaux

Title: Vice President, General Counsel,

and Secretary

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

EQUINITI TRUST COMPANY, LLC

By: /s/ Steve Hoffman

Name: Steve Hoffman

Title: Senior Vice President

EXHIBIT A

FORM

of

CERTIFICATE OF DESIGNATIONS

of

SERIES B PREFERRED STOCK

of

CARVANA CO.

(Pursuant to Section 151 of the Delaware General

Corporation Law)

Carvana Co., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies that the following resolution was adopted by the board of directors of the Corporation (the “Board of Directors”) as required by Section 151 of the General Corporation Law of the State of Delaware on January 16, 2023:

RESOLVED, that pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time, the “Certificate of Incorporation”), a series of Series B Preferred Stock, par value $0.01 per share, of the Corporation (“Preferred Stock”) be and it hereby is created, and that the designation and amount thereof and the powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

Section 1. Designation and Amount. The shares of this series shall be designated as Series B Preferred Stock (the “Series B Preferred Stock”), and the number of shares constituting the Series B Preferred Stock shall be 200,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series B Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series B Preferred Stock.

Section 2. Dividends and Distributions.

(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any other stock of the Corporation) ranking prior and superior to the Series B Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out

of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an amount (if any) per share (rounded to the nearest cent), subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate per share amount of all cash dividends, and 1,000 multiplied by the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Class A Common Stock, par value $0.001 per share, of the Corporation (the “Common Stock”) or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise) declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Preferred Stock. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) of this Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock).

(C) Dividends due pursuant to paragraph (A) of this Section 2 shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

Section 3. Voting Rights. The holders of shares of Series B Preferred Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set forth, each share of Series B Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided in the Certificate of Incorporation, including any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series B Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights (including the Class B Common Stock, par value $0.001 per share, of the Corporation) shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C) Except as set forth herein, or as otherwise required by law, holders of Series B Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding‑up) to the Series B Preferred Stock;

(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding‑up) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding‑up) to the Series B Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding‑up) to the Series B Preferred Stock.

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5. Reacquired Shares. Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. The Corporation shall take all such actions as are necessary to cause all such shares to become authorized but unissued shares of Preferred Stock that may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in the Certificate of Incorporation, including any Certificate of Designations creating a series of Preferred Stock or any similar stock, or as otherwise required by law.

Section 6. Liquidation, Dissolution or Winding‑Up.

(A) Upon any liquidation, dissolution or winding‑up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding‑up) to the Series B Preferred Stock unless, prior thereto, the holders of Series B Preferred Stock shall have received an amount per share (the “Series B Liquidation Preference”) equal to an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount to be distributed per share to holders of shares of Common Stock plus an amount equal to any accrued and unpaid dividends. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) If there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series B Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series B Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.

(C) Neither the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall be deemed to be a liquidation, dissolution or winding‑up of the Corporation within the meaning of this Section 6.

Section 7. Consolidation, Merger, Etc. If the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 8. Amendment. While any Series B Preferred Stock is issued and outstanding, the Certificate of Incorporation shall not be amended in any manner, including in a merger or consolidation, which would alter, change or repeal the powers, preferences or special rights of the Series B Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock, voting together as a single class.

Section 9. Rank. The Series B Preferred Stock shall rank, with respect to the payment of dividends and upon liquidation, dissolution and winding‑up, junior to all other series of Preferred Stock, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its duly authorized officer this 16th day of January 2023.

CARVANA CO.

By:

Name:

Title:

EXHIBIT B

Form of Right Certificate

Certificate No. R-_______ _____ Rights

NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEMPTION, EXCHANGE OR TERMINATION OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, MAY BECOME NULL AND VOID.

Right Certificate

CARVANA CO.

This certifies that ___________________________, or his, her or its registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Section 382 Rights Agreement (as may be amended from time to time, the “Rights Agreement”), dated as of January 16, 2023, between Carvana Co., a Delaware corporation (the “Company”), and Equiniti Trust Company, LLC, as successor in interest to American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as rights agent (or any successor rights agent) (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to the Final Expiration Date (as such term is defined in the Rights Agreement) or earlier under certain circumstances set forth in the Rights Agreement, at the office or offices of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series B Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”), at a purchase price of $50.00 per one one-thousandth of a Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase properly completed and duly executed, accompanied by such documentation as the Rights Agent may reasonably request. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of January 16, 2023, based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

From and after the occurrence of a Stock Acquisition Date (as defined in the Rights Agreement), if the Rights evidenced by this Right Certificate are or were acquired or Beneficially Owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person, such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights.

This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are incorporated herein by this reference and made a part hereof, and to which

Rights Agreement reference is made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the office or offices of the Rights Agent designated for such purpose.

This Right Certificate, with or without other Right Certificates, upon surrender at the office or offices of the Rights Agent designated for such purpose, accompanied by such documentation as the Rights Agent may reasonably request, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, at the Company’s option, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or in part for shares of the Company’s Class A Common Stock, par value $0.001 per share, Preferred Shares, cash, debt securities, or other assets, property or instruments. The shares and other securities transferred as part of the exchange may be transferred to a trust created upon such terms as the Board of Directors of the Company may determine.

No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement.

This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of ____________.

Attest: CARVANA CO.

_____________________________ By: _____________________________

Countersigned:

_____________________________

Equiniti Trust Company, LLC, Rights Agent

By: __________________________

Authorized Signature

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the

Right Certificate.)

FOR VALUE RECEIVED, ___________________________________ hereby sells, assigns and

transfers unto

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _______________________________, Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

Date: ______________ __________________________________

Signature

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (bank, stock broker or savings and loan association with membership in an approved signature medallion program).

----------------------------------------------------------------

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof and are not issued with respect to Common Shares underlying a Derivative Position described in the definition of Beneficial Owner (as such terms are defined in the Rights Agreement).

__________________________________________              Signature

----------------------------------------------------------------

Form of Reverse Side of Right Certificate -- continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise the Right Certificate.)

TO CARVANA CO.:

The undersigned hereby irrevocably elects to exercise _______________ Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:

Please insert Social Security or other identifying number:

(Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

Please insert Social Security or other identifying number:.

(Please print name and address)

Dated: _____________ __, ______ __________________________________

Signature

(Signature must conform to the holder specified on the Right Certificate)

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (bank, stock broker or savings and loan association with membership in an approved signature medallion program).

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof and are not issued with respect to Common Shares underlying a Derivative Position described in the definition of Beneficial Owner (as such terms are defined in the Rights Agreement).

__________________________________

Signature

----------------------------------------------------------------

NOTICE

The signature in the foregoing Forms of Assignment and Election to Purchase must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

In the event that the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such assignment or election to purchase will not be honored.

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, Ernest Garcia III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Carvana Co.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;    

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 19, 2023	/s/ Ernest C. Garcia, III
		Ernest C. Garcia, III
		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Mark Jenkins, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Carvana Co.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;    

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 19, 2023	/s/ Mark Jenkins
		Mark Jenkins
		Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to Rule 18 U.S.C. Section 1350

In connection with the Quarterly Report on Form 10-Q of Carvana Co. (the “Company”) for the quarter ended June 30, 2023, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Ernest Garcia III, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 19, 2023	/s/ Ernest C. Garcia, III
		Ernest C. Garcia, III
		Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to Rule18 U.S.C. Section 1350

In connection with the Quarterly Report on Form 10-Q of Carvana Co. (the “Company”) for the quarter ended June 30, 2023, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Mark Jenkins, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 19, 2023	/s/ Mark Jenkins
		Mark Jenkins
		Chief Financial Officer

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 17, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-38073
Entity Registrant Name	CARVANA CO.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-4549921
Entity Address, Address Line One	300 E. Rio Salado Parkway
Entity Address, City or Town	Tempe
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85281
City Area Code	602
Local Phone Number	852-6604
Title of 12(b) Security	Class A Common Stock, Par Value $0.001 Per Share
Trading Symbol	CVNA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001690820
Current Fiscal Year End Date	--12-31
Preferred Stock Purchase Rights
Entity Information [Line Items]
Title of 12(b) Security	Preferred Stock Purchase Rights
Security Exchange Name	NYSE
Class A Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		106,543,855
Class B Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		82,900,276

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 541	$ 434
Restricted cash	136	194
Accounts receivable, net	335	253
Finance receivables held for sale, net	1,098	1,334
Vehicle inventory	1,302	1,876
Beneficial interests in securitizations	335	321
Other current assets, including $5 and $6, respectively, due from related parties	165	182
Total current assets	3,912	4,594
Property and equipment, net	3,126	3,244
Operating lease right-of-use assets, including $12 and $14, respectively, from leases with related parties	489	536
Intangible assets, net	61	70
Other assets, including $2 and $1, respectively, due from related parties	261	254
Total assets	7,849	8,698
Current liabilities:
Accounts payable and accrued liabilities, including $6 and $16, respectively, due to related parties	739	777
Short-term revolving facilities	1,161	1,534
Current portion of long-term debt	199	201
Other current liabilities, including $3 and $4, respectively, from leases with related parties	80	80
Total current liabilities	2,179	2,592
Long-term debt, excluding current portion	6,542	6,574
Operating lease liabilities, excluding current portion, including $8 and $9, respectively, from leases with related parties	466	507
Other liabilities	68	78
Total liabilities	9,255	9,751
Commitments and contingencies (Note 17)
Stockholders' deficit:
Preferred stock, $0.01 par value - 50,000 shares authorized; none issued and outstanding as of June 30, 2023 and December 31, 2022	0	0
Additional paid-in capital	1,597	1,558
Accumulated deficit	(2,294)	(2,076)
Total stockholders' deficit attributable to Carvana Co.	(697)	(518)
Non-controlling interests	(709)	(535)
Total stockholders' deficit	(1,406)	(1,053)
Total liabilities & stockholders' deficit	7,849	8,698
Class A Common Stock
Stockholders' deficit:
Common stock	0	0
Class B Common Stock
Stockholders' deficit:
Common stock	$ 0	$ 0

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Other current assets, due from related parties	$ 165	$ 182
Operating lease right-of-use asset, from leases with related party	489	536
Other assets, due from related parties	261	254
Accounts payable and accrued liabilities, due to related parties	739	777
Other current liabilities, from leases with related parties	80	80
Operating lease liabilities, excluding current portion, from leases with related parties	$ 466	$ 507
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Related Party
Other current assets, due from related parties	$ 5	$ 6
Operating lease right-of-use asset, from leases with related party	12	14
Other assets, due from related parties	2	1
Accounts payable and accrued liabilities, due to related parties	6	16
Other current liabilities, from leases with related parties	3	4
Operating lease liabilities, excluding current portion, from leases with related parties	$ 8	$ 9
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	106,469,000	106,037,000
Common stock, shares outstanding (in shares)	106,469,000	106,037,000
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	82,900,000	82,900,000
Common stock, shares outstanding (in shares)	82,900,000	82,900,000

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Condensed Consolidated Statements of Operations - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Sales and operating revenues:
Net sales and operating revenues, from related parties		$ 2,968	$ 3,884	$ 5,574	$ 7,381
Cost of sales, including $1, $9, $2 and $18, respectively, to related parties		2,469	3,488	4,734	6,687
Gross profit		499	396	840	694
Selling, general and administrative expenses, including $10, $7, $18 and $13, respectively, to related parties		452	721	924	1,448
Interest expense		155	116	314	180
Other (income) expense, net		(3)	(3)	(5)	10
Net loss before income taxes		(105)	(438)	(393)	(944)
Income tax (benefit) provision		0	1	(2)	1
Net loss		(105)	(439)	(391)	(945)
Net loss attributable to non-controlling interests		(47)	(201)	(173)	(447)
Net loss attributable to Carvana Co.		$ (58)	$ (238)	$ (218)	$ (498)
Net loss per share of Class A common stock, basic (in dollars per share)		$ (0.55)	$ (2.35)	$ (2.05)	$ (5.20)
Net loss per share of Class A common stock, diluted (in dollars per share)		$ (0.55)	$ (2.35)	$ (2.05)	$ (5.20)
Weighted-average shares of Class A common stock, basic (in shares)		106,222,000	101,450,000	106,117,000	95,773,000
Weighted-average shares of Class A common stock, diluted (in shares)		106,222,000	101,450,000	106,117,000	95,773,000
Class A Common Stock
Sales and operating revenues:
Weighted-average shares of Class A common stock, basic (in shares)	[1]	106,222,000	101,450,000	106,117,000	95,773,000
Weighted-average shares of Class A common stock, diluted (in shares)		106,222,000	101,450,000	106,117,000	95,773,000
Retail vehicle sales, net
Sales and operating revenues:
Net sales and operating revenues, from related parties		$ 1,961	$ 2,962	$ 3,788	$ 5,694
Wholesale sales and revenues
Sales and operating revenues:
Net sales and operating revenues, from related parties		777	704	1,395	1,279
Other sales and revenues
Sales and operating revenues:
Net sales and operating revenues, from related parties		$ 230	$ 218	$ 391	$ 408

[1] Weighted-average shares of Class A common stock outstanding have been adjusted for unvested restricted stock awards.

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Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net sales and operating revenues, from related parties	$ 2,968	$ 3,884	$ 5,574	$ 7,381
Cost of sales, to related parties	2,469	3,488	4,734	6,687
Selling, general and administrative expenses, to related parties	452	721	924	1,448
Related Party
Cost of sales, to related parties	1	9	2	18
Selling, general and administrative expenses, to related parties	10	7	18	13
Wholesale sales and revenues
Net sales and operating revenues, from related parties	777	704	1,395	1,279
Wholesale sales and revenues | Related Party
Net sales and operating revenues, from related parties	5	7	10	21
Other sales and revenues
Net sales and operating revenues, from related parties	230	218	391	408
Other sales and revenues | Related Party
Net sales and operating revenues, from related parties	$ 33	$ 50	$ 69	$ 98

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Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Millions	Total	Equity Offering	Carvana Group	Common Stock Class A Common Stock	Common Stock Class A Common Stock Restricted Stock Units	Common Stock Class B Common Stock	Additional Paid-in Capital	Additional Paid-in Capital Equity Offering	Additional Paid-in Capital Carvana Group	Accumulated Deficit	Non-controlling Interests	Non-controlling Interests Equity Offering
Beginning Balance (in shares) at Dec. 31, 2021				89,930,000		82,900,000
Beginning Balance at Dec. 31, 2021	$ 525			$ 0		$ 0	$ 795			$ (489)	$ 219
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(506)									(260)	(246)
Exchanges of LLC Units (in shares)				27,000
Adjustments to the non-controlling interests related to equity offering & Exchanges of LLC units	0						1				(1)
Establishment of deferred tax assets related to increases in tax basis in Carvana Group			$ 1						$ 1
Establishment of valuation allowance related to deferred tax assets associated with increases in tax basis in Carvana Group			(1)						(1)
Contribution of Class A common stock from related party (in shares)				(97,000)
Issuance of Class A common stock (in shares)					139,000
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	(12)						(12)
Options exercised (in shares)				63,000
Options exercised	2						2
Equity-based compensation	43						43
Ending Balance (in shares) at Mar. 31, 2022				90,062,000		82,900,000
Ending Balance at Mar. 31, 2022	52			$ 0		$ 0	829			(749)	(28)
Beginning Balance (in shares) at Dec. 31, 2021				89,930,000		82,900,000
Beginning Balance at Dec. 31, 2021	525			$ 0		$ 0	795			(489)	219
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(945)
Ending Balance (in shares) at Jun. 30, 2022				105,789,000		82,900,000
Ending Balance at Jun. 30, 2022	864			$ 0		$ 0	1,526			(987)	325
Beginning Balance (in shares) at Mar. 31, 2022				90,062,000		82,900,000
Beginning Balance at Mar. 31, 2022	52			$ 0		$ 0	829			(749)	(28)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(439)									(238)	(201)
Issuances of Class A common stock, net of underwriters' discounts and commissions and offering expenses	1,227						1,227
Exchanges of LLC Units (in shares)				19,000
Adjustments to the non-controlling interests related to equity offering & Exchanges of LLC units	0	$ 0						$ (554)				$ 554
Establishment of deferred tax assets related to increases in tax basis in Carvana Group			21						21
Establishment of valuation allowance related to deferred tax assets associated with increases in tax basis in Carvana Group			$ (21)						$ (21)
Contribution of Class A common stock from related party (in shares)				(2,000)
Issuance of Class A common stock (in shares)				15,625,000	48,000
Issuance of Class A common stock under ESPP (in shares)				27,000
Issuance of Class A common stock under ESPP	1						1
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	5						5
Options exercised (in shares)				10,000
Options exercised	0
Equity-based compensation	18						18
Ending Balance (in shares) at Jun. 30, 2022				105,789,000		82,900,000
Ending Balance at Jun. 30, 2022	864			$ 0		$ 0	1,526			(987)	325
Beginning Balance (in shares) at Dec. 31, 2022				106,037,000		82,900,000
Beginning Balance at Dec. 31, 2022	(1,053)			$ 0		$ 0	1,558			(2,076)	(535)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(286)									(160)	(126)
Exchanges of LLC Units (in shares)				14,000
Adjustments to the non-controlling interests related to equity offering & Exchanges of LLC units	0						1				(1)
Contribution of Class A common stock from related party (in shares)				(16,000)
Issuance of Class A common stock (in shares)					39,000
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes (in shares)				(30,000)
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	0
Options exercised (in shares)				3,000
Options exercised	0
Equity-based compensation	17						17
Ending Balance (in shares) at Mar. 31, 2023				106,047,000		82,900,000
Ending Balance at Mar. 31, 2023	(1,322)			$ 0		$ 0	1,576			(2,236)	(662)
Beginning Balance (in shares) at Dec. 31, 2022				106,037,000		82,900,000
Beginning Balance at Dec. 31, 2022	(1,053)			$ 0		$ 0	1,558			(2,076)	(535)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(391)
Ending Balance (in shares) at Jun. 30, 2023				106,469,000		82,900,000
Ending Balance at Jun. 30, 2023	(1,406)			$ 0		$ 0	1,597			(2,294)	(709)
Beginning Balance (in shares) at Mar. 31, 2023				106,047,000		82,900,000
Beginning Balance at Mar. 31, 2023	(1,322)			$ 0		$ 0	1,576			(2,236)	(662)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(105)									(58)	(47)
Contribution of Class A common stock from related party (in shares)				(16,000)
Issuance of Class A common stock (in shares)					415,000
Issuance of Class A common stock under ESPP (in shares)				20,000
Issuance of Class A common stock under ESPP	0
Forfeitures of restricted stock and restricted stock surrendered in lieu of withholding taxes	(2)						(2)
Options exercised (in shares)				3,000
Options exercised	0
Equity-based compensation	23						23
Ending Balance (in shares) at Jun. 30, 2023				106,469,000		82,900,000
Ending Balance at Jun. 30, 2023	$ (1,406)			$ 0		$ 0	$ 1,597			$ (2,294)	$ (709)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows from Operating Activities:
Net loss	$ (391)	$ (945)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	183	101
Equity-based compensation expense	34	42
Loss on disposal of property and equipment	6	2
Provision for bad debt and valuation allowance	25	8
Amortization and write-off of debt issuance costs	14	12
Unrealized loss on warrants to acquire Root's Class A common stock	0	5
Unrealized (gain) loss on beneficial interests in securitization	(5)	10
Changes in finance receivable related assets:
Originations of finance receivables	(2,913)	(3,960)
Proceeds from sale of finance receivables, net	3,118	3,921
Gain on loan sales	(214)	(235)
Principal payments received on finance receivables held for sale	132	113
Other changes in assets and liabilities:
Vehicle inventory	564	333
Accounts receivable	(86)	(29)
Other assets	4	(19)
Accounts payable and accrued liabilities	(24)	122
Operating lease right-of-use assets	47	(102)
Operating lease liabilities	(41)	140
Other liabilities	(10)	(6)
Net cash provided by (used in) operating activities	443	(487)
Cash Flows from Investing Activities:
Purchases of property and equipment	(50)	(361)
Proceeds from disposal of property and equipment	33	0
Payments for acquisitions, net of cash acquired	(7)	(2,189)
Principal payments received on and proceeds from sale of beneficial interests	30	25
Net cash provided by (used in) investing activities	6	(2,525)
Cash Flows from Financing Activities:
Proceeds from short-term revolving facilities	4,536	8,159
Payments on short-term revolving facilities	(4,909)	(9,094)
Proceeds from issuance of long-term debt	62	3,416
Payments on long-term debt	(85)	(66)
Payments of debt issuance costs	(2)	(65)
Net proceeds from issuance of Class A common stock	0	1,227
Proceeds from equity-based compensation plans	0	3
Tax withholdings related to restricted stock units and awards	(2)	(7)
Net cash (used in) provided by financing activities	(400)	3,573
Net increase in cash, cash equivalents and restricted cash	49	561
Cash, cash equivalents and restricted cash at beginning of period	628	636
Cash, cash equivalents and restricted cash at end of period	$ 677	$ 1,197

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Business Organization

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Organization

NOTE 1 — BUSINESS ORGANIZATION

Description of Business

Carvana Co. and its wholly-owned subsidiary Carvana Co. Sub LLC (collectively, "Carvana Co.", and, together with its consolidated subsidiaries, the "Company"), is the leading e-commerce platform for buying and selling used cars. The Company is transforming the used car sales experience by giving consumers what they want - a wide selection, great value and quality, transparent pricing, and a simple, no pressure transaction. Using the website, customers can complete all phases of a used vehicle transaction, including financing their purchase, trading in their current vehicle, and purchasing complementary products such as vehicle service contracts ("VSC"), auto insurance, and GAP waiver coverage. Each element of the Company's business, from inventory procurement to fulfillment and overall ease of the online transaction, has been built for this singular purpose.

Organization

Carvana Co. is a holding company that was formed as a Delaware corporation on November 29, 2016, for the purpose of completing its initial public offering ("IPO") and related transactions in order to operate the business of Carvana Group, LLC and its subsidiaries (collectively, "Carvana Group"). Substantially all of the Company's assets and liabilities represent the assets and liabilities of Carvana Group, except the Company's Senior Notes (as defined in Note 10 — Debt Instruments) which were issued by Carvana Co. and are guaranteed by its and Carvana Group's existing domestic restricted subsidiaries, excluding ADESA US Auction, LLC ("ADESA"), and its subsidiaries, which the Company designated as unrestricted subsidiaries under the Indentures (as defined below) in March 2023.

In accordance with Carvana Group, LLC's amended and restated limited liability company agreement (the "LLC Agreement"), Carvana Co. is the sole manager of Carvana Group and conducts, directs and exercises full control over the activities of Carvana Group. There are two classes of common ownership interests in Carvana Group, Class A common units (the "Class A Units") and Class B common units (the "Class B Units"). As further discussed in Note 11 — Stockholders' Equity (Deficit), the Class A Units and Class B Units (collectively, the "LLC Units") do not hold voting rights, which results in Carvana Group being considered a variable interest entity ("VIE"). Due to Carvana Co.'s power to control and its significant economic interest in Carvana Group, it is considered the primary beneficiary of the VIE and the Company consolidates the financial results of Carvana Group. As of June 30, 2023, Carvana Co. owned approximately 55.8% of Carvana Group and the LLC Unitholders (as defined in Note 11 — Stockholders' Equity (Deficit)) owned the remaining 44.2%.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K filed on February 23, 2023.

The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of June 30, 2023, results of operations and changes in stockholder's equity (deficit) for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations.

As discussed in Note 1 — Business Organization, Carvana Group is considered a VIE and Carvana Co. consolidates its financial results due to the determination that it is the primary beneficiary.

Liquidity

Since inception, the Company has incurred losses, and expects to incur additional losses in the future as it shifts priorities to focus on driving profitability through operating efficiency and reducing expenses. Historically, the Company's capital and liquidity needs were primarily satisfied through its debt and equity financings, operating cash flows, floor plan facility, and Finance Receivable Facilities (as defined below), certain of which facilities expire within the next twelve months. The Company plans to extend the maturity date of these facilities within the next year by amending its existing facilities or by entering into new agreements. In January 2023, the Company amended its Master Purchase and Sale Agreement for the purchaser to purchase up to a maximum of $4.0 billion of the Company's finance receivables from the amendment date through January 2024, and such facility had approximately $2.3 billion of unused capacity as of June 30, 2023. In addition, the Company has a $2.0 billion floor plan facility through March 22, 2024, with such facility having approximately $1.4 billion of unused capacity as of June 30, 2023. Additionally, in May 2023, the Company entered into an agreement pursuant to which a lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until May 31, 2024. Management believes that current working capital, cash flows from operations, and expected continued or new financing arrangements will be sufficient to fund operations for at least one year from the financial statement issuance date.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company's assets and liabilities and the results of operations.

Recently Issued But Not Yet Adopted Accounting Standards

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. ASU 2023-01 clarifies the accounting for leasehold improvements associated with common control leases. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those years. The Company does not expect the update to have a material effect on its consolidated financial statements.

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Business Combinations

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combinations

NOTE 3 — BUSINESS COMBINATIONS

Acquisition of ADESA U.S. Physical Auction Business

On May 9, 2022, the Company completed its acquisition of 100% of the equity interests in the U.S. physical auction business of ADESA from KAR Auction Services, Inc. for approximately $2.2 billion in cash (the "ADESA Acquisition"). Proceeds from the issuance and sale of the 2030 Notes (as defined below) were used to fund the acquisition. The acquisition included 56 auction sites throughout the U.S. with 6.5 million square feet of buildings on more than 4,000 acres of land, significantly expanding the Company's infrastructure and enhancing its customer offering by facilitating a broader selection of vehicles and faster delivery times.

The following table summarizes the allocation of the purchase price consideration to identifiable assets acquired and liabilities assumed as of December 31, 2022:

	Purchase Price Allocation
	(in millions)
Assets Acquired
Current assets	$	208
Property and equipment	1,281
Operating lease right-of-use assets	188
Intangible assets	79
Other assets	1
Total Assets Acquired	1,757
Liabilities Assumed
Current liabilities	233
Operating lease liabilities	167
Total Liabilities Assumed	400
Net Assets Acquired	1,357
Purchase price consideration	2,195
Goodwill	$	838

Identifiable intangible assets acquired consist of the following:

	Fair Value		Useful Life
Customer relationships	$	50	10 years
Developed technology	$	29	3 years

Customer relationships were valued using the multi-period excess earnings method of the income approach. Developed technology was valued using the replacement cost method of the cost approach. Significant assumptions used in the valuations were forecasted revenues and attrition rate and are classified as Level 3 due to the lack of observable market data. No residual values were assigned to the customer relationships and developed technology intangible assets and they are amortized on an economic useful life basis commensurate with future anticipated cash flows and straight line, respectively. As of June 30, 2023, the remaining weighted-average amortization period for the intangible assets acquired was approximately 6.1 years.

Real property was valued using market comparable transactions of the market approach, for which the key assumption is the similarity of the acquired property to market comparable transactions. Personal property was valued using the replacement cost method of the cost approach, for which the key assumptions are the costs of similar personal property in new condition and economic obsolescence rates.

The acquisition resulted in the recognition of $838 million of goodwill, which is deductible for tax purposes and represents the future economic benefits expected to arise from anticipated synergies and intangible assets that do not qualify for separate recognition, including an assembled workforce, non-contractual relationships and other agreements.

For the three and six months ended June 30, 2023, the Company recognized $223 million and $434 million, respectively, of wholesale sales and revenues, $197 million and $382 million, respectively, of cost of sales, and a net loss of $18 million and $36 million, respectively, from ADESA operations, which includes $31 million and $62 million, respectively, of depreciation and amortization, including acquired intangible assets amortization expense of $3 million and $8 million, respectively.

For the three and six months ended June 30, 2022, the Company recognized $108 million of wholesale sales and revenues, $103 million of cost of sales, and a net loss of $21 million from ADESA operations, which includes $20 million of depreciation and amortization, including acquired intangible assets amortization expense of $4 million.

The following unaudited pro forma combined results of operations information for the three and six months ended June 30, 2022 have been prepared as if the ADESA Acquisition occurred on January 1, 2021:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Revenues	$	3,968	$	7,680
Net loss	(485)		(1,075)
Net loss attributable to non-controlling interests	(216)		(478)
Net loss attributable to Carvana Co.	$	(269)	$	(597)
Net loss per share of Class A common stock - basic and diluted	$	(2.54)	$	(5.65)
Weighted-average shares of Class A common stock - basic and diluted	105,743		105,731

The unaudited pro forma combined results of operations information reflect the following pro forma adjustments:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Interest expense	$	36	$	123
Lease expense	$	1	5
Depreciation and amortization expense	$	7	13
Intercompany revenues and cost of sales	$	(2)	$	(7)

The unaudited pro forma combined results of operations information is provided for informational purposes only and is not necessarily intended to represent the results that would have been achieved had the ADESA Acquisition been consummated on January 1, 2021 or indicative of the results that may be achieved in the future.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

NOTE 4 — PROPERTY AND EQUIPMENT, NET

The following table summarizes property and equipment, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Land and site improvements	$	1,331	$	1,331
Buildings and improvements	1,317		1,267
Transportation fleet	625		673
Software	284		245
Furniture, fixtures and equipment	140		158
Total property and equipment excluding construction in progress	3,697		3,674
Less: accumulated depreciation and amortization on property and equipment	(652)		(564)
Property and equipment excluding construction in progress, net	3,045		3,110
Construction in progress	81		134
Property and equipment, net	$	3,126	$	3,244

Depreciation and amortization expense on property and equipment was $99 million and $85 million for the three months ended June 30, 2023 and 2022, respectively, of which $42 million and $45 million were recorded to selling, general and administrative expense, respectively, $13 million and $12 million were capitalized to vehicle inventory, respectively, and $44 million and $28 million were recorded to cost of sales, respectively, including $18 million and $11 million previously capitalized to vehicle inventory, respectively.

Depreciation and amortization expense on property and equipment was $199 million and $138 million for the six months ended June 30, 2023 and 2022, respectively, of which $86 million and $81 million were recorded to selling, general and administrative expense, respectively, $25 million and $21 million were capitalized to vehicle inventory, respectively, and $88 million and $36 million were recorded to cost of sales, respectively, including $37 million and $18 million previously capitalized to vehicle inventory, respectively.

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Intangible Assets

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Intangible Assets

NOTE 5 — INTANGIBLE ASSETS

The following table summarizes intangible assets, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Intangible assets:
Customer relationships	$	50	$	50
Developed technology	41		41
Non-compete agreements	—		1
Intangible assets, acquired cost	91		92
Less: accumulated amortization	(30)		(22)
Intangible assets, net	$	61	$	70

Amortization expense was $4 million during each of the three months ended June 30, 2023 and 2022 and $9 million and $4 million during the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the remaining weighted-

average amortization period for definite-lived intangible assets was approximately 5.5 years. The anticipated annual amortization expense to be recognized in future years as of June 30, 2023, is as follows:

	Expected Future Amortization
	(in millions)
Remainder of 2023	$	9
2024	18
2025	14
2026	7
2027	5
Thereafter	8
Total	$	61

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Accounts Payable and Other Accrued Liabilities

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable and Other Accrued Liabilities

NOTE 6 — ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

The following table summarizes accounts payable and other accrued liabilities as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Accounts payable, including $6 and $16, respectively, due to related parties	$	255	$	232
Accrued interest expense	96		99
Sales taxes and vehicle licenses and fees	83		76
Accrued compensation and benefits	52		65
Reserve for returns and cancellations	58		60
Customer deposits	39		23
Accrued advertising costs	4		7
Accrued property and equipment	3		10
Other accrued liabilities	149		205
Total accounts payable and other accrued liabilities	$	739	$	777

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Related Party Transactions

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 7 — RELATED PARTY TRANSACTIONS

Lease Agreements

In November 2014, the Company and DriveTime Automotive Group, Inc. (together with its consolidated affiliates, collectively, “DriveTime”), a related party of the Company due to Ernest Garcia II, Ernest Garcia III, and entities controlled by one or both of them (collectively the "Garcia Parties") controlling and owning substantially all of the interests in DriveTime, entered into a lease agreement (the "DriveTime Lease Agreement") that governs the Company’s access to and utilization of temporary storage, reconditioning, offices and parking space at various DriveTime facilities, including hubs and inspection and reconditioning centers. The DriveTime Lease Agreement was most recently amended in December 2018. The last hub facility lease remaining under the DriveTime Lease Agreement expired in April 2023, and the leases for the inspection and reconditioning centers expire between 2024 and 2026.

In March 2017, the Company and DriveTime entered into a lease agreement that governs the Company's access to and utilization of office and parking space at various DriveTime facilities (the "DriveTime Hub Lease Agreement"). The DriveTime

Hub Lease Agreement was most recently amended in July 2021. The last facility remaining under the DriveTime Hub Lease Agreement expired in April 2023 and was not renewed.

Prior to expiration, the hub locations under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement both had cancellable lease terms of less than twelve months with rights to terminate at the Company's election with 60 days' prior written notice and certain one-year renewal options provided. At non-reconditioning locations, because it was not reasonably certain that the Company would exercise its options to extend the leases or abstain from exercising its termination rights within these lease agreements to create a lease term greater than one year, the Company accounted for them as short-term leases. For these locations, the Company made variable monthly lease payments based on its pro rata utilization of space at each facility plus a pro rata share of each facility’s actual insurance costs and real estate taxes. Management had determined that the costs allocated to the Company were based on a reasonable methodology. The DriveTime Lease Agreement also includes the Blue Mound and Delanco inspection and reconditioning centers. At both of these locations, the Company expects the lease to continue beyond twelve months, therefore, those locations are not considered short-term leases. The Company occupies all of the space at these inspection and reconditioning centers and makes monthly lease payments based on DriveTime's actual rent expense. In addition, the Company is responsible for the actual insurance costs and real estate taxes at these inspection and reconditioning centers locations.

At all locations, the Company is additionally responsible for paying for any tenant improvements it requires to conduct its operations. Management has determined that the costs allocated to the Company are based on a reasonable methodology.

In February 2017, the Company entered into a lease agreement with DriveTime for sole occupancy of a fully operational inspection and reconditioning center in Winder, Georgia. The lease has an initial term of eight years, subject to the Company's ability to exercise three renewal options of five years each.

Expenses related to these operating lease agreements are allocated based on usage to inventory and selling, general and administrative expenses in the accompanying unaudited condensed consolidated balance sheets and statements of operations. Costs allocated to inventory are recognized as cost of sales when the inventory is sold. Total costs related to these operating lease agreements, including those noted above, were $1 million during each of the three months ended June 30, 2023 and 2022, and $2 million during each of the six months ended June 30, 2023 and 2022, respectively, allocated between inventory and selling, general and administrative expenses.

Office Leases

In September 2016, the Company entered into a lease for office space in Tempe, Arizona. In connection with that lease, the Company entered into a sublease with DriveTime for the use of another floor in the same building. The lease and sublease each have a term of 83 months, subject to the right to exercise three five-year extension options. Pursuant to the sublease, the Company pays the rent equal to the amounts due under DriveTime's master lease directly to DriveTime's landlord. The rent expense incurred related to this first floor sublease was less than $1 million during each of the three and six months ended June 30, 2023 and 2022.

In December 2019, Verde Investments, Inc., an affiliate of DriveTime ("Verde"), purchased an office building in Tempe, Arizona that the Company leased from an unrelated landlord prior to Verde's purchase. In connection with the purchase, Verde assumed that lease. The lease has an initial term of ten years, subject to the right to exercise two five-year extension options. The rent expense incurred under the lease with Verde was less than $1 million during each of the three and six months ended June 30, 2023 and 2022.

Wholesale Sales and Revenues

DriveTime purchases and sells wholesale vehicles from and to the Company through competitive online auctions that are managed by an unrelated third party, and through the Company's wholesale marketplace platform. The Company recognized

$5 million and $7 million of wholesale sales and revenues from DriveTime during the three months ended June 30, 2023 and 2022, respectively, and $10 million and $21 million during the six months ended June 30, 2023 and 2022, respectively.

Retail Vehicle Acquisitions and Reconditioning

During the second quarter of 2021, the Company began acquiring reconditioned retail vehicles from DriveTime. The purchase price of each vehicle was equal to the wholesale price of the vehicle plus a fee for transportation and reconditioning services. In addition, DriveTime performs reconditioning services for the Company at DriveTime reconditioning centers. As of June 30, 2023 and 2022, less than $1 million and $3 million, respectively, related to vehicles and reconditioning services were included in vehicle inventory in the accompanying unaudited condensed consolidated balance sheets. The Company also recognized $1 million and $9 million of cost of goods sold during the three months ended June 30, 2023 and 2022, respectively, and $2 million and $18 million during the six months ended June 30, 2023 and 2022, respectively.

Master Dealer Agreement

In December 2016, the Company entered into a master dealer agreement with DriveTime (the "Master Dealer Agreement"), pursuant to which the Company may sell VSCs to customers purchasing a vehicle from the Company. The Company earns a commission on each VSC sold to its customers and DriveTime is obligated by and subsequently administers the VSCs. The Company collects the retail purchase price of the VSCs from its customers and remits the purchase price net of commission to DriveTime. During the three months ended June 30, 2023 and 2022, the Company recognized $33 million and $49 million, respectively, and during the six months ended June 30, 2023 and 2022, the Company recognized $68 million and $96 million, respectively, of commissions earned on VSCs sold to its customers and administered by DriveTime, net of a reserve for estimated contract cancellations. The commission earned on the sale of these VSCs is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations. In November 2018, the Company amended the Master Dealer Agreement to allow the Company to receive payments for excess reserves based on the performance of the VSCs versus the reserves held by the VSC administrator, once a required claims period for such VSCs has passed. In August 2020 and April 2021, the Company and DriveTime amended the Master Dealer Agreement to adjust excess reserve payment calculations and timing and the scope of DriveTime's after-sale administration services, respectively. The Company recognized less than $1 million and $1 million during the three months ended June 30, 2023 and 2022, respectively, and $1 million and $2 million during the six months ended June 30, 2023 and 2022, respectively, related to payments for excess reserves to which it expects to be entitled, which is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations.

Beginning in 2017, DriveTime also administers the Company's limited warranty provided to all customers and administered a portion of the Company's GAP waiver coverage under the Master Dealer Agreement. Since the first quarter of 2020, the Company's GAP waiver coverage sales have been administered by an unrelated third party. The Company pays a per-vehicle fee to DriveTime to administer the limited warranty included with every purchase and prior to the first quarter of 2020 paid a per-contract fee to DriveTime to administer a portion of the GAP waiver coverage it sells to its customers. The Company incurred $5 million and $9 million during each of the three and six months ended June 30, 2023 and 2022, respectively, related to the administration of limited warranty.

Profit Sharing Agreement

In June 2018, the Company entered into an agreement with an unaffiliated third party, pursuant to which the Company would sell certain Road Hazard ("RH") and Pre-Paid Maintenance ("PPM") contracts. Under this agreement, third parties would administer the RH and PPM contracts, including providing customer and administrative services, and pay a profit sharing component to the Company. In 2022, the Company began selling equivalent offerings from DriveTime, pursuant to the Master Dealer Agreement discussed above, and all rights and obligations in connection with existing RH and PPM contracts were transferred to DriveTime (the "Transferred Contracts"). Finally, in December 2022, the Company entered into a profit sharing agreement with DriveTime with regard to the Transferred Contracts (the "Profit Sharing Agreement"). During each of the three and six months ended June 30, 2023, the Company recognized less than $1 million in revenues under the Profit Sharing Agreement.

Servicing and Administrative Fees

DriveTime provides servicing and administrative functions associated with the Company's finance receivables. The Company incurred expenses of $4 million and $2 million during the three months ended June 30, 2023 and 2022, respectively, and $8 million and $4 million during the six months ended June 30, 2023 and 2022, respectively, related to these services.

Aircraft Time Sharing Agreement

The Company entered into an agreement to share usage of two aircraft owned by Verde and operated by DriveTime on October 22, 2015, and the agreement was subsequently amended in 2017. Pursuant to the agreement, the Company agreed to reimburse DriveTime for actual expenses for each of its flights. The original agreement was for 12 months, with perpetual 12-month automatic renewals. Either the Company or DriveTime can terminate the agreement with 30 days’ prior written notice. The Company reimbursed DriveTime less than $1 million under this agreement during each of the three and six months ended June 30, 2023 and 2022.

Shared Services Agreement with DriveTime

In November 2014, the Company and DriveTime entered into a shared services agreement whereby DriveTime provided certain accounting and tax, legal and compliance, information technology, telecommunications, benefits, insurance, real estate, equipment, corporate communications, software and production, and other services primarily to facilitate the transition of these services to the Company on a standalone basis (the "Shared Services Agreement"). The Shared Services Agreement was most recently amended and restated in February 2021 and operates on a year-to-year basis, with the Company having the right to terminate any or all services with 30 days' prior written notice and DriveTime having the right to terminate any or all services with 90 days' prior written notice. Charges allocated to the Company are based on the Company’s actual use of the specific services detailed in the Shared Services Agreement. The Company incurred less than $1 million in expenses related to the Shared Services Agreement during each of the three and six months ended June 30, 2023 and 2022.

Accounts Payable Due to Related Party

As of June 30, 2023 and December 31, 2022, $6 million and $16 million, respectively, was due to related parties primarily related to the agreements mentioned above, and is included in accounts payable and accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

Contributions of Class A Common Stock From Ernest Garcia III

On January 5, 2022, in recognition of the Company selling its 1 millionth vehicle in the fourth quarter of 2021, the Company's CEO, Ernest Garcia III ("Mr. Garcia"), committed to giving then-current employees 23 shares of Class A common stock each from his personal shareholdings once employees reach their two-year employment anniversary ("CEO Milestone Gift" or "Gift"). As a result and during the three months ended March 31, 2022, the Company granted 23 restricted stock units ("RSUs") to each current employee, which vest after they complete their second year of employment, for a total of 435,035 RSUs granted during the period. For every gift that vests, and pursuant to a contribution agreement (the "Contribution Agreement") entered into by and between the Company and Mr. Garcia on February 22, 2022, Mr. Garcia contributes to the Company, at the end of each fiscal quarter, the number of shares of Class A common stock, granted pursuant to the CEO Milestone Gift, that have vested during such quarter. The shares contributed shall be shares of Class A common stock that Mr. Garcia individually owns, at no charge. The contribution is intended to fund RSU awards to certain employees of the Company upon their satisfying the applicable employment tenure requirements. During the three months ended June 30, 2023 and 2022, 15,778 and 14,099 RSUs, respectively, and during the six months ended June 30, 2023 and 2022, 31,625 and 113,206 RSUs, respectively, vested and were contributed by Mr. Garcia. Although the Company does not expect Mr. Garcia to incur any tax obligations related to the contribution, the Company has agreed to indemnify Mr. Garcia from any such obligations that may arise.

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Finance Receivable Sale Agreements

6 Months Ended

Jun. 30, 2023

Transfers and Servicing [Abstract]

Finance Receivable Sale Agreements

NOTE 8 — FINANCE RECEIVABLE SALE AGREEMENTS

The Company originates loans for its customers and sells them to partners and investors pursuant to finance receivable sale agreements. Historically, the Company has sold loans through two types of arrangements: forward flow agreements and fixed pool loan sales, including securitization transactions.

Master Purchase and Sale Agreement

In December 2016, the Company entered into a master purchase and sale agreement (the "Master Purchase and Sale Agreement" or "MPSA") with Ally Bank and Ally Financial Inc. (collectively the "Ally Parties"). Pursuant to the MPSA, the Company sells finance receivables meeting certain underwriting criteria under a committed forward flow arrangement without recourse to the Company for their post-sale performance. The Company and the Ally Parties amended the MPSA at various times throughout 2021 and 2022, and on January 13, 2023 and January 20, 2023 the MPSA was further amended to extend the scheduled commitment termination date to January 12, 2024, and establish a commitment by the Ally Parties to purchase up to a maximum of $4.0 billion of principal balances of finance receivables between January 13, 2023 and the scheduled commitment termination date. Finally, the Company and the Ally Parties entered into additional amendments to the MPSA on March 24, 2023 and April 17, 2023 to broaden the scope of finance receivables eligible for sale to the Ally Parties and update account information.

During the three months ended June 30, 2023 and 2022, the Company sold $1.0 billion and $1.3 billion, respectively, in principal balances of finance receivables under the MPSA. During the six months ended June 30, 2023 and 2022, the Company sold $1.7 billion and $1.8 billion, respectively, in principal balances of finance receivables under the MPSA and had $2.3 billion of unused capacity as of June 30, 2023.

Securitization Transactions

The Company sponsors and establishes securitization trusts to purchase finance receivables from the Company. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that the Company sells to the securitization trusts. Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables. The net proceeds from the sales are the fair value of the assets obtained as part of the transactions and typically include cash and at least 5% of the beneficial interests issued by the securitization trusts to comply with the Risk Retention Rules (as defined below), as further discussed in Note 9 — Securitizations and Variable Interest Entities.

During the three months ended June 30, 2023 and 2022, the Company sold $0.9 billion and $0.6 billion, respectively, in principal balances of finance receivables through securitization transactions. During the six months ended June 30, 2023 and 2022, the Company sold $1.3 billion and $2.0 billion, respectively, in principal balances of finance receivables through securitization transactions.

Gain on Loan Sales

The total gain related to finance receivables sold to financing partners and pursuant to securitization transactions was $150 million and $130 million during the three months ended June 30, 2023 and 2022, respectively, and $214 million and $235 million during the six months ended June 30, 2023 and 2022, respectively, which is included in other sales and revenues in the accompanying unaudited condensed consolidated statements of operations.

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Securitizations and Variable Interest Entities

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Securitizations and Variable Interest Entities

NOTE 9 — SECURITIZATIONS AND VARIABLE INTEREST ENTITIES

As noted in Note 8 — Finance Receivable Sale Agreements, the Company sponsors and establishes securitization trusts to purchase finance receivables from the Company. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that the Company sells to the securitization trusts. Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables. The net proceeds from the sales are the fair value of the assets obtained as part of the transactions and typically include cash and at least 5% of the beneficial interests issued by the securitization trusts to comply with Regulation RR of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Risk Retention Rules"). The beneficial interests retained by the Company include, but

are not limited to, rated notes and certificates of the securitization trusts. The holders of the certificates issued by the securitization trusts have rights to cash flows only after the holders of the notes issued by the securitization trusts have received their contractual cash flows. The securitization trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the securitization trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company are subject principally to the credit and prepayment risk stemming from the underlying finance receivables.

The securitization trusts established in connection with asset-backed securitization transactions are VIEs. For each VIE that the Company establishes in its role as sponsor of securitization transactions, it performs an analysis to determine whether or not it is the primary beneficiary of the VIE. The Company’s continuing involvement with the VIEs consists of retaining a portion of the securities issued by the VIEs and performing ministerial duties as the trust administrator. As of June 30, 2023, the Company is not the primary beneficiary of these securitization trusts because its retained interests in the VIEs do not have exposures to losses or benefits that could potentially be significant to the VIEs. As such, the Company does not consolidate the securitization trusts.

The assets the Company retains in the unconsolidated VIEs are presented as beneficial interests in securitizations on the accompanying unaudited condensed consolidated balance sheets, which as of June 30, 2023 and December 31, 2022 were $335 million and $321 million, respectively. The Company held no other assets or liabilities related to its involvement with unconsolidated VIEs as of June 30, 2023 and December 31, 2022.

The following table summarizes the carrying value and total exposure to losses of its assets related to unconsolidated VIEs with which the Company has continuing involvement, but is not the primary beneficiary at June 30, 2023 and December 31, 2022. Total exposure represents the estimated loss the Company would incur under severe, hypothetical circumstances, such as if the value of the interests in the securitization trusts and any associated collateral declined to zero. The Company believes the possibility of this is remote. As such, the total exposure presented below is not an indication of the Company's expected losses.

	June 30, 2023				December 31, 2022
	Carrying Value		Total Exposure		Carrying Value		Total Exposure
	(in millions)
Rated notes	$	266	$	266	$	252	$	252
Certificates and other assets	69		69		69		69
Total unconsolidated VIEs	$	335	$	335	$	321	$	321

The beneficial interests in securitizations are considered securities available for sale subject to restrictions on transfer pursuant to the Company’s obligations as a sponsor under Risk Retention Rules. As described in Note 10 — Debt Instruments, the Company has entered into secured borrowing facilities through which it finances certain of these retained beneficial interests in securitizations. These securities are interests in securitization trusts, thus there are no contractual maturities. The amortized cost and fair value of securities available for sale as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Rated notes	$	278	$	266	$	268	$	252
Certificates and other assets	54		69		43		69
Total securities available for sale	$	332	$	335	$	311	$	321

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Debt Instruments

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt Instruments

NOTE 10 — DEBT INSTRUMENTS

Debt instruments, excluding finance leases, which are discussed in Note 16 — Leases, as of June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in millions)
Asset-based financing:
Floor plan facility	$	557	$	569
Finance receivable facilities	604		965
Financing of beneficial interest in securitizations	278		268
Notes payable	2		3
Real estate financing	484		486
Total asset-based financing	1,925		2,291
Senior notes	5,725		5,725
Total debt	7,650		8,016
Less: current portion	(1,270)		(1,638)
Less: unamortized debt issuance costs (1)	(75)		(82)
Total included in long-term debt, net	$	6,305	$	6,296

(1) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the accompanying unaudited condensed consolidated balance sheets. Unamortized debt issuance costs related to revolving debt arrangements are presented within other assets on the accompanying unaudited condensed consolidated balance sheets and not included here.

Short-Term Revolving Facilities

Floor Plan Facility

The Company previously entered into a floor plan facility with a lender to finance its vehicle inventory, which was secured by Carvana LLC's vehicle inventory, general intangibles, accounts receivable, and finance receivables. The facility was amended at various times and effective September 22, 2022, the Company amended and restated the facility to extend the maturity date, with a line of credit of $2.2 billion through September 22, 2023, and $2.0 billion through March 22, 2024, and tie the interest rate to a prime rate plus 1.00%. On May 31, 2023, the Company amended the facility to have a single line of credit of $2.0 billion through March 22, 2024.

Under the facility, repayment of amounts drawn for the purchase of a vehicle should generally be made within several days after selling or otherwise disposing of the vehicle. Outstanding balances related to vehicles held in inventory for more than 150 days require monthly principal payments equal to 10% of the original principal amount of that vehicle until the remaining outstanding balance is equal to the lesser of (i) 50% of the original principal amount or (ii) 50% of the wholesale value. Prepayments may be made without incurring a premium or penalty. Additionally, the Company is permitted to make prepayments to the lender to be held as principal payments under the facility and subsequently reborrow such amounts. The facility also requires monthly interest payments and that at least 12.5% of the total principal amount owed to the lender is held as restricted cash. The Company is also required to pay the lender an availability fee based on the average unused capacity during the prior calendar quarter under the facility.

As of June 30, 2023, the Company had $557 million outstanding under the facility, unused capacity of $1.4 billion, and held $70 million in restricted cash related to this facility. During the three months ended June 30, 2023, the Company's effective interest rate on the facility was approximately 8.00%.

As of December 31, 2022, the Company had $569 million outstanding under the facility, unused capacity of $1.6 billion, and held $71 million in restricted cash related to this facility. For the year ended December 31, 2022, the Company's effective interest rate on the facility was approximately 3.57%.

Active Finance Receivable Facilities

The Company has various short-term revolving credit facilities to fund certain finance receivables originated by the Company prior to selling them, which are typically secured by the finance receivables pledged to them (the "Finance Receivable Facilities").

In January 2020, the Company entered into an agreement pursuant to which a lender agreed to provide a revolving credit facility, which was subsequently increased to $500 million, to fund certain finance receivables originated by the Company. In June 2021, the Company amended its agreement to, among other things, extend the maturity date to January 24, 2023. In January 2023, the Company amended its agreement to, among other things, adjust the line of credit to $300 million, and extend the maturity date to January 24, 2024.

In February 2020, the Company entered into an agreement pursuant to which a second lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase the line of credit to $600 million, and extend the maturity date to December 8, 2023.

In April 2021, the Company entered into an agreement pursuant to which a third lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase this line of credit to $600 million. In September 2022, the Company amended its agreement to extend the maturity date to March 30, 2024.

In October 2021, the Company entered into an agreement pursuant to which a fourth lender agreed to provide a $350 million revolving credit facility to fund certain finance receivables originated by the Company. On May 8, 2023, the Company settled all outstanding amounts owed and terminated the agreement with the lender.

In March 2022, the Company entered into an agreement pursuant to which a fifth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until September 18, 2023.

In May 2023, the Company entered into an agreement pursuant to which a sixth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. The Company can draw upon this facility until May 31, 2024.

The Finance Receivable Facilities require that any undistributed amounts collected on the pledged finance receivables be held as restricted cash. The Finance Receivable Facilities require monthly payments of interest and fees based on usage and unused facility amounts. The Finance Receivable Facilities self-amortize from the end of the draw period until maturity, offer full prepayment rights, and have no credit sublimits or aging restrictions, subject to negotiated concentration limits. The subsidiaries that entered into these Finance Receivable Facilities are each wholly-owned, special purpose entities whose assets are not available to the general creditors of the Company. As of June 30, 2023 and December 31, 2022, the Company had $604 million and $965 million, respectively, outstanding under these Finance Receivable Facilities, unused capacity of $1.9 billion and $1.6 billion, respectively, and held $24 million and $36 million, respectively, in restricted cash related to these Finance Receivable Facilities. During the three months ended June 30, 2023, the Company's effective interest rate on these Finance Receivable Facilities was approximately 6.78%. For the year ended December 31, 2022, the Company's effective interest rate on these Finance Receivable Facilities was approximately 2.93%.

Long-Term Debt

Senior Unsecured Notes

The Company has issued various tranches of senior unsecured notes (collectively, the "Senior Notes") each under a separate indenture (collectively, the "Indentures"), as further described below.

The following table summarizes components of the Company's senior unsecured notes:

	June 30, 2023		December 31, 2022		Interest Rate
	(in millions, except percentages)
2025 Senior Unsecured Notes due October 1, 2025 ("2025 Notes")	$	500	$	500	5.625	%
2027 Senior Unsecured Notes due April 15, 2027 ("2027 Notes")	600		600		5.500	%
2028 Senior Unsecured Notes due October 1, 2028 ("2028 Notes")	600		600		5.875	%
2029 Senior Unsecured Notes due September 1, 2029 ("2029 Notes")	750		750		4.875	%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes")	3,275		3,275		10.250	%
Total principal amount	5,725		5,725
Less: unamortized debt issuance cost	(70)		(76)
Total debt	$	5,655	$	5,649

Each of the 2025 Notes, the 2027 Notes, the 2028 Notes and the 2029 Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party thereto and U.S. Bank National Association, as trustee. The 2030 Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. Interest on each of the Senior Notes is payable semi-annually, beginning on April 1, 2021 for the 2025 Notes and 2028 Notes, October 15, 2021 for the 2027 Notes, March 1, 2022 for the 2029 Notes, and November 1, 2022 for the 2030 Notes. The Senior Notes mature as specified in the table above unless earlier repurchased or redeemed and are guaranteed by the Company's existing domestic restricted subsidiaries (other than the subsidiaries formed for inventory, finance receivables, securitization facilities, immaterial subsidiaries, or unrestricted subsidiaries). In March 2023, the Company designated ADESA and its subsidiaries as unrestricted subsidiaries under the

Indentures.

The Company may redeem some or all of each issuance of Senior Notes at redemption prices set forth in each respective indenture, plus any accrued and unpaid interest to the redemption date. Prior to those redemption dates, the Company may redeem up to 35% of the aggregate principal amount at a redemption price equal to 100% plus the respective interest rate specified in the table above, together with accrued and unpaid interest to, but not including, the date of redemption, with the net cash proceeds of certain equity offerings. With respect to the 2030 Notes, the Company may, at its option, redeem in the aggregate of up to 10% of the original aggregate principal amount of the 2030 Notes during the period from, and including, May 1, 2025 to, but excluding May 1, 2027, at a redemption price equal to 105.125% of the 2030 Notes to be redeemed, plus accrued and unpaid interest thereon to the relevant redemption rate. In addition, the Company may, at its option, redeem some or all of the Senior Notes prior to its redemption date, by paying a make-whole premium plus any accrued and unpaid interest to, but not including, the redemption date. If the Company experiences certain change of control events, it must make an offer to purchase all of the Senior Notes at 101% of the principal amount thereof, plus any accrued and unpaid interest, to the repurchase date.

The Indentures contain restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things and subject to certain exceptions, incur additional debt or issue preferred stock, create new liens, make intercompany payments, pay dividends and make other distributions in respect of the Company's capital stock, redeem or repurchase the Company’s capital stock or prepay subordinated indebtedness, make certain investments or certain other restricted payments, guarantee indebtedness, designate unrestricted subsidiaries, sell certain kinds of assets, enter into certain types of transactions with affiliates, and effect mergers or consolidations. Certain of these covenants may be suspended if any of the Senior Notes are assigned an investment grade rating from any two of Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, and Fitch Ratings.

As further described under Note 20 — Subsequent Events, on July 17, 2023, the Company entered into a transaction support agreement (the "Transaction Support Agreement") pursuant to which, among other transactions described in Note 20 — Subsequent Events, certain holders of the Senior Notes have agreed to support, approve, implement and enter into definitive documents with respect to certain transactions, including, but not limited to, (i) the exchange of Senior Notes for three tranches of senior secured notes due 2028, 2030 and 2031, respectively (such notes, the "New Secured Notes"), in an aggregate principal amount of up to $4.376 billion (the "Exchange Offers"), and (ii) the solicitation of consents from certain eligible holders of

Senior Notes to amend certain provisions in the Indentures to be conducted simultaneously with the Exchange Offers (the "Consent Solicitations").

Notes Payable

The Company has entered into promissory note and disbursement agreements to finance certain equipment for its transportation fleet and building improvements. The assets financed with the proceeds from these notes serve as the collateral for each note and certain security agreements related to these assets have cross collateralization and cross default provisions with respect to one another. The notes have a fixed annual interest rate, a term of 3.25 years and require monthly payments. As of June 30, 2023 and December 31, 2022, the outstanding principal of these notes had a weighted-average interest rate of 8.2% and 7.5%, respectively, and totaled $2 million and $3 million, respectively, net of unamortized debt issuance costs, of which $2 million and $1 million, respectively, was due within the next twelve months and is included in current portion of long-term debt in the accompanying unaudited condensed consolidated balance sheets.

Real Estate Financing

The Company finances certain purchases and construction of its property and equipment through various sale and leaseback transactions. As of June 30, 2023, none of these transactions have qualified for sale accounting due to meeting the criteria for finance leases, or forms of continuing involvement, such as repurchase options or renewal periods that extend the lease for substantially all of the asset's remaining useful life, and are therefore accounted for as financing transactions. These arrangements require monthly payments and have initial terms of 20 to 25 years. Some of the agreements are subject to renewal options of up to 25 years and some are subject to base rent increases throughout the term. As of June 30, 2023 and December 31, 2022, the outstanding liability associated with these sale and leaseback arrangements, net of unamortized debt issuance costs, was $482 million and $483 million, respectively, and was included in long-term debt in the accompanying unaudited condensed consolidated balance sheets.

Financing of Beneficial Interests in Securitizations

As discussed in Note 9 — Securitizations and Variable Interest Entities, the Company has retained certain beneficial interests in securitizations pursuant to the Company’s obligations as a sponsor under the Risk Retention Rules. Beginning in June 2019, the Company entered into secured borrowing facilities through which it finances certain retained beneficial interests in securitizations whereby the Company sells such interests and agrees to repurchase them for their fair value at a stated time of repurchase.

As of June 30, 2023 and December 31, 2022, the Company has pledged $278 million and $268 million, respectively, of its beneficial interests in securitizations as collateral under the repurchase agreements with expected repurchases ranging from September 2023 to June 2030. The securitization trusts distribute payments related to the Company's pledged beneficial interests in securitizations directly to the lenders, which reduces the beneficial interests in securitizations and the related debt balance. Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral, the repurchase price of the pledged collateral will be increased by the amount of the decline.

The outstanding balance of these facilities, net of unamortized debt issuance costs, was $275 million and $265 million as of June 30, 2023 and December 31, 2022, respectively, of which $106 million and $102 million, respectively, was included in current portion of long-term debt in the accompanying unaudited condensed consolidated balance sheets.

As of June 30, 2023, the Company was in compliance with all debt covenants.

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Stockholders' Equity (Deficit)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Stockholders' Equity (Deficit)

NOTE 11 — STOCKHOLDERS' EQUITY (DEFICIT)

Organizational Transactions

Carvana Co.'s amended and restated certificate of incorporation, among other things, authorizes (i) 50 million shares of Preferred Stock, par value $0.01 per share, (ii) 500 million shares of Class A common stock, par value $0.001 per share, and (iii) 125 million shares of Class B common stock, par value $0.001 per share. Each share of Class A common stock generally

entitles its holder to one vote on all matters to be voted on by stockholders. Each share of Class B common stock held by the Garcia Parties generally entitles its holder to ten votes on all matters to be voted on by stockholders, for so long as the Garcia Parties maintain direct or indirect beneficial ownership of at least 25% of the outstanding shares of Carvana Co.'s Class A common stock determined on an as-exchanged basis assuming that all of the Class A Units and Class B Units were exchanged for Class A common stock. All other shares of Class B common stock generally entitle their holders to one vote per share on all matters to be voted on by stockholders. Holders of Class B common stock are not entitled to receive dividends and would not be entitled to receive any distributions upon the liquidation, dissolution or winding down of the Company. Holders of Class A and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by applicable law.

Carvana Group's amended and restated LLC Agreement provides for two classes of common ownership interests in Carvana Group: (i) Class A Units and (ii) Class B Units (together, the "LLC Units"). Carvana Co. is required to, at all times, maintain (i) a four-to-five ratio between the number of shares of Class A common stock issued and outstanding by Carvana Co. and the number of Class A Units owned by Carvana Co. (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities and subject to adjustment as set forth in the exchange agreement (the "Exchange Agreement") further discussed below, and taking into account Carvana Co. Sub LLC's 0.1% ownership interest in Carvana, LLC) and (ii) a four-to-five ratio between the number of shares of Class B common stock owned by the original holders of LLC units prior to the IPO (the "Original LLC Unitholders") and the number of Class A Units owned by the Original LLC Unitholders. The Company may issue shares of Class B common stock only to the extent necessary to maintain these ratios. Shares of Class B common stock are transferable only if an Original LLC Unitholder elects to exchange them, together with 1.25 times as many LLC Units, for consideration from the Company. Such consideration from the Company can be, at the Company’s election, either shares of Class A common stock or cash.

As of June 30, 2023 and December 31, 2022, there were 237 million and 236 million Class A Units and 2 million and 1 million Class B Units, respectively, (as adjusted for the participation thresholds and closing price of Class A common stock on June 30, 2023 and December 31, 2022) issued and outstanding. As discussed in Note 13 — Equity-Based Compensation, Class B Units were issued under the Company’s LLC Equity Incentive Plan (the "LLC Equity Incentive Plan") and are subject to a participation threshold, and are earned over the requisite service period.

Equity Offerings

On April 26, 2022, the Company completed a public offering of 15.625 million shares of its Class A common stock at an offering price of $80 for total net proceeds of $1.2 billion, after deducting underwriting discounts and offering expenses. The Garcia Parties purchased an aggregate of 5.4 million shares of the Class A common stock offered at the public offering price. The Company used the net proceeds to purchase 19.5 million newly-issued LLC Units in Carvana Group.

Exchange Agreement

Carvana Co. and the Original LLC Unitholders together with any holders of LLC Units issued subsequent to the IPO (together, the "LLC Unitholders") entered into an Exchange Agreement under which each LLC Unitholder (and certain permitted transferees thereof) may receive shares of the Company's Class A common stock in exchange for their LLC Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to (i) conversion ratio adjustments for stock splits, stock dividends, reclassifications and similar transactions, (ii) vesting for certain LLC Units, and (iii) the respective participation threshold for Class B Units. To the extent such owners also hold Class B common stock, they are required to deliver to Carvana Co. a number of shares of Class B common stock equal to the number of shares of Class A common stock being exchanged for. Any shares of Class B common stock so delivered are canceled. The number of exchangeable Class B Units is determined based on the value of Carvana Co.'s Class A common stock and the applicable participation threshold.

During the three months ended June 30, 2023 and 2022, certain LLC Unitholders exchanged zero and less than 1 million LLC Units and no shares of Class B common stock for zero and less than 1 million newly-issued shares of Class A common stock, respectively. During each of the six months ended June 30, 2023 and 2022, certain LLC Unitholders exchanged less than 1 million LLC Units and no shares of Class B common stock for less than 1 million newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, Carvana Co. received zero and less than 1 million LLC Units during the three months ended June 30, 2023 and 2022, respectively, and less than 1 million LLC Units during each of the six months ended June 30, 2023 and 2022, increasing its total ownership interest in Carvana Group for the three months ended June 30, 2022.

Class A Non-Convertible Preferred Units

On October 2, 2018, Carvana Group, LLC amended its LLC Agreement to create a class of non-convertible preferred units (the "Class A Non-Convertible Preferred Units"), effective September 21, 2018. The Class A Non-Convertible Preferred Units were created in connection with Carvana Co.'s issuance of its Senior Notes, as discussed further and defined in Note 10 — Debt Instruments. On October 2, 2020, Carvana Group, LLC amended and restated its LLC Agreement to, among other things, authorize the issuance of 1.1 million Class A Non-Convertible Preferred Units to be sold to Carvana Co. in connection with the issuance of its 2025 and 2028 Notes and authorize the issuance of additional Class A Non-Convertible Preferred Units, in each case in consideration for the capital contribution made or deemed to have been made by Carvana Co. of the net proceeds of senior unsecured notes issuances. On March 29, 2021, Carvana Group, LLC issued 0.6 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2027 Notes. On August 16, 2021, Carvana Group, LLC issued 0.8 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2029 Notes. On May 6, 2022, Carvana Group, LLC issued 3.3 million Class A Non-Convertible Preferred Units in connection with the issuance of its 2030 Notes. Carvana Co. used its net proceeds from certain Senior Unsecured Notes due 2023, (which have since been repurchased), the 2025 and 2028 Notes, the 2027 Notes, the 2029 Notes, and the 2030 Notes to purchase 0.6 million, 1.1 million, 0.6 million, 0.8 million, and 3.3 million, respectively, of Class A Non-Convertible Preferred Units.

When Carvana Co. makes payments on the Senior Notes, Carvana Group makes an equal cash distribution, as necessary, to the Class A Non-Convertible Preferred Units. For each $1,000 principal amount of Senior Notes that Carvana Co. repays or otherwise retires, one Class A Non-Convertible Preferred Unit is canceled and retired.

Tax Asset Preservation Plan

On January 16, 2023, the Company entered into a Section 382 Rights Agreement (the “Tax Asset Preservation Plan”) designed to preserve shareholder value and the value of certain tax assets primarily associated with federal net operating loss carryforwards and built-in losses under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). The Tax Asset Preservation Plan is intended to act as a deterrent to any person or group acquiring 4.9% or more of the Company's outstanding Class A common stock (any such person an “Acquiring Person”), without the approval of the Company’s board of directors (the "Board").

In connection therewith, the Board declared a dividend of one preferred share purchase right (a “Right”) for each share of Class A common stock, par value $0.001 per share, of the Company. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”) at a price of $50.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The Rights will separate and begin trading separately from the Class A common stock, and right certificates will be caused to evidence the Rights, on the earlier to occur of (i) the Close of Business (as such term is defined in the Tax Asset Preservation Plan) on the tenth day following a public announcement, or the public disclosure of facts indicating, that a Person (as such term is defined in the Tax Asset Preservation Plan) or group of affiliated or associated Persons has acquired Beneficial Ownership (as such term is defined in the Tax Asset Preservation Plan) of 4.9% or more of the outstanding Class A common stock (or, in the event that the Board determines to effect an exchange in accordance with Section 24 of the Tax Asset Preservation Plan and the Board determines that a later date is advisable, then such later date) and (ii) the close of business on the tenth business day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer the consummation of which would result in the Beneficial Ownership by a Person or group of 4.9% or more of the outstanding Class A common stock. If issued, each Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void) will become exercisable for Class A common stock having a value equal to two times the exercise price of the Right. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company, including without limitation any dividend, voting or liquidation rights.

On July 18, 2023, the Company amended and restated its Tax Asset Preservation Plan in order to adjust the definition of Beneficial Ownership to exclude derivatives that may be only settled in cash, do not confer voting rights, and lack other features consistent with beneficial ownership of shares of Class A common stock.

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Non-Controlling Interests

6 Months Ended

Jun. 30, 2023

Noncontrolling Interest [Abstract]

Non-Controlling Interests

NOTE 12 — NON-CONTROLLING INTERESTS

As discussed in Note 1 — Business Organization, Carvana Co. consolidates the financial results of Carvana Group and reports a non-controlling interest related to the portion of Carvana Group owned by the LLC Unitholders. Changes in the

ownership interest in Carvana Group while Carvana Co. retains its controlling interest will be accounted for as equity transactions. Exchanges of LLC Units result in a change in ownership and reduce the amount recorded as non-controlling interests and increase additional paid-in capital.

Upon the issuance of shares of Class A common stock by Carvana Co. related to the Company’s equity compensation plans such as the exercise of options, issuance of restricted or non-restricted stock, payment of bonuses in stock or settlement of stock appreciation rights in stock, Carvana Group is required to issue to Carvana Co. a number of Class A Units equal to 1.25 times the number of shares of Class A common stock being issued in connection with the exercise of such options or issuance of other types of equity compensation, subject to adjustment for stock splits, stock dividends, reclassifications, and similar transactions. Activity related to the Company's equity compensation plans may result in a change in ownership which will impact the amount recorded as non-controlling interest and additional paid-in capital.

The non-controlling interest related to the Class B Units is determined based on the respective participation thresholds and the share price of Class A common stock on an as-converted basis. To the extent that the number of as-converted Class B Units change or Class B Units are forfeited, the resulting difference in ownership will be accounted for as equity transactions adjusting the non-controlling interest and additional paid-in capital.

During the six months ended June 30, 2023 and 2022, the total adjustments related to exchanges of LLC Units were a decrease in non-controlling interests and a corresponding increase in additional paid-in capital of $1 million each, which have been included in exchanges of LLC Units in the accompanying unaudited condensed consolidated statements of stockholders' equity (deficit).

As of June 30, 2023, Carvana Co. owned approximately 55.8% of Carvana Group with the LLC Unitholders owning the remaining 44.2%. The net loss attributable to the non-controlling interests on the accompanying unaudited condensed consolidated statements of operations represents the portion of the net loss attributable to the economic interest in Carvana Group held by the non-controlling LLC Unitholders calculated based on the weighted average non-controlling interests' ownership during the periods presented.

	Six Months Ended June 30,
	2023		2022
	(in millions)
Transfers from non-controlling interests:
Decrease as a result of issuances of Class A common stock	$	—	$	(554)
Increase as a result of exchanges of LLC Units	$	1	$	1
Total transfers from non-controlling interests	$	1	$	(553)

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Equity-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

NOTE 13 — EQUITY-BASED COMPENSATION

Equity-based compensation is recognized based on amortizing the grant-date fair value on a straight-line basis over the requisite service period, which is generally the vesting period of the award, less actual forfeitures. A summary of equity-based compensation recognized during the three and six months ended June 30, 2023 and 2022 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Restricted Stock Units and Awards excluding those granted in relation to the CEO Milestone Gift	$	19	$	8	$	33	$	17
Restricted Stock Units granted in relation to the CEO Milestone Gift	—		6		(1)		37
Options	4		4		8		7
Total equity-based compensation	23		18		40		61
Equity-based compensation capitalized to property and equipment	(3)		(2)		(5)		(4)
Equity-based compensation capitalized to inventory	(1)		(2)		(1)		(15)
Equity-based compensation, net of capitalized amounts	$	19	$	14	$	34	$	42

As of June 30, 2023, the total unrecognized compensation related to outstanding equity awards was $223 million, which the Company expects to recognize over a weighted-average period of approximately 3.1 years. Total unrecognized equity-based compensation will be adjusted for actual forfeitures.

2017 Omnibus Incentive Plan

In connection with the IPO, the Company adopted the 2017 Omnibus Incentive Plan (the "2017 Incentive Plan"). The number of shares authorized for issuance under the 2017 Incentive Plan is subject to an automatic annual increase of the lesser of two percent of the Company's outstanding common stock or an amount determined by the Compensation and Nominating Committee of the Board. While the Compensation and Nominating Committee determined not to increase the number of shares authorized for issuance in prior years, the automatic annual increase on January 1, 2023 was approved. As a result, in February 2023, the Company registered approximately 2 million additional shares (the "Automatic Increase"). In addition, on February 22, 2023, the Board approved an amendment, subject to stockholder approval, to increase the number of shares available under the 2017 Incentive Plan by 20 million shares (the "Amendment Increase"). On February 22, 2023, Ernest Garcia II also granted the Board an irrevocable proxy to vote the shares of Class A and Class B common stock directly held and beneficially owned by Mr. Garcia II in favor of the Amendment Increase. The Company's stockholders approved the Amendment Increase at the annual stockholder meeting on May 1, 2023. After taking into account the Automatic Increase and the Amendment Increase, approximately 36 million shares of Class A common stock are available for issuance under the 2017 Incentive Plan, which the Company may grant as stock options, stock appreciation rights, restricted stock, restricted stock units and other equity-based awards to employees, directors, officers and consultants. The majority of equity granted by the Company vests over four-year periods based on continued employment with the Company. As of June 30, 2023, approximately 17 million shares remain available for future equity-based award grants under this plan.

Employee Stock Purchase Plan

In May 2021, the Company adopted an employee stock purchase plan (the "ESPP"). On July 1, 2021, the ESPP went into effect. The ESPP allows substantially all employees, excluding members of senior management, to acquire shares of the Company’s Class A common stock through payroll deductions over six-month offering periods, commencing on January 1 and July 1 of each year. The per share purchase price is equal to 90% of the fair market value of a share of the Company’s Class A common stock on the last day of the offering period. Participant purchases are limited to maximums that may vary between

$10,000 and $25,000 of stock per calendar year. The Company is authorized to grant up to 0.5 million shares of Class A common stock under the ESPP.

During the six months ended June 30, 2023 and 2022, the Company issued 20,127 and 27,462 shares of Class A common stock, respectively, and recognized less than $1 million of equity-based compensation expense in each period. As of June 30, 2023, 391,027 shares remained available for future issuance.

Class A Units

During 2018, the Company granted certain employees Class A Units with service-based vesting over two- to four-year periods and a grant-date fair value of $18.58 per Class A Unit. The grantees entered into the Exchange Agreement under which each LLC Unitholder (and certain permitted transferees thereof) may receive shares of the Company's Class A common stock in exchange for their LLC Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting.

Class B Units

In March 2015, Carvana Group adopted the LLC Equity Incentive Plan. Under the LLC Equity Incentive Plan, Carvana Group could grant Class B Units to eligible employees, non-employee officers, consultants and directors with service-based vesting, typically four to five years. In connection with the completion of the IPO, Carvana Group discontinued the grant of new awards under the LLC Equity Incentive Plan, however the LLC Equity Incentive Plan will continue in connection with administration of existing awards that remain outstanding. Grantees may receive shares of the Company's Class A common stock in exchange for Class B Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting and the respective participation threshold for Class B Units. Class B Units do not expire. There were no Class B Units issued during the three and six months ended June 30, 2023 or 2022. As of June 30, 2023, outstanding Class B Units had participation thresholds between $0.00 to $12.00.

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Loss Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Loss Per Share

NOTE 14 — LOSS PER SHARE

Basic and diluted net loss per share is computed by dividing the net loss attributable to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive shares. For all periods presented, potentially dilutive shares are excluded from diluted net loss per share because they have an anti-dilutive impact. Therefore, basic and diluted net loss per share attributable to Class A common stockholders are the same for all periods presented. Net loss for all periods presented is attributable only to Class A common stockholders, due to no activity related to convertible preferred stock during those periods.

The following table presents the calculation of basic and diluted net loss per share during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions, except number of shares, which are reflected in thousands, and per share amounts)
Numerator:
Net loss	$	(105)	$	(439)	$	(391)	$	(945)
Net loss attributable to non-controlling interests	(47)		(201)		(173)		(447)
Net loss attributable to Carvana Co. Class A common stockholders, basic and diluted	$	(58)	$	(238)	$	(218)	$	(498)
Denominator:
Weighted-average shares of Class A common stock outstanding	106,247		101,450		106,154		95,773
Nonvested weighted-average restricted stock awards	(25)		—		(37)		—
Weighted-average shares of Class A common stock outstanding, basic and diluted	106,222		101,450		106,117		95,773
Net loss per share of Class A common stock, basic and diluted	$	(0.55)	$	(2.35)	$	(2.05)	$	(5.20)

Shares of Class B common stock do not share in the losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net loss per share of Class B common stock under the two-class method has not been presented.

The following table presents potentially dilutive securities, as of the end of the period, excluded from the computations of diluted net loss per share of Class A common stock for the three and six months ended June 30, 2023 and 2022.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
	(in thousands)
Options (1)	4,029	1,281	4,029	1,281
Restricted Stock Units and Awards (1)	9,953	74	9,953	74
Class A Units (2)	82,963	82,963	82,963	82,963
Class B Units (2)	988	1,835	856	1,835

_________________________

(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

(2) Represents the weighted-average as-converted LLC units that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive.

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 15 — INCOME TAXES

As described in Note 1 — Business Organization and Note 11 — Stockholders' Equity (Deficit), as a result of the IPO, Carvana Co. began consolidating the financial results of Carvana Group. Carvana Group is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Carvana Group is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Carvana Group is passed through to and included in the taxable income or loss of its members, including Carvana Co., based on its economic interest held in Carvana Group. Carvana Co. was formed on November 29, 2016 and did not engage in any operations prior to the IPO. Carvana Co. is taxed as a corporation and is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income or loss of Carvana Group, as well as any stand-alone income or loss generated by Carvana Co.

As described in Note 11 — Stockholders' Equity (Deficit), the Company acquired zero and less than 1 million LLC Units during the three months ended June 30, 2023, and 2022, respectively, and less than 1 million LLC Units during each of the six months ended June 30, 2023 and 2022 in connection with exchanges with LLC Unitholders. During the three months ended June 30, 2023, and 2022, the Company recorded a gross deferred tax asset of zero and $1 million, respectively, and less than $1 million and $1 million, respectively, during the six months ended June 30, 2023 and 2022 associated with the basis difference in its investment in Carvana Group related to the acquisition of the LLC Units which is reflected as an increase to additional paid-in capital in the accompanying unaudited condensed consolidated statements of stockholders' equity (deficit).

During the six months ended June 30, 2023, management performed an assessment of the recoverability of deferred tax assets. Management determined, based on the accounting standards applicable to such assessment, that there was sufficient evidence as a result of the Company’s cumulative losses to conclude it was more likely than not that its deferred tax assets would not be realized and has recorded a full valuation allowance against its deferred tax assets. In the event that management was to determine that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be made which would reduce the provision for income taxes.

The Company recognizes uncertain income tax positions when it is more-likely-than-not the position will be sustained upon examination. As of June 30, 2023 and December 31, 2022, the Company has not identified any uncertain tax positions and has not recognized any related reserves.

The Company's effective tax rate for the three months ended June 30, 2023 and 2022 was a benefit of 0.4% and an expense of 0.1%, respectively, and for the six months ended June 30, 2023 and 2022 was a benefit of 0.6% and an expense of 0.2%, respectively, related to its wholly-owned subsidiaries.

Tax Receivable Agreement

Carvana Co. expects to obtain an increase in its share of the tax basis in the net assets of Carvana Group when LLC Units are exchanged by the LLC Unitholders and other qualifying transactions. As described in Note 11 — Stockholders' Equity (Deficit), each change in outstanding shares of Class A common stock results in a corresponding increase or decrease in Carvana Co.'s ownership of LLC Units. The Company intends to treat any exchanges of LLC Units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Carvana Co. would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the IPO, the Company entered into a Tax Receivable Agreement (the "TRA"). Under the TRA, the Company generally will be required to pay to the LLC Unitholders 85% of the amount of cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes created as a result of any sales or exchanges (as determined for U.S. federal income tax purposes) to or with the Company of their interests in Carvana Group for shares of Carvana Co.'s Class A common stock or cash, including any basis adjustment relating to the assets of Carvana Group and (ii) tax benefits attributable to payments made under the TRA (including imputed interest). The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.

If the Internal Revenue Service or a state or local taxing authority challenges the tax basis adjustments that give rise to payments under the TRA and the tax basis adjustments are subsequently disallowed, the recipients of payments under the agreement will not reimburse the Company for any payments the Company previously made to them. Any such disallowance would be taken into account in determining future payments under the TRA and would, therefore, reduce the amount of any such future payments. Nevertheless, if the claimed tax benefits from the tax basis adjustments are disallowed, the Company’s payments under the TRA could exceed its actual tax savings, and the Company may not be able to recoup payments under the TRA that were calculated on the assumption that the disallowed tax savings were available.

The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur, (ii) there is a material breach of any material obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the

Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any LLC Units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination.

As of June 30, 2023, the Company has concluded, based on applicable accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized; therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets. As of June 30, 2023, the total unrecorded TRA liability is approximately $1.6 billion. If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements of operations.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

NOTE 16 — LEASES

The Company is party to various lease agreements for real estate and transportation equipment. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company also assesses whether each lease is an operating or finance lease at the lease commencement date. Rent expense of operating leases is recognized on a straight-line basis over the lease term and includes scheduled rent increases as well as amortization of tenant improvement allowances.

Operating Leases

As of June 30, 2023, the Company is a tenant under various operating leases related to certain of its hubs, vending machines, inspection and reconditioning centers, auction locations with reconditioning capacity, storage, parking and corporate offices. The initial terms expire at various dates between 2023 and 2038. Many of the leases include one or more renewal options ranging from one to twenty years and some contain purchase options.

The Company's operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities on the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 7 — Related Party Transactions for further discussion of operating leases with related parties.

Finance Leases

The Company has finance leases for certain equipment in its transportation fleet. The leases have initial terms of two to five years, some of which include extension options for up to four additional years, and require monthly payments. The Company's finance leases are included in long-term debt on the accompanying unaudited condensed consolidated balance sheets.

Lease Costs and Activity

The Company's lease costs and activity during the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Lease costs:
Finance leases:
Amortization of finance lease assets	$	28	$	24	$	56	$	41
Interest obligations under finance leases	5		5		10		8
Total finance lease costs	$	33	$	29	$	66	$	49
Operating leases:
Fixed lease costs to non-related parties	$	17	$	27	$	35	$	52
Fixed lease costs to related parties	1		1		2		2
Total operating lease costs	$	18	$	28	$	37	$	54
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities to non-related parties					$	53	$	32
Operating lease liabilities to related parties					$	2	$	1
Interest payments on finance lease liabilities					$	10	$	8
Cash payments related to lease liabilities included in financing cash flows:
Principal payments on finance lease liabilities					$	64	$	65

Maturity Analysis of Lease Liabilities

The following table summarizes maturities of lease liabilities as of June 30, 2023:

			Operating Leases (1)
	Finance Leases		Related Party (2)		Non-Related Party		Total Operating		Total
	(in millions)
Remainder of 2023	$	55	$	2	$	45	$	47	$	102
2024	101		4		93		97		198
2025	91		2		90		92		183
2026	75		2		87		89		164
2027	35		2		79		81		116
Thereafter	6		2		297		299		305
Total minimum lease payments	363		14		691		705		1,068
Less: amount representing interest	(36)		(2)		(177)		(179)		(215)
Total lease liabilities	$	327	$	12	$	514	$	526	$	853

_________________________

(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included.

(2) Related party lease payments exclude rent payments due under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets.

As of June 30, 2023 and December 31, 2022, none of the Company's lease agreements contain material residual value guarantees or material restrictive covenants.

Lease Terms and Discount Rates

The weighted-average remaining lease terms and discount rates as of June 30, 2023 and 2022 were as follows, excluding short-term operating leases:

	As of June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	8.1		8.9
Finance leases	3.8		4.5
Weighted-average discount rate
Operating leases	7.1	%	7.0	%
Finance leases	5.8	%	5.5	%

Leases

NOTE 16 — LEASES

The Company is party to various lease agreements for real estate and transportation equipment. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company also assesses whether each lease is an operating or finance lease at the lease commencement date. Rent expense of operating leases is recognized on a straight-line basis over the lease term and includes scheduled rent increases as well as amortization of tenant improvement allowances.

Operating Leases

As of June 30, 2023, the Company is a tenant under various operating leases related to certain of its hubs, vending machines, inspection and reconditioning centers, auction locations with reconditioning capacity, storage, parking and corporate offices. The initial terms expire at various dates between 2023 and 2038. Many of the leases include one or more renewal options ranging from one to twenty years and some contain purchase options.

The Company's operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities on the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 7 — Related Party Transactions for further discussion of operating leases with related parties.

Finance Leases

The Company has finance leases for certain equipment in its transportation fleet. The leases have initial terms of two to five years, some of which include extension options for up to four additional years, and require monthly payments. The Company's finance leases are included in long-term debt on the accompanying unaudited condensed consolidated balance sheets.

Lease Costs and Activity

The Company's lease costs and activity during the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Lease costs:
Finance leases:
Amortization of finance lease assets	$	28	$	24	$	56	$	41
Interest obligations under finance leases	5		5		10		8
Total finance lease costs	$	33	$	29	$	66	$	49
Operating leases:
Fixed lease costs to non-related parties	$	17	$	27	$	35	$	52
Fixed lease costs to related parties	1		1		2		2
Total operating lease costs	$	18	$	28	$	37	$	54
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities to non-related parties					$	53	$	32
Operating lease liabilities to related parties					$	2	$	1
Interest payments on finance lease liabilities					$	10	$	8
Cash payments related to lease liabilities included in financing cash flows:
Principal payments on finance lease liabilities					$	64	$	65

Maturity Analysis of Lease Liabilities

The following table summarizes maturities of lease liabilities as of June 30, 2023:

			Operating Leases (1)
	Finance Leases		Related Party (2)		Non-Related Party		Total Operating		Total
	(in millions)
Remainder of 2023	$	55	$	2	$	45	$	47	$	102
2024	101		4		93		97		198
2025	91		2		90		92		183
2026	75		2		87		89		164
2027	35		2		79		81		116
Thereafter	6		2		297		299		305
Total minimum lease payments	363		14		691		705		1,068
Less: amount representing interest	(36)		(2)		(177)		(179)		(215)
Total lease liabilities	$	327	$	12	$	514	$	526	$	853

_________________________

(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included.

(2) Related party lease payments exclude rent payments due under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets.

As of June 30, 2023 and December 31, 2022, none of the Company's lease agreements contain material residual value guarantees or material restrictive covenants.

Lease Terms and Discount Rates

The weighted-average remaining lease terms and discount rates as of June 30, 2023 and 2022 were as follows, excluding short-term operating leases:

	As of June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	8.1		8.9
Finance leases	3.8		4.5
Weighted-average discount rate
Operating leases	7.1	%	7.0	%
Finance leases	5.8	%	5.5	%

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 17 — COMMITMENTS AND CONTINGENCIES

Accrued Limited Warranty

As part of its retail strategy, the Company provides a 100-day or 4,189-mile limited warranty to customers to repair certain broken or defective components of each retail vehicle sold. As such, the Company accrues for such repairs based on actual claims incurred to-date and repair reserves based on historical trends. The liability was $16 million and $19 million as of June 30, 2023 and December 31, 2022, respectively, and is included in accounts payable and other accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

Purchase Obligations

The Company has purchase obligations for certain customary services related to operating a wholesale auction business of $155 million in aggregate over the next six years, as of June 30, 2023. These purchase obligations are recorded as liabilities when the services are rendered.

Legal Matters

From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business for a publicly traded auto retail and e-commerce company. For example, the Company is currently a party to legal and regulatory disputes, including putative class action and shareholder derivative lawsuits, alleging, among other things, the violation of federal securities and antitrust laws and state laws regarding consumer protection, stockholders' rights and the titling and registration of vehicles sold to its customers. These disputes include, but are not limited to, In re Carvana Co. Securities Litigation, United States District Court for the District of Arizona (Case No. CV-22-2126-PHX-MTL); City of Warwick Retirement System v. Carvana Co., et al., Maricopa County, Arizona Superior Court (Case No. CV2022-013054); In re Carvana Co. Stockholders Litigation, Delaware Chancery Court (Case No. 2020-0415-KSJM); Neal Vestal v. Carvana Co., et al., Delaware Chancery Court (Case No. 2022-0609-KSJM); Taiae Bradley v. Carvana, LLC, United States District Court for the Eastern District of Pennsylvania (Case No. 2:22-cv-02525-MMB); Dana Jennings, et al. v. Carvana, LLC, United States District Court for the Eastern District of Pennsylvania (Case No. 5:21-cv-05400-EGS); Mountaineer Motors of Lenoir, LLC v. Carvana, LLC, et al., United States District Court for the Western District of North Carolina (Case No. 5:22-cv-00171); Syretta Harvin et al. v. Carvana, LLC et al., United States District Court for the Eastern District of Pennsylvania (Case No. 2:23-cv-02068-MRP); and In re Carvana Co. Stockholders Litigation, Delaware Chancery Court (Case No. 2023-0600-KSJM). Brittany Fischer v. Carvana, LLC, Lee County, Florida Circuit Court (Case No. 2022-007133-CA-01) was settled for an immaterial amount in the second quarter of 2023.

The Company believes the claims in these matters are not material or are without merit and intends to defend the matters vigorously. The Company also continues to work closely with government agencies to respond to their requests. It is not possible to determine the probability of loss or estimate damages, if any, for any of the above matters, and therefore, the Company has not established reserves for any of these proceedings. If the Company determines that a loss is both probable and reasonably estimable, the Company will record a liability, and, if the liability is material, disclose the amount of the liability reserved. If an unfavorable ruling or development were to occur, there exists the possibility of a material adverse impact on the Company's business, results of operations, financial condition or cash flows.

Future litigation may be necessary to defend the Company and its partners by determining the scope, enforceability and validity of third party proprietary rights or to establish its proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE 18 — FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company holds certain assets that are required to be measured at fair value on a recurring basis, and beneficial interests in securitizations for which it elected the fair value option. A description of the fair value hierarchy and the Company's methodologies are included in Note 2 — Summary of Significant Accounting Policies in its most recent Annual Report on Form 10-K.

The following tables are a summary of fair value measurements and hierarchy level at June 30, 2023 and December 31, 2022:

	June 30, 2023
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	357	$	357	$	—	$	—
Beneficial interests in securitizations	335		—		—		335

	December 31, 2022
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	272	$	272	$	—	$	—
Beneficial interests in securitizations	321		—		—		321

_________________________

(1) Consists of highly liquid investments with original maturities of three months or less and classified in cash and cash equivalents and restricted cash in the accompanying unaudited condensed consolidated balance sheets.

As of June 30, 2023 and December 31, 2022, the Company has purchase price adjustment receivables of $14 million and $37 million, respectively, which are carried at fair value and classified as other assets in the accompanying consolidated balance sheets. Under the MPSA, the purchaser will make future cash payments to the Company based on the performance of the finance receivables sold. The fair value of the purchase price adjustment receivables are determined based on the extent to which the Company’s estimated performance of the underlying finance receivables exceeds a mutually agreed upon performance threshold of the underlying finance receivables as of measurement dates specified in the MPSA. The Company develops its estimate of future cumulative losses based on the historical performance of finance receivables it originated with similar characteristics as well as general macro-economic trends. The Company then utilizes a discounted cash flow model to calculate the present value of the expected future payment amounts. Due to the lack of observable market data these receivables are classified as Level 3. The adjustments to the fair value of the purchase price adjustment receivables were a gain of less than $1 million and $3 million during the three months ended June 30, 2023 and 2022, respectively, and a gain of $2 million and $6 million during the six months ended June 30, 2023 and 2022, respectively, and are reflected in other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations.

Beneficial Interests in Securitizations

Beneficial interests in securitizations include notes and certificates of the securitization trusts, the same securities as issued to other investors as described in Note 9 — Securitizations and Variable Interest Entities. Beneficial interests in securitizations are initially treated as Level 2 assets when the securitization transaction occurs in close proximity to the end of the period and there is a lack of observable changes in the economic inputs. When the securitization transaction does not occur in close proximity to the end of the period and there have been observable changes in the economic inputs, beneficial interests in securitizations are classified as Level 3.

The Company's beneficial interests in securitizations include rated notes and certificates and other assets, all of which are classified as Level 3 due to the lack of observable market data. The Company determines the fair value of its rated notes based on non-binding broker quotes. The non-binding broker quotes are based on models that consider the prevailing interest rates, recent market transactions, and current business conditions. The Company determines the fair value of its certificates and other assets using a combination of non-binding market quotes and internally developed discounted cash flow models. The discounted cash flow models use discount rates based on prevailing interest rates and the characteristics of the specific instruments. As of June 30, 2023 and December 31, 2022, the range of discount rates were 6.4% to 10.9% and 7.1% to 11.3%, respectively. Significant increases or decreases in the inputs to the models could result in a significantly higher or lower fair value measurement. The Company elected the fair value option on its beneficial interests in securitizations, which allows it to

recognize changes in the fair value of these assets in the period the fair value changes. Changes in the fair value of the beneficial interests in securitizations are reflected in other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations.

For beneficial interests in securitizations measured at fair value on a recurring basis, the Company's transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period on a quarterly basis. There were no transfers out of Level 3 during the three and six months ended June 30, 2023 or 2022.

In December 2021, the Company began selling certain of its beneficial interests in securitizations that meet the criteria for sale set forth in the Risk Retention Rules. For the three and six months ended June 30, 2023, the Company sold beneficial interests in securitizations for a purchase price totaling $8 million. For the three and six months ended June 30, 2022, the Company sold beneficial interests in securitizations for a purchase price totaling $2 million and $3 million, respectively.

The following table presents additional information about Level 3 beneficial interests in securitizations measured at fair value on a recurring basis for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Opening Balance	$	312	$	416	$	321	$	382
Received in securitization transactions	69		37		92		124
Payments received	(42)		(50)		(75)		(92)
Change in fair value	4		—		5		(10)
Sales of beneficial interests	(8)		(2)		(8)		(3)
Ending Balance	$	335	$	401	$	335	$	401

Fair Value of Financial Instruments

The carrying amounts of restricted cash, accounts receivable, accounts payable and accrued liabilities, and accounts payable to related party approximate fair value due to their respective short-term maturities. The carrying value of the short-term revolving facilities were determined to approximate fair value due to their short-term duration and variable interest rates that approximate prevailing interest rates as of each reporting period. The carrying value of notes payable and sale leasebacks were determined to approximate fair value as each of the transactions were entered into at prevailing interest rates during each respective period and they have not materially changed as of or during the periods ended June 30, 2023 and December 31, 2022. The carrying value of the financing of beneficial interests in securitizations was determined to approximate fair value because in the event of a decline in the fair value of the pledged collateral of the financing, the repurchase price of the pledged collateral will be increased by the amount of the decline.

The fair value of the Senior Notes, which are not carried at fair value on the accompanying unaudited condensed consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices for the identical liability. The fair value of the Senior Notes as of June 30, 2023 and December 31, 2022 was as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value, net of unamortized debt issuance costs	$	5,655	$	5,649
Fair value	4,186		2,533

The fair value of finance receivables, which are not carried at fair value on the accompanying unaudited condensed consolidated balance sheets, was determined utilizing the estimated sales price based on the historical experience of the

Company. Such fair value measurement of the finance receivables, net is considered Level 2 under the fair value hierarchy. The carrying value and fair value of the finance receivables as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value	$	1,098	$	1,334
Fair value	1,181		1,437

Investment in Equity Securities

In October 2021, the Company purchased Series A convertible preferred shares in Root, Inc. ("Root"), an equity security that does not have a readily determinable fair value. The Company elected to measure this investment using a measurement alternative pursuant to the accounting standards and recorded the investment at its cost of $126 million which will subsequently be adjusted for observable price changes. The Company considered all relevant transactions since the date of its investment and has not recorded any impairments or upward or downward adjustments to the carrying amount of its investment in Root, as there have not been changes in the observable price of its equity interest through June 30, 2023. On August 12, 2022, Root effected a reverse stock split of its Class A common stock and Class B common stock at a ratio of 18:1, whereby each 18 shares of Root’s Class A common stock and Class B common stock were automatically combined into one share of Class A common stock or Class B common stock, respectively (the “Reverse Stock Split”). The shares of Root's Class A common stock issuable to the Company on the conversion of the Series A convertible preferred shares were adjusted proportionally.

Also in October 2021, the Company entered into a commercial agreement with Root, under which the Root auto insurance products were to be embedded into the Company's e-commerce platform. In accordance with the provisions of the commercial agreement, the Company received eight tranches of warrants to purchase shares of Root's Class A common stock (the "Warrants"). On September 1, 2022, the integrated auto insurance solution, which embedded into the Company's e-commerce platform (the "Integrated Platform"), was completed. One tranche of the Warrants, consisting of 2.4 million shares, as adjusted pursuant to the Reverse Stock Split, became exercisable upon completion of the Integrated Platform, and is considered a derivative instrument. The other tranches vest based on insurance product sales through the Integrated Platform and are considered derivative instruments. The Company used a Monte Carlo simulation to estimate the fair value of these Warrants, which are classified as Level 3. At contract inception, the Company recognized an asset of $30 million for the Warrants and deferred revenue, classified in other assets and other liabilities, respectively in the accompanying consolidated balance sheets. During 2022, the Company determined it was probable that the volume of insurance products required to earn the Warrants would be achieved and recorded an additional $75 million of Warrants and deferred revenue based on the contract inception date fair value as determined by the Monte Carlo simulation. The Warrants and deferred revenue are classified in other assets and other liabilities, respectively, in the accompanying unaudited condensed consolidated balance sheets.

The following table presents changes in the Company's Level 3 Warrants measured at fair value:

	2023
	(in millions)
Balance at December 31, 2022	$	2
Total unrealized loss (1)	(1)
Balance at June 30, 2023	$	1

(1) The Company recognized the decrease in fair value in relation to the Warrants to acquire Root's Class A common stock through other (income) expense, net in the accompanying consolidated statements of operations. The Company recognized a

decrease in fair value of zero and $1 million during the three and six months ended June 30, 2023, respectively, and less than $1 million and $5 million during the three and six months ended June 30, 2022, respectively.

Derivative Instruments

The Company utilizes non-designated cash flow hedges including interest rate cap agreements to minimize its exposure to interest rate fluctuations on variable rate debt borrowings. Interest rate caps provide that the counterparty will pay the purchaser at the end of each contractual period in which the index interest rate exceeds the contractually agreed upon cap rate.

In the first quarter of 2023, the Company entered into one interest rate cap agreement to limit exposure to interest rate risk on variable rate debt associated with finance receivables. The interest rate cap has a cap rate of 5.0% with a notional amount of $364 million, expiring in July 2027. In the second quarter of 2023, the Company entered into a second interest rate cap agreement to limit exposure to interest rate risk on variable rate debt associated with finance receivables. The interest rate cap has a cap rate of 5.0% and a notional amount of $236 million, expiring in April 2027.

The fair value of the Company's interest rate caps is impacted by the credit risk of both the Company and its counterparty. The Company has an agreement with its derivative financial instrument counterparty that contains provisions providing that if the Company defaults on the indebtedness associated with its derivative financial instrument, then the Company could also be declared in default on its derivative financial instrument obligation. In addition, the Company minimizes nonperformance risk on its derivative instrument by evaluating the creditworthiness of its counterparty, which is limited to major banks and financial institutions.

The Company does not apply hedge accounting to the interest rate caps and records all mark-to-market adjustments directly to other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations. The fair value of the interest rate caps is categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data. For the three and six months ended June 30, 2023, the Company recognized mark-to-market adjustments of $2 million and $1 million of income, respectively, within other (income) expense, net in the accompanying unaudited condensed consolidated statements of operations. As of June 30, 2023, the fair value of the interest rate caps is recorded in the accompanying unaudited condensed consolidated balance sheets within other current assets and was $12 million.

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE 19 — SUPPLEMENTAL CASH FLOW INFORMATION

The following table summarizes supplemental cash flow information for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022
	(in millions)
Supplemental cash flow information:
Cash payments for interest	$	313	$	129
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	3	$	49
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	321
Property and equipment acquired under finance leases	$	36	$	232
Equity-based compensation expense capitalized to property and equipment	$	5	$	4
Fair value of beneficial interests received in securitization transactions	$	92	$	124
Reductions of beneficial interests in securitizations and associated long-term debt	$	53	$	70

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the accompanying unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the accompanying unaudited condensed consolidated statements of cash flows for all periods presented:

	June 30, 2023		December 31, 2022		June 30, 2022
	(in millions)
Cash and cash equivalents	$	541	$	434	$	1,047
Restricted cash	136		194		150
Total cash, cash equivalents and restricted cash	$	677	$	628	$	1,197

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Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

NOTE 20 — SUBSEQUENT EVENTS

Transaction Support Agreement

On July 17, 2023, the Company entered into a Transaction Support Agreement with an ad hoc group of holders of Senior Notes representing over 90% of the aggregate principal amount of outstanding Senior Notes (the "Ad Hoc Group"), Carvana Group, LLC, and the Garcia Parties.

Pursuant to the Transaction Support Agreement, subject to the terms and conditions set forth therein, the Ad Hoc Group has agreed to support, approve, implement and enter into definitive documents with respect to the following transactions: (i) the new issuance through one or more equity offerings for aggregate gross proceeds of at least $350 million of Class A and/or LLC Units (together the "New Equity"), (ii) the Exchange Offers; (iii) concurrently with, but separate from the Exchange Offers, the commencement by the Company of a cash tender offer to purchase certain 2025 Notes; (iv) the Consent Solicitations and (v) with respect to the Garcia Parties only, the purchase of their pro rata portion of any offering on New Equity (such commitment not to exceed $126 million); provided that such commitment shall automatically terminate on the date the Company raises $700 million of gross proceeds from the issuance of New Equity.

The Transaction Support Agreement may be terminated under various circumstances.

At-the-Market Offering Program

On July 19, 2023, the Company entered into an agreement (the "Distribution Agreement") with Citigroup Global Markets Inc. and Moelis & Company LLC (the "Sales Agents"), whereby the Company may sell up to the greater of (i) shares of Class A common stock representing an aggregate offering price of $1.0 billion, or (ii) an aggregate number of 35 million shares of Class A common stock, from time to time, through an "at the market offering" program.

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net loss attributable to Carvana Co. Class A common stockholders, basic and diluted	$ (58)	$ (238)	$ (218)	$ (498)

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Insider Trading Arrangements	3 Months Ended	6 Months Ended
	Jun. 30, 2023 shares	Jun. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Paul Breaux [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		10b5-1 Plan"). Mr. Breaux's 10b5-1 Plan was adopted on June 11, 2022 and provided for the potential sale of up to 105,000 shares of Class A common stock, including shares obtained from the conversion of Carvana Group, LLC Class B common units (the "B Units") into shares of Class A common stock. Following the termination of the previous 10b5-1 Plan, on June 9, 2023. Mr. Breaux also entered into a new 10b5-1 Plan. Mr. Breaux's new 10b5-1 Plan provides for the potential sale of up to 445,000 shares of Class A common stock, including shares obtained from the exercise of vested stock options and the conversion of B Units covered by the 10b5-1 Plan, between September 8, 2023 and December 31, 2025.
Name	Paul Breaux
Title	Vice President, General Counsel, and Secretary
Rule 10b5-1 Arrangement Terminated	true
Non-Rule 10b5-1 Arrangement Terminated	false
Daniel Gill [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Daniel Gill, the Company's Chief Product Officer entered into a 10b5-1 Plan. Mr. Gill's 10b5-1 Plan provides for the potential sale of up to 432,522 shares of Class A common stock, including shares obtained from the exercise of vested stock options covered by the 10b5-1 Plan, between September 13, 2023 and August 31, 2025.
Name	Daniel Gill
Title	Chief Product Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	June 14, 2023
Paul Breaux Trading Arrangement, June 11, 2022 [Member] | Paul Breaux [Member]
Trading Arrangements, by Individual
Adoption Date	June 11, 2022
Aggregate Available	105,000	105,000
Paul Breaux Trading Arrangement, June 9th, 2023 [Member] | Paul Breaux [Member]
Trading Arrangements, by Individual
Adoption Date	June 9, 2023
Aggregate Available	445,000	445,000
Daniel Gill Trading Arrangement, Maximum [Member] | Daniel Gill [Member]
Trading Arrangements, by Individual
Aggregate Available	432,522	432,522

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K filed on February 23, 2023.

Use of Estimates

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company's assets and liabilities and the results of operations.

Recently Issued But Not Yet Adopted Accounting Standards

Recently Issued But Not Yet Adopted Accounting Standards

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. ASU 2023-01 clarifies the accounting for leasehold improvements associated with common control leases. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those years. The Company does not expect the update to have a material effect on its consolidated financial statements.

Net (Loss) Earnings Per Share

Basic and diluted net loss per share is computed by dividing the net loss attributable to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive shares.

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Summary of Identifiable Assets and Liabilities Assumed and Intangible Assets Acquired

The following table summarizes the allocation of the purchase price consideration to identifiable assets acquired and liabilities assumed as of December 31, 2022:

	Purchase Price Allocation
	(in millions)
Assets Acquired
Current assets	$	208
Property and equipment	1,281
Operating lease right-of-use assets	188
Intangible assets	79
Other assets	1
Total Assets Acquired	1,757
Liabilities Assumed
Current liabilities	233
Operating lease liabilities	167
Total Liabilities Assumed	400
Net Assets Acquired	1,357
Purchase price consideration	2,195
Goodwill	$	838

Identifiable intangible assets acquired consist of the following:

	Fair Value		Useful Life
Customer relationships	$	50	10 years
Developed technology	$	29	3 years

Summary of Unaudited Pro Forma Results

The following unaudited pro forma combined results of operations information for the three and six months ended June 30, 2022 have been prepared as if the ADESA Acquisition occurred on January 1, 2021:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Revenues	$	3,968	$	7,680
Net loss	(485)		(1,075)
Net loss attributable to non-controlling interests	(216)		(478)
Net loss attributable to Carvana Co.	$	(269)	$	(597)
Net loss per share of Class A common stock - basic and diluted	$	(2.54)	$	(5.65)
Weighted-average shares of Class A common stock - basic and diluted	105,743		105,731

The unaudited pro forma combined results of operations information reflect the following pro forma adjustments:

	Unaudited
	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Interest expense	$	36	$	123
Lease expense	$	1	5
Depreciation and amortization expense	$	7	13
Intercompany revenues and cost of sales	$	(2)	$	(7)

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

The following table summarizes property and equipment, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Land and site improvements	$	1,331	$	1,331
Buildings and improvements	1,317		1,267
Transportation fleet	625		673
Software	284		245
Furniture, fixtures and equipment	140		158
Total property and equipment excluding construction in progress	3,697		3,674
Less: accumulated depreciation and amortization on property and equipment	(652)		(564)
Property and equipment excluding construction in progress, net	3,045		3,110
Construction in progress	81		134
Property and equipment, net	$	3,126	$	3,244

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Schedule of Intangible Assets and Goodwill

The following table summarizes intangible assets, net as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Intangible assets:
Customer relationships	$	50	$	50
Developed technology	41		41
Non-compete agreements	—		1
Intangible assets, acquired cost	91		92
Less: accumulated amortization	(30)		(22)
Intangible assets, net	$	61	$	70

Schedule of Anticipated Future Annual Amortization Expense

The anticipated annual amortization expense to be recognized in future years as of June 30, 2023, is as follows:

	Expected Future Amortization
	(in millions)
Remainder of 2023	$	9
2024	18
2025	14
2026	7
2027	5
Thereafter	8
Total	$	61

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Accounts Payable and Other Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Summary of Accounts Payable and Other Accrued Liabilities

The following table summarizes accounts payable and other accrued liabilities as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in millions)
Accounts payable, including $6 and $16, respectively, due to related parties	$	255	$	232
Accrued interest expense	96		99
Sales taxes and vehicle licenses and fees	83		76
Accrued compensation and benefits	52		65
Reserve for returns and cancellations	58		60
Customer deposits	39		23
Accrued advertising costs	4		7
Accrued property and equipment	3		10
Other accrued liabilities	149		205
Total accounts payable and other accrued liabilities	$	739	$	777

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Securitizations and Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities Total Exposure and Amortized Cost and Fair Value of Securities Available for Sale

The following table summarizes the carrying value and total exposure to losses of its assets related to unconsolidated VIEs with which the Company has continuing involvement, but is not the primary beneficiary at June 30, 2023 and December 31, 2022. Total exposure represents the estimated loss the Company would incur under severe, hypothetical circumstances, such as if the value of the interests in the securitization trusts and any associated collateral declined to zero. The Company believes the possibility of this is remote. As such, the total exposure presented below is not an indication of the Company's expected losses.

	June 30, 2023				December 31, 2022
	Carrying Value		Total Exposure		Carrying Value		Total Exposure
	(in millions)
Rated notes	$	266	$	266	$	252	$	252
Certificates and other assets	69		69		69		69
Total unconsolidated VIEs	$	335	$	335	$	321	$	321

The amortized cost and fair value of securities available for sale as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Rated notes	$	278	$	266	$	268	$	252
Certificates and other assets	54		69		43		69
Total securities available for sale	$	332	$	335	$	311	$	321

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Debt Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt Instruments, Excluding Finance Leases

Debt instruments, excluding finance leases, which are discussed in Note 16 — Leases, as of June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in millions)
Asset-based financing:
Floor plan facility	$	557	$	569
Finance receivable facilities	604		965
Financing of beneficial interest in securitizations	278		268
Notes payable	2		3
Real estate financing	484		486
Total asset-based financing	1,925		2,291
Senior notes	5,725		5,725
Total debt	7,650		8,016
Less: current portion	(1,270)		(1,638)
Less: unamortized debt issuance costs (1)	(75)		(82)
Total included in long-term debt, net	$	6,305	$	6,296

(1) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the accompanying unaudited condensed consolidated balance sheets. Unamortized debt issuance costs related to revolving debt arrangements are presented within other assets on the accompanying unaudited condensed consolidated balance sheets and not included here.

The following table summarizes components of the Company's senior unsecured notes:

	June 30, 2023		December 31, 2022		Interest Rate
	(in millions, except percentages)
2025 Senior Unsecured Notes due October 1, 2025 ("2025 Notes")	$	500	$	500	5.625	%
2027 Senior Unsecured Notes due April 15, 2027 ("2027 Notes")	600		600		5.500	%
2028 Senior Unsecured Notes due October 1, 2028 ("2028 Notes")	600		600		5.875	%
2029 Senior Unsecured Notes due September 1, 2029 ("2029 Notes")	750		750		4.875	%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes")	3,275		3,275		10.250	%
Total principal amount	5,725		5,725
Less: unamortized debt issuance cost	(70)		(76)
Total debt	$	5,655	$	5,649

Schedule of Components of Senior Unsecured Notes

Debt instruments, excluding finance leases, which are discussed in Note 16 — Leases, as of June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in millions)
Asset-based financing:
Floor plan facility	$	557	$	569
Finance receivable facilities	604		965
Financing of beneficial interest in securitizations	278		268
Notes payable	2		3
Real estate financing	484		486
Total asset-based financing	1,925		2,291
Senior notes	5,725		5,725
Total debt	7,650		8,016
Less: current portion	(1,270)		(1,638)
Less: unamortized debt issuance costs (1)	(75)		(82)
Total included in long-term debt, net	$	6,305	$	6,296

(1) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the accompanying unaudited condensed consolidated balance sheets. Unamortized debt issuance costs related to revolving debt arrangements are presented within other assets on the accompanying unaudited condensed consolidated balance sheets and not included here.

The following table summarizes components of the Company's senior unsecured notes:

	June 30, 2023		December 31, 2022		Interest Rate
	(in millions, except percentages)
2025 Senior Unsecured Notes due October 1, 2025 ("2025 Notes")	$	500	$	500	5.625	%
2027 Senior Unsecured Notes due April 15, 2027 ("2027 Notes")	600		600		5.500	%
2028 Senior Unsecured Notes due October 1, 2028 ("2028 Notes")	600		600		5.875	%
2029 Senior Unsecured Notes due September 1, 2029 ("2029 Notes")	750		750		4.875	%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes")	3,275		3,275		10.250	%
Total principal amount	5,725		5,725
Less: unamortized debt issuance cost	(70)		(76)
Total debt	$	5,655	$	5,649

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Non-Controlling Interest (Tables)

6 Months Ended

Jun. 30, 2023

Noncontrolling Interest [Abstract]

Summary of Effects of Changes in Ownership in Carvana Group on Equity

	Six Months Ended June 30,
	2023		2022
	(in millions)
Transfers from non-controlling interests:
Decrease as a result of issuances of Class A common stock	$	—	$	(554)
Increase as a result of exchanges of LLC Units	$	1	$	1
Total transfers from non-controlling interests	$	1	$	(553)

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Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Equity-Based Compensation Expense

A summary of equity-based compensation recognized during the three and six months ended June 30, 2023 and 2022 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Restricted Stock Units and Awards excluding those granted in relation to the CEO Milestone Gift	$	19	$	8	$	33	$	17
Restricted Stock Units granted in relation to the CEO Milestone Gift	—		6		(1)		37
Options	4		4		8		7
Total equity-based compensation	23		18		40		61
Equity-based compensation capitalized to property and equipment	(3)		(2)		(5)		(4)
Equity-based compensation capitalized to inventory	(1)		(2)		(1)		(15)
Equity-based compensation, net of capitalized amounts	$	19	$	14	$	34	$	42

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Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Summary of the Calculation of Basic and Diluted Net (Loss) Earnings Per Share

The following table presents the calculation of basic and diluted net loss per share during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions, except number of shares, which are reflected in thousands, and per share amounts)
Numerator:
Net loss	$	(105)	$	(439)	$	(391)	$	(945)
Net loss attributable to non-controlling interests	(47)		(201)		(173)		(447)
Net loss attributable to Carvana Co. Class A common stockholders, basic and diluted	$	(58)	$	(238)	$	(218)	$	(498)
Denominator:
Weighted-average shares of Class A common stock outstanding	106,247		101,450		106,154		95,773
Nonvested weighted-average restricted stock awards	(25)		—		(37)		—
Weighted-average shares of Class A common stock outstanding, basic and diluted	106,222		101,450		106,117		95,773
Net loss per share of Class A common stock, basic and diluted	$	(0.55)	$	(2.35)	$	(2.05)	$	(5.20)

Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share

The following table presents potentially dilutive securities, as of the end of the period, excluded from the computations of diluted net loss per share of Class A common stock for the three and six months ended June 30, 2023 and 2022.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
	(in thousands)
Options (1)	4,029	1,281	4,029	1,281
Restricted Stock Units and Awards (1)	9,953	74	9,953	74
Class A Units (2)	82,963	82,963	82,963	82,963
Class B Units (2)	988	1,835	856	1,835

_________________________

(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

(2) Represents the weighted-average as-converted LLC units that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive.

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Lease Cost and Activity

The Company's lease costs and activity during the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Lease costs:
Finance leases:
Amortization of finance lease assets	$	28	$	24	$	56	$	41
Interest obligations under finance leases	5		5		10		8
Total finance lease costs	$	33	$	29	$	66	$	49
Operating leases:
Fixed lease costs to non-related parties	$	17	$	27	$	35	$	52
Fixed lease costs to related parties	1		1		2		2
Total operating lease costs	$	18	$	28	$	37	$	54
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities to non-related parties					$	53	$	32
Operating lease liabilities to related parties					$	2	$	1
Interest payments on finance lease liabilities					$	10	$	8
Cash payments related to lease liabilities included in financing cash flows:
Principal payments on finance lease liabilities					$	64	$	65

Schedule of Finance Lease, Maturity

The following table summarizes maturities of lease liabilities as of June 30, 2023:

			Operating Leases (1)
	Finance Leases		Related Party (2)		Non-Related Party		Total Operating		Total
	(in millions)
Remainder of 2023	$	55	$	2	$	45	$	47	$	102
2024	101		4		93		97		198
2025	91		2		90		92		183
2026	75		2		87		89		164
2027	35		2		79		81		116
Thereafter	6		2		297		299		305
Total minimum lease payments	363		14		691		705		1,068
Less: amount representing interest	(36)		(2)		(177)		(179)		(215)
Total lease liabilities	$	327	$	12	$	514	$	526	$	853

_________________________

(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included.

(2) Related party lease payments exclude rent payments due under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets.

Schedule of Operating Lease, Maturity

The following table summarizes maturities of lease liabilities as of June 30, 2023:

			Operating Leases (1)
	Finance Leases		Related Party (2)		Non-Related Party		Total Operating		Total
	(in millions)
Remainder of 2023	$	55	$	2	$	45	$	47	$	102
2024	101		4		93		97		198
2025	91		2		90		92		183
2026	75		2		87		89		164
2027	35		2		79		81		116
Thereafter	6		2		297		299		305
Total minimum lease payments	363		14		691		705		1,068
Less: amount representing interest	(36)		(2)		(177)		(179)		(215)
Total lease liabilities	$	327	$	12	$	514	$	526	$	853

_________________________

(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included.

(2) Related party lease payments exclude rent payments due under the DriveTime Lease Agreement and the DriveTime Hub Lease Agreement for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets.

Schedule of Weighted-Average Remaining Lease Terms and Discount Rates

The weighted-average remaining lease terms and discount rates as of June 30, 2023 and 2022 were as follows, excluding short-term operating leases:

	As of June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	8.1		8.9
Finance leases	3.8		4.5
Weighted-average discount rate
Operating leases	7.1	%	7.0	%
Finance leases	5.8	%	5.5	%

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Carrying Value and Fair Value of Finance Receivables

The following tables are a summary of fair value measurements and hierarchy level at June 30, 2023 and December 31, 2022:

	June 30, 2023
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	357	$	357	$	—	$	—
Beneficial interests in securitizations	335		—		—		335

	December 31, 2022
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Money market funds (1)	$	272	$	272	$	—	$	—
Beneficial interests in securitizations	321		—		—		321

_________________________

(1) Consists of highly liquid investments with original maturities of three months or less and classified in cash and cash equivalents and restricted cash in the accompanying unaudited condensed consolidated balance sheets.

The carrying value and fair value of the finance receivables as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value	$	1,098	$	1,334
Fair value	1,181		1,437

Scheduled of Additional Information of Beneficial Interests in Securitizations

The following table presents additional information about Level 3 beneficial interests in securitizations measured at fair value on a recurring basis for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Opening Balance	$	312	$	416	$	321	$	382
Received in securitization transactions	69		37		92		124
Payments received	(42)		(50)		(75)		(92)
Change in fair value	4		—		5		(10)
Sales of beneficial interests	(8)		(2)		(8)		(3)
Ending Balance	$	335	$	401	$	335	$	401

Schedule of Fair Value Senior Notes

The fair value of the Senior Notes as of June 30, 2023 and December 31, 2022 was as follows:

	June 30, 2023		December 31, 2022
	(in millions)
Carrying value, net of unamortized debt issuance costs	$	5,655	$	5,649
Fair value	4,186		2,533

Schedule of Changes in Warrants

The following table presents changes in the Company's Level 3 Warrants measured at fair value:

	2023
	(in millions)
Balance at December 31, 2022	$	2
Total unrealized loss (1)	(1)
Balance at June 30, 2023	$	1

(1) The Company recognized the decrease in fair value in relation to the Warrants to acquire Root's Class A common stock through other (income) expense, net in the accompanying consolidated statements of operations. The Company recognized a

decrease in fair value of zero and $1 million during the three and six months ended June 30, 2023, respectively, and less than $1 million and $5 million during the three and six months ended June 30, 2022, respectively.

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Summary of Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022
	(in millions)
Supplemental cash flow information:
Cash payments for interest	$	313	$	129
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	3	$	49
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	321
Property and equipment acquired under finance leases	$	36	$	232
Equity-based compensation expense capitalized to property and equipment	$	5	$	4
Fair value of beneficial interests received in securitization transactions	$	92	$	124
Reductions of beneficial interests in securitizations and associated long-term debt	$	53	$	70

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the accompanying unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the accompanying unaudited condensed consolidated statements of cash flows for all periods presented:

	June 30, 2023		December 31, 2022		June 30, 2022
	(in millions)
Cash and cash equivalents	$	541	$	434	$	1,047
Restricted cash	136		194		150
Total cash, cash equivalents and restricted cash	$	677	$	628	$	1,197

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Business Organization - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 class
Subsidiary, Sale of Stock [Line Items]
Number of classes of common ownership interests	2
Carvana Group
Subsidiary, Sale of Stock [Line Items]
Ownership percentage by Carvana Co.	55.80%
Ownership percentage by LLC Unitholders	44.20%

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Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2023	May 31, 2023	Jan. 31, 2023	Jan. 13, 2023
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 300,000,000
MPSA | Consumer Loan
Debt Instrument [Line Items]
Transfer of financial assets accounted for as sales, new total eligible amount to be sold	$ 4,000,000,000			$ 4,000,000,000
Receivable purchase agreement, remaining unused capacity	2,300,000,000
Floor Plan Facility, 18-Month | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	2,000,000,000
Line of credit facility, remaining borrowing capacity	$ 1,400,000,000
SPVANA VI Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 500,000,000

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Business Combinations - Narrative (Details) ft² in Millions, $ in Millions			3 Months Ended		6 Months Ended
	Jun. 30, 2023	May 09, 2022 USD ($) a ft² site	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Acres of land acquired (more than) | a		4,000
ADESA
Business Combination, Separately Recognized Transactions [Line Items]
Percentage of equity interests acquired		100.00%
Consideration transferred		$ 2,200
Number of sites acquired throughout the U.S. | site		56
Square feet of buildings acquired | ft²		6.5
Weighted average amortization period, intangible assets acquired	6 years 1 month 6 days
Goodwill		$ 838					$ 838
Cost of sales			$ 197	$ 103	$ 382	$ 103
Net loss			18	21	36	21
Depreciation and amortization			31	20	62	20
Amortization expense			3	4	8	4
ADESA | Wholesale sales and revenues
Business Combination, Separately Recognized Transactions [Line Items]
Revenue recognized			$ 223	$ 108	$ 434	$ 108

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Business Combinations - Assets Acquired and Liabilities Assumed and Intangible Assets Acquired (Details) - ADESA - USD ($) $ in Millions		12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	May 09, 2022
Assets Acquired
Current assets		$ 208
Property and equipment		1,281
Operating lease right-of-use assets		188
Intangible assets		79
Other assets		1
Total Assets Acquired		1,757
Liabilities Assumed
Current liabilities		233
Operating lease liabilities		167
Total Liabilities Assumed		400
Net Assets Acquired		1,357
Purchase price consideration		2,195
Goodwill		838	$ 838
Useful Life	6 years 1 month 6 days
Customer relationships
Liabilities Assumed
Fair Value		$ 50
Useful Life		10 years
Developed technology
Liabilities Assumed
Fair Value		$ 29
Useful Life		3 years

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Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Business Acquisition [Line Items]
Net loss attributable to Carvana Co.	$ (269)	$ (597)
ADESA
Business Acquisition [Line Items]
Revenues	3,968	7,680
Net loss	(485)	(1,075)
Net loss attributable to non-controlling interests	$ (216)	$ (478)
Net loss per share of Class A common stock - basic (in dollars per share)	$ (2.54)	$ (5.65)
Net loss per share of Class A common stock - diluted (in dollars per share)	$ (2.54)	$ (5.65)
Weighted-average shares of Class A common stock - basic (in shares)	105,743	105,731
Weighted-average shares of Class A common stock - diluted (in shares)	105,743	105,731
Interest expense	$ 36	$ 123
Lease expense	1	5
Depreciation and amortization expense	7	13
Intercompany revenues and cost of sales	$ (2)	$ (7)

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Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,697	$ 3,674
Less: accumulated depreciation and amortization on property and equipment	(652)	(564)
Property and equipment, net	3,126	3,244
Land and site improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	1,331	1,331
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	1,317	1,267
Transportation fleet
Property, Plant and Equipment [Line Items]
Total property and equipment	625	673
Software
Property, Plant and Equipment [Line Items]
Total property and equipment	284	245
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	140	158
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	81	134
Excluding Construction In Progress
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 3,045	$ 3,110

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Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense			$ 183	$ 101
Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 99	$ 85	199	138
Property, Plant and Equipment | Vehicle Inventory
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	13	12	25	21
Property, Plant and Equipment | Selling, general and administrative
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	42	45	86	81
Property, Plant and Equipment | Cost of sales
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	44	28	88	36
Property, Plant and Equipment | Cost of sales, previously capitalized to vehicle inventory
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 18	$ 11	$ 37	$ 18

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Intangible Assets - Summary of Fair Value of Acquired Intangible Assets (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Intangible assets:
Intangible assets, acquired cost	$ 91	$ 92
Total	61	70
Car360
Intangible assets:
Less: accumulated amortization	(30)	(22)
Car360 | Customer relationships
Intangible assets:
Intangible assets, acquired cost	50	50
Car360 | Developed technology
Intangible assets:
Intangible assets, acquired cost	41	41
Car360 | Non-compete agreements
Intangible assets:
Intangible assets, acquired cost	$ 0	$ 1

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Intangible Assets - Narrative (Details) - Car360 - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Amortization expense	$ 4	$ 4	$ 9	$ 4
Useful Life			5 years 6 months

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Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Total	$ 61	$ 70
Car360
Business Acquisition [Line Items]
Remainder of 2023	9
2024	18
2025	14
2026	7
2027	5
Thereafter	$ 8

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Accounts Payable and Other Accrued Liabilities - Summary of Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Payables And Accruals [Line Items]
Accounts payable, including $6 and $16, respectively, due to related parties	$ 255	$ 232
Accrued interest expense	96	99
Sales taxes and vehicle licenses and fees	83	76
Accrued compensation and benefits	52	65
Reserve for returns and cancellations	58	60
Customer deposits	39	23
Accrued advertising costs	4	7
Accrued property and equipment	3	10
Other accrued liabilities	149	205
Total accounts payable and other accrued liabilities	739	777
Related Party
Payables And Accruals [Line Items]
Accounts payable, including $6 and $16, respectively, due to related parties	6	16
Total accounts payable and other accrued liabilities	$ 6	$ 16

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Related Party Transactions - Lease Agreements (Details) $ in Millions	1 Months Ended		3 Months Ended		6 Months Ended
	Mar. 31, 2017	Feb. 28, 2017 renewal_option	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) renewal_option	Jun. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Operating lease, cost			$ 18	$ 28	$ 37	$ 54
Purchase of certain leasehold improvements and equipment					$ 50	361
Building
Related Party Transaction [Line Items]
Operating lease, number of renewal options | renewal_option					1
Building | Maximum
Related Party Transaction [Line Items]
Operating leases, renewal term			20 years		20 years
Related Party | DriveTime Automotive Group, Inc. | Related Party Lease Agreements | Building
Related Party Transaction [Line Items]
Operating lease term	12 months
Termination rights, prior written notice period	60 days
Related Party | DriveTime Automotive Group, Inc. | Lease Agreement for Fully-Operational Inspection and Reconditioning Center | Building | Winder, Georgia
Related Party Transaction [Line Items]
Operating lease term		8 years
Operating lease, number of renewal options | renewal_option		3
Operating leases, renewal term		5 years
Related Party | Verde Investments, Inc. and DriveTime Automotive Group Inc. | Related Party Lease Agreements
Related Party Transaction [Line Items]
Operating lease, cost			$ 1	$ 1	$ 2	$ 2

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Related Party Transactions - Office Leases (Details) $ in Millions	1 Months Ended		3 Months Ended		6 Months Ended
	Dec. 31, 2019 renewal_option	Sep. 30, 2016 renewal_option	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
DriveTime Automotive Group, Inc.
Related Party Transaction [Line Items]
Rent expense | $			$ 1	$ 1	$ 1	$ 1
Verde Investments, Inc.
Related Party Transaction [Line Items]
Rent expense | $			$ 1	$ 1	$ 1	$ 1
Related Party | DriveTime Automotive Group, Inc. | Corporate Headquarters, Office Lease and Subleased Office Space, First Floor
Related Party Transaction [Line Items]
Operating lease term		83 months
Operating lease, number of renewal options | renewal_option		3
Operating leases, renewal term		5 years
Related Party | Verde Investments, Inc. | Office Building Lease | Tempe, Arizona
Related Party Transaction [Line Items]
Operating lease term	10 years
Operating lease, number of renewal options | renewal_option	2
Operating leases, renewal term	5 years

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Related Party Transactions - Wholesale Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	$ 2,968	$ 3,884	$ 5,574	$ 7,381
Wholesale sales and revenues
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	777	704	1,395	1,279
Wholesale sales and revenues | Related Party
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	5	7	10	21
Wholesale sales and revenues | DriveTime Automotive Group, Inc. | Related Party
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	$ 5	$ 7	$ 10	$ 21

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Related Party Transactions - Retail Vehicle Acquisitions and Reconditioning (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Inventory (less than for six months ended 6/30/2023)	$ 1,302		$ 1,302		$ 1,876
Cost of sales, to related parties	2,469	$ 3,488	4,734	$ 6,687
Related Party
Related Party Transaction [Line Items]
Cost of sales, to related parties	1	9	2	18
Used Vehicles | DriveTime Automotive Group, Inc. | Related Party
Related Party Transaction [Line Items]
Inventory (less than for six months ended 6/30/2023)	1	3	1	3
Used Vehicle Sales | DriveTime Automotive Group, Inc. | Related Party
Related Party Transaction [Line Items]
Cost of sales, to related parties	$ 1	$ 9	$ 2	$ 18

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Related Party Transactions - Master Dealer Agreement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	$ 2,968	$ 3,884	$ 5,574	$ 7,381
DriveTime Automotive Group, Inc. | Related Party | Master Dealer Agreement
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties	33	49	68	96
Revenue related to excess cash reserves on contracts	1	1	1	2
General and administrative expense	$ 5	$ 5	$ 9	$ 9

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Related Party Transactions - Profit Sharing Agreement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties (less than)	$ 2,968	$ 3,884	$ 5,574	$ 7,381
Other sales and revenues
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties (less than)	230	218	391	408
DriveTime Automotive Group, Inc. | Other sales and revenues
Related Party Transaction [Line Items]
Net sales and operating revenues, from related parties (less than)	$ 1	$ 1	$ 1	$ 1

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Related Party Transactions - Servicing and Administrative Fees (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
DriveTime Automotive Group, Inc. | Servicing and Administrative Fees | Related Party
Related Party Transaction [Line Items]
General and administrative expense	$ 4	$ 2	$ 8	$ 4

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Related Party Transactions - Aircraft Time Sharing Agreement (Details) - Related Party $ in Millions		1 Months Ended	3 Months Ended		6 Months Ended
	Oct. 22, 2015 aircraft	Feb. 28, 2021	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2017 aircraft
DriveTime Automotive Group, Inc. | Aircraft Time Sharing Agreement | Air Transportation Equipment
Related Party Transaction [Line Items]
Contractual agreement term	12 months
Contractual agreement, perpetual automatic renewal	12 months
Number of allowable days prior to contract termination with written notice	30 days
DriveTime Automotive Group, Inc. | Shared Services Agreement with DriveTime
Related Party Transaction [Line Items]
Number of allowable days prior to contract termination with written notice		30 days
Verde Investments, Inc. | Aircraft Time Sharing Agreement | Air Transportation Equipment
Related Party Transaction [Line Items]
Reimbursement expense (less than) | $			$ 1	$ 1	$ 1	$ 1
Verde Investments, Inc. | DriveTime Automotive Group, Inc. | Aircraft Time Sharing Agreement | Air Transportation Equipment
Related Party Transaction [Line Items]
Number of aircrafts | aircraft	2						2

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Related Party Transactions - Shared Services Agreement with DriveTime (Details) - DriveTime Automotive Group, Inc. - Related Party - Shared Services Agreement with DriveTime - USD ($) $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 28, 2021	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Number of allowable days prior to contract termination with written notice	30 days
Number of allowable days prior to contract termination with written notice from service provider	90 days
Payments to acquire GAP waiver insurance policy (less than)		$ 1	$ 1	$ 1	$ 1

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Related Party Transactions - Accounts Payable Due to Related Party (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Accounts payable and accrued liabilities, due to related parties	$ 739	$ 777
Related Party
Related Party Transaction [Line Items]
Accounts payable and accrued liabilities, due to related parties	$ 6	$ 16

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Related Party Transactions - Contributions of Class A Common Shares From Ernest Garcia III (Details) - Contribution Agreement, CEO Milestone Gift - Related Party - USD ($)		3 Months Ended			6 Months Ended
	Jan. 05, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Chief Executive Officer
Related Party Transaction [Line Items]
Vesting period	2 years
Restricted Stock Units
Related Party Transaction [Line Items]
Contribution of Class A common stock from related party, fee charged	$ 0
Restricted Stock Units | Chief Executive Officer
Related Party Transaction [Line Items]
Shares granted during period, per employee (in shares)				23
Shares granted during period, (in shares)	435,035
Shares vested during period (in shares)		15,778	14,099		31,625	113,206
Class A Common Stock | Chief Executive Officer
Related Party Transaction [Line Items]
Stock contribution commitment, shares per employee (in shares)	23

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Finance Receivable Sale Agreements (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) agreementType	Jun. 30, 2022 USD ($)	Jan. 13, 2023 USD ($)
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Number of agreement types | agreementType			2
Consumer Loan | MPSA
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Transfer of financial assets accounted for as sales, new total eligible amount to be sold	$ 4,000,000,000		$ 4,000,000,000		$ 4,000,000,000
Receivable purchase agreement, remaining unused capacity	2,300,000,000		2,300,000,000
Principal balances of finance receivables sold	1,000,000,000	$ 1,300,000,000	1,700,000,000	$ 1,800,000,000
Consumer Loan | Master Purchase Sale Agreement, 2017 Master Transfer Agreement and Other Partners
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Gain on loan sales	150,000,000	130,000,000	214,000,000	235,000,000
Securitization Transaction
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Principal balances of finance receivables sold	$ 900,000,000	$ 600,000,000	$ 1,300,000,000	$ 2,000,000,000

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Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Variable Interest Entity [Line Items]
Beneficial interests in securitizations	$ 335	$ 321
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Beneficial interests in securitizations	$ 335	$ 321

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Securitizations and Variable Interest Entities - Schedule of Expected Losses (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Variable Interest Entity [Line Items]
Carrying Value	$ 335	$ 321
Total Exposure	335	321
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Carrying Value	335	321
Rated notes | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Carrying Value	266	252
Total Exposure	266	252
Certificates and other assets | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Carrying Value	69	69
Total Exposure	$ 69	$ 69

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Securitizations and Variable Interest Entities - Schedule of Cost and Fair Value of Securities (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Variable Interest Entity [Line Items]
Amortized Cost	$ 332	$ 311
Fair Value	335	321
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Fair Value	335	321
Rated notes | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Amortized Cost	278	268
Fair Value	266	252
Certificates and other assets | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Amortized Cost	54	43
Fair Value	$ 69	$ 69

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Debt Instruments - Schedule of Debt Instruments, Excluding Finance Leases (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total debt	$ 7,650	$ 8,016
Total asset-based financing	1,925	2,291
Less: current portion	(1,270)	(1,638)
Less: unamortized debt issuance cost	(75)	(82)
Total included in long-term debt, net	6,305	6,296
Financing of beneficial interest in securitizations
Debt Instrument [Line Items]
Total debt	278	268
Real estate financing
Debt Instrument [Line Items]
Total debt	484	486
Senior notes
Debt Instrument [Line Items]
Less: unamortized debt issuance cost	(70)	(76)
Floor plan facility | Line of Credit
Debt Instrument [Line Items]
Total debt	557	569
Finance receivable facilities | Line of Credit
Debt Instrument [Line Items]
Total debt	604	965
Notes payable | Notes payable
Debt Instrument [Line Items]
Total debt	2	3
Senior notes | Senior notes
Debt Instrument [Line Items]
Total debt	$ 5,725	$ 5,725

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Debt Instruments - Floor Plan Facility (Details) - USD ($)		1 Months Ended
	Sep. 22, 2022	Nov. 30, 2019	Jun. 30, 2023	Jan. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity (up to)				$ 300,000,000
Line of credit, outstanding			$ 1,161,000,000		$ 1,534,000,000
Held in restricted cash			136,000,000		194,000,000	$ 150,000,000
Floor plan facility | Line of Credit
Line of Credit Facility [Line Items]
Outstanding balance, days held in inventory threshold		150 days
Outstanding balance, held in inventory, percentage of original principal amount due		10.00%
Outstanding balance, held in inventory, original principal amount, threshold		50.00%
Outstanding balance, held in inventory, wholesale value, threshold		50.00%
Deposit required under floor plan facility, percentage of principal balance		12.50%
Floor Plan Facility, 12-Month | Line of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity (up to)	$ 2,200,000,000
Line of credit, outstanding					569,000,000
Line of credit facility, remaining borrowing capacity					1,600,000,000
Held in restricted cash					$ 71,000,000
Interest rate					3.57%
Floor Plan Facility, 12-Month | Line of Credit | Prime Rate
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	1.00%
Floor Plan Facility, 18-Month | Line of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity (up to)			2,000,000,000
Current borrowing capacity	$ 2,000,000,000
Line of credit, outstanding			557,000,000
Line of credit facility, remaining borrowing capacity			1,400,000,000
Held in restricted cash			$ 70,000,000
Interest rate			8.00%

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Debt Instruments - Active Finance Receivable Facilities (Details) - USD ($)	Jun. 30, 2023	May 31, 2023	Jan. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Oct. 31, 2021	Apr. 30, 2021	Feb. 29, 2020	Jan. 31, 2020
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 300,000,000
Line of credit, outstanding	$ 1,161,000,000			$ 1,534,000,000
Held in restricted cash	136,000,000			194,000,000	$ 150,000,000
Revolving Credit Facility | SPVANA I Credit Facility
Debt Instrument [Line Items]
Current commitment											$ 500,000,000
Revolving Credit Facility | SPVANA II Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity							$ 600,000,000			$ 500,000,000
Revolving Credit Facility | SPVANA III Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity							$ 600,000,000		$ 500,000,000
Revolving Credit Facility | SPVANA IV Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity								$ 350,000,000
Revolving Credit Facility | SPVANA V Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 500,000,000
Revolving Credit Facility | SPVANA VI Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 500,000,000
Revolving Credit Facility | Finance receivable facilities
Debt Instrument [Line Items]
Held in restricted cash	24,000,000			36,000,000
Revolving Credit Facility | All SPVANA Credit Facilities
Debt Instrument [Line Items]
Line of credit, outstanding	604,000,000			965,000,000
Line of credit facility, remaining borrowing capacity	$ 1,900,000,000			$ 1,600,000,000
Interest rate	6.78%			2.93%

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Debt Instruments - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Less: unamortized debt issuance cost	$ (75)	$ (82)
Senior notes
Debt Instrument [Line Items]
Total principal amount	5,725	5,725
Less: unamortized debt issuance cost	(70)	(76)
Total debt	5,655	5,649
2025 Senior Unsecured Notes ("2025 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 500	500
Interest Rate	5.625%
2027 Senior Unsecured Notes ("2027 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 600	600
Interest Rate	5.50%
2028 Senior Unsecured Notes ("2028 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 600	600
Interest Rate	5.875%
2029 Senior Unsecured Notes ("2029 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 750	750
Interest Rate	4.875%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 3,275	$ 3,275
Interest Rate	10.25%

XML

Debt Instruments - Long-Term Debt (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jul. 17, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Notes payable, current portion	$ 199		$ 201
Beneficial interests in securitization, pledged assets as collateral	7,849		8,698
Long-term debt, current portion	1,270		1,638
Variable Interest Entity, Not Primary Beneficiary
Debt Instrument [Line Items]
Outstanding principal, net of debt issuance costs	275		265
Long-term debt, current portion	106		102
Variable Interest Entity, Not Primary Beneficiary | Asset Pledged as Collateral
Debt Instrument [Line Items]
Beneficial interests in securitization, pledged assets as collateral	278		268
Leased Properties and Construction Improvements
Debt Instrument [Line Items]
Sale leaseback liability, net, included in long-term debt	$ 482		483
Minimum | Leased Properties and Construction Improvements
Debt Instrument [Line Items]
Sale leaseback transaction, expiration period	20 years
Maximum | Leased Properties and Construction Improvements
Debt Instrument [Line Items]
Sale leaseback transaction, expiration period	25 years
Sale leaseback transaction, renewal period (up to)	25 years
Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 5,725		5,725
Outstanding principal, net of debt issuance costs	$ 5,655		5,649
Senior notes | Subsequent Event
Debt Instrument [Line Items]
Total principal amount		$ 4,376
Senior Unsecured Notes | Senior notes | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Redemption price, percentage of principal amount redeemed (up to)	35.00%
Redemption price, percentage	100.00%
Senior Unsecured Notes | Senior notes | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption price, percentage	101.00%
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes") | Senior notes
Debt Instrument [Line Items]
Total principal amount	$ 3,275		$ 3,275
2030 Senior Unsecured Notes due May 1, 2030 ("2030 Notes") | Senior notes | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Redemption price, percentage of principal amount redeemed (up to)	10.00%
Redemption price, percentage	105.125%
Promissory Note | Notes payable
Debt Instrument [Line Items]
Weighted average interest rate	8.20%		7.50%
Notes payable	$ 2		$ 3
Notes payable, current, less than	$ 2
Notes payable, current portion			$ 1
Promissory Note | Notes payable | Minimum
Debt Instrument [Line Items]
Debt instrument, term	3 years 3 months

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Stockholders' Equity (Deficit) - Organizational Transactions (Details)			1 Months Ended	6 Months Ended	12 Months Ended
	May 03, 2017 vote $ / shares shares	May 02, 2017	Mar. 31, 2015	Jun. 30, 2023 class $ / shares shares	Dec. 31, 2019	Jan. 16, 2023 $ / shares	Dec. 31, 2022 $ / shares shares
Limited Partners' Capital Account [Line Items]
Preferred stock, shares authorized (in shares)	50,000,000			50,000,000			50,000,000
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.01			$ 0.01		$ 0.01	$ 0.01
Number of classes of common ownership interests | class				2
Conversion ratio				1.25
Common unit, multiplier used for conversion ratio				1.25
Class A Units
Limited Partners' Capital Account [Line Items]
Conversion ratio					0.8
Class B Units
Limited Partners' Capital Account [Line Items]
Conversion ratio			0.8
Carvana Group
Limited Partners' Capital Account [Line Items]
Number of classes of common ownership interests | class				2
Carvana Group | Class A Units
Limited Partners' Capital Account [Line Items]
Common units, issued (in shares)				237,000,000			236,000,000
Common units, outstanding (in shares)				237,000,000			236,000,000
Carvana Group | Class B Units
Limited Partners' Capital Account [Line Items]
Common units, issued (in shares)				2,000,000			1,000,000
Common units, outstanding (in shares)				2,000,000			1,000,000
Garcia Parties
Limited Partners' Capital Account [Line Items]
Ownership percentage of outstanding shares, minimum requirement		25.00%
Carvana Sub
Limited Partners' Capital Account [Line Items]
Percentage of voting power		0.10%
Class A Common Stock
Limited Partners' Capital Account [Line Items]
Common stock, shares authorized (in shares)	500,000,000			500,000,000			500,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001			$ 0.001		$ 0.001	$ 0.001
Number of votes | vote	1
Required ratio between shares issued and shares owned of subsidiary	0.8
Required ratio between shares outstanding and shares owned of subsidiary	0.8
Class A Common Stock | Exchange Agreement
Limited Partners' Capital Account [Line Items]
Conversion ratio	0.8
Class B Common Stock
Limited Partners' Capital Account [Line Items]
Common stock, shares authorized (in shares)	125,000,000			125,000,000			125,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001			$ 0.001			$ 0.001
Number of votes | vote	1
Conversion ratio	0.8
Class B Common Stock | Garcia Parties
Limited Partners' Capital Account [Line Items]
Number of votes | vote	10

XML

Stockholders' Equity (Deficit) - Equity Offerings (Details) - Class A Common Stock $ / shares in Units, $ in Billions	Apr. 26, 2022 USD ($) $ / shares shares
Follow-On Public Offering
Limited Partners' Capital Account [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	15,625,000
Sale of stock, net proceeds received | $	$ 1.2
Follow-On Public Offering | Carvana Group
Limited Partners' Capital Account [Line Items]
LLC units purchased (in shares)	19,500,000
Follow-On Public Offering | Garcia Parties
Limited Partners' Capital Account [Line Items]
Investment, number of shares purchased in transaction (in shares)	5,400,000
Public Equity Offering
Limited Partners' Capital Account [Line Items]
Sale of stock, price per share (in dollars per share) | $ / shares	$ 80

XML

Stockholders' Equity (Deficit) - Exchange Agreement (Details) - Exchange Agreement - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Class B Common Stock
Limited Partners' Capital Account [Line Items]
Exchange of stock, LLC Units exchanged (less than for the three months ended 03/31/2023 Class A) (in shares)	0	0	0	0
Class A Common Stock
Limited Partners' Capital Account [Line Items]
Exchange of stock, shares issued (less than for the three months ended 3/31/2023) (in shares)	0	1,000,000	1,000,000	1,000,000
Class A Units
Limited Partners' Capital Account [Line Items]
Exchange of stock, LLC Units exchanged (less than for the three months ended 03/31/2023 Class A) (in shares)	0	1,000,000	1,000,000	1,000,000
LLC units acquired (less than) (in shares)	0	1,000,000	1,000,000	1,000,000

XML

Stockholders' Equity (Deficit) - Class A Non-Convertible Preferred Units (Details) - USD ($)	May 06, 2022	Aug. 16, 2021	Mar. 29, 2021	Oct. 02, 2020	Oct. 02, 2018
Senior notes
Limited Partners' Capital Account [Line Items]
Repayment or retirement of debt, equity cancellation and retirement criteria					$ 1,000
Carvana Group | Class A Non-Convertible Preferred Units
Limited Partners' Capital Account [Line Items]
Repayment of debt, number of shares canceled and retired (in shares)					1
Carvana Group | Class A Non-Convertible Preferred Units | Senior notes | 2027 Notes
Limited Partners' Capital Account [Line Items]
Issuance of stock (in shares)			600,000
Carvana Group | Class A Non-Convertible Preferred Units | Senior notes | 2023 Notes
Limited Partners' Capital Account [Line Items]
Issuance of stock (in shares)			600,000
Carvana Group | Class A Non-Convertible Preferred Units | Senior notes | 2025 Notes and 2028 Notes
Limited Partners' Capital Account [Line Items]
Issuance of stock (in shares)				1,100,000
Carvana Group | Class A Non-Convertible Preferred Units | Senior notes | 2029 Notes
Limited Partners' Capital Account [Line Items]
Issuance of stock (in shares)		800,000
Carvana Group | Class A Non-Convertible Preferred Units | Senior notes | 2030 Notes
Limited Partners' Capital Account [Line Items]
Issuance of stock (in shares)	3,300,000

XML

Stockholders' Equity (Deficit) - Tax Asset Preservation Plan (Details)	Jun. 30, 2023 $ / shares	Jan. 16, 2023 shares $ / shares	Dec. 31, 2022 $ / shares	May 03, 2017 $ / shares
Class of Stock [Line Items]
Dividend declared, preferred stock purchase right (in shares) | shares		1
Preferred stock, portion of share | shares		0.001
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Class of warrant or right, price per one one-thousandth of a preferred share		50
Class A Common Stock
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001	$ 0.001

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Non-Controlling Interests - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
Noncontrolling Interest [Line Items]
Conversion ratio	1.25
Increase as a result of exchanges of LLC Units	$ 1	$ 1
Carvana Group
Noncontrolling Interest [Line Items]
Ownership percentage by Carvana Co.	55.80%
Ownership percentage by LLC Unitholders	44.20%

XML

Non-Controlling Interests - Changes in Ownership (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Noncontrolling Interest [Abstract]
Decrease as a result of issuances of Class A common stock	$ 0	$ (554)
Increase as a result of exchanges of LLC Units	1	1
Total transfers from non-controlling interests	$ 1	$ (553)

XML

Equity-Based Compensation - Equity-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation	$ 23	$ 18	$ 40	$ 61
Equity-based compensation, net of capitalized amounts	19	14	34	42
Unrecognized compensation expense	223		$ 223
Unrecognized compensation expense, period for recognition			3 years 1 month 6 days
Property and Equipment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense capitalized	3	2	$ 5	4
Inventories
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense capitalized	1	2	1	15
Restricted Stock Units and Awards excluding those granted in relation to the CEO Milestone Gift
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation	19	8	33	17
Restricted Stock Units granted in relation to the CEO Milestone Gift
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation	0	6	(1)	37
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation	$ 4	$ 4	$ 8	$ 7

XML

Equity-Based Compensation - 2017 Omnibus Incentive Plan (Details) - shares		1 Months Ended	6 Months Ended
	May 01, 2023	Feb. 28, 2023	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Automatic annual increase lesser of, percent of common stock			2.00%
Additional shares registered (in shares)	20,000,000
2017 Omnibus Incentive Plan | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Additional shares registered (in shares)		2,000,000
Maximum number of awards authorized for grant (in shares)		36,000,000
Number of shares available for grant (in shares)			17,000,000
2017 Omnibus Incentive Plan, Excluding CEO Milestone Gift
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Service-based vesting period			4 years

XML

Equity-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2021	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, equity-based compensation expense (less than)		$ 19,000	$ 14,000	$ 34,000	$ 42,000
Employee Stock | Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, equity-based compensation expense (less than)				$ 1,000	$ 1,000
Employee Stock | Employee Stock Purchase Plan | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, purchase period	6 months
ESPP purchase price of common stock, percent of fair market value	90.00%
ESPP, number of shares available (in shares)	500,000
ESPP, number of shares issued (in shares)				20,127	27,462
Employee Stock | Employee Stock Purchase Plan | Class A Common Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, contribution amount	$ 10
Employee Stock | Employee Stock Purchase Plan | Class A Common Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, contribution amount	$ 25

XML

Equity-Based Compensation - Class A Units (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2019	Dec. 31, 2018 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio	1.25
Class A Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units granted in the period (in dollars per share)			$ 18.58
Conversion ratio		0.8
Minimum | Class A Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service-based vesting period			2 years
Maximum | Class A Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service-based vesting period			4 years

XML

Equity-Based Compensation - Class B Units (Details) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP, equity-based compensation expense (less than) | $		$ 19	$ 14	$ 34	$ 42
Conversion ratio				1.25
Class B Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units issued in the period (in shares) | shares		0	0	0	0
Conversion ratio	0.8
Class B Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service-based vesting period	4 years
Participation threshold (in dollars per share)				$ 0
Class B Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service-based vesting period	5 years
Participation threshold (in dollars per share)				$ 12

XML

Loss Per Share - Calculation of Basic and Diluted Net (Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended				6 Months Ended
		Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator:
Net loss		$ (105)	$ (286)	$ (439)	$ (506)	$ (391)	$ (945)
Net loss attributable to non-controlling interests		(47)		(201)		(173)	(447)
Net loss attributable to Carvana Co. Class A common stockholders, basic and diluted		$ (58)		$ (238)		$ (218)	$ (498)
Denominator:
Weighted-average shares of Class A common stock outstanding, basic (in shares)		106,222,000		101,450,000		106,117,000	95,773,000
Weighted-average shares of Class A common stock outstanding, diluted (in shares)		106,222,000		101,450,000		106,117,000	95,773,000
Net loss per share of Class A common stock, basic (in dollars per share)		$ (0.55)		$ (2.35)		$ (2.05)	$ (5.20)
Net loss per share of Class A common stock, diluted (in dollars per share)		$ (0.55)		$ (2.35)		$ (2.05)	$ (5.20)
Class A Common Stock
Denominator:
Weighted-average shares of Class A common stock outstanding (in shares)		106,247,000		101,450,000		106,154,000	95,773,000
Weighted-average shares of Class A common stock outstanding, basic (in shares)	[1]	106,222,000		101,450,000		106,117,000	95,773,000
Weighted-average shares of Class A common stock outstanding, diluted (in shares)		106,222,000		101,450,000		106,117,000	95,773,000
Class A Common Stock | Restricted Stock
Denominator:
Nonvested weighted-average restricted stock awards (in shares)		(25,000)		0		(37,000)	0

[1] Weighted-average shares of Class A common stock outstanding have been adjusted for unvested restricted stock awards.

XML

Loss Per Share - Schedule of Potentially Dilutive Securities (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,029	1,281	4,029	1,281
Restricted Stock Units and Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	9,953	74	9,953	74
Class A Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	82,963	82,963	82,963	82,963
Class B Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	988	1,835	856	1,835

XML

Income Taxes - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Dec. 31, 2022 USD ($)
Income Tax Contingency [Line Items]
Uncertain tax positions	$ 0		$ 0		$ 0
Related reserves	$ 0		$ 0		$ 0
Effective income tax rate, expense (benefit)	0.40%	(0.10%)	0.60%	(0.20%)
Amount of cash savings as a result of tax attributes created from sales/exchanges, percent	0.85		0.85
Remaining tax benefits, percent	0.15		0.15
Deferred tax liability, unrecorded, tax receivable agreements	$ 1,600,000,000		$ 1,600,000,000
Carvana Group
Income Tax Contingency [Line Items]
Gross deferred tax asset, acquired during period (less than)	$ 0	$ 1,000,000	$ 1,000,000	$ 1,000,000
Exchange Agreement | Class A Units
Income Tax Contingency [Line Items]
LLC units acquired (less than) (in shares) | shares	0	1,000,000	1,000,000	1,000,000

XML

Income Taxes - Tax Receivable Agreement (Details) $ in Billions	Jun. 30, 2023 USD ($)
Income Tax Disclosure [Abstract]
Deferred tax liability, unrecorded, tax receivable agreements	$ 1.6

XML

Leases - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 renewal_option
Lessee, Lease, Description [Line Items]
Finance lease, extension term	4 years
Building
Lessee, Lease, Description [Line Items]
Operating lease, number of renewal options	1
Minimum
Lessee, Lease, Description [Line Items]
Finance lease, term of contract	2 years
Minimum | Building
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Finance lease, term of contract	5 years
Maximum | Building
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	20 years

XML

Leases - Schedule of Lease Cost and Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Finance leases:
Amortization of finance lease assets	$ 28	$ 24	$ 56	$ 41
Interest obligations under finance leases	5	5	10	8
Total finance lease costs	33	29	66	49
Operating leases:
Total operating lease costs	18	28	37	54
Cash payments related to lease liabilities included in operating cash flows:
Interest payments on finance lease liabilities			10	8
Cash payments related to lease liabilities included in financing cash flows:
Principal payments on finance lease liabilities			64	65
Nonrelated Party
Operating leases:
Fixed lease costs	17	27	35	52
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities			53	32
Related Party
Operating leases:
Fixed lease costs	$ 1	$ 1	2	2
Cash payments related to lease liabilities included in operating cash flows:
Operating lease liabilities			$ 2	$ 1

XML

Leases - Schedule of Operating and Finance Lease Maturities (Details) $ in Millions	Jun. 30, 2023 USD ($)
Finance Leases
Remainder of 2023	$ 55
2024	101
2025	91
2026	75
2027	35
Thereafter	6
Total minimum lease payments	363
Less: amount representing interest	(36)
Total lease liabilities	327
Operating Leases
Remainder of 2023	47
2024	97
2025	92
2026	89
2027	81
Thereafter	299
Total minimum lease payments	705
Less: amount representing interest	(179)
Total lease liabilities	526
Total
Remainder of 2023	102
2024	198
2025	183
2026	164
2027	116
Thereafter	305
Total minimum lease payments	1,068
Less: amount representing interest	$ (215)
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Notes Payable, Current And Long-Term Debt, Excluding Current Maturities [Member]
Total lease liabilities	$ 853
Related Party
Operating Leases
Remainder of 2023	2
2024	4
2025	2
2026	2
2027	2
Thereafter	2
Total minimum lease payments	14
Less: amount representing interest	(2)
Total lease liabilities	12
Nonrelated Party
Operating Leases
Remainder of 2023	45
2024	93
2025	90
2026	87
2027	79
Thereafter	297
Total minimum lease payments	691
Less: amount representing interest	(177)
Total lease liabilities	$ 514

XML

Leases - Schedule of Lease Terms and Discount Rates (Details)	Jun. 30, 2023	Jun. 30, 2022
Weighted-average remaining lease terms (years)
Operating leases	8 years 1 month 6 days	8 years 10 months 24 days
Finance leases	3 years 9 months 18 days	4 years 6 months
Weighted-average discount rate
Operating leases	7.10%	7.00%
Finance leases	5.80%	5.50%

XML

Commitments and Contingencies - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) mi	Dec. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Limited warranty, period	100 days
Limited warranty, miles | mi	4,189
Accrued limited warranty	$ 16	$ 19
Purchase obligation for services	$ 155
Purchase obligation, term	6 years

XML

Fair Value of Financial Instruments - Fair Value Assets Measured on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Assets:
Beneficial interests in securitizations	$ 335	$ 321
Money market funds
Assets:
Money market funds	357	272
Level 1
Assets:
Beneficial interests in securitizations	0	0
Level 1 | Money market funds
Assets:
Money market funds	357	272
Level 2
Assets:
Beneficial interests in securitizations	0	0
Level 2 | Money market funds
Assets:
Money market funds	0	0
Level 3
Assets:
Beneficial interests in securitizations	335	321
Level 3 | Money market funds
Assets:
Money market funds	$ 0	$ 0

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Fair Value of Financial Instruments - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Sep. 01, 2022 shares	Oct. 31, 2021 USD ($) tranche
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stockholders' equity note, stock split, conversion ratio			0.0556
Warrant or right, exercisable (in shares) | shares							2,400,000
Derivative, cap interest rate	5.00%		5.00%			5.00%
Interest Rate Cap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative, gain (loss) on derivative, net	$ (2)		$ (1)
Derivative, fair value, net	12		12
Root, Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, not readily determinable fair value								$ 126
Root, Inc. | Warrant
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, number of tranches | tranche								8
Level 3 | Root, Inc. | Warrant
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, fair value								$ 30
Deferred revenue								$ 30
Warrants to acquire Root's Class A common stock					$ 75
Level 2 | Interest Rate Cap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative, notional amount	236		236			$ 364
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Purchase price adjustment receivable	14		14		$ 37
Purchase price adjustment receivable gain (less than for 3 months ended 6/30/23)	$ 1	$ 3	$ 2	$ 6
Fair Value, Measurements, Recurring | Level 3 | Variable Interest Entity, Not Primary Beneficiary
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Proceeds from sale of beneficial interests		$ 2		$ 3
Fair Value, Measurements, Recurring | Minimum | Level 3 | Variable Interest Entity, Not Primary Beneficiary | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, discount rate	0.064		0.064		0.071
Fair Value, Measurements, Recurring | Maximum | Level 3 | Variable Interest Entity, Not Primary Beneficiary | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, discount rate	0.109		0.109		0.113

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Fair Value of Financial Instruments - Reconciliation Level Three, Beneficial Interests in Securitizations (Details) - Variable Interest Entity, Not Primary Beneficiary - Level 3 - Fair Value, Measurements, Recurring - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening Balance	$ 312	$ 416	$ 321	$ 382
Received in securitization transactions	69	37	92	124
Payments received	(42)	(50)	(75)	(92)
Change in fair value	4	0	5	(10)
Sales of beneficial interests	(8)	(2)	(8)	(3)
Ending Balance	$ 335	$ 401	$ 335	$ 401

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Fair Value of Financial Instruments - Carrying Value and Fair Value, Senior Notes (Details) - Level 2 - Senior Unsecured Notes Effective September 2018 - Senior notes - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Carrying value, net of unamortized debt issuance costs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	$ 5,655	$ 5,649
Fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	$ 4,186	$ 2,533

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Fair Value of Financial Instruments - Carrying Value and Fair Value, Finance Receivables (Details) - Level 2 - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Carrying value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivables	$ 1,098	$ 1,334
Fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivables	$ 1,181	$ 1,437

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Fair Value of Financial Instruments - Changes in Warrants (Details) - Root, Inc. - Level 3 - Warrant - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening Balance			$ 2
Total unrealized loss (less than for 3 months ended 6/30/23 & 6/30/22)	$ 0	$ 1	(1)	$ (5)
Ending Balance	$ 1		$ 1

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Supplemental Cash Flow Information - Summary of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Supplemental cash flow information:
Cash payments for interest	$ 313	$ 129
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	3	49
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	0	321
Property and equipment acquired under finance leases	36	232
Equity-based compensation expense capitalized to property and equipment	5	4
Fair value of beneficial interests received in securitization transactions	92	124
Reductions of beneficial interests in securitizations and associated long-term debt	$ 53	$ 70

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Supplemental Cash Flow Information - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 541	$ 434	$ 1,047
Restricted cash	136	194	150
Total cash, cash equivalents and restricted cash	$ 677	$ 628	$ 1,197	$ 636

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Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions	Jul. 19, 2023	Jul. 17, 2023
Subsequent Event [Line Items]
Transaction support agreement, equity issuance, minimum proceeds required		$ 700
Class A Common Stock
Subsequent Event [Line Items]
Transaction support agreement, equity offering		350
At-the-Market Offering Program
Subsequent Event [Line Items]
Sale of stock, consideration to be received on transaction	$ 1,000
Sale of stock, number of shares to be issued in transaction (in shares)	35,000,000
Conditional Sale of Equity to Related Party | Related Party
Subsequent Event [Line Items]
Sale of stock, consideration to be received on transaction		$ 126
Senior notes
Subsequent Event [Line Items]
Percent of aggregate principal amount		90.00%