LETTER FROM OUR CEO TOM GRECO Many decades ago, the founder of our company, Arthur Taubman, established three timeless values for Advance. First, Inspire our team members to be the very best they can be. Second, Serve our customers better than anyone else. Third, Grow our business profitably. In a year best described as “exhausting,” our team took to heart each of these values to serve our customers better than ever. As always, in 2021, nothing was more important than the health, safety and wellbeing of our Advance team members and customers. And for their part, our team members continued to show the utmost in care for others despite extreme challenges. Every week, our approximately 68,000 team members came together as one team to deliver on our mission: Passion for Customers...Passion for Yes! As a result of this selfless dedication to keeping customers on the road, we achieved a record-setting year. This included our highest net sales growth, adjusted operating margin expansion 1 , adjusted diluted earnings per share and cash returned to shareholders since becoming a public company in 2002. Meanwhile, we achieved these record results as we elevated our focus on corporate sustainability. We believe our track record within Environmental, Social and Governance (ESG) over the past few years is inextricably linked with the significant improvement in our performance. Let me start with our commitment to our people, including how we Grow Talent, which is one of our Cultural Beliefs. Not only has our focus on growing talent led to improved performance, but it is also becoming a differentiator for Advance.

When we say Grow Talent, it means we are all inspired to learn and grow together. We accomplish this by building an “ownership culture” – the idea that when our team members feel empowered to make decisions, we will provide a superior experience for our customers. An ownership culture means we Advance Together, by giving team members a voice in the company’s culture, while encouraging them to bring their whole authentic selves to work every day. In a challenging labor market like we experienced this past year, providing a strong and distinct company culture was particularly important. We supported our commitment to building an ownership culture with substantial investments in our team, including differentiated programs like Fuel the Frontline, which provides stock awards to frontline team members who distinguish themselves with outstanding performance in their respective functions and areas. We’ve now granted over 24,000 stock awards to frontline team members, valued at over $60 million upon grant since the inception of our Fuel the Frontline program. We remain the only company in our industry making this significant investment in stock ownership for frontline team members. When we started Fuel the Frontline, we knew the investment benefits would build over time and deliver a meaningful impact across our organization. We continue to see positive improvements from this unique program, including a significant reduction in our turnover, which for key frontline roles is approximately half of what it was five years ago.

1. Adjusted results are non-GAAP financial measures. For additional information regarding these non-Gaap financial measures, please see the discussion of these key metrics included in the company's 2021 form 10-k or Q4 2021 earnings release.







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