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What changed in ASBURY AUTOMOTIVE GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ASBURY AUTOMOTIVE GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+364 added−308 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-29)

Top changes in ASBURY AUTOMOTIVE GROUP INC's 2024 10-K

364 paragraphs added · 308 removed · 252 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+17 added−10 removed78 unchanged
Biggest changeIn addition, we believe that local management of dealership operations enables our retail network to provide market specific responses to sales, customer service and inventory requirements. The general manager of each of our dealerships is responsible for the operations, personnel and financial performance of that dealership as well as other day-to-day operations.
Biggest changeOur executive management team has extensive experience in the auto retail sector and is able to leverage experience from all positions throughout the Company. In addition, we believe that local management of dealership operations enables our retail network to provide market specific responses to sales, customer service and inventory requirements.
Demand for new vehicles is generally highest during the second, third, and fourth quarters of each year and, accordingly, we expect our revenues and operating results to generally be higher during these periods. In addition, we typically experience higher sales of luxury vehicles, which have higher average selling prices and gross profit per vehicle retailed, in the fourth quarter.
Demand for new vehicles is generally highest during the second and third quarters of each year and, accordingly, we expect our revenues and operating results to generally be higher during these periods. In addition, we typically experience higher sales of luxury vehicles, which have higher average selling prices and gross profit per vehicle retailed, in the fourth quarter.
All the point-of-sale credit card machines in all our locations show a prompt asking our guests if they would like to round up their change or donate $1, $3, $5, or a custom amount to HBCUs in their communities. At the end of each quarter, the funds raised are donated to the HBCUs across the country.
The point-of-sale credit card machines in our locations show a prompt asking our guests if they would like to round up their change or donate $1, $3, $5, or a custom amount to HBCUs in their communities. At the end of each quarter, the funds raised are donated to HBCUs across the country.
Our used vehicle operations compete with other franchised dealerships, non-franchised automotive dealerships, regional and national vehicle rental companies, and internet-based vehicle brokers for the supply and resale of used vehicles. We compete with other franchised dealerships to perform warranty and recall-related repairs and with other franchised dealerships and independent service centers for non-warranty repair and maintenance services.
Our used vehicle operations compete with other franchised dealerships, non-franchised automotive dealerships, regional and national vehicle rental companies, and internet-based vehicle brokers for the supply and resale of used vehicles. We compete with other franchised dealerships to perform warranty and recall-related repairs. We compete with other franchised dealerships and independent service centers for collision and non-warranty repair and maintenance services.
If we are found to be in purported violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect our operations, our business, our reputation, financial condition, results of operations, and prospects could suffer" and "Our TCA business is subject to a wide range of federal, state and local laws and regulations, some of which we may not have previously been subject.
If we are found to be in purported violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect our operations, our business, results of operations, financial condition, cash flows, reputation and prospects could suffer" and "Our TCA business is subject to a wide range of federal, state and local laws and regulations, some of which we may not have previously been subject.
Such agreements also define other standards and limitations, including: • company-wide performance criteria; • capitalization requirements; • limitations on changes in our ownership or management; 13 Table of Contents • limitations on the number of a particular manufacturer's franchises owned by us; • restrictions or prohibitions on our ability to pledge the stock of certain of our subsidiaries; and • conditions for consent to proposed acquisitions, including sales and customer satisfaction criteria, as well as limitations on the total local, regional, and national market share percentage that would be represented by a particular manufacturer's franchises owned by us after giving effect to a proposed acquisition.
Such agreements also define other standards and limitations, including: • company-wide performance criteria; • capitalization requirements; • limitations on changes in our ownership or management; • limitations on the number of a particular manufacturer's franchises owned by us; • restrictions or prohibitions on our ability to pledge the stock of certain of our subsidiaries; and • conditions for consent to proposed acquisitions, including sales and customer satisfaction criteria, as well as limitations on the total local, regional, and national market share percentage that would be represented by a particular manufacturer's franchises owned by us after giving effect to a proposed acquisition.
We believe, however, that the increased use of advanced technology in vehicles is making it difficult for independent repair shops to compete effectively with franchised dealerships as they may not be able to make the investment necessary to perform major or technical repairs.
We believe, however, that the increased use of advanced technology in vehicles is making it difficult for independent repair shops to compete effectively with franchised dealerships as they may not be able to make the investments necessary to perform major or technical repairs.
Our success depends on our employees and their commitment to delivering a consistent and exceptional guest experience. Our employees work at locations in Colorado, Florida, Georgia, Indiana, Missouri, South Carolina, Texas, California, Arizona, New Mexico, Idaho, Utah, Washington, Virginia, Maryland and Delaware.
Our success depends on our employees and their commitment to delivering a consistent and exceptional guest experience. Our employees work at locations in Colorado, Florida, Georgia, Indiana, Missouri, South Carolina, Texas, California, Arizona, New Mexico, Idaho, Utah, Virginia and Maryland.
Four Key Components of Our Business The following chart presents the contribution to total revenue and gross profit by each line of business for the year ended December 31, 2023: 7 Table of Contents Our new vehicle franchise retail network within our Dealerships segment is made up of dealerships located in 16 states operating primarily under 16 locally branded dealership groups.
Four Key Components of Our Business The following chart presents the contribution to total revenue and gross profit by each line of business for the year ended December 31, 2024: 7 Table of Contents Our new vehicle franchise retail network within our Dealerships segment is made up of dealerships located in 14 states operating primarily under 16 locally branded dealership groups.
Miller Dealerships Arizona Chrysler(b), Dodge(c), Fiat, Ford, Genesis, Hyundai, Jeep(b), Nissan, Toyota, Volkswagen(a) California Toyota(a) Colorado Chrysler(a), Dodge(b), Fiat, Ford, Jeep(a), Nissan(b), Volkswagen Idaho Chrysler, Dodge, Honda, Jeep, Subaru New Mexico Chevrolet, Chrysler(a), Dodge, Hyundai(a), Jeep(a), Toyota Utah Chevrolet(a), Chrysler(c), Dodge(c), Ford(b), Honda, Jeep(c), Lexus(a), Lincoln, Mercedes-Benz, Toyota, Sprinter Washington Honda Mike Shaw, Stevinson & Arapahoe Automotive Groups Colorado Subaru(a), Chevrolet, Chrysler, Dodge, Hyundai(a), Jaguar, Jeep, Lexus(a), Porsche, Toyota(a) Nalley Automotive Group Georgia Acura, Audi, Bentley, BMW, Chevrolet, Honda, Hyundai, Infiniti(a), Kia, Lexus(a), Nissan, Toyota(b), Volkswagen Park Place Automotive Texas Acura, Lexus(a), Land Rover, Mercedes-Benz(b), Porsche, Volvo, Sprinter(b) Plaza Motor Company Missouri Audi, BMW, Infiniti, Land Rover, Mercedes-Benz(a), Sprinter(a) ____________________________ (a) This state has two of these franchises.
Miller Dealerships Arizona Chrysler(b), Dodge Ram(c), Fiat, Ford, Genesis, Hyundai, Jeep(b), Nissan, Toyota, Volkswagen(a) California Toyota(a) Colorado Chrysler(a), Dodge Ram(b), Fiat, Ford, Jeep(a), Nissan, Volkswagen Idaho Chrysler, Dodge Ram, Honda, Jeep, Subaru New Mexico Chevrolet, Chrysler(a), Dodge Ram, Hyundai(a), Jeep(a), Toyota Utah Chevrolet(a), Chrysler(c), Dodge Ram(c), Ford(b), Honda, Jeep(c), Lexus(a), Lincoln, Mercedes-Benz, Toyota, Sprinter Mike Shaw, Stevinson & Arapahoe Automotive Groups Colorado Subaru(a), Chevrolet, Chrysler, Dodge Ram, Hyundai(a), Jaguar, Jeep, Lexus(a), Porsche, Toyota(a) Nalley Automotive Group Georgia Acura, Audi, Bentley, BMW, Honda, Hyundai, Infiniti(a), Kia, Lexus(a), Toyota(b), Volkswagen Park Place Automotive Texas Acura, Lexus(a), Land Rover, Mercedes-Benz(b), Porsche, Volvo, Sprinter(b) Plaza Motor Company Missouri Audi, BMW, Infiniti, Land Rover, Mercedes-Benz(a), Sprinter(a) ____________________________ (a) This dealership group has two of these franchises.
For additional information, please refer to the risk factor captioned "If state laws that protect automotive retailers are repealed, weakened, or superseded by our framework agreements with manufacturers, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their dealer agreements which could have a materially adverse effect on our business, financial condition, and results of operations." Regulations We operate in a highly regulated industry.
For additional information, please refer to the risk factor captioned "If state laws that protect automotive retailers are repealed, weakened, or superseded by our framework agreements with manufacturers, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their dealer agreements which could have a material adverse effect on our business, results of operations, financial condition, and cash flows." Regulations We operate in a highly regulated industry.
Our TCA business is subject to state licensing and registration requirements, and financial responsibility and security requirements. For additional information, please refer to the risk factors captioned: "Our operations are subject to extensive governmental laws and regulations.
Our TCA business is subject to state licensing and registration requirements, and financial responsibility and security requirements. For additional information, please refer to the risk factors captioned: "Our dealership operations and facilities are subject to extensive governmental laws and regulations.
As of December 31, 2023, we employed approximately 15,000 full-time and part-time employees, none of whom were covered by collective bargaining agreements. We believe we have good relations with our employees.
As of December 31, 2024, we employed approximately 15,000 full-time and part-time employees, none of whom were covered by collective bargaining agreements. We believe we have good relations with our employees.
We believe that our employees help to set us apart from our competitors, and, therefore, we understand they are our greatest asset. As a result, a critical part of our business strategy is investing in, supporting and developing our employees so that they are trained and incentivized to provide best-in-class service to our guests.
We believe that our employees help to set us apart from our competitors, and, therefore, we understand 15 Table of Contents they are our greatest asset. As a result, a critical part of our business strategy is investing in, supporting and developing our employees so that they are trained and incentivized to provide best-in-class service to our guests.
The following chart provides a detailed breakdown of our states, brand names, and franchises as of December 31, 2023: Dealership Group Brand Name State Franchise Coggin Automotive Group Florida Acura, BMW, Buick, Chevrolet, Ford(a), GMC, Honda(d), Hyundai, Mercedes-Benz, Nissan(a), Toyota Courtesy Autogroup Florida Chrysler, Dodge, Genesis, Honda, Hyundai, Infiniti, Jeep, Kia, Mercedes-Benz, Nissan, Sprinter, Toyota Crown Automotive Company South Carolina Nissan Virginia Acura, BMW(a), MINI David McDavid Auto Group Texas Ford, Honda(a), Lincoln Greenville Automotive Group South Carolina Land Rover, Porsche, Toyota, Volvo Hare, Bill Estes & Kahlo Automotive Groups Indiana Buick, Chevrolet(b), Chrysler(a), Dodge(a), Ford, GMC, Honda, Isuzu, Jeep(a), Toyota Jim Koons Automotive Companies Maryland Buick, Chevrolet(a), Ford, GMC, Kia, Mercedes-Benz, Sprinter, Toyota(b), Volvo Virginia Buick(a), Chevrolet, Chrysler, Dodge, Ford(b), GMC(a), Hyundai, Jeep, Kia, Toyota(a) Delaware Lexus Larry H.
The following chart provides a detailed breakdown of our states, brand names, and franchises as of December 31, 2024: Dealership Group Brand Name State Franchise Coggin Automotive Group Florida Acura, BMW, Buick, Chevrolet, Ford(a), GMC, Honda(d), Hyundai, Mercedes-Benz, Nissan(a), Toyota Courtesy Autogroup Florida Chrysler, Dodge Ram, Honda, Hyundai, Infiniti, Jeep, Kia, Mercedes-Benz, Nissan, Sprinter, Toyota Crown Automotive Company South Carolina Nissan Virginia Acura, BMW(a), MINI David McDavid Auto Group Texas Ford, Honda(a), Lincoln Greenville Automotive Group South Carolina Land Rover, Porsche, Toyota, Volvo Hare, Bill Estes & Kahlo Automotive Groups Indiana Chevrolet(b), Chrysler(a), Dodge Ram(a), Ford, GMC, Honda, Isuzu, Jeep(a), Toyota Jim Koons Automotive Companies Maryland Chevrolet(a), Ford, GMC, Kia, Mercedes-Benz, Sprinter, Toyota(b), Volvo Virginia Buick, Chevrolet, Chrysler, Dodge Ram, Ford(b), GMC(a), Hyundai, Jeep, Kia, Toyota(a) Larry H.
Grow F&I product penetration and expand TCA's service offerings across the full dealership portfolio. We are positioned to leverage the acquisition of LHM to improve profitability via the ownership of TCA, a highly scalable provider of a full-suite of F&I products.
Grow F&I product penetration and expand TCA's service offerings across the full dealership portfolio. We continue to be positioned to leverage the acquisition of LHM to improve profitability via the ownership of TCA, a highly scalable provider of a full-suite of F&I products.
Our financing activities, as well as our sale of finance and insurance products, may also be impacted indirectly by laws and regulations that govern automotive finance 14 Table of Contents companies and other financial institutions, including regulations adopted by the Consumer Financial Protection Bureau (the "CFPB").
Our financing activities, as well as our sale of finance and insurance products, may also be impacted indirectly by laws and regulations that govern automotive finance companies and other financial institutions, including regulations adopted by the Consumer Financial Protection Bureau (the "CFPB").
Our operations are also subject to the National Traffic and Motor Vehicle Safety Act, Federal Motor Vehicle Safety Standards and other product standards promulgated by the United States Department of Transportation, and the rules and regulations of various state motor vehicle regulatory agencies.
Our operations are also subject to the National 14 Table of Contents Traffic and Motor Vehicle Safety Act, Federal Motor Vehicle Safety Standards and other product standards promulgated by the United States Department of Transportation, and the rules and regulations of various state motor vehicle regulatory agencies.
Acquisitions On December 11, 2023, the Company completed the acquisition of the business of the Jim Koons ("Koons") Automotive Companies, (collectively, the "Koons acquisition"), thereby acquiring 20 new vehicle dealerships, six collision centers and the real property related thereto for an aggregate purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $103.8 million of assets held for sale related to Koons Lexus of Wilmington.
On December 11, 2023, the Company completed the acquisition of the business of the Jim Koons ("Koons") Automotive Companies, (collectively, the "Koons acquisition"), thereby acquiring 20 new vehicle dealerships, six collision centers and the real property related thereto for an aggregate purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington.
We believe the principal competitive factors in providing financing are convenience, interest rates, and flexibility in contract length. Seasonality The automobile industry has historically been subject to seasonal variations.
We believe the principal competitive factors in providing financing are convenience, interest rates, and flexibility in contract length. 12 Table of Contents Seasonality The automobile industry has historically been subject to seasonal variations.
Compensation and Benefits We offer competitive compensation and benefits to attract and retain the best people, including the following benefits for our full-time employees: • Health, dental, and vision benefits with multiple plan choices; • Discounted healthcare premiums for biometric screening and completion of health survey; and • Employee assistance program.
Compensation and Benefits We offer competitive compensation and benefits to attract and retain the best people, including the following benefits for our full-time employees: • Health, dental, and vision benefits with multiple plan choices; • Discounted healthcare premiums for biometric screening and completion of health survey; and • Employee assistance program. 16 Table of Contents Saving and retirement • Holiday match; and • 401(k) match.
Used vehicle sales include the sale of used vehicles to individual retail customers ("used retail") and the sale of used vehicles to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" collectively referred to as "used").
Used vehicle sales include the sale of used vehicles to individual retail customers ("used retail") and the sale of used vehicles to other dealers or licensed wholesalers ("wholesale") (the terms "used retail" and "wholesale" collectively referred to as "used").
Through donations from our guests and company match, we have contributed more than $1 million to HBCUs since the start of our partnership with HBCU Change in May 2021. Recruitment and Talent Development When recruiting for open positions, we search for people of varying backgrounds, perspectives, and experiences in order to support a diverse and inclusive culture.
Through donations from our guests and company match, we have contributed more than $1.5 million to HBCUs since the start of our partnership with HBCU Change in May 2021. Recruitment and Talent Development When recruiting for open positions, we search for the most talented people who each have varying backgrounds, perspectives, and experiences.
(d) This state has five of these franchises. 8 Table of Contents Operations New Vehicle Sales The following table reflects the number of franchises we owned as of December 31, 2023 and the percentage of new vehicle revenues represented by class and franchise for the year ended December 31, 2023: Class/Franchise Number of Franchises Owned % of New Vehicle Revenues Luxury Lexus 9 11 % Mercedes-Benz 9 8 BMW 5 3 Acura 4 2 Infiniti 4 1 Land Rover 3 2 Porsche 3 2 Volvo 3 1 Audi 2 1 Genesis 2 1 Lincoln 2 1 Bentley 1 * Jaguar 1 * Total Luxury 48 33 % Import Toyota 19 16 % Honda 13 10 Hyundai 9 4 Nissan 9 3 Sprinter 8 1 Kia 4 2 Volkswagen 4 1 Subaru 3 2 Fiat 2 * MINI 1 * Isuzu 1 * Total Import 73 39 % Domestic Chrysler, Dodge, Jeep, Ram 52 12 % Chevrolet, Buick, GMC 22 6 Ford 13 10 Total Domestic 87 28 % Total Franchises 208 100 % * Franchise accounted for less than 1% of new vehicle revenues for the year ended December 31, 2023.
(d) This dealership group has five of these franchises. 8 Table of Contents Operations New Vehicle Sales The following table reflects the number of franchises we owned as of December 31, 2024 and the percentage of new vehicle revenues represented by class and franchise for the year ended December 31, 2024: Class/Franchise Number of Franchises Owned % of New Vehicle Revenues Luxury Mercedes-Benz 9 8 % Lexus 8 10 BMW 5 3 Acura 4 1 Infiniti 4 1 Land Rover 3 2 Porsche 3 2 Volvo 3 1 Audi 2 1 Lincoln 2 1 Genesis 1 * Bentley 1 * Jaguar 1 * Total Luxury 46 30 % Import Toyota 19 19 % Honda 12 9 Hyundai 9 5 Sprinter 8 1 Nissan 6 2 Kia 4 2 Volkswagen 4 1 Subaru 3 2 Fiat 2 * MINI 1 * Isuzu 1 * Total Import 69 41 % Domestic Chrysler, Dodge, Jeep, Ram 52 9 % Chevrolet, Buick, GMC 18 8 Ford 13 13 Total Domestic 83 29 % Total Franchises 198 100 % * Franchise accounted for less than 1% of new vehicle revenues for the year ended December 31, 2024.
We capitalize costs, such as employee sales commissions, to obtain customer contracts, and amortize those costs over the life of the contract. Amortization of costs to obtain customer contracts is included in selling, general and administrative expenses in the consolidated statements of income.
We capitalize costs, such as employee sales commissions, to obtain customer contracts, and amortize those costs over the life of the contract. Amortization of costs to obtain customer contracts is included in selling, general and administrative expenses in the consolidated statements of income. The portion of commissions that are paid to affiliated dealerships are eliminated upon consolidation.
As part of our long-term growth strategy, we invest in technologies or partner with leading software platform vendors to develop applications that (i) serve our guests with omni-channel buying options offering enhanced speed, and transparency, (ii) drive a more efficient guest experience at a lower cost to serve and (iii) offer tailored recommendations to value add products and services.
Accelerate same store growth and guest experience through technology investment . As part of our long-term growth strategy, we invest in technologies or partner with leading software platform vendors to develop applications that (i) serve our guests with omni-channel buying options offering enhanced speed, and transparency and (ii) drive a more efficient guest experience at a lower cost to serve.
(b) This state has three of these franchises. (c) This state has four of these franchises.
(b) This dealership group has three of these franchises. (c) This dealership group has four of these franchises.
As of December 31, 2023, we owned and operated 208 new vehicle franchises, representing 31 brands of automobiles at 158 dealership locations, 37 collision centers, and Total Care Auto, Powered by Landcar ("TCA" or "TCA Business"), our finance and insurance ("F&I") product provider, within 16 states. Our store operations are conducted by our subsidiaries.
As of December 31, 2024, we owned and operated 198 new vehicle franchises, representing 31 brands of automobiles at 152 dealership locations, 37 collision centers, and Total Care Auto, Powered by Landcar ("TCA" or "TCA Business"), our finance and insurance ("F&I") product provider, within 14 states.
Disability and accident insurance • Short-term disability and long-term disability insurance; • Accident insurance, hospital indemnity, employee critical illness insurance; • Employer paid life insurance; and • Supplemental life insurance. Scholarships for education • Annual scholarship program.
Paid time off • Up to 4 weeks paid time off; • Paid pregnancy leave; and • Paid parental leave. Disability and accident insurance • Short-term disability and long-term disability insurance; • Accident insurance, hospital indemnity, employee critical illness insurance; • Employer paid life insurance; and • Supplemental life insurance. Scholarships for education • Annual scholarship program.
For new vehicle sales, our dealerships compete with other franchised dealerships, primarily in their regions. Our new vehicle store competitors also have franchise agreements with the various vehicle manufacturers, and as such, generally obtain new vehicle inventory from vehicle manufacturers on the same terms as us.
Our new vehicle store competitors also have franchise agreements with the various vehicle manufacturers, and as such, generally obtain new vehicle inventory from vehicle manufacturers on the same terms as us.
Similarly, we are able to leverage our scale to implement these best practices when integrating newly acquired dealerships allowing us to continue to improve our operating efficiencies. Deploy capital to highest returns and continue to invest in the business. Our capital allocation decisions are made within the context of maintaining sufficient liquidity and a prudent capital structure.
Similarly, we are able to leverage our scale to implement these best practices when integrating newly acquired dealerships allowing us to continue to improve our operating efficiencies. 11 Table of Contents Deploy capital to highest returns and continue to invest in the business.
We expect to complete the rollout of TCA's service offerings to all of our dealerships in 2024. Attract, retain and invest in top talent to drive growth and optimize operations . We believe the core of our business success lies in our talent pool, so we are focused on attracting, hiring and retaining the best people.
Attract, retain and invest in top talent to drive growth and optimize operations . We believe the core of our business success lies in our talent pool, so we are focused on attracting, hiring and retaining the best people. We also invest in resources to train and develop our employees.
Upon consolidation, the associated service revenue and costs recorded by the Dealerships segment are eliminated against claims expense recorded by the TCA segment. Third-party claims paid related to the contracts are recognized in F&I cost of sales. In addition, F&I revenue includes investment income and other gains and losses related to the performance of our investment portfolio.
All claims paid related to the contracts are recognized in F&I cost of sales in the TCA segment. In addition, F&I revenue includes investment income and other gains and losses related to the performance of our investment portfolio.
We intend to execute on this strategic plan by focusing on a variety of growth efforts including, balanced capital allocation, driving same-store revenue growth and acquiring revenue through strategic transactions. Competition The automotive retail and service industry is highly competitive with respect to price, service, location, and selection.
We intend to execute on this strategic plan by focusing on a variety of growth efforts including, balanced capital allocation, driving same-store revenue growth and acquiring revenue through strategic transactions.
We believe our cash position and borrowing capacity, combined with our current and expected future cash generation capability, provides us with financial flexibility to, among other things, reinvest in our business, acquire dealerships and repurchase our stock, when prudent.
The Company’s transaction adjusted net leverage ratio was 2.85x at December 31, 2024, compared to 2.54x at December 31, 2023. We believe our cash position and borrowing capacity, combined with our current and expected future cash generation capability, provides us with financial flexibility to, among other things, reinvest in our business, acquire dealerships and repurchase our stock, when prudent.
Divestitures During the year ended December 31, 2023, we sold one franchise (one dealership location) in Austin, Texas. The Company recorded a pre-tax gain totaling $13.5 million. 6 Table of Contents During the year ended December 31, 2022, we sold one franchise (one dealership location) in St.
The Company recorded a pre-tax gain totaling $8.6 million, which is presented in our accompanying consolidated statements of income as a gain on dealership divestitures, net. During the year ended December 31, 2023, we sold 1 franchise (1 dealership location) in Austin, Texas. The Company recorded a pre-tax gain totaling $13.5 million.
TCA’s key offerings include vehicle service contracts, prepaid maintenance, protection plans, key and remote replacement, leased vehicle protection and tire and wheel protection. We are continuing to integrate TCA’s service offerings across our full dealership portfolio to increase our F&I product penetration and profitability.
We are continuing to integrate TCA’s service offerings across our full dealership portfolio to increase our F&I product penetration and profitability.
Leverage scale and cost structure to improve operating efficiencies. We are positioned to leverage our significant scale so that we are able to achieve competitive operating margins by centralizing and streamlining various back-office functions.
The general manager of each of our dealerships is responsible for the operations, personnel and financial performance of that dealership as well as other day-to-day operations. Leverage scale and cost structure to improve operating efficiencies. We are positioned to leverage our significant scale so that we are able to achieve competitive operating margins by centralizing and streamlining various back-office functions.
The portion of commissions that are paid to affiliated dealerships are eliminated in the TCA segment upon consolidation. The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's products.
The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's products. Upon consolidation, the associated service revenue recorded by the Dealerships segment is eliminated against the service costs incurred by the Dealerships segment.
The acquisition was funded with borrowings under Asbury’s existing credit facility and cash on hand. The Koons acquisition diversifies Asbury's geographic mix, with expansion in the greater Washington-Baltimore region of the United States. There were no acquisitions during the year ended December 31, 2022. On December 17, 2021, the Company completed the acquisition of the businesses of the Larry H.
The acquisition was funded with borrowings under Asbury’s existing credit facility and cash on hand. The Koons acquisition diversified Asbury's geographic mix, with expansion in the greater Washington-Baltimore region of the United States.
Louis, Missouri, three franchises (three dealership locations) and one collision center in Denver, Colorado, two franchises (two dealership locations) in Spokane, Washington, one franchise (one dealership location) in Albuquerque, New Mexico and 11 franchises (nine dealership locations) and two collision centers in North Carolina. The Company recorded a pre-tax gain totaling $207.1 million.
During the year ended December 31, 2022, we sold one franchise (one dealership location) in St. Louis, Missouri, three franchises (three dealership locations) and one collision center in Denver, Colorado, two franchises (two dealership locations) in Spokane, Washington, one franchise (one dealership location) in Albuquerque, New Mexico and 11 franchises (nine dealership locations) and two collision centers in North Carolina.
We formed a partnership with HBCU Change, an app-based organization that lets users round up their spending and donate to historically black colleges and universities ("HBCU"). We learned that many HBCUs historically lag in funding and resources compared to other public or private universities and many have closed their doors in recent years.
We learned that many HBCUs historically lag in funding and resources compared to other public or private universities and many have closed their doors in recent years.
Notwithstanding the terms of any dealer agreement, the states in which we operate have automotive dealership franchise laws which provide that it is unlawful for a manufacturer to terminate or not renew a franchise unless "good cause" exists.
Notwithstanding the terms of any dealer agreement, the states in which we operate have automotive dealership franchise laws which provide that it is unlawful for a manufacturer to terminate or not renew a franchise unless "good cause" exists. 13 Table of Contents In addition to requirements under dealer agreements, we are subject to provisions contained in supplemental agreements, framework agreements, dealer addenda and manufacturers' policies, collectively referred to as "framework agreements." Framework agreements impose requirements on us in addition to those described above.
Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, vehicle manufacturer incentive programs, or adverse weather events. 12 Table of Contents Dealer and Framework Agreements Each of our dealerships operate pursuant to a dealer agreement between the dealership and the manufacturer (or in some cases the distributor) of each brand of new vehicles sold and/or serviced at the dealership.
Dealer and Framework Agreements Each of our dealerships operate pursuant to a dealer agreement between the dealership and the manufacturer (or in some cases the distributor) of each brand of new vehicles sold and/or serviced at the dealership.
Community Outreach Through our Asbury Cares program, we support selected community partner organizations to focus on reducing social inequality. Since 2021, we have awarded all of our employees with an additional 40 hours of paid time off per year that can only be used to volunteer with our local community partners.
Since 2021, we have awarded all of our full-time employees with an additional 40 hours of paid time off per year that can be used to volunteer with our local community partners. We have seen significant year-over-year growth in employee participation in our community engagement events.
We target a 2.5x to 3.5x adjusted net leverage ratio, which is calculated as set forth in our credit facility, in a normal 11 Table of Contents business environment. The Company’s adjusted net leverage ratio was 2.5x at December 31, 2023, compared to 1.7x at December 31, 2022.
Our capital allocation decisions are made within the context of maintaining sufficient liquidity and a prudent capital structure. We target a 2.5x to 3.5x transaction adjusted net leverage ratio, which is calculated as set forth in our credit facility, in a normal business environment.
We have seen significant year-over-year growth in employee participation in our community engagement events. A significant portion of our Asbury Cares Community Initiative revolves around education and making sure that young people in underserved communities have access to a quality education.
A significant portion of our Asbury Cares Community program revolves around education and making sure that young people in underserved communities have access to a quality education. We formed a partnership with HBCU Change, an app-based organization that lets users round up their spending and donate to historically black colleges and universities ("HBCU").
Our ability to provide a low friction experience across our omni-channel platform drives customer satisfaction and repeat business across our dealership portfolio.
Our ability to provide a low friction experience across our omni-channel platform drives customer satisfaction and repeat business across our dealership portfolio. Acquisitions On February 14, 2025, the Company, through one of its subsidiaries, entered into a Purchase and Sale Agreement (the "Transaction Agreement") with various entities that comprise the Herb Chambers automotive group (the "Herb Chambers Dealerships").
We intend to continue to learn and develop - working towards building a workplace where every Asbury team member feels included and welcomed. Our Chief Diversity Equity and Inclusion Officer and her team lead the strategic focus and execution of our DE&I strategy in partnership with our operations leadership and support teams throughout the company.
We intend to continue to learn and develop - working towards building a workplace where every Asbury team member feels included and welcomed. Community Outreach Through our Asbury Cares program, we support selected community partner organizations across the nation to help reduce disparities in our communities where we live and serve.
Removed
Miller ("LHM") Dealerships and TCA (collectively, the "LHM acquisition"), thereby acquiring 54 new vehicle dealerships, seven used cars stores, 11 collision centers, a used vehicle wholesale business, the real property related thereto, and the entities comprising the TCA business for a total purchase price of $3.48 billion.
Added
Our store operations are conducted by our subsidiaries and the Company operates in two reportable segments, the Dealerships and TCA segments.
Removed
The purchase price was financed through a combination of cash, debt, including senior notes, real estate facilities, new and used vehicle floor plan facilities and the proceeds from the issuance of common stock. As a result of the transaction, the Company operates in two reportable segments, the Dealerships and TCA segments.
Added
Pursuant to the Transaction Agreement, the Company is expected to acquire substantially all of the assets, including all real property and businesses, of the Herb Chambers Dealerships (collectively, the "Businesses") for an aggregate purchase price of approximately $1.34 billion, which includes $750 million for goodwill and approximately $590 million for the real estate and leasehold improvements.
Removed
In addition to the LHM acquisition, during the year ended December 31, 2021, we acquired the assets of 11 franchises (10 dealership locations) in the Denver, Colorado market and three franchises (one dealership location) in the Indianapolis, Indiana market for a combined purchase price of $485.7 million.
Added
In addition, the Company will acquire new vehicles, used vehicles, service loaner vehicles, fixed assets, parts and supplies for a purchase price to be determined at the closing (the "Closing") of the transactions set forth in the Transaction Agreement and will reimburse the Herb Chambers Dealerships for certain dealership construction and development costs incurred prior to the Closing.
Removed
We funded these acquisitions with an aggregate of $455.1 million of cash and $9.6 million of floor plan borrowings for the purchase of the related new vehicle inventory. In the aggregate, these acquisitions included purchase price holdbacks of $21.0 million for potential indemnity claims made by us with respect to the acquired franchises.
Added
The Businesses include 33 dealerships, 52 franchises and three collision centers. Herb Chambers will retain ownership of the Mercedes-Benz of Boston dealership in Somerville, Massachusetts (the "MB Boston Dealership").
Removed
During the year ended December 31, 2021, we sold one franchise (one dealership location) in the Charlottesville, Virginia market. The Company recorded a pre-tax gain totaling $8.0 million.
Added
The Transaction Agreement includes certain restrictions and obligations regarding the sale of the MB Boston Dealership, including a put right obligating the Company to purchase the MB Boston Dealership during the five-year period following the Closing, absent certain circumstances.
Removed
Accelerate same store growth and guest experience through technology investment .
Added
The Closing is subject to various customary closing conditions, including (i) receipt of approval of the transactions by certain automotive manufacturers, (ii) receipt of certain governmental clearances, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) the continued accuracy of the representations and warranties of the parties, (iv) the assignment of certain leases and key contracts and (v) the absence of a material adverse effect.
Removed
We also invest in resources to train and develop our employees. Our executive management team has extensive experience in the auto retail sector and is able to leverage experience from all positions throughout the Company.
Added
The Transaction Agreement also contains certain termination rights. The Herb Chambers Dealerships may, in some circumstances of termination, be required to pay us a termination fee of $100 million, and in other circumstances of termination, be entitled to receive certain earnest money.
Removed
In addition to requirements under dealer agreements, we are subject to provisions contained in supplemental agreements, framework agreements, dealer addenda and manufacturers' policies, collectively referred to as "framework agreements." Framework agreements impose requirements on us in addition to those described above.
Added
The Closing is anticipated to occur in the second quarter of 2025. 6 Table of Contents Some but not all of the factors that could cause actual results or events to differ materially from those anticipated are set forth at "Item 1A. Risk Factors" in this Form 10-K.
Removed
Diversity, Equity and Inclusion We strive to recruit new employees based on their diversity of thought, background and experience as well as diversity of personal characteristics to best reflect our guests and communities we serve. 15 Table of Contents The goal of our diversity, equity and inclusion ("DE&I") efforts is to create more welcoming and inclusive workplaces throughout our dealerships and offices to enable us to attract, retain and develop the careers of diverse, highly talented team members.
Added
There were no acquisitions during the years ended December 31, 2024 and 2022.
Removed
Saving and retirement • Holiday match; and • 401(k) match. 16 Table of Contents Paid time off • Up to 4 weeks paid time off; • Paid pregnancy leave; and • Paid parental leave.
Added
Divestitures During the year ended December 31, 2024, we sold 1 Lexus franchise (1 dealership location) in Wilmington, Delaware due to OEM requirements in connection with the Koons acquisition, 1 Nissan franchise (1 dealership location) in Denver, Colorado, 1 Nissan franchise (1 dealership location) in Atlanta, Georgia, 1 Chevrolet franchise (1 dealership location) in Atlanta, Georgia and 1 Honda franchise (1 dealership location) in Spokane, Washington.
Added
The Company recorded a pre-tax gain totaling $207.1 million.
Added
TCA’s key offerings include vehicle service contracts, prepaid maintenance, protection plans, key and remote replacement, leased vehicle protection and tire and wheel protection. Over the long-term, we expect that the profitability of our TCA products will be higher than the profitability associated with selling F&I products offered by third-parties.
Added
We expect to complete the rollout of TCA's service offerings to all of our dealerships in 2025 by offering TCA products in our Florida market during the first quarter of 2025, and the Koons platform in the second quarter of 2025; however, no assurance can be given that the rollout will be completed with the timeframe contemplated.
Added
Aligning with our strategic outlook, the Company, on February 14, 2025, through one of its subsidiaries, entered into a Transaction Agreement with the Herb Chambers Dealerships that will result in the Company acquiring substantially all of the assets, including all real property and businesses of the Herb Chambers Dealerships, which comprise 33 dealerships, 52 franchises and three collision centers, which is expected to positively contribute to the Company’s overall revenue objectives.
Added
Competition The automotive retail and service industry is highly competitive with respect to price, service, location, and selection. For new vehicle sales, our dealerships compete with other franchised dealerships, primarily in their regions.
Added
Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, vehicle manufacturer incentive programs, or adverse weather events, or other occurrences that are outside of our control.
Added
Inclusive and Welcoming Culture We strive to create a welcoming and inclusive workplace throughout our dealerships and offices for our team members who represent a wide range of backgrounds and experiences. We feel that building this culture enables us to attract, retain and develop the careers of our highly talented team members.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

57 edited+28 added−6 removed166 unchanged
Biggest changeThese risks include, but are not limited to: (i) failing to obtain manufacturers’ consents to acquisitions of additional franchises; (ii) incurring significant transaction-related costs for both completed and failed acquisitions; (iii) incurring significantly higher capital expenditures and operating expenses; (iv) failing to integrate the operations and personnel of the acquired dealerships and impairing relationships with employees; (v) incorrectly valuing entities to be acquired or incurring undisclosed liabilities at acquired dealerships; (vi) disrupting our ongoing business and diverting our management resources to newly acquired dealerships; (vii) failing to achieve expected performance levels; (viii) impairing relationships with manufacturers and customers as a result of changes in management; (ix) failing to realize expected benefits and synergies from the transaction; and (ix) failing to implement or improve controls, policies and information systems and related security measures in the acquired businesses.
Biggest changeThese risks include, but are not limited to: (i) failing to obtain manufacturers’ consents to acquisitions of additional franchises; (ii) manufacturers' requirements to divest certain franchises when acquiring additional franchises; (iii) incurring significant transaction-related costs for completed, failed and pending acquisitions; (iv) incurring significantly higher capital expenditures and operating expenses; (v) the inability to obtain the necessary financing in order to complete acquisitions; (vi) failing to successfully integrate the operations and personnel of the acquired dealerships and impairing relationships with employees; (vii) impairing relationships with employees of the acquired dealerships; (viii) incorrectly valuing entities to be acquired or incurring undisclosed liabilities at acquired dealerships; (ix) disrupting our ongoing business and diverting our management resources to newly acquired dealerships; (x) failing to achieve expected performance levels and financial results on a same store basis after integration; (xi) impairing relationships with manufacturers and customers as a result of changes in management; (xii) delays or difficulties related to our ability to obtain future necessary regulatory approvals for TCA in jurisdictions applicable to acquired dealerships; (xiii) difficulties in entering geographic markets in which we have no or limited direct prior experience; (xiv) failing to realize expected benefits and synergies from the transaction; and (xv) failing to implement or improve controls, policies and information systems and related security measures in the acquired businesses.
Our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party information systems, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time or (ii) our relationship with our DMS providers or any other third-party provider deteriorates.
Our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party information systems, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time for any reason or (ii) our relationship with our DMS providers or any other third-party provider deteriorates.
In addition, if a vehicle manufacturer’s financial condition worsens and it seeks protection from creditors in bankruptcy or similar proceedings, or otherwise under the laws of its jurisdiction of organization, (i) the manufacturer could seek to terminate or reject all or certain of our franchises, (ii) if the manufacturer is successful in terminating all or certain of our franchises, we may not receive adequate compensation for those franchises, (iii) our cost to obtain financing for our new vehicle inventory may increase or no longer be available from such manufacturer’s captive finance subsidiary, (iv) consumer demand for such manufacturer’s products could be materially adversely affected, especially if costs related to improving such manufacturer’s financial condition are factored into the price of its products, (v) there may be a significant disruption in the availability of consumer credit to purchase or lease that manufacturer’s vehicles or negative changes in the terms of such financing, which may negatively impact our sales, or (vi) there may be a reduction in the value of receivables and inventory associated with that manufacturer, among other things.
In addition, if a vehicle manufacturer’s financial condition worsens and it seeks protection from creditors in bankruptcy or similar proceedings, or otherwise under the laws of its jurisdiction of organization, (i) the manufacturer could seek to terminate or reject all or certain of our franchises, (ii) if the manufacturer is successful in terminating all or certain of our franchises, we may not receive adequate compensation for those franchises, (iii) our cost to obtain financing for our new vehicle inventory 22 Table of Contents may increase or no longer be available from such manufacturer’s captive finance subsidiary, (iv) consumer demand for such manufacturer’s products could be materially adversely affected, especially if costs related to improving such manufacturer’s financial condition are factored into the price of its products, (v) there may be a significant disruption in the availability of consumer credit to purchase or lease that manufacturer’s vehicles or negative changes in the terms of such financing, which may negatively impact our sales, or (vi) there may be a reduction in the value of receivables and inventory associated with that manufacturer, among other things.
Furthermore, we expect that new laws and regulations, particularly at the federal level, in other areas may be enacted, which could also materially adversely impact our business. On August 3, 2022, we received a Civil Investigative Demand (“CID”) from the FTC requesting information and documents concerning the Company’s corporate structure and operation of six of its dealerships.
Furthermore, we expect that new laws and regulations, particularly at the federal level, in other areas may be enacted, which could also materially adversely impact our business. On August 3, 2022, we received a Civil Investigative Demand ("CID") from the FTC requesting information and documents concerning the Company’s corporate structure and operation of six of its dealerships.
Our failure to comply with any of these covenants in the future could constitute a default under the relevant agreement, which could, depending on the relevant agreement, (i) entitle the creditors under such agreement to terminate our ability to borrow under the relevant agreement and accelerate our obligations to repay outstanding borrowings; (ii) require us to repay those borrowings; (iii) entitle the creditors under such agreement to foreclose on the property securing the relevant indebtedness; or (iv) prevent us from making debt service payments on certain of our other indebtedness, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our failure to comply with any of these covenants in the future could constitute a default under the relevant agreement, which could, depending on the relevant agreement, (i) entitle the creditors under such agreement to terminate our ability to borrow under the relevant agreement and accelerate our obligations to repay outstanding borrowings; (ii) require us to repay those borrowings; (iii) entitle the creditors under such agreement to foreclose on the property securing the relevant 25 Table of Contents indebtedness; or (iv) prevent us from making debt service payments on certain of our other indebtedness, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Although the requirements contained in these agreements did not restrict our subsidiaries from distributing cash to us as of December 31, 2023, unexpected changes to our financial metrics or to the terms of our franchise agreements, dealer agreements, or other agreements with manufacturers could require us to alter the manner in which we distribute or use cash.
Although the requirements contained in these agreements did not restrict our subsidiaries from distributing cash to us as of December 31, 2024, unexpected changes to our financial metrics or to the terms of our franchise agreements, dealer agreements, or other agreements with manufacturers could require us to alter the manner in which we distribute or use cash.
We depend on the efficient operation of our information systems and those of our third-party service providers. We rely on information systems at our dealerships in all aspects of our sales and service efforts, as well in the preparation of our consolidated financial and operating data. All of our dealerships currently operate on two dealer management systems ("DMS").
We depend on the efficient operation of our information systems and those of our third-party service providers. We rely on information systems at our dealerships in all aspects of our sales and service efforts, as well as in the preparation of our consolidated financial and operating data. All of our dealerships currently operate on three dealer management systems ("DMS").
If the state franchise laws are repealed, weakened or amended to permit vehicle manufacturers to sell vehicles (whether electric or not) directly to consumers, they may be able to have a competitive advantage over the 22 Table of Contents traditional dealers, which could have a material adverse effect on our sales in those states, which in turn, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If the state franchise laws are repealed, weakened or amended to permit vehicle manufacturers to sell vehicles (whether electric or not) directly to consumers, they may be able to have a competitive advantage over the traditional dealers, which could have a material adverse effect on our sales in those states, which in turn, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Although we believe we have systems and processes in place to protect against risks associated with cyber incidents in the future, depending on the nature of an incident, these protections may not be fully sufficient.
Although we believe we have systems and processes in place to protect against risks associated with cybersecurity incidents in the future, depending on the nature of an incident, these protections may not be fully sufficient.
In addition, we believe the automotive dealership industry is a particular target of identity thieves, as there are numerous opportunities for a data security breach, including cybersecurity breaches, burglary, lost or misplaced data, malware, ransomware, computer viruses or other malicious software code, corruption of data, exfiltration of data to malicious sites, the dark web or other locations or threat actors, or misappropriation of data by employees, vendors or unaffiliated third parties.
In addition, we believe the automotive dealership industry is a particular target of identity thieves and other threat actors, as there are numerous opportunities for cybersecurity incidents, including cybersecurity breaches, burglary, lost or misplaced data, malware, ransomware, computer viruses or other malicious software code, corruption of data, exfiltration of data to malicious sites, the dark web or other locations or threat actors, or misappropriation of data by employees, vendors or unaffiliated third parties.
We currently devote significant resources to comply with applicable federal, state, and local regulation of health, safety, environmental, zoning and land use regulations, and we may need to spend additional time, effort, and money to keep our operations and existing or acquired facilities in compliance therewith.
We 28 Table of Contents currently devote significant resources to comply with applicable federal, state, and local regulation of health, safety, environmental, zoning and land use regulations, and we may need to spend additional time, effort, and money to keep our operations and existing or acquired facilities in compliance therewith.
Key incentive programs include: (i) customer rebates on new vehicles; (ii) dealer incentives on new vehicles; (iii) special financing or leasing terms; (iv) warranties on new and used vehicles; and (v) sponsorship of used vehicle sales by authorized new vehicle dealers. Vehicle manufacturers often make many changes to their incentive programs.
Key incentive programs include: (i) customer rebates on new vehicles; (ii) dealer incentives on new vehicles; (iii) special financing or leasing terms; (iv) warranties on new and used vehicles; and (v) sponsorship of used vehicle sales by authorized new vehicle dealers. 24 Table of Contents Vehicle manufacturers often make many changes to their incentive programs.
In January 2024, the FTC published the Combatting Auto Retail Scams Final Rule (the “CARS Rule”), which prohibits a broad range of current accepted industry sales and marketing practices and imposes significant new dealer disclosure obligations and record-keeping requirements throughout the vehicle-buying process.
In January 2024, the FTC published the Combatting Auto Retail Scams Final Rule (the "CARS Rule"), which prohibits a broad range of current accepted industry sales and marketing practices and imposes significant new dealer disclosure obligations and record-keeping requirements throughout the vehicle-buying process.
Our inability to execute a substantial portion of our business strategy, could adversely affect our business, results of operations, financial condition and cash flows. We seek to execute on our strategic plan using a variety of growth efforts including, driving same-store revenue growth and acquiring additional revenue through strategic acquisitions.
Our inability to execute a substantial portion of our business strategy, could adversely affect our business, results of operations, financial condition and cash flows. We seek to execute on our strategic plan using a variety of growth efforts, which includes driving same-store revenue growth and acquiring additional revenue through strategic acquisitions.
Triggers of these clauses are often based upon actions by our stockholders and are generally outside of our control. Restrictions on any unapproved changes of ownership or management may adversely impact our value, as they may prevent or deter prospective acquirers from gaining 23 Table of Contents control of us.
Triggers of these clauses are often based upon actions by our stockholders and are generally outside of our control. Restrictions on any unapproved changes of ownership or management may adversely impact our value, as they may prevent or deter prospective acquirers from gaining control of us.
In addition, we remain vulnerable to other matters that may impact the manufacturers of the vehicles we sell, many of which are outside of our control, including: (i) changes in their respective financial condition; (ii) changes in their respective marketing efforts; (iii) changes in their respective reputation; (iv) manufacturer and other product defects, including recalls; (v) changes in their respective management; (vi) disruptions in the production and delivery of vehicles and parts due to natural disasters, pandemics or other reasons; and (vii) issues with respect to labor relations.
In addition, we remain vulnerable to other matters that may impact the manufacturers of the vehicles we sell, many of which are outside of our control, including: (i) changes in their respective financial condition; (ii) changes in their respective marketing efforts; (iii) changes in their respective reputation; (iv) manufacturer and other product defects, including recalls; (v) changes in their respective management; (vi) disruptions in the production and delivery of vehicles and parts due to natural disasters, pandemics, wars, conflicts or other reasons; (vii) issues with respect to labor relations; and (viii) consolidation among manufacturers.
Vehicle manufacturers that produce vehicles outside of the U.S. are subject to additional risks including changes in quotas, tariffs or 21 Table of Contents duties, fluctuations in foreign currency exchange rates, regulations governing imports and the costs related thereto, and foreign governmental regulations.
Vehicle manufacturers that produce vehicles outside of the U.S. are subject to additional risks including changes in quotas, tariffs or duties, fluctuations in foreign currency exchange rates, regulations governing imports and the costs related thereto, and foreign governmental regulations.
On February 8, 2024, the FTC staff counsel sent to us a proposed consent order and draft complaint, alleging that the Company and three of our dealerships had violated Section 5 of the Federal Trade Commission Act (“FTC Act”) and certain provisions of the Equal Credit Opportunity Act (“ECOA”) in connection with the sale of add-on products (e.g., vehicle service contracts, maintenance plans, etc.), and advising that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims.
On February 8, 2024, the FTC staff counsel sent to us a proposed consent order and draft complaint, alleging that the Company and three of our dealerships had violated Section 5 of the Federal Trade Commission Act ("FTC Act") and certain provisions of the Equal Credit Opportunity Act ("ECOA") in connection with the sale of add-on products (e.g., vehicle service contracts, maintenance plans, etc.), and advised that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims.
As such, supply chain disruptions resulting from natural disasters, adverse weather, pandemics, labor stoppages and other events may affect the flow of vehicle and parts inventories to us or our manufacturing partners.
As such, supply chain disruptions resulting from natural disasters, adverse weather, pandemics, tariffs, labor stoppages, wars, conflicts and other events may affect the flow of vehicle and parts inventories to us or our manufacturing partners.
Because of the increasing number and sophistication of cyber-attacks, and despite the security measures we have in place and any additional measures we may implement or adopt in the future, our facilities and systems, and those of our third-party service providers, could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, scams, burglary, human errors, acts of vandalism and/or other events.
Because of the increasing number and sophistication of some cybersecurity incidents and cyber-attacks, and despite the security measures we have in place and any additional measures we may implement or adopt in the future, our facilities and systems, and those of our third-party service providers and business partners, could be vulnerable to cybersecurity incidents, security breaches, computer viruses, lost or misplaced data, programming errors, scams, burglary, human errors, acts of vandalism and/or other events.
We do not believe that the ultimate resolution of any known matters will have a material 29 Table of Contents adverse effect on our business, reputation, financial condition, results of operations, cash flows or prospects.
We do not believe that the ultimate resolution of any known matters will have a material adverse effect on our business, reputation, financial condition, results of operations, cash flows or prospects.
Cyber incidents can result from human error or intentional (or deliberate) attacks or unintentional events by insiders (e.g., employees) or third parties, including cybercriminals, competitors, nation-states and “hacktivists,” among others.
Cyber incidents can result from human error or intentional (or deliberate) attacks or unintentional events by insiders (e.g., employees) or third parties, including cybercriminals, competitors, nation-states and "hacktivists," among others.
Additionally, a shift in consumer’s vehicle preferences driven by pricing, fuel costs or other factors may have a material adverse effect on our revenues, margins and results of operations. 20 Table of Contents Changes in general economic conditions may make it difficult for us to execute our business strategy.
Additionally, a shift in consumer vehicle preferences driven by pricing, fuel costs or other factors may have a material adverse effect on our revenues, margins and results of operations. Changes in general economic conditions may make it difficult for us to execute our business strategy.
As a result, rising interest rates may have the effect of simultaneously increasing our capital costs and reducing our revenues. Given our variable interest rate debt and floor plan notes payable outstanding as of December 31, 2023, each one percent increase in market interest rates would increase our total annual interest expense by approximately $18.1 million.
As a result, rising interest rates may have the effect of simultaneously increasing our capital costs and reducing our revenues. Given our variable interest rate debt and floor plan notes payable outstanding as of December 31, 2024, each one percent increase in market interest rates would increase our total annual interest expense by approximately $16.7 million.
Inflation can adversely affect us by increasing the costs of labor, fuel and other costs as well as by reducing demand for automobiles. Sales of certain vehicles, particularly trucks and sport utility vehicles that historically have provided us with higher gross profit per vehicle retailed, may be sensitive to fuel prices.
Recently, inflation has increased throughout the U.S. economy. Inflation can adversely affect us by increasing the costs of labor, fuel and other costs as well as by reducing demand for automobiles. Sales of certain vehicles, particularly trucks and sport utility vehicles that historically have provided us with higher gross profit per vehicle retailed, may be sensitive to fuel prices.
In addition, with respect to employment practices, we are subject to various 27 Table of Contents laws and regulations, including complex federal, state, and local wage and hour and anti-discrimination laws.
In addition, with respect to employment practices, we are subject to various laws and regulations, including complex federal, state, and local wage and hour and anti-discrimination laws.
In addition, because techniques used in cybersecurity attacks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
In addition, because techniques used in cybersecurity attacks and incidents change frequently and may not be recognized until launched against a target, we or our business partners and service providers may be unable to anticipate these techniques or to implement adequate preventative measures.
The United States or the countries from which our products are imported may, from time to time, impose new quotas, duties, tariffs or other restrictions or limitations, or adjust presently prevailing quotas, duties or tariffs.
The United States or the countries from which our products are imported may, from time to time, impose new quotas, duties, tariffs or other restrictions or limitations, or adjust presently prevailing quotas, duties or tariffs, including recently proclaimed and possible future tariffs.
For example, improvements in electric, battery-powered and hybrid gas/electric vehicles have increased consumer demand for such vehicles.
For 21 Table of Contents example, improvements in electric, battery-powered and hybrid gas/electric vehicles have increased consumer demand for such vehicles.
As described under Item 9A. "Controls and Procedures" below, we previously concluded that a material weakness in our internal control over financial reporting existed as of December 31, 2022 and, accordingly, internal control over financial reporting and our disclosure controls and procedures were not effective as of such date.
"Controls and Procedures" below, we have concluded that a material weakness in our internal control over financial reporting existed as of December 31, 2024 and, accordingly, internal control over financial reporting and our disclosure controls and procedures were not effective as of such date.
Our future performance will be impacted by general economic conditions including among other things: changes in employment levels; consumer demand, preferences and confidence levels; the availability and cost of credit; fuel prices; levels of discretionary personal income; inflation; and interest rates. Recently, inflation has increased throughout the U.S. economy.
Our future performance will be impacted by general economic conditions including among other things: changes in employment levels; consumer demand, preferences and confidence levels; the availability and cost of credit; fuel prices; levels of discretionary personal income; inflation; interest rates; and changes in U.S. trade policy, including the imposition of tariffs and resulting consequences.
We must test our goodwill and manufacturer franchise rights for impairment at least annually, which could result in a material, non-cash write-down of goodwill or manufacturer franchise rights and could have a material adverse effect on our results of operations and stockholders’ equity. Our principal intangible assets are goodwill and our rights under our franchise agreements with vehicle manufacturers.
Goodwill and manufacturer franchise rights comprise a significant portion of our total assets. We must test our goodwill and manufacturer franchise rights for impairment at least annually, which could result in a material, non-cash write-down of goodwill or manufacturer franchise rights and could have a material adverse effect on our results of operations and stockholders’ equity.
( Honda and Acura ) 12 % Ford Motor Company ( Ford and Lincoln ) 11 % Mercedes-Benz USA, LLC ( Mercedes-Benz and Sprinter ) 9 % General Motors Company ( Chevrolet, Buick and GMC) 6 % Hyundai Motor North America ( Hyundai and Genesis ) 5 % Similar to automotive retailers, vehicle manufacturers may be affected by the long-term U.S. and international economic climate.
( Chrysler, Dodge, Jeep, Ram and Fiat ) 9 % Mercedes-Benz USA, LLC ( Mercedes-Benz and Sprinter ) 8 % General Motors Company ( Chevrolet, Buick and GMC) 8 % Hyundai Motor North America ( Hyundai and Genesis ) 5 % Similar to automotive retailers, vehicle manufacturers may be affected by the long-term U.S. and international economic climate.
As of December 31, 2023, we had total debt of $3.23 billion and total floor plan notes payable, net of $1.79 billion.
As of December 31, 2024, we had total debt of $3.16 billion and total floor plan notes payable, net of $1.69 billion.
Goodwill and indefinite-lived intangible assets, including manufacturer franchise rights, are subject to impairment assessments at least annually (or more frequently when events or changes in circumstances indicate that an impairment may have occurred), by applying a qualitative or quantitative assessment. A decrease in our market capitalization or profitability increases the risk of goodwill impairment.
Our principal intangible assets are goodwill and our rights under our franchise agreements with vehicle manufacturers. Goodwill and indefinite-lived intangible assets, including manufacturer franchise rights, are subject to impairment assessments at least annually (or more frequently when events or changes in circumstances indicate that an impairment may have occurred), by applying a qualitative or quantitative assessment.
The fair value of our manufacturer franchise rights is determined by discounting a subset of the projected cash flows at a dealership that we attribute to the value of the franchise. Changes to the business mix or declining cash flows in a dealership increase the risk of impairment.
A decrease in our market capitalization or profitability increases the risk of goodwill impairment. The fair value of our manufacturer franchise rights is determined by discounting a subset of the projected cash flows at a dealership that we attribute to the value of the franchise.
While we have experienced cyber incidents in the past, and may experience additional incidents in the future, we are not aware of any incident having a material adverse effect on our business, results of operations or financial condition to date. However, there can be no assurance that we will not experience future cyber incidents that may be material.
While we and the business partners and service providers on which we rely have experienced cybersecurity incidents in the past, and may experience additional incidents in the future, we are not aware of any incident having a material adverse effect on our business, results of operations or financial condition to date.
For the year ended December 31, 2023, manufacturers representing 5% or more of our revenues from new vehicle sales were as follows: Manufacturer (Vehicle Brands): % of Total New Vehicle Revenues Toyota Motor Sales, U.S.A., Inc. ( Toyota and Lexus ) 27 % Stellantis N.V. ( Chrysler, Dodge, Jeep, Ram and Fiat ) 12 % American Honda Motor Co., Inc.
For the year ended December 31, 2024, manufacturers representing 5% or more of our revenues from new vehicle sales were as follows: Manufacturer (Vehicle Brands): % of Total New Vehicle Revenues Toyota Motor Sales, U.S.A., Inc. ( Toyota and Lexus ) 30 % Ford Motor Company ( Ford and Lincoln ) 13 % American Honda Motor Co., Inc.
For such potential liabilities, we believe we are entitled to indemnification from other entities. However, we cannot provide assurance that such entities will view their obligations as we do or will be able or willing to satisfy them.
Liability under these laws and regulations can be imposed on a joint and several basis and without regard to fault. For such potential liabilities, we believe we are entitled to indemnification from other entities. However, we cannot provide assurance that such entities will view their obligations as we do or will be able or willing to satisfy them.
In addition, we may become subject to broad liabilities arising out of contamination at our currently and formerly owned or operated facilities, at locations to which hazardous substances were transported from such facilities, and at such locations related to entities formerly affiliated with us. 28 Table of Contents Liability under these laws and regulations can be imposed on a joint and several basis and without regard to fault.
In addition, we may become subject to broad liabilities arising out of contamination at our currently and formerly owned or operated facilities, at locations to which hazardous substances were transported from such facilities, and at such locations related to entities formerly affiliated with us.
If market conditions cause subprime lenders to tighten credit standards, or if interest rates increase, the ability to obtain financing from subprime lenders for these consumers to purchase vehicles could become limited, resulting in a decline in our vehicle sales, which in turn, could have a material adverse effect on our financial condition and results of operations. 25 Table of Contents We may identify a material weakness in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements or otherwise adversely affect the accuracy, reliability or timeliness of our financial statements.
If market conditions cause subprime lenders to tighten credit standards, or if interest rates increase, the ability to obtain financing from subprime lenders for these consumers to purchase vehicles could become limited, resulting in a decline in our vehicle sales, which in turn, could have a material adverse effect on our financial condition and results of operations.
We are, and expect to continue to be, subject to legal and administrative proceedings, which, if the outcomes are adverse to us, could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and prospects.
In addition, if enrollment in our health care plans increases significantly, the additional costs that we will incur may be significant enough to materially affect our business, financial condition, results of operations and cash flows. 30 Table of Contents We are, and expect to continue to be, subject to legal and administrative proceedings, which, if the outcomes are adverse to us, could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and prospects.
When seeking to acquire other dealerships, we often compete with several other national, regional and local dealership groups, and other strategic and financial buyers, some of which may have greater financial resources than us.
However, there can be no assurance that there will be sufficient revenue from such acquisitions to offset increased expenses and costs arising out of such acquisitions. When seeking to acquire other dealerships, we often compete with several other national, regional and local dealership groups, and other strategic and financial buyers, some of which may have greater financial resources than us.
These limit, among other things, our ability to incur certain additional debt, create certain liens or other 24 Table of Contents encumbrances and make certain payments (including dividends and repurchases of our common stock and for investments).
These limit, among other things, our ability to incur certain additional debt, create certain liens or other encumbrances and make certain payments (including dividends and repurchases of our common stock and for investments). Certain of these agreements also require us to maintain compliance with certain financial ratios, including, but not limited to, our adjusted net leverage ratio.
During the year ended December 31, 2023, we recognized asset impairment charges of $117.2 million associated with manufacturer franchise rights recorded at certain dealerships and goodwill associated with certain asset disposal groups.
Changes to the business mix or declining cash flows in a dealership increase the risk of impairment. During the year ended December 31, 2024, we recognized asset impairment charges of $149.5 million associated with manufacturer franchise rights recorded at certain dealerships and goodwill associated with certain asset disposal groups.
We cannot give assurance that we will be able to execute a substantial portion of our strategic plan which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 19 Table of Contents Goodwill and manufacturer franchise rights comprise a significant portion of our total assets.
Furthermore, we may decide to alter or discontinue aspects of our strategic plan and may adopt alternative or additional strategies in response to business or competitive factors or other factors or events beyond our control. 19 Table of Contents We cannot give assurance that we will be able to execute a substantial portion of our strategic plan which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
The FTC has stayed the CARS Rule’s original effective date of July 30, 2024 pending the resolution of a judicial challenge to the CARS Rule. Compliance with the CARS Rule, if it becomes effective, would be burdensome and cause us to incur increased costs.
The FTC stayed the CARS Rule’s original effective date of July 30, 2024 pending the resolution of a judicial challenge to the CARS Rule.
Accordingly, we believe that our future growth depends in part on our ability to manage expansion, control costs in our operations and acquire and effectively integrate acquired dealerships into our organization. For example, with the recent consummation of the Koons acquisition, we will experience significantly more sales, and have more assets and employees than we did prior to the transaction.
Accordingly, we believe that our future growth depends in part on our ability to manage expansion, control costs in our operations and acquire and effectively integrate acquired dealerships into our organization.
We may obtain new vehicles from manufacturers, service vehicles, sell new vehicles and display vehicle manufacturers’ trademarks only to the extent permitted under these agreements. The terms of these agreements may conflict with our interests and objectives and may impose limitations on key aspects of our operations, including acquisition strategy and capital spending.
We may obtain new vehicles from manufacturers, service vehicles, sell new vehicles and display vehicle manufacturers’ trademarks only to the extent permitted under these agreements.
For example, manufacturers can set performance standards with respect to sales volume, sales effectiveness and customer satisfaction, and require us to obtain manufacturer consent before we can acquire dealerships selling a manufacturer’s automobiles.
The terms of these agreements may conflict with our interests and objectives and may impose limitations on key aspects of our operations, including acquisition strategy and capital spending. 23 Table of Contents For example, manufacturers can set performance standards with respect to sales volume, sales effectiveness and customer satisfaction, and require us to obtain manufacturer consent before we can acquire dealerships selling a manufacturer’s automobiles.
Significant increases in fuel economy requirements or new federal or state restrictions on emissions of carbon dioxide that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we sell or lead to changes in automotive technology. 26 Table of Contents A failure of any of our information systems or those of our third-party service providers, or a data security breach with regard to personally identifiable information ("PII") about our customers or employees, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Significant increases in fuel economy requirements or new federal or state restrictions on emissions of carbon dioxide that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we sell or lead to changes in automotive technology.
The integration processes require us to expend significant capital and significantly expand the scope of our operations and financial systems. Integration also requires support or other actions by third-parties such as vendors, suppliers, and licensing agencies and the untimely or inadequate responses from such third-parties can delay or otherwise negatively impact the integration process.
Integration also requires 18 Table of Contents support or other actions by third parties such as vendors, suppliers, and licensing agencies, and the untimely or inadequate responses from such third parties can delay or otherwise negatively impact integration processes. We also face additional risks commonly encountered with growth through acquisitions.
Competition for attractive acquisition targets may result in fewer acquisition opportunities for us and we may have to forgo acquisition opportunities to the extent we cannot negotiate such acquisitions on acceptable terms. 18 Table of Contents We also face additional risks commonly encountered with growth through acquisitions.
Competition for attractive acquisition targets may result in fewer acquisition opportunities for us and we may have to forgo acquisition opportunities to the extent we cannot negotiate such acquisitions on acceptable terms. The integration processes require us to expend significant capital and significantly expand the scope of our operations and financial systems.
Completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly. Failure to maintain effective internal control over financial reporting may adversely affect the accuracy and reliability of our financial statements and have other consequences that may materially and adversely affect our business.
The occurrence of, or failure to remediate, this material weakness and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy, reliability and timeliness of our financial statements and have other consequences that could materially and adversely affect our business.
The Company disputes the FTC’s allegations that it violated the FTC Act and the ECOA, and is currently involved in discussions with the FTC staff regarding the matter.
The Company vigorously disputed, and continues to vigorously dispute, the FTC’s allegations that it violated the FTC Act and the ECOA.
At this time, we are unable to reasonably predict the possible outcome of this matter, or provide a reasonably possible range of loss, if any, as a result of the investigation.
The Company’s lawsuit also contends that FTC commissioners and in-house administrative law judges are effectively insulated from removal by the President in contravention of the Constitution’s requirements. At this time, we are unable to reasonably predict the possible outcome of the Company’s dispute with the FTC, or provide a reasonably possible range of loss, if any.
If the FTC files a suit against us based on these allegations, whether meritorious or not, it may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs and other expenses.
There can be no assurance that the Company will succeed in either the FTC’s administrative proceeding against the Company or in the Company’s lawsuit against the FTC, and the FTC’s allegations, whether meritorious or not, may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs and other expenses. 29 Table of Contents Environmental laws and regulations govern, among other things, discharges into the air and water, storage of petroleum substances and chemicals, the handling and disposal of solid and hazardous wastes, investigation and remediation of contamination.
Removed
Furthermore, we may decide to alter or discontinue aspects of our strategic plan and may adopt alternative or additional strategies in response to business or competitive factors or other factors or events beyond our control.
Added
For example, with the consummation of the Koons acquisition in 2023 and the pending Herb Chambers acquisition, we have experienced, and expect to continue to experience, significantly more sales, and have more assets and employees than we did previously.
Removed
Certain of these agreements also require us to maintain compliance with certain financial ratios, including, but not limited to, our adjusted net leverage ratio.
Added
The Herb Chambers Dealerships acquisition may not occur at all or may not occur in the expected time frame, which may negatively affect the trading price of our common stock and our future business and financial results.
Removed
Management identified the material weakness as a result of deficiencies in information technology general controls ("ITGCs") at LHM and TCA, businesses that we acquired in December 2021. During 2023, we completed the remediation measures related to the material weakness and we have concluded that our internal control over financial reporting is effective as of December 31, 2023.
Added
No assurance can be provided that the Herb Chambers Dealerships acquisition will be completed in the manner and on the time frame currently anticipated, or at all. Completion of the Herb Chambers Dealerships acquisition is subject to the satisfaction or waiver of a number of conditions beyond our control that may prevent, delay or otherwise materially adversely affect its completion.
Removed
There can be no assurance that negotiations between us and the FTC for a favorable settlement will be successful, or that we will succeed in any litigation as a result of the investigation.
Added
If the Herb Chambers Dealerships acquisition is not completed, if there are significant delays in completing the Herb Chambers Dealerships acquisition or if the Herb Chambers Dealerships acquisition involves an unexpected amount of remedies required by regulatory authorities, it could negatively affect the trading price of our common stock and our future business and financial results.
Removed
Environmental laws and regulations govern, among other things, discharges into the air and water, storage of petroleum substances and chemicals, the handling and disposal of solid and hazardous wastes, investigation and remediation of contamination.
Added
The following are some but not all of the factors that could cause the Herb Chambers Dealerships acquisition to be delayed or not successfully be completed: (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the Transaction Agreement; (ii) the risk that the necessary manufacturer approvals may not be obtained; (iii) the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated; (iv) the inability to obtain the necessary financing in order to complete the acquisition; (v) the risk that the proposed acquisition will not be consummated in a timely manner; and (vi) the risk that any of the closing conditions to the proposed acquisition may not be satisfied or may not be satisfied in a timely manner.
Removed
In addition, if enrollment in our health care plans increases significantly, the additional costs that we will incur may be significant enough to materially affect our business, financial condition, results of operations and cash flows.
Added
We may not realize the strategic benefits and cost synergies that are anticipated from the planned Herb Chambers Dealerships acquisition. Our future growth depends in part on our ability to acquire and effectively integrate acquired dealerships into our organization, such as the pending Herb Chambers Dealerships acquisition.
Added
The benefits that are expected to result from the Herb Chambers Dealerships acquisition will depend, in part, on our ability to consummate the Herb Chambers Dealerships acquisition within the anticipated time period, or at all, and to integrate and realize the anticipated cost synergies from the Herb Chambers Dealerships acquisition.
Added
There is a significant degree of difficulty and management distraction inherent in the process of integrating an acquisition.
Added
Some members of our management may be required to devote considerable time to this integration process, which will decrease the time they will have to manage the Company, service existing customers, attract new customers 20 Table of Contents and develop new businesses or strategies.
Added
If management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business, financial condition and results of operations could suffer.
Added
We also cannot guarantee that the benefits and cost synergies that we currently expect to realize as a result of the Herb Chambers Dealerships acquisition will be achieved within our anticipated time frames or at all.
Added
Additionally, we may incur substantial expenses in connection with the integration of the Herb Chambers Dealerships, which may exceed expectations and offset certain anticipated benefits.
Added
The following are some but not all of the factors that could cause actual results or events to differ materially from those anticipated in connection with the Herb Chambers Dealerships acquisition: (i) risks related to disruption of management time from ongoing business operations due to the proposed acquisition; (ii) the failure to realize the benefits expected from the proposed acquisition; (iii) the failure to promptly and effectively integrate the operations, including information technology systems and security, and personnel, including applicable pay plans; (iv) the effect of the announcement of the proposed Transaction on the ability of the Company to retain and hire key personnel, and maintain relationships with suppliers; and (v) our ability to execute our business strategy and accelerate same store growth after integration.
Added
( Honda and Acura ) 10 % Stellantis N.V.
Added
We anticipate the completion of the Herb Chambers Dealerships acquisition will cause us to (i) use a substantial portion of our cash resources; (ii) incur additional debt, which will increase our interest expense, leverage and debt service requirements; (iii) assume certain liabilities; (iv) record goodwill and intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges; (v) incur tax expenses in connection with the acquisition and related to the effect of the acquisition on our legal structure; (vi) incur financing, restructuring and other related expenses; and (vii) be subject to certain litigation of the acquired company.
Added
We also expect that the completion of the Herb Chambers Dealerships acquisition will impact our debt service obligations.
Added
We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements or otherwise adversely affect the accuracy, reliability or timeliness of our financial statements. As described under Item 9A.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−0 removed15 unchanged
Biggest changeAs of the date of this Form 10-K, no cybersecurity incident or attack, or any risk from cybersecurity threat, has materially affected or has been determined to be reasonably likely to materially affect the Company, our business strategy, results of operations, or financial condition. For additional information regarding the risks from cybersecurity threats we face, see the section captioned.
Biggest changeAs of the date of this Form 10-K, no cybersecurity incident or attack, or any risk from 32 Table of Contents cybersecurity threat, has materially affected or has been determined to be reasonably likely to materially affect the Company, our business strategy, results of operations, or financial condition.
Under the oversight of the audit committee and capital allocation and risk management committee of the Company’s Board of Directors, and as directed by the Company’s Chief Executive Officer, our CIO is primarily responsible for the assessment and management of material cybersecurity risks.
Under the oversight of the audit committee and capital allocation and risk management committee of the Company’s Board of Directors, and as directed by the Company’s Chief Executive Officer, our CIO is responsible for the assessment and management of material cybersecurity risks.
Asbury’s information and data security training programs are housed in a Learning Management System (LMS). We migrate our acquired companies into Asbury’s current LMS. Governance Our Chief Information Officer (“CIO”), who has over 35 years of experience in the technology field, oversees cybersecurity, data privacy and manages Asbury’s information and security procedures.
Asbury’s information and data security training programs are housed in a Learning Management System ("LMS"). We migrate our acquired companies into Asbury’s current LMS. Governance Our Chief Information Officer ("CIO"), who has over 35 years of experience in the technology field, oversees cybersecurity, data privacy and manages Asbury’s information and security procedures.
Our cybersecurity capabilities, processes, and other security measures also include, without limitation: • Service Organization Controls ("SOC")-as-a-Service (SOCaas) wherein a third-party vendor operates and maintains a fully-managed SOC on a subscription basis via the cloud; • Security Information and Event Management (“SIEM”) software, which provides a threat detection, compliance, and security incident management system; • Endpoint Detection and Response (“EDR”) software, which monitors for malicious activities on internal endpoints (e.g., Windows workstations, servers, MAC clients, and Linux endpoints); • Cloud monitoring; and • Disaster recovery and incident response plans, including a ransomware response plan.
Our cybersecurity capabilities, processes, and other security measures also include, without limitation: • Service Organization Controls ("SOC")-as-a-Service (SOCaas) wherein a third-party vendor operates and maintains a fully-managed SOC on a subscription basis via the cloud; • Security Information and Event Management ("SIEM") software, which provides a threat detection, compliance, and security incident management system; • Endpoint Detection and Response ("EDR") software, which monitors for malicious activities on internal endpoints (e.g., Windows workstations, servers, MAC clients, and Linux endpoints); • Cloud monitoring; and • Disaster recovery and incident response plans, including a ransomware response plan.
Asbury also has a Director of Cybersecurity, as well as a formal team of analysts. Our Board of Directors maintains ultimate oversight of the Company’s enterprise risk management program, which includes material cyber security risks.
Asbury also has a Director of Cybersecurity, as well as a formal team of analysts. 31 Table of Contents Our Board of Directors maintains ultimate oversight of the Company’s enterprise risk management program, which includes material cyber security risks.
Our CIO oversees the Company’s cybersecurity incident response plan and related processes that are designed to assess and manage material risks from cybersecurity threats. 30 Table of Contents The CIO also coordinates with the Company’s legal counsel and third parties, such as consultants and legal advisors, to assess and manage material risks from cybersecurity threats.
Our CIO oversees the Company’s cybersecurity incident response plan and related processes that are designed to assess and manage material risks from cybersecurity threats. The CIO also coordinates with the Company’s legal counsel and third parties, such as consultants and legal advisors, to assess and manage material risks from cybersecurity threats.
For further discussion of the risks associated with cybersecurity incidents, see “ A failure of any of our information systems or those of our third-party service providers, or a data security breach with regard to personally identifiable information ("PII") about our customers or 31 Table of Contents employees, could have a material adverse effect on our business, results of operations, financial condition and cash flows.” beginning on page 27 of the section entitled “Item 1A.
For further discussion of the risks associated with cybersecurity incidents, see " A failure of any of our information systems or those of our third-party service providers, or a data security breach with regard to personally identifiable information ("PII") about our customers or employees, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We have experienced targeted cybersecurity incidents in the past that have resulted in unauthorized persons gaining access to certain of our information systems, and we could in the future experience similar incidents.
We, or the business partners or services providers on which we rely, have experienced cybersecurity incidents in the past that have resulted in disruptions, technology failures, or unauthorized persons gaining access to certain information systems, and we could in the future experience similar incidents.
Added
For additional information regarding the risks from cybersecurity threats we face, see the section captioned.
Added
" beginning on page 27 of the section entitled "Item 1A. Risk Factors" in this Form 10-K.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed1 unchanged
Biggest changeItem 2. Properties We lease our corporate headquarters, which is located at 2905 Premiere Parkway, NW, Suite 300, Duluth, Georgia 30097. We also have a corporate office in Texas. The operations of our TCA business are located in leased office space in Utah.
Biggest changeWe also have a corporate office in Texas. The operations of our TCA business are located in leased office space in Utah.
As of December 31, 2023, our operations encompassed 158 franchised dealership locations, 37 collision repair centers, throughout 16 states as follows: Dealerships Collision Repair Centers Dealership Group Brand Name: Owned Leased Owned Leased Coggin Automotive Group 12 4 (a) 5 2 Courtesy Autogroup 6 2 2 — Crown Automotive Company 3 2 (b) — — David McDavid Auto Group 4 — 2 — Greenville Automotive Group 4 — 1 — Hare, Bill Estes & Kahlo Automotive Groups 9 — 1 — Koons Automotive Group 18 2 5 1 Larry H.
As of December 31, 2024, our operations encompassed 152 franchised dealership locations, 37 collision repair centers, throughout 14 states as follows: Dealerships Collision Repair Centers Dealership Group Brand Name: Owned Leased Owned Leased Coggin Automotive Group 12 4 (a) 5 2 Courtesy Autogroup 6 2 2 — Crown Automotive Company 3 1 (b) — — David McDavid Auto Group 4 — 2 — Greenville Automotive Group 4 1 1 — Hare, Bill Estes & Kahlo Automotive Groups 9 — 1 — Koons Automotive Group 17 2 5 1 Larry H.
Miller Dealerships 44 4 (b) 7 2 Mike Shaw, Stevinson & Arapahoe Automotive Groups 7 5 — — Nalley Automotive Group 16 1 4 1 Park Place Automotive 5 4 (c) 2 1 Plaza Motor Company 5 1 (b) — 1 Total 133 25 29 8 ______________________________________ (a) Includes one dealership that leases a new vehicle facility and operates a separate used vehicle facility that is owned.
Miller Dealerships 41 4 (b) 7 2 Mike Shaw, Stevinson & Arapahoe Automotive Groups 8 4 — — Nalley Automotive Group 14 1 4 1 Park Place Automotive 5 4 (c) 2 1 Plaza Motor Company 5 1 (b) — 1 Total 128 24 29 8 ______________________________________ (a) Includes one dealership that leases a new vehicle facility and operates a separate used vehicle facility that is owned.
Added
Item 2. Properties We lease our corporate headquarters, which is located at 2905 Premiere Parkway, NW, Suite 300, Duluth, Georgia 30097. In November 2024, we acquired real estate in Sandy Springs, Georgia to serve as our future corporate headquarters. We anticipate the relocation to our new corporate headquarters during the second half of 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

5 edited+4 added−1 removed4 unchanged
Biggest changeAt this time, we are unable to reasonably predict the possible outcome of this matter, or provide a reasonably possible range of loss, if any, as a result of the 32 Table of Contents investigation.
Biggest changeThe Company’s lawsuit also contends that FTC commissioners and in-house administrative law judges are effectively insulated from removal by the President in contravention of the Constitution’s requirements. At this time, we are unable to reasonably predict the possible outcome of the Company’s dispute with the FTC, or provide a reasonably possible range of loss, if any.
On August 3, 2022, we received a Civil Investigative Demand (“CID”) from the FTC requesting information and documents concerning the Company’s corporate structure and operation of six of its dealerships. We responded to the CID by producing information and documents for the period August 1, 2019 to April 24, 2023.
On August 3, 2022, we received a Civil Investigative Demand ("CID") from the Federal Trade Commission (the "FTC") requesting information and documents concerning the Company’s corporate structure and operation of six of its dealerships. We responded to the CID by producing information and documents for the period August 1, 2019 to April 24, 2023.
On February 8, 2024, the FTC staff counsel sent to us a proposed consent order and draft complaint, alleging that the Company and three of our dealerships had violated Section 5 of the Federal Trade Commission Act (“FTC Act”) and certain provisions of the Equal Credit Opportunity Act (“ECOA”) in connection with the sale of add-on products (e.g., vehicle service contracts, maintenance plans, etc.), and advising that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims.
On February 8, 2024, the FTC staff counsel sent to us a proposed consent order and draft complaint, alleging that the Company and 33 Table of Contents three of our dealerships had violated Section 5 of the Federal Trade Commission Act ("FTC Act") and certain provisions of the Equal Credit Opportunity Act ("ECOA") in connection with the sale of add-on products (e.g., vehicle service contracts, maintenance plans, etc.), and advising that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims.
If the FTC files a suit against us based on these allegations, whether meritorious or not, it may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs and other expenses. Item 4. Mine Safety Disclosures Not applicable. 33 Table of Contents PART II
There can be no assurance that the Company will succeed in either the FTC’s administrative proceeding against the Company or in the Company’s lawsuit against the FTC, and the FTC’s allegations, whether meritorious or not, may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs and other expenses.
The Company disputes the FTC’s allegations that it violated the FTC Act and the ECOA, and is currently involved in discussions with the FTC staff regarding the matter.
The Company vigorously disputed, and continues to vigorously dispute, the FTC’s allegations that it violated the FTC Act and the ECOA.
Removed
There can be no assurance that negotiations between us and the FTC for a favorable settlement will be successful, or that we will succeed in any litigation as a result of the investigation.
Added
As a result, on August 16, 2024, the FTC initiated an administrative proceeding by filing an enforcement action against the Company; David McDavid Honda Frisco, David McDavid Honda Irving, and David McDavid Ford Fort Worth, three of the Company’s dealerships; and an individual general manager at one of the dealerships pursuant to the allegations set forth above.
Added
On October 4, 2024, the Company filed a lawsuit against the FTC in the United States District Court for the Northern District of Texas, seeking to enjoin the FTC’s administrative proceeding on the ground that the administrative proceeding was unconstitutional.
Added
Among other things, the Company’s lawsuit asserts that the FTC’s administrative proceeding violates Asbury’s constitutional rights by denying it the right to a jury trial and by allowing the FTC to serve as both prosecutor and judge in the same proceeding.
Added
Item 4. Mine Safety Disclosures Not applicable. 34 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+2 added−0 removed6 unchanged
Biggest changeInformation about the shares of our common stock that we repurchased during the quarter ended December 31, 2023 is set forth below: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (In millions 10/01/2023 - 10/31/2023 130,785 $ 188.33 129,834 $ 225.6 11/01/2023 - 11/30/2023 116,397 $ 197.20 116,207 $ 202.6 12/01/2023 - 12/31/2023 — $ — — $ 202.6 Total 247,182 246,041 On May 26, 2023, our Board of Directors announced that it authorized a new $250.0 million share repurchase authorization (the "New Share Repurchase Authorization"), which replaced our previous share repurchase authorization for the repurchase of our common stock in open market transactions or privately negotiated transactions or in other manners as permitted by federal security laws and other legal and contractual requirements. 34 Table of Contents PERFORMANCE GRAPH The following graph furnished by us shows the value as of December 31, 2023, of a $100 investment in our common stock made on December 31, 2018, as compared with similar investments based on (i) the value of the S&P 500 Index (with dividends reinvested) and (ii) the value of a market-weighted Peer Group Index composed of the common stock of AutoNation, Inc.; Sonic Automotive, Inc.; Group 1 Automotive, Inc.; Penske Automotive Group, Inc.; and Lithia Motors, Inc., in each case on a "total return" basis assuming the reinvestment of any dividends.
Biggest changeInformation about the shares of our common stock that we repurchased during the quarter ended December 31, 2024 is set forth below: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (In millions 10/01/2024 - 10/31/2024 3,957 $ 219.97 3,957 $ 275.9 11/01/2024 - 11/30/2024 206 $ 255.29 — $ 275.9 12/01/2024 - 12/31/2024 24 $ 258.98 — $ 275.9 Total 4,187 3,957 On May 15, 2024, the Company announced that its Board of Directors approved an increase of $256.2 million in the Company's common share repurchase authorization to $400 million (the "New Share Repurchase Authorization"), for the repurchase of our common stock in open market transactions or privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements.
Such graph is not, and will not be deemed, filed or incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent specifically incorporated by reference therein by us. 35 Table of Contents Item 6. Reserved
Such graph is not, and will not be deemed, filed or incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent specifically incorporated by reference therein by us. 36 Table of Contents Item 6. Reserved
On February 27, 2024, the last reported sale price of our common stock on the NYSE was $212.00 per share, and there were approximately 505 record holders of our common stock. Our credit agreement with Bank of America, N.A.
On February 24, 2025, the last reported sale price of our common stock on the NYSE was $274.15 per share, and there were approximately 511 record holders of our common stock. Our credit agreement with Bank of America, N.A.
Added
The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchase will depend on such factors as Asbury’s stock price, general economic and market conditions, the potential impact on its capital structure, the expected return on competing uses of capital such as strategic dealership acquisitions and capital investments and other considerations.
Added
The program does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without further notice. 35 Table of Contents PERFORMANCE GRAPH The following graph furnished by us shows the value as of December 31, 2024, of a $100 investment in our common stock made on December 31, 2019, as compared with similar investments based on (i) the value of the S&P 500 Index (with dividends reinvested) and (ii) the value of a market-weighted Peer Group Index composed of the common stock of AutoNation, Inc.; Sonic Automotive, Inc.; Group 1 Automotive, Inc.; Penske Automotive Group, Inc.; and Lithia Motors, Inc., in each case on a "total return" basis assuming the reinvestment of any dividends.

Item 7. Management's Discussion & Analysis

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

122 edited+58 added−38 removed111 unchanged
Biggest changeThe $281.6 million decrease in adjusted cash flow provided by operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022, was primarily the result of the following: • decrease in $192.4 million in net income and non-cash adjustments to net income; • $144.1 million decrease related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2023 compared to 2022; • $210.9 million decrease related to the change in other current assets, net; • $2.6 million decrease in other long term assets and liabilities, net; and • $1.3 million decrease related to the change in operating lease liabilities. 60 Table of Contents The decrease in our adjusted cash flow provided by operating activities, was partially offset by: • $155.2 million related to an increase in inventory, net of floor plan notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and divestitures; and • $114.4 million increase related to the change in accounts payable and accrued liabilities; and The $354.9 million increase in our adjusted cash flow provided by operating activities for the year ended December 31, 2022 compared to the year ended December 31, 2021, was primarily the result of the following: • increase of $431.9 million in net income and non-cash adjustments to net income; • $126.7 million related to an increase in inventory, net of floor plan notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and divestitures; and • $16.2 million increase in other long term assets and liabilities, net.
Biggest changeThe $281.7 million decrease in our adjusted cash flow provided by operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022, was primarily the result of the following: • decrease of $192.4 million in net income and non-cash adjustments to net income; • $144.1 million related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2023 compared to 2022; • $210.9 million related to the decrease in other current assets, net; 62 Table of Contents • $2.6 million increase in other long term assets and liabilities, net and • $1.3 million related to the change in operating lease liabilities.
Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts, and collision repair service; and finance and insurance products. The finance and insurance products are provided by both independent third parties and TCA.
Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts, and collision repair service; and finance and insurance products. The finance and insurance products are provided by both TCA and independent third parties.
Manufacturers continue to be hampered by the lack of availability of parts and key components from suppliers which has impacted new vehicle inventory levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these production slowdowns or when normalized production will resume at these manufacturers.
Certain manufacturers continue to be hampered by the lack of availability of parts and key components from suppliers which has impacted new vehicle inventory levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these production slowdowns or when normalized production will resume at these manufacturers.
Finance and Insurance, net— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except for per vehicle data) As Reported: Finance and insurance, net revenue $ 676.2 $ 797.0 $ (120.8) (15) % Finance and insurance, net gross profit $ 638.2 $ 750.7 $ (112.5) (15) % Finance and insurance, net per vehicle sold $ 2,304 $ 2,480 $ (177) (7) % Same Store: Finance and insurance, net revenue $ 667.3 $ 761.7 $ (94.4) (12) % Finance and insurance, net gross profit $ 629.4 $ 715.5 $ (86.1) (12) % Finance and insurance, net per vehicle sold $ 2,308 $ 2,527 $ (219) (9) % F&I revenue, net decreased by $120.8 million (15%) in 2023 when compared to 2022 primarily as a result of an 8% decrease in new and used retail unit sales and a 7% decrease in F&I per vehicle retailed.
Finance and Insurance, net— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except for per vehicle data) As Reported: Finance and insurance, net revenue $ 676.2 $ 797.0 $ (120.8) (15) % Finance and insurance, net gross profit $ 638.2 $ 750.7 $ (112.5) (15) % Finance and insurance, net per vehicle sold $ 2,304 $ 2,480 $ (177) (7) % Same Store: Finance and insurance, net revenue $ 667.3 $ 761.7 $ (94.4) (12) % Finance and insurance, net gross profit $ 629.4 $ 715.5 $ (86.1) (12) % Finance and insurance, net per vehicle sold $ 2,308 $ 2,527 $ (219) (9) % F&I revenue, net decreased by $120.8 million (15%) in 2023 when compared to 2022 primarily as a result of an 8% decrease in new and used retail unit sales and an 7% decrease in F&I per vehicle retailed.
The Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except per share data) REVENUE: New vehicle $ 7,630.7 $ 7,365.6 $ 265.1 4 % Used vehicle 4,414.3 5,197.1 (782.8) (15) % Parts and service 2,081.5 2,074.2 7.3 — % Finance and insurance, net 676.2 797.0 (120.8) (15) % TOTAL REVENUE 14,802.7 15,433.8 (631.2) (4) % GROSS PROFIT: New vehicle 703.0 844.0 (141.0) (17) % Used vehicle 264.0 353.2 (89.2) (25) % Parts and service 1,150.6 1,152.6 (2.1) — % Finance and insurance, net 638.2 750.7 (112.5) (15) % TOTAL GROSS PROFIT 2,755.8 3,100.6 (344.8) (11) % OPERATING EXPENSES: Selling, general, and administrative 1,617.4 1,763.4 (146.0) (8) % Depreciation and amortization 67.7 69.0 (1.3) (2) % Asset impairments 117.2 — 117.2 NM Other operating income, net — (4.4) 4.4 (100) % INCOME FROM OPERATIONS 953.5 1,272.6 (319.1) (25) % OTHER (INCOME) EXPENSES: Floor plan interest expense 9.6 8.4 1.3 15 % Other interest expense, net 156.1 152.2 3.9 3 % Gain on dealership divestitures, net (13.5) (207.1) 193.6 NM Total other expenses (income), net 152.2 (46.5) 198.8 NM INCOME BEFORE INCOME TAXES 801.3 1,319.1 (517.8) (39) % Income tax expense 198.8 321.8 (123.0) (38) % NET INCOME $ 602.5 $ 997.3 $ (394.8) (40) % Net income per common share—Diluted $ 28.74 $ 44.61 $ (15.87) (36) % ______________________________ NM — Not Meaningful 38 Table of Contents For the Year Ended December 31, 2023 2022 REVENUE MIX PERCENTAGES: New vehicles 51.5 % 47.7 % Used retail vehicles 27.1 % 31.3 % Used vehicle wholesale 2.7 % 2.4 % Parts and service 14.1 % 13.4 % Finance and insurance, net 4.6 % 5.2 % Total revenue 100.0 % 100.0 % GROSS PROFIT MIX PERCENTAGES: New vehicles 25.5 % 27.2 % Used retail vehicles 9.0 % 11.2 % Used vehicle wholesale 0.6 % 0.2 % Parts and service 41.8 % 37.2 % Finance and insurance, net 23.2 % 24.2 % Total gross profit 100.0 % 100.0 % GROSS PROFIT MARGIN 18.6 % 20.1 % SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 58.7 % 56.9 % Total revenue during 2023 decreased by $631.2 million (4%) compared to 2022, due to a $782.8 million (15%) decrease in used vehicle revenue, a $120.8 million (15%) decrease in F&I revenue, offset by a $265.1 million (4%) increase in new vehicle revenue and a $7.3 million increase in parts and service revenue.
The Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except per share data) REVENUE: New vehicle $ 7,630.7 $ 7,365.6 $ 265.1 4 % Used vehicle 4,414.3 5,197.1 (782.8) (15) % Parts and service 2,081.5 2,074.2 7.3 — % Finance and insurance, net 676.2 797.0 (120.8) (15) % TOTAL REVENUE 14,802.7 15,433.8 (631.2) (4) % GROSS PROFIT: New vehicle 703.0 844.0 (141.0) (17) % Used vehicle 264.0 353.2 (89.2) (25) % Parts and service 1,150.6 1,152.6 (2.1) — % Finance and insurance, net 638.2 750.7 (112.5) (15) % TOTAL GROSS PROFIT 2,755.8 3,100.6 (344.8) (11) % OPERATING EXPENSES: Selling, general and administrative 1,617.4 1,763.4 (146.0) (8) % Depreciation and amortization 67.7 69.0 (1.3) (2) % Asset impairments 117.2 — 117.2 NM Other operating income, net — (4.4) 4.4 (100) % INCOME FROM OPERATIONS 953.5 1,272.6 (319.1) (25) % OTHER (INCOME) EXPENSES: Floor plan interest expense 9.6 8.4 1.3 15 % Other interest expense, net 156.1 152.2 3.9 3 % Gain on dealership divestitures, net (13.5) (207.1) 193.6 NM Total other expenses (income), net 152.2 (46.5) 198.8 NM INCOME BEFORE INCOME TAXES 801.3 1,319.1 (517.8) (39) % Income tax expense 198.8 321.8 (123.0) (38) % NET INCOME $ 602.5 $ 997.3 $ (394.8) (40) % Net income per common share—Diluted $ 28.74 $ 44.61 $ (15.87) (36) % ______________________________ NM — Not Meaningful 49 Table of Contents For the Year Ended December 31, 2023 2022 REVENUE MIX PERCENTAGES: New vehicles 51.5 % 47.7 % Used retail vehicles 27.1 % 31.3 % Used vehicle wholesale 2.7 % 2.4 % Parts and service 14.1 % 13.4 % Finance and insurance, net 4.6 % 5.2 % Total revenue 100.0 % 100.0 % GROSS PROFIT MIX PERCENTAGES: New vehicles 25.5 % 27.2 % Used retail vehicles 9.0 % 11.2 % Used vehicle wholesale 0.6 % 0.2 % Parts and service 41.8 % 37.2 % Finance and insurance, net 23.2 % 24.2 % Total gross profit 100.0 % 100.0 % GROSS PROFIT MARGIN 18.6 % 20.1 % SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 58.7 % 56.9 % Total revenue during 2023 decreased by $631.2 million (4%) compared to 2022, due to a $782.8 million (15%) decrease in used vehicle revenue, a $120.8 million (15%) decrease in F&I revenue, offset by a $265.1 million (4%) increase in new vehicle revenue and a $7.3 million increase in parts and service revenue.
Overall, net income decreased by $394.8 million (40%) from $997.3 million in 2022 to $602.5 million in 2023. 39 Table of Contents New Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Luxury $ 2,524.1 $ 2,315.7 $ 208.4 9 % Import 3,002.6 2,914.9 87.7 3 % Domestic 2,104.1 2,135.0 (30.9) (1) % Total new vehicle revenue $ 7,630.7 $ 7,365.6 $ 265.1 4 % Gross profit: Luxury $ 274.3 $ 293.0 $ (18.7) (6) % Import 265.8 338.7 (72.9) (22) % Domestic 162.9 212.3 (49.5) (23) % Total new vehicle gross profit $ 703.0 $ 844.0 $ (141.0) (17) % New vehicle units: Luxury 35,300 33,904 1,396 4 % Import 77,740 78,388 (648) (1) % Domestic 36,469 38,887 (2,418) (6) % Total new vehicle units 149,509 151,179 (1,670) (1) % Same Store: Revenue: Luxury $ 2,503.2 $ 2,210.4 $ 292.8 13 % Import 2,967.3 2,744.2 223.1 8 % Domestic 2,059.0 2,074.3 (15.4) (1) % Total new vehicle revenue $ 7,529.5 $ 7,028.9 $ 500.6 7 % Gross profit: Luxury $ 272.0 $ 281.6 $ (9.6) (3) % Import 262.0 319.5 (57.5) (18) % Domestic 159.6 206.5 (46.9) (23) % Total new vehicle gross profit $ 693.6 $ 807.6 $ (114.0) (14) % New vehicle units: Luxury 34,947 32,154 2,793 9 % Import 76,896 73,845 3,051 4 % Domestic 35,700 37,699 (1,999) (5) % Total new vehicle units 147,543 143,698 3,845 3 % 40 Table of Contents New Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 As Reported: Revenue per new vehicle sold $ 51,038 $ 48,721 $ 2,318 5 % Gross profit per new vehicle sold $ 4,702 $ 5,583 $ (881) (16) % New vehicle gross margin 9.2 % 11.5 % (2.2) % Luxury: Gross profit per new vehicle sold $ 7,770 $ 8,642 $ (871) (10) % New vehicle gross margin 10.9 % 12.7 % (1.8) % Import: Gross profit per new vehicle sold $ 3,419 $ 4,320 $ (901) (21) % New vehicle gross margin 8.9 % 11.6 % (2.8) % Domestic: Gross profit per new vehicle sold $ 4,466 $ 5,460 $ (994) (18) % New vehicle gross margin 7.7 % 9.9 % (2.2) % Same Store: Revenue per new vehicle sold $ 51,033 $ 48,915 $ 2,118 4 % Gross profit per new vehicle sold $ 4,701 $ 5,620 $ (919) (16) % New vehicle gross margin 9.2 % 11.5 % (2.3) % Luxury: Gross profit per new vehicle sold $ 7,783 $ 8,758 $ (975) (11) % New vehicle gross margin 10.9 % 12.7 % (1.9) % Import: Gross profit per new vehicle sold $ 3,407 $ 4,326 $ (919) (21) % New vehicle gross margin 8.8 % 11.6 % (2.8) % Domestic: Gross profit per new vehicle sold $ 4,472 $ 5,479 $ (1,007) (18) % New vehicle gross margin 7.8 % 10.0 % (2.2) % During 2023, new vehicle revenue increased by $265.1 million (4%) when compared to 2022, as a result of a 5% increase in revenue per new vehicle sold partially offset by a 1% decrease in new vehicle unit sales.
Overall, net income decreased by $394.8 million (40%) from $997.3 million in 2022 to $602.5 million in 2023. 50 Table of Contents New Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Luxury $ 2,524.1 $ 2,315.7 $ 208.4 9 % Import 3,002.6 2,914.9 87.7 3 % Domestic 2,104.1 2,135.0 (30.9) (1) % Total new vehicle revenue $ 7,630.7 $ 7,365.6 $ 265.1 4 % Gross profit: Luxury $ 274.3 $ 293.0 $ (18.7) (6) % Import 265.8 338.7 (72.9) (22) % Domestic 162.9 212.3 (49.5) (23) % Total new vehicle gross profit $ 703.0 $ 844.0 $ (141.0) (17) % New vehicle units: Luxury 35,300 33,904 1,396 4 % Import 77,740 78,388 (648) (1) % Domestic 36,469 38,887 (2,418) (6) % Total new vehicle units 149,509 151,179 (1,670) (1) % Same Store: Revenue: Luxury $ 2,503.2 $ 2,210.4 $ 292.8 13 % Import 2,967.3 2,744.2 223.1 8 % Domestic 2,059.0 2,074.3 (15.4) (1) % Total new vehicle revenue $ 7,529.5 $ 7,028.9 $ 500.6 7 % Gross profit: Luxury $ 272.0 $ 281.6 $ (9.6) (3) % Import 262.0 319.5 (57.5) (18) % Domestic 159.6 206.5 (46.9) (23) % Total new vehicle gross profit $ 693.6 $ 807.6 $ (114.0) (14) % New vehicle units: Luxury 34,947 32,154 2,793 9 % Import 76,896 73,845 3,051 4 % Domestic 35,700 37,699 (1,999) (5) % Total new vehicle units 147,543 143,698 3,845 3 % 51 Table of Contents New Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2023 2022 As Reported: Revenue per new vehicle sold $ 51,038 $ 48,721 $ 2,318 5 % Gross profit per new vehicle sold $ 4,702 $ 5,583 $ (881) (16) % New vehicle gross margin 9.2 % 11.5 % (2.2) % Luxury: Gross profit per new vehicle sold $ 7,770 $ 8,642 $ (871) (10) % New vehicle gross margin 10.9 % 12.7 % (1.8) % Import: Gross profit per new vehicle sold $ 3,419 $ 4,320 $ (901) (21) % New vehicle gross margin 8.9 % 11.6 % (2.8) % Domestic: Gross profit per new vehicle sold $ 4,466 $ 5,460 $ (994) (18) % New vehicle gross margin 7.7 % 9.9 % (2.2) % Same Store: Revenue per new vehicle sold $ 51,033 $ 48,915 $ 2,118 4 % Gross profit per new vehicle sold $ 4,701 $ 5,620 $ (919) (16) % New vehicle gross margin 9.2 % 11.5 % (2.3) % Luxury: Gross profit per new vehicle sold $ 7,783 $ 8,758 $ (975) (11) % New vehicle gross margin 10.9 % 12.7 % (1.9) % Import: Gross profit per new vehicle sold $ 3,407 $ 4,326 $ (919) (21) % New vehicle gross margin 8.8 % 11.6 % (2.8) % Domestic: Gross profit per new vehicle sold $ 4,472 $ 5,479 $ (1,007) (18) % New vehicle gross margin 7.8 % 10.0 % (2.2) % During 2023, new vehicle revenue increased by $265.1 million (4%) when compared to 2022, as a result of a 5% increase in revenue per new vehicle sold partially offset by a 1% decrease in new vehicle unit sales.
Our Dealerships segment revenues are derived primarily from: (i) the sale of new vehicles; (ii) the sale of used vehicles to individual retail customers ("used retail") and to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" are collectively referred to as "used"); (iii) repair and maintenance services, including collision repair, the sale of automotive replacement parts, and the reconditioning of used vehicles (collectively referred to as "parts and service"); and (iv) the arrangement of third-party vehicle financing and the sale of a number of vehicle protection products.
Our Dealerships segment revenues are derived primarily from: (i) the sale of new vehicles; (ii) the sale of used vehicles to individual retail customers ("used retail") and to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" are collectively referred to as "used"); (iii) repair and maintenance services, collision repair, the sale of automotive replacement parts, and the reconditioning of used vehicles (collectively referred to as "parts and service"); and (iv) the arrangement of third-party vehicle financing and the sale of a number of vehicle protection products.
As explained in Note 14 of the Company's consolidated financial statements as of and for the year ended December 31, 2023, the Senior Notes have been fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by each existing and future restricted subsidiary of the Company (the "Guarantor Subsidiaries"), which are listed in Exhibit 21, with the exception of Landcar Administration Company, Landcar Agency, Inc. and Landcar Casualty Company and their respective subsidiaries (collectively, the "TCA Non-Guarantor Subsidiaries").
As explained in Note 14 of the Company's consolidated financial statements as of and for the year ended December 31, 2024, the Senior Notes have been fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by each existing and future restricted subsidiary of the Company (the "Guarantor Subsidiaries"), which are listed in Exhibit 21, with the exception of Landcar Administration Company, Landcar Agency, Inc. and Landcar Casualty Company and their respective subsidiaries (collectively, the "TCA Non-Guarantor Subsidiaries").
Subject to our continued compliance with a consolidated fixed charge coverage ratio and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Indentures, restricted payments capacity additions (or subtractions if negative) equal to a base level plus the cumulative amount of (i) 50% of our net income (as defined in the 2023 Senior Credit Facility) plus (ii) 100% of any cash proceeds we receive from the sale of equity interests minus (iii) the dollar amount of share purchases made and dividends 58 Table of Contents paid during the defined measurement periods, subject to certain exceptions.
Subject to our continued compliance with a consolidated fixed charge coverage ratio and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Indentures, restricted payments capacity additions (or subtractions if negative) equal to a base level plus the cumulative amount of (i) 50% of our net income (as defined in the 2023 Senior Credit Facility) plus (ii) 100% of any cash proceeds we receive from the sale of equity interests minus (iii) the dollar amount of share purchases made and dividends paid during the defined measurement periods, subject to certain exceptions.
Contractual Obligations As of December 31, 2023, we had significant contractual obligations related to our floor plan notes payable disclosed in Notes 11 and 12, operating lease liabilities disclosed in Note 19 and long-term debt arrangements discussed in Note 14. Disclosures related to our commitments and contingencies are outlined in Note 21.
Contractual Obligations As of December 31, 2024, we had significant contractual obligations related to our floor plan notes payable disclosed in Notes 11 and 12, operating lease liabilities disclosed in Note 19 and long-term debt arrangements discussed in Note 14. Disclosures related to our commitments and contingencies are outlined in Note 21.
The majority of our floor plan notes are payable to parties unaffiliated with the entities from which we purchase our new vehicle inventory, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles. We did not have any acquisitions in 2022.
The majority of our floor plan notes are payable to parties unaffiliated with the entities from which we purchase our new vehicle inventory, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles. We did not have any dealership acquisitions in 2024 and 2022.
We have determined the dealerships in each of our operating segments are components that are aggregated into several geographic market-based reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our franchised dealerships offer new and used vehicles, parts and service, and arrange for third-party vehicle financing and the sale of insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways) and (v) operate under similar regulatory environments.
We have determined the dealerships in each of our operating segments are components that are aggregated into geographic region-based operating segments which are also our reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our franchised dealerships offer new and used vehicles, parts and service, and arrange for third-party vehicle financing and the sale of insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways) and (v) operate under similar regulatory environments.
Refer to the "Forward-Looking Statements" and Part I, Item 1A. Risk Factors for a discussion of these risks and uncertainties. The discussion of our financial condition and results of operations for the year ended December 31, 2021 is included in Item 7.
Refer to the "Forward-Looking Statements" and Part I, Item 1A. Risk Factors for a discussion of these risks and uncertainties. The discussion of our financial condition and results of operations for the year ended December 31, 2022 is included in Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022. OVERVIEW We are one of the largest automotive retailers in the United States.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. OVERVIEW We are one of the largest automotive retailers in the United States.
We ended the year with approximately 43 41 Table of Contents days of supply of new vehicle inventory which reflects an increase from 26 days of supply as of December 31, 2022 but remains well below historical levels.
We ended the year with approximately 43 days of supply of 52 Table of Contents new vehicle inventory which reflects an increase from 26 days of supply as of December 31, 2022 but remains well below historical levels.
The proceeds of the September 2020 Offering were used to redeem certain seller notes issued in connection with the acquisition of Park Place. The 2028 Notes and the 2030 Notes are guaranteed, jointly and severally, on a senior unsecured basis, by each of our existing and future restricted subsidiaries, other than the TCA Non-Guarantor Subsidiaries.
The proceeds of the September 2020 Offering were used to redeem certain seller notes issued in connection with the acquisition of Park Place. 58 Table of Contents The 2028 Notes and the 2030 Notes are guaranteed, jointly and severally, on a senior unsecured basis, by each of our existing and future restricted subsidiaries, other than the TCA Non-Guarantor Subsidiaries.
Adjusted cash flow provided by operating activities may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations we also review the related GAAP measures.
Adjusted cash flow provided by operating activities may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for 61 Table of Contents analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations we also review the related GAAP measures.
On and with effect from June 1, 2022, certain of our subsidiaries entered into an amendment to our 2015 Wells Fargo Master Loan Agreement to replace the benchmark reference rate of LIBOR to SOFR.
On and with effect from June 1, 2022, certain of our subsidiaries entered into an amendment to our 2018 Wells Fargo Master Loan Agreement to replace the benchmark reference rate of LIBOR to SOFR.
Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business. We do not amortize goodwill and other intangible assets that are deemed to have indefinite lives.
Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business. 65 Table of Contents We do not amortize goodwill and other intangible assets that are deemed to have indefinite lives.
Guarantor Financial Information As of December 31, 2023, the Company had outstanding $405 million of 4.500% Senior Notes due 2028 and $445 million of 4.750% Senior Notes due 2030.
Guarantor Financial Information As of December 31, 2024, the Company had outstanding $405 million of 4.500% Senior Notes due 2028 and $445 million of 4.750% Senior Notes due 2030.
Used Vehicle Floor Plan Facility — A $375.0 million Used Vehicle Floor Plan Facility to finance the acquisition of used vehicle inventory and for working capital and capital expenditures, as well as to refinance used vehicles. We began the year with no amounts drawn on our Used Vehicle Floor Plan Facility.
Used Vehicle Floor Plan Facility — A $375.0 million Used Vehicle Floor Plan Facility to finance the acquisition of used vehicle inventory and for working capital and capital expenditures, as well as to refinance used vehicles. We began the year with $307.1 million amounts drawn on our Used Vehicle Floor Plan Facility.
As of December 31, 2023 we had total mortgage notes payable outstanding of $31.9 million which are collateralized by the associated real estate. • 2021 Real Estate Facility —On December 17, 2021, we entered into a real estate term loan credit agreement with Bank of America, N.A., as administrative agent and the other lenders party thereto, which provided for term loans in an aggregate amount equal to $689.7 million (the "2021 Real Estate Facility").
As of December 31, 2024 we had total mortgage notes payable outstanding of $29.6 million which are collateralized by the associated real estate. • 2021 Real Estate Facility —On December 17, 2021, we entered into a real estate term loan credit agreement with Bank of America, N.A., as administrative agent and the other lenders party thereto, which provided for term loans in an aggregate amount equal to $689.7 million (the "2021 Real Estate Facility").
Used vehicle revenues and unit volume have continued to 42 Table of Contents contract during 2023, along with margins on both an all store and same store basis. Used vehicle revenue and unit volumes have been negatively impacted by the affordability headwinds and lack of inventory availability, especially in vehicles with lower mileage.
Used vehicle revenues and unit volume have continued to contract during 44 Table of Contents 2024, along with margins on both an all store and same store basis. Used vehicle revenue and unit volumes have been negatively impacted by the affordability headwinds and lack of inventory availability, especially in vehicles with lower mileage.
On December 11, 2023, we completed the acquisition of the Jim Koons Dealerships for a total purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $103.8 million of assets held for sale related to Koons Lexus of Wilmington.
On December 11, 2023, we completed the acquisition of the Jim Koons Dealerships for a total purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington.
In connection with a change in reporting units in our Dealerships segment, we performed quantitative impairment tests of goodwill for the affected reporting units as of October 1, 2023, both before and after the change in reporting units.
In connection with a change in reporting units in our Dealerships segment, we performed qualitative and quantitative impairment tests of goodwill for the affected reporting units as of October 1, 2024, both before and after the change in reporting units.
During the year ended December 31, 2023 and 2022, we repurchased 1,316,167 and 1,635,030 shares of our common stock under our Repurchase Program for a total of $258.1 million and $297.0 million and 48,262 and 56,024 shares of our common stock for $11.4 million and $9.2 million from employees in connection with a net share settlement feature of employee equity-based awards, respectively.
During the year ended December 31, 2024, 2023, 2022 we repurchased 830,297, 1,316,167 and 1,635,030 shares of our common stock under our Repurchase Program for a total of 183.0 million and $258.1 million and $297.0 million and 46,941, 48,262 and 56,024 shares of our common stock for $10.2 million, $11.4 million and $9.2 million from employees in connection with a net share settlement feature of employee equity-based awards, respectively.
In addition to the payment of interest on borrowings outstanding under the 2023 Senior Credit Facility, we are required to pay a quarterly commitment fee on total unused commitments thereunder.
I n addition to the payment of interest on borrowings outstanding under the 2023 Senior Credit Facility, we are required to pay a quarterly commitment fee on total unused commitments thereunder.
In addition, we include all floor plan borrowings and repayments in our internal 59 Table of Contents operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts.
In addition, we include all floor plan borrowings and repayments in our internal operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts.
Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation. 36 Table of Contents Our continued organic growth is dependent upon the execution of our balanced automotive retailing and service business strategy, the continued strength of our brand mix, and the production and allocation of desirable vehicles from the automobile manufacturers whose brands we sell.
Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the consolidated financial statements. 37 Table of Contents Our continued organic growth is dependent upon the execution of our balanced automotive retailing and service business strategy, the continued strength of our brand mix, and the production and allocation of desirable vehicles from the automobile manufacturers whose brands we sell.
We expect that capital expenditures during 2024 will total approximately $250.0 million to upgrade or replace our existing facilities, construct new facilities, expand our service capacity, and invest in technology and equipment. In addition, as part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations.
We expect that capital expenditures during 2025 will total approximately $260.3 million to upgrade or replace our existing facilities, construct new facilities, expand our service capacity, and invest in technology and equipment. In addition, as part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations.
The $47.6 million increase in same store gross profit, excluding reconditioning and preparation, is primarily due to a $33.8 million (5%) increase in customer pay gross profit, an $11.3 million (8%) increase in warranty gross profit, and a $2.5 million (3%) increase in wholesale parts gross profit.
The 54 Table of Contents $47.6 million increase in same store gross profit, excluding reconditioning and preparation, is primarily due to a $33.8 million (5%) increase in customer pay gross profit, an $11.3 million (8%) increase in warranty gross profit and a $2.5 million (3%) increase in wholesale parts gross profit.
On and with effect from 57 Table of Contents June 1, 2022, certain of our subsidiaries entered into an amendment to our 2018 Wells Fargo Master Loan Agreement to replace the benchmark reference rate of LIBOR to SOFR.
On and with effect from June 1, 2022, certain 59 Table of Contents of our subsidiaries entered into an amendment to our 2015 Wells Fargo Master Loan Agreement to replace the benchmark reference rate of LIBOR to SOFR.
We did not have any net proceeds from the issuance of common stock in 2023.
We did not have any net proceeds from the issuance of common stock in 2024 or 2023.
Cash flows from investing activities relate primarily to capital expenditures, acquisitions, divestitures, and the sale of property and equipment. Capital expenditures, excluding the purchase of real estate, were $142.3 million, $94.6 million, and $74.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Cash flows from investing activities relate primarily to capital expenditures, acquisitions, divestitures, and the sale of property and equipment. Capital expenditures, excluding the purchase of real estate, were $162.6 million, $142.3 million, and $94.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We were in compliance with all of our covenants as of December 31, 2023.
We were in compliance with all of our covenants as of December 31, 2024.
As of December 31, 2023, we had remaining authorization to repurchase up to an additional $202.6 million of our common stock. Any repurchases will be subject to applicable limitations in our debt or other financing agreements that may be in existence from time to time.
As of December 31, 2024, we had remaining authorization to repurchase up to an additional $275.9 million of our common stock. Any repurchases will be subject to applicable limitations in our debt or other financing agreements that may be in existence from time to time.
We have determined, based on how we integrate acquisitions into our business, how the components of our business 63 Table of Contents share resources and interact with one another, and how we review the results of our operations, that we have several geographic market-based operating segments.
We have determined, based on how we integrate acquisitions into our business, how the components of our business share resources and interact with one another, and how we review the results of our operations, that we have several geographic region-based operating segments.
Borrowings under the 2015 Wells Fargo Master Loan Facility are guaranteed by us and are collateralized by the real property financed under the 2015 Wells Fargo Master Loan Facility. As of December 31, 2023, the outstanding balance under this agreement was $37.2 million. There is no further borrowing availability under the 2015 Wells Fargo Master Loan Facility.
Borrowings under the 2015 Wells Fargo Master Loan Facility are guaranteed by us and are collateralized by the real property financed under the 2015 Wells Fargo Master Loan Facility. As of December 31, 2024, the outstanding balance under this agreement was $32.0 million. There is no further borrowing availability under the 2015 Wells Fargo Master Loan Facility.
We did not have any floor plan borrowing related to our used vehicle floor plan facility as of December 31,2022. During the year ended December 31, 2023, 2022 and 2021, we borrowed $329.0 million, $330.0 million, and $439.0 million, and repaid $329.0 million, $499.0 million and $270.0 million, respectively, on our revolving line of credit.
We did not have any floor plan borrowing related to our used vehicle floor plan facility as of December 31, 2022. During the year ended December 31, 2024, 2023 and 2022, we borrowed $1,213.5 million, $329.0 million, and $330.0 million, and repaid $1,213.5 million, $329.0 million and $499.0 million, respectively, on our revolving line of credit.
The Company recorded a pre-tax gain totaling $13.5 million. During the year ended December 31, 2022, we sold one franchise (one dealership location) in St.
Gain on Dealership Divestitures — During the year ended December 31, 2023, we sold one franchise (one dealership location) in Austin, Texas. The Company recorded a pre-tax gain totaling $13.5 million. During the year ended December 31, 2022, we sold one franchise (one dealership location) in St.
The F&I products offered by TCA are sold through affiliated dealerships. For the year ended December 31, 2023, our new vehicle revenue brand mix consisted of 39% imports, 33% luxury, and 28% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.
The F&I products offered by TCA are sold through affiliated dealerships. For the year ended December 31, 2024, our new vehicle revenue brand mix consisted of 41% imports, 30% luxury, and 29% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.
S elling, General, and Administrative Expense— For the Year Ended December 31, Increase (Decrease) % of Gross Profit Increase (Decrease) 2023 % of Gross Profit 2022 % of Gross Profit (Dollars in millions) As Reported: Personnel costs $ 1,081.7 39.3 % $ 1,247.4 40.2 % $ (165.7) (1.0) % Rent and related expenses 119.0 4.3 % 121.7 3.9 % (2.7) 0.4 % Advertising 47.5 1.7 % 50.1 1.6 % (2.6) 0.1 % Other 369.2 13.4 % 344.2 11.1 % 25.0 2.3 % Selling, general, and administrative expense $ 1,617.4 58.7 % $ 1,763.4 56.9 % $ (146.0) 1.8 % Gross profit $ 2,755.8 $ 3,100.6 Same Store: Personnel costs $ 1,068.5 39.2 % $ 1,181.8 40.2 % $ (113.3) (0.9) % Rent and related expenses 117.9 4.3 % 116.3 4.0 % 1.6 0.4 % Advertising 45.6 1.7 % 43.8 1.5 % 1.8 0.2 % Other 361.6 13.3 % 329.0 11.2 % 32.6 2.1 % Selling, general, and administrative expense $ 1,593.6 58.5 % $ 1,670.9 56.8 % $ (77.3) 1.7 % Gross profit $ 2,722.8 $ 2,941.7 SG&A expense as a percentage of gross profit increased 182 basis points from 56.9% in 2022 to 58.7% in 2023.
Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation. 55 Table of Contents S elling, General and Administrative Expense— For the Year Ended December 31, Increase (Decrease) % of Gross Profit Increase (Decrease) 2023 % of Gross Profit 2022 % of Gross Profit (Dollars in millions) As Reported: Personnel costs $ 1,081.7 39.3 % $ 1,247.4 40.2 % $ (165.7) (1.0) % Rent and related expenses 119.0 4.3 % 121.7 3.9 % (2.7) 0.4 % Advertising 47.5 1.7 % 50.1 1.6 % (2.6) 0.1 % Other 369.2 13.4 % 344.2 11.1 % 25.0 2.3 % Selling, general and administrative expense $ 1,617.4 58.7 % $ 1,763.4 56.9 % $ (146.0) 1.8 % Gross profit $ 2,755.8 $ 3,100.6 Same Store: Personnel costs $ 1,068.5 39.2 % $ 1,181.8 40.2 % $ (113.3) (0.9) % Rent and related expenses 117.9 4.3 % 116.3 4.0 % 1.6 0.4 % Advertising 45.6 1.7 % 43.8 1.5 % 1.8 0.2 % Other 361.6 13.3 % 329.0 11.2 % 32.6 2.1 % Selling, general and administrative expense $ 1,593.6 58.5 % $ 1,670.9 56.8 % $ (77.3) 1.7 % Gross profit $ 2,722.8 $ 2,941.7 SG&A expense as a percentage of gross profit increased 182 basis points from 56.9% in 2022 to 58.7% in 2023.
As of December 31, 2023, through our Dealerships segment, we owned and operated 208 new vehicle franchises (158 dealership locations), representing 31 brands of automobiles, within 16 states. We also operated 37 collision centers, and Total Care Auto, Powered by Landcar ("TCA"), our F&I product provider.
As of December 31, 2024, through our Dealerships segment, we owned and operated 198 new vehicle franchises (152 dealership locations), representing 31 brands of automobiles, within 14 states. We also operated 37 collision centers, and Total Care Auto, Powered by Landcar ("TCA"), our F&I product provider.
In addition, during the years ended December 31, 2023 and 2021, we had non-trade floor plan borrowings of $256.1 million and $214.5 million respectively, related to acquisitions.
In addition, during the years ended December 31, 2023, we had non-trade floor plan borrowings of $256.1 million, related to acquisitions.
As of December 31, 2023, we had $1.46 billion outstanding under the New Vehicle Floor Plan Facility, which includes $127.2 million classified in loaner vehicles notes payable which is included in accounts payable and accrued liabilities in our consolidated balance sheets. As of December 31, 2023, we held $44.7 million in the floor plan notes payable offset account.
As of December 31, 2024, we had $1.42 billion outstanding under the New Vehicle Floor Plan Facility, which includes $56.7 million classified in loaner vehicles notes payable which is included in accounts payable and accrued liabilities in our consolidated balance sheets. As of December 31, 2024, we held $115.7 million in the floor plan notes payable offset account.
For the Year Ended December 31, 2023 2022 2021 (In millions) Reconciliation of cash provided by operating activities to cash provided by operating activities, as adjusted Cash provided by operating activities, as reported $ 313.0 $ 696.0 $ 1,163.7 Change in Floor Plan Notes Payable Non-Trade, net 1,018.9 (191.1) (608.7) Change in Floor Plan Notes Payable Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures (571.3) 462.4 131.1 Change in Floor Plan Notes Payable Trade associated with floor plan offset and acquisitions and divestitures, net (55.3) 19.7 (54.0) Adjusted cash flow provided by operating activities $ 705.4 $ 987.0 $ 632.1 Operating Activities— Net cash provided by operating activities totaled $313.0 million, $696.0 million, and $1.16 billion for the years ended December 31, 2023, 2022, and 2021, respectively.
For the Year Ended December 31, 2024 2023 2022 (In millions) Reconciliation of cash provided by operating activities to cash provided by operating activities, as adjusted Cash provided by operating activities, as reported $ 671.2 $ 313.0 $ 696.0 Change in Floor Plan Notes Payable Non-Trade, net (5.2) 1,018.9 (191.1) Change in Floor Plan Notes Payable Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures 71.9 (571.3) 462.4 Change in Floor Plan Notes Payable Trade associated with floor plan offset and acquisitions and divestitures, net (49.5) (55.3) 19.7 Adjusted cash flow provided by operating activities $ 688.4 $ 705.3 $ 987.0 Operating Activities— Net cash provided by operating activities totaled $671.2 million, $313.0 million, and $696.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.
We attribute the decreases in used vehicle retail gross profit margin to a softening in the used 51 Table of Contents vehicle market, which was at record highs in 2021 as a result of new vehicle inventory shortages caused by semiconductor supply chain issues and COVID-19 disruptions.
We attribute the decreases in used vehicle retail gross profit margin to a softening in the used vehicle market, which was at record highs in 2021 and, to a lesser extent 2022, as a result of new vehicle inventory shortages initially caused by COVID-19 disruptions followed by supply chain issues.
As of December 31, 2023, we had $165.9 million of outstanding borrowings under the 2021 BofA Real Estate Facility. There is no further borrowing availability under the 2021 BofA Real Estate Credit Agreement.
As of December 31, 2024, we had $158.6 million of outstanding borrowings under the 2021 BofA Real Estate Facility. There is no further borrowing availability under the 2021 BofA Real Estate Credit Agreement.
Investing Activities— Net cash used in investing activities totaled $1.68 billion and $3.92 billion for the year ended December 31, 2023 and 2021, respectively, compared to net cash provided by investing activities of $464.7 million for the year ended December 31, 2022.
Investing Activities— Net cash used in investing activities totaled $137.2 million and $1.68 billion for the years ended December 31, 2024 and 2023, respectively, compared to net cash provided by investing activities of $464.7 million for the year ended December 31, 2022.
During the years ended December 31, 2023, 2022, and 2021, we had non-trade floor plan borrowings of $8.39 billion, $7.41 billion, and $5.04 billion, respectively. Included in our non-trade floor plan borrowings, were borrowings of $307.1 million and $294.0 million for the years ended December 31, 2023 and 2021, respectively, related to our used vehicle floor plan facility.
During the years ended December 31, 2024, 2023, and 2022, we had non-trade floor plan borrowings of $9.45 billion, $8.39 billion, and $7.41 billion, respectively. Included in our non-trade floor plan borrowings, were borrowings of $100.7 million and $307.1 million for the years ended December 31, 2024 and 2023, respectively, related to our used vehicle floor plan facility.
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA, among other things, implements a 1% excise tax on share repurchases, which takes effect in tax years beginning after December 31, 2022. In 2023, we recorded a total of $2.5 million excise tax on our share repurchases.
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA, among other things, im plements a 1% excise tax on share repurchases, which takes effect in tax years beginning after December 31, 2022. In 2024, we recorded a total of $1.7 million exci se tax on our share repurchases.
As of December 31, 2023, we had $72.0 million, outstanding borrowings under the 2018 Wells Fargo Master Loan Facility. There is no further borrowing availability under the 2018 Wells Fargo Master Loan Facility.
As of December 31, 2024, we had $62.2 million, outstanding borrowings under the 2018 Wells Fargo Master Loan Facility. There is no further borrowing availability under the 2018 Wells Fargo Master Loan Facility.
Adjusted cash flow provided by operating activities totaled $705.4 million, $987.0 million, and $632.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Adjusted cash flow provided by operating activities totaled $688.4 million, $705.3 million, and $987.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.
As of December 31, 2023, we had $50.3 million, of outstanding borrowings under the 2018 BofA Real Estate Facility. There is no further borrowing availability under the 2018 BofA Real Estate Facility.
As of December 31, 2024, we had $37.9 million, of outstanding borrowings under the 2018 BofA Real Estate Facility. There is no further borrowing availability under the 2018 BofA Real Estate Facility.
We did not purchase any equity securities in 2023. During the years ended December 31, 2023, 2022, and 2021, we also received proceeds of $60.3 million, $69.7 million, and $0.8 million from the sale of debt securities and $51.8 million, $50.3 million and $0.4 million, from the sale of equity securities, respectively.
During the years ended December 31, 2024, 2023, and 2022, we also received proceeds of $149.8 million, $60.3 million, and $69.7 million from the sale of debt securities respectively and $51.8 million and $50.3 million, from the sale of equity securities in 2023, and 2022, respectively.
The $7.3 million increase in parts and service revenue was due to a $6.3 million increase in customer pay revenue and a $10.2 million (4%) increase in warranty revenue, partially offset by a $9.2 million (2%) decrease in wholesale parts revenue. Same store parts and service revenue increased $102.6 (5%) from $1.96 billion in 2022 to $2.06 billion in 2023.
Same store parts and service revenue increased $102.6 million (5%) from $1.96 billion in 2022 to $2.06 billion in 2023. The increase in same store parts and service revenue was due to a $72.1 million (6%) increase in customer pay revenue, a $19.8 million (8%) increase in warranty revenue and a $10.7 million (2%) increase in wholesale parts revenue.
The $57.5 million increase in same store gross profit, excluding reconditioning and preparation, is primarily due to a $60.1 million (15%) increase in customer pay gross profit and a $3.2 million (11%) increase in wholesale parts gross profit, partially offset by a $5.7 million (7%) decrease in warranty gross profit.
The $55.4 million increase in same store gross profit, excluding reconditioning and preparation, is primarily due to a $44.5 million (8%) increase in customer pay gross profit and a $21.3 million (15%) increase in warranty gross profit, partially offset by an $8.1 million (7%) decrease in collision gross profit and a $2.3 million (3%) decrease in wholesale parts gross profit.
There were no purchases related to real estate for the year ended December 31, 2023. Purchases of real estate totaled $13.3 million and $7.8 million for the years ended December 31, 2022, and 2021, respectively. In addition, we purchased previously leased facilities for $217.1 million during the year ended December 31, 2021.
There were no purchases related to real estate for the year ended December 31, 2023. Purchases of real estate totaled $145.6 million and $13.3 million for the years ended December 31, 2024, and 2022, respectively. In addition, we purchased previously leased facilities for $11.9 million during the year ended December 31, 2024.
During the years ended December 31, 2023, 2022, and 2021, we made non-trade floor plan repayments of $7.06 billion, $7.89 billion, and $5.36 billion, respectively. In addition, during the years ended December 31, 2022 and 2021, we had floor plan repayments associated with dealership divestitures of $48.4 million and $0.8 million, respectively.
During the years ended December 31, 2024, 2023, and 2022, we made non-trade floor plan repayments of $9.66 billion, $7.06 billion, and $7.89 billion, respectively. In addition, during the years ended December 31, 2024 and 2022, we had floor plan repayments associated with dealership divestitures of $34.1 million and $48.4 million, respectively.
On March 24, 2020, the Company redeemed $245.0 million aggregate principal million of the 2028 Notes and $280.0 million aggregate principal amount of the 2030 Notes pursuant to a special mandatory redemption. 56 Table of Contents In September 2020, the Company completed an add-on issuance of $250.0 million aggregate principal amount of additional senior notes consisting of $125.0 million aggregate principal amount of additional 2028 Notes at a price of 101.00% of par, plus accrued interest from September 1, 2020, and $125.0 million aggregate principal amount of additional 2030 Notes (together with the additional 2028 Notes, the "Additional Notes") at a price of 101.75% of par, plus accrued interest from September 1, 2020 (the "September 2020 Offering").
In September 2020, the Company completed an add-on issuance of $250.0 million aggregate principal amount of additional senior notes consisting of $125.0 million aggregate principal amount of additional 2028 Notes at a price of 101.00% of par, plus accrued interest from September 1, 2020, and $125.0 million aggregate principal amount of additional 2030 Notes (together with the additional 2028 Notes, the "Additional Notes") at a price of 101.75% of par, plus accrued interest from September 1, 2020 (the "September 2020 Offering").
Income Tax Expense — The $123.0 million (38%) decrease in income tax expense was primarily the result of a $517.8 million (39%) decrease in income before income taxes. Our effective tax rate increased 41 basis points from 24.4% in 2022 to 24.8% in 2023.
The Company recorded a net pre-tax gain totaling $207.1 million. 56 Table of Contents Income Tax Expense — The $123.0 million (38%) decrease in income tax expense was primarily the result of a $517.8 million (39%) decrease in income before income taxes. Our effective tax rate increased 41 basis points from 24.4% in 2022 to 24.8% in 2023.
We did not have any share repurchases in 2021. 62 Table of Contents Off Balance Sheet Arrangements We had no off balance sheet arrangements during any of the periods presented other than those disclosed in Note 21 "Commitments and Contingencies" of the Company's consolidated financial statements.
Off Balance Sheet Arrangements We had no off balance sheet arrangements during any of the periods presented other than those disclosed in Note 21 "Commitments and Contingencies" of the Company's consolidated financial statements.
TCA's products are sold through our automobile dealerships. Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio.
TCA's products are sold through our automobile dealerships. Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns.
Accordingly, the significant increases in revenue, gross profit and income from operations for 2022 compared to 2021 are largely a result of these acquisitions.
Accordingly, the significant increases in revenue, gross profit and income from operations for 2024 compared to 2023 are largely a result of this acquisition.
As of December 31, 2023, we had $195.1 million, which is net of $50.5 million in our floor plan offset account, outstanding under our floor plan facility.
As of December 31, 2024, we had $349.9 million, which is net of $1.0 million in our floor plan offset account, outstanding under our floor plan facility.
As of December 31, 2023, we had $614.4 million of outstanding borrowings under the 2021 Real Estate Facility.
As of December 31, 2024, we had $579.9 million of outstanding borrowings under the 2021 Real Estate Facility.
Historically, the sales of new vehicles generally results in a lower gross profit margin than used vehicle sales, sales of parts and service, and sales of F&I products. As a result, when used vehicle, parts and service, and F&I revenue increase as a percentage of total revenue, we expect our overall gross profit margin to increase.
As a result, when used vehicle, parts and service, and F&I revenue increase as a percentage of total revenue, we expect our overall gross profit margin to increase.
Louis, Missouri, three franchises (three dealership locations) and one collision center in Colorado, two franchises (two dealership locations) in Spokane, Washington, one franchise (one dealership location) in Albuquerque, New Mexico and 11 franchises (nine dealership locations) and two collision centers in North Carolina. The Company recorded a net pre-tax gain totaling $207.1 million.
Louis, Missouri, three franchises (three dealership locations) and one collision center in Colorado, two franchises (two dealership locations) in Spokane, Washington, one franchise (one dealership location) in Albuquerque, New Mexico and 11 franchises (nine dealership locations) and two collision centers in North Carolina.
Additionally, amounts related to divested dealerships are excluded from each comparative period. During 2022, the Company completed sixteen divestitures that contributed $683 million in revenue for the year. Four of the divestitures closed in the first quarter, three in the second quarter, and nine in the fourth quarter of 2022.
Additionally, amounts related to divested dealerships are excluded from each comparative period for same store reporting. During 2022, the Company completed sixteen divestitures that contributed $683 million in revenue for the year.
Additionally, lower gross profit was driven by lower gross profit per vehicle sold for both new and used vehicles as margins continue to shift downward from the historic highs in recent years. • The effects of dealership divestitures also impacted consolidated revenue and gross profit.
This increase was offset by lower gross profit per vehicle sold for both new and used as margins continue to shift downward from the historic highs in recent years. • The effects of dealership divestitures also impacted consolidated revenue and gross profit. During the year ended December 31, 2024, we divested five franchises (five dealership locations).
The increase in same store parts and service revenue was due to a $108.7 million (15%) increase in customer pay revenue and a $26.8 million (17%) increase in wholesale parts revenue, partially offset by a $9.1 million (6%) decrease in warranty revenue.
The increase in same store parts and service revenue was due to a $42.7 million (4%) increase in customer pay revenue and a $33.0 million (12%) increase in warranty revenue, partially offset by a $15.6 million (4%) decrease in wholesale parts revenue and a $24.2 million (9%) decrease in collision revenue.
The financial results of the TCA segment, after dealership eliminations, are as follows: For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions) Finance and insurance, revenue $ 126.0 $ 2.3 $ 123.7 NM Finance and insurance, cost of sales $ 46.3 $ 3.6 $ 42.7 NM Finance and insurance, gross profit $ 79.8 $ (1.3) $ 81.0 NM TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP, appearance protection contracts and lease wear-and-tear contracts.
The financial results of the TCA segment, after dealership eliminations, are as follows: For the Year Ended December 31, Increase (Decrease) % Change 2024 2023 (Dollars in millions) Finance and insurance, revenue $ 120.6 $ 138.3 $ (17.8) (13) % Finance and insurance, cost of sales $ 54.4 $ 37.9 $ 16.4 43 % Finance and insurance, gross profit $ 66.2 $ 100.4 $ (34.2) (34) % TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP, appearance protection contracts and lease wear-and-tear contracts.
The increase in our adjusted cash flow provided by operating activities, was partially offset by: • $53.2 million related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2022 compared to 2021; • $126.6 million related to the change in other current assets, net; • $35.3 million related to the change in accounts payable and accrued liabilities; and • $4.8 million related to the change in operating lease liabilities.
The decrease in our adjusted cash flow provided by operating activities, was partially offset by: • $118.1 million decrease related to the change in other current assets, net; • $69.4 million decrease related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2024 compared to 2023; and • $8.2 million decrease in other long term assets and liabilities, net.
Therefore, the product mix of F&I products sold by TCA can affect the gross profits earned. In addition, interest rate volatility based on economic and market conditions outside the control of the Company, may increase or reduce TCA segment gross profit margins as well as the fair market values of certain securities within our investment portfolio.
In addition, interest rate volatility based on economic and market conditions outside the control of the Company, may increase or reduce TCA segment gross profit margins as well as the fair market values of certain securities within our investment portfolio. Fair market values typically fluctuate inversely to the fluctuations in interest rates.
It is reasonably possible that future developments could have a negative effect on the estimates and assumptions utilized in our impairment assessments and could result in material impairment charges in future periods. 64 Table of Contents
We continue to monitor developments related to macroeconomic conditions and the performance of our stores and reporting units. It is reasonably possible that future developments could have a negative effect on the estimates and assumptions utilized in our impairment assessments and could result in material impairment charges in future periods.
In addition, we are able to re-designate any amounts moved to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility back to the Revolving Credit Facility. As of December 31, 2022, $389.0 million of availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan Facility.
In addition, we are able to re-designate any amounts moved to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility back to the Revolving Credit Facility.
In 2023, total Company and same store used vehicle retail gross profit margins decreased 100 and 102 basis points, respectively, to both 6.2%.
In 2024, total Company and same store used vehicle retail gross profit margins decreased 122 and 101 basis points, respectively, to 5.0% and 5.2%.
During the year ended December 31, 2023, we had additional borrowings of $547.1 million and $240.0 million in 55 Table of Contents repayments resulting in $307.1 million outstanding borrowings as of December 31, 2023. We did not have any borrowing capacity under the Used Vehicle Floor Plan Facility based on our borrowing base calculation as of December 31, 2023.
During the year ended December 31, 2024, we had additional borrowings of $376.4 million and $582.8 million 57 Table of Contents in repayments resulting in $100.7 million outstanding borrowings as of December 31, 2024. We had $186.1 million borrowing capacity under the Used Vehicle Floor Plan Facility based on our borrowing base calculation as of December 31, 2024.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2023, we had total available liquidity of $459.8 million, which consisted of cash and cash equivalents of $32.5 million (excluding $13.2 million held by TCA), available funds in our floor plan offset accounts of $95.2 million million and $332.1 million of availability under our revolving credit facility.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we had total available liquidity of $827.7 million , which consisted of cash and cash equivalents of $38.9 million (excluding $30.5 million held by TCA), available funds in our floor plan offset accounts of $116.7 million million and $486.0 million of availability under our revolving credit facility and $186.1 million of availability under our used vehicle floor plan facility.
A significant portion of our cost structure is variable (such as sales commissions) or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long-term.
Selling, general and administrative ("SG&A") expenses consist primarily of fixed and incentive-based compensation, advertising, rent, insurance, utilities, and other customary operating expenses. A significant portion of our cost structure is variable (such as sales commissions) or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long-term.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−1 removed3 unchanged
Biggest changeAll of our interest rate swaps qualify for cash flow hedge accounting treatment and do not contain any ineffectiveness. As of December 31, 2023 we had six interest rate swap agreements. In January 2022, we entered into two new interest rate swap agreements with a combined notional principal amount of $550.0 million.
Biggest changeAll of our interest rate swaps qualify for cash flow hedge accounting treatment and do not contain any ineffectiveness. As of December 31, 2024 we had six interest rate swap agreements. These swaps are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR.
For additional information about the effect of our derivative instruments, please refer to Note 15 "Financial Instruments and Fair Value" within the accompanying consolidated financial statements. 65 Table of Contents
For additional information about the effect of our derivative instruments, please refer to Note 15 "Financial Instruments and Fair Value" within the accompanying consolidated financial statements. 67 Table of Contents
We periodically receive floor plan assistance from certain automobile manufacturers, which is primarily accounted for as a reduction in our new vehicle inventory cost. Floor plan assistance reduced our cost of sales for the years ended December 31, 2023, 2022, and 2021, by $87.0 million, $85.8 million, and $57.5 million, respectively.
We periodically receive floor plan assistance from certain automobile manufacturers, which is primarily accounted for as a reduction in our new vehicle inventory cost. Floor plan assistance reduced our cost of sales for the years ended December 31, 2024, 2023, and 2022, by $99.7 million, $87.0 million and $85.8 million, respectively.
Based on $1.81 billion of total variable interest rate debt, which includes our floor plan notes payable, amounts drawn on our used vehicle floor plan, revolver and certain mortgage liabilities, outstanding as of December 31, 2023, a 100 basis point change in interest rates would result in a change of $18.1 million in annual interest expense.
Based on $1.67 billion of total variable interest rate debt, which includes our floor plan notes payable, amounts drawn on our used vehicle floor plan, revolver and certain mortgage liabilities, outstanding as of December 31, 2024, a 100 basis point change in interest rates would result in a change of $16.7 million in annual interest expense.
The following table provides information on the attributes of each swap as of December 31, 2023: Inception Date Notional Value at Inception Notional Value Notional Value at Maturity Maturity Date (In millions) (In millions) (In millions) January 2022 $ 300.0 $ 273.8 $ 228.8 December 2026 January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031 May 2021 $ 184.4 $ 165.9 $ 110.6 May 2031 July 2020 $ 93.5 $ 76.2 $ 50.6 December 2028 July 2020 $ 85.5 $ 68.0 $ 57.3 November 2025 June 2015 $ 100.0 $ 58.8 $ 53.1 February 2025 These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to other interest expense in the same period or periods during which the hedged transactions affect earnings.
The following table provides information on the attributes of each swap as of December 31, 2024: 66 Table of Contents Inception Date Notional Value at Inception Notional Value Notional Value at Maturity Maturity Date (In millions) (In millions) (In millions) January 2022 $ 300.0 $ 258.8 $ 228.8 December 2026 January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031 May 2021 $ 184.4 $ 158.6 $ 110.6 May 2031 July 2020 $ 93.5 $ 71.0 $ 50.6 December 2028 July 2020 $ 85.5 $ 62.7 $ 57.3 November 2025 June 2015 $ 100.0 $ 53.5 $ 53.1 February 2025 These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to other interest expense in the same period or periods during which the hedged transactions affect earnings.
Removed
These swaps are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR.

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