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What changed in ASBURY AUTOMOTIVE GROUP INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ASBURY AUTOMOTIVE GROUP INC's 2022 and 2023 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 2023 report.

+332 added−324 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-01)

Top changes in ASBURY AUTOMOTIVE GROUP INC's 2023 10-K

332 paragraphs added · 324 removed · 239 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+9 added−17 removed83 unchanged
Biggest change(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, 2022 and the percentage of new vehicle revenues represented by class and franchise for the year ended December 31, 2022: Class/Franchise Number of Franchises Owned % of New Vehicle Revenues Luxury Lexus 8 9 % Mercedes-Benz 8 8 Acura 6 2 BMW 5 4 Genesis 3 1 Infiniti 4 1 Jaguar 4 * Land Rover 3 1 Lincoln 3 1 Porsche 3 2 Volvo 2 1 Audi 1 1 Bentley 1 * Total Luxury 51 31 % Import Toyota 14 17 % Honda 13 9 Nissan 9 4 Hyundai 8 5 Sprinter 7 * Volkswagen 4 1 Subaru 3 2 Fiat 2 * Kia 2 2 MINI 1 * Isuzu 1 * Total Import 64 40 % Domestic Chrysler, Dodge, Jeep, Ram 49 15 % Ford 9 9 Chevrolet, Buick, GMC 13 5 Total Domestic 71 29 % Total Franchises 186 100 % * Franchise accounted for less than 1% of new vehicle revenues for the year ended December 31, 2022.
Biggest change(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.
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, Genesis, Hyundai(a), Jeep(a), Toyota Utah Chevrolet(a), Chrysler(c), Dodge(c), Ford(b), Honda, Jeep(c), Lexus(a), Lincoln(a), 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, Jaguar, Lexus(a), Land Rover, Mercedes-Benz(b), Porsche, Volvo, Sprinter(b) Plaza Motor Company Missouri Audi, BMW, Infiniti, Jaguar, Land Rover, Mercedes-Benz(a), Sprinter(a) _____________________________ (a) This state has two of these franchises.
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.
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 have not have been 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, 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.
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 now operates in two reportable segments, the Dealerships and TCA segments.
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.
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.
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.
However, none of our dealerships have been subject to any material liabilities in the past, nor do we know of any fact or condition that would result in any material liabilities being incurred in the future. Human Capital Mission and Vision At Asbury, our North Star and our mission is to be the most guest-centric automotive retailer.
However, none of our dealerships has been subject to any material liabilities in the past, nor do we know of any fact or condition that would result in any material liabilities being incurred in the future. Human Capital Mission and Vision At Asbury, our North Star and our mission is to be the most guest-centric automotive retailer.
In addition, we provide collision repair services at our 32 free-standing collision repair centers that we operate either on the premises of, or in close proximity to, our dealerships. Historically, parts and service revenues have been more stable than those from vehicle sales.
In addition, we provide collision repair services at our 37 free-standing collision repair centers that we operate either on the premises of, or in close proximity to, our dealerships. Historically, parts and service revenues have been more stable than those from vehicle sales.
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 and Virginia.
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.
We believe that our employees help to set us apart from our competitors, and, therefore, we 15 Table of Contents 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 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.
F&I revenue in our TCA segment represents the premium revenue earned from customers for F&I products primarily sold in connection with the purchase of vehicles at our dealerships. The premium revenue is recognized over the life of the F&I product contract as services are provided.
F&I revenue in our TCA segment represents the premium revenue earned from customers for F&I products primarily sold in connection with the purchase of vehicles at our dealerships. The premium revenue is recognized over the life of the F&I 10 Table of Contents product contract as services are provided.
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 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 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.
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.
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, 2022. 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 15 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, 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.
The following chart provides a detailed breakdown of our states, brand names, and franchises as of December 31, 2022: 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 Acura, Ford, Honda(a), Lincoln Greenville Automotive Group South Carolina Jaguar, 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 Larry H.
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.
Used vehicle sales include the sale of used vehicles to individual retail 9 Table of Contents 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 at auction ("wholesale") (the terms "used retail" and "wholesale" collectively referred to as "used").
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.
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.
As of December 31, 2022, we employed approximately 13,000 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, 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.
We capitalize costs to obtain customer contracts, employee sales commissions, and amortize those costs over the life of the contract. Amortization of costs to obtain customer contracts is included in selling, 10 Table of Contents 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.
In addition, we offer our employees access to an online career path tool, which helps them plan their desired career path and see the required performance goals and milestones to be considered for a promotion.
In 2022, we launched a training curriculum for all store positions. In addition, we offer our employees access to an online career path tool, which helps them plan their desired career path and see the required performance goals and milestones to be considered for a promotion.
We intend to execute on this strategic plan by focusing on a variety of growth efforts including, driving same-store revenue growth, acquiring additional revenue through strategic acquisitions and adding incremental revenue through our Clicklane platform. 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. Competition The automotive retail and service industry is highly competitive with respect to price, service, location, and selection.
We believe that leasing provides a number of benefits to our other business lines, including the historical customer loyalty to the leasing dealership for repairs and maintenance services and the fact that lessors typically give the leasing dealership the first option to purchase the off-lease vehicle.
We believe that leasing provides a number of benefits to our other business lines, including the historical customer loyalty to the leasing dealership for repairs and maintenance services and the fact that lessors typically give the leasing dealership the first option to purchase the off-lease vehicle. 9 Table of Contents Used Vehicle Sales We sell used vehicles at all our franchised dealership locations.
The insurance companies that underwrite our insurance require we secure certain of our obligations for deductible reimbursements with collateral. Our collateral requirements are set by the insurance companies and, to date, have been satisfied by posting surety bonds, letters of credit, and/or cash deposits. Our collateral requirements may change from time-to-time based on, among other things, our claims experience.
The insurance companies that underwrite our insurance require we secure certain of our obligations for deductible reimbursements with collateral. Our collateral requirements are set by the insurance companies and, to date, have been satisfied by posting surety bonds, letters of credit, and/or cash deposits.
The portion of commissions that are paid to affiliated dealerships are eliminated in the TCA segment upon consolidation. 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.
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.
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.
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.
Similarly, 11 Table of Contents 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.
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.
We also evaluate dealership acquisition opportunities based on market position and geography, brand representation and availability, key personnel and other factors. Our approach to dispositions and acquisitions is highly disciplined with a focus on long-term strategic value to stockholders. Execute our five-year strategic plan to target an increase in our annual revenue to $32 billion by 2025.
We also evaluate dealership acquisition opportunities based on market position and geography, brand representation and availability, key personnel and other factors. Our approach to dispositions and acquisitions is highly disciplined with a focus on long-term strategic value to stockholders. Deliver on our mission to grow and transform our business with revenue of $30 billion or more by 2030.
In 2021, to ensure widespread support for our outreach program, we 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.
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.
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; • Choice of multiple health, dental and vision plans; • Discount 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.
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.
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. Our executive management team has extensive experience in the auto retail sector and is able to leverage experience from all positions throughout the Company.
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.
As of December 31, 2022, we owned and operated 186 new vehicle franchises, representing 31 brands of automobiles at 139 dealership locations, 32 collision centers, seven stand-alone used vehicle dealerships, one used vehicle wholesale business, one auto auction, and Total Care Auto, Powered by Landcar ("TCA" or "TCA Business"), our finance and insurance ("F&I") product provider, within 14 states.
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.
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. TCA’s key offerings include vehicle service contracts, prepaid maintenance, protection plans, key and remote replacement, leased vehicle protection and tire and wheel protection.
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.
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 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.
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.
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.
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.
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.
Our ability to provide a low friction experience across our omni-channel platform drives customer satisfaction and repeat business across our dealership portfolio. In December 2020, we introduced Clicklane, the automotive retail industry’s first, end-to-end, 100% online vehicle retail tool.
Our ability to provide a low friction experience across our omni-channel platform drives customer satisfaction and repeat business across our dealership portfolio.
Item 1. BUSINESS Asbury Automotive Group, Inc., a Delaware corporation organized in 2002, is a Fortune 500 company and one of the largest franchised automotive retailers in the United States with 139 new vehicle dealerships across 14 states.
Item 1. BUSINESS Asbury Automotive Group, Inc., a Delaware corporation organized in 2002, is a Fortune 500 company and one of the largest franchised automotive retailers in the United States. Our mission and vision is to put the guest experience first and follow our "North Star" to be the most guest-centric automotive retailer in the industry.
We continually evaluate additional opportunities to drive revenue growth while maintaining our disciplined approach to capital allocation. In December 2020, we announced our five-year strategic plan, targeting an increase in our revenue to $20 billion by 2025. In April 2022, the Company announced an update to this plan by increasing the annual revenue target to $32 billion by 2025.
We continually evaluate additional opportunities to drive revenue growth while maintaining our disciplined approach to capital allocation. In February 2024, the Company announced an update to our strategic outlook targeting revenue of $30 billion or more by 2030.
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 adjusted net leverage ratio in a normal business environment. The Company’s adjusted net leverage ratio was 1.7x at December 31, 2022, compared to 2.7x at December 31, 2021.
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.
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.
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.
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. We formed a partnership with HBCU Change, an app-based organization that lets users round up their spending and donate to historical black colleges and universities ("HBCU").
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.
We are continuing to integrate TCA’s service offerings across our full dealership portfolio to increase our F&I product penetration and profitability. We expect to complete the rollout of TCA's service offerings to all of our dealerships in 2023. Attract, retain and invest in top talent to drive growth and optimize operations .
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.
Our goal is to promote employees from within to career growth opportunities whenever possible. We invest resources to train and develop our employees to reach their career goals. In 2022, we launched a training curriculum for all store positions.
We also partner with local colleges and trade schools to develop apprenticeship and internship programs. This allows us to help provide valuable training to entry-level candidates while also growing our pipeline. Our goal is to promote employees from within to career growth opportunities whenever possible. We invest resources to train and develop our employees to reach their career goals.
During the year ended December 31, 2020, we sold two franchises (two dealership locations) in the Atlanta, Georgia market, six franchises (five dealership locations) and one collision center in the Jackson, Mississippi market, and one franchise (one dealership location) in the Greenville, South Carolina market. The Company recorded a pre-tax gain totaling $62.3 million.
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.
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 to focus on reducing social inequality.
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.
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. We also partner with local colleges and trade schools to develop apprenticeship and internship programs. This allows us to help provide valuable training to entry-level candidates while also growing our pipeline.
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.
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Our mission and vision is to put the guest experience first and follow our "North Star" to be the most guest-centric automotive retailer in the industry.
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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.
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Our store operations are conducted by our subsidiaries.
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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.
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This differentiated platform offers our customers an easy, seamless and transparent approach to completing the purchase or sale of vehicles completely online inclusive of all documentation, loan origination and everything in between. We believe the Clicklane tool will further enhance our physical dealership network and creates a competitive advantage as the vehicle buying process evolves in a digital environment.
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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.
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Acquisitions On December 17, 2021, the Company completed the acquisition of the businesses of the Larry H.
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Accelerate same store growth and guest experience through technology investment .
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On August 24, 2020, the Company, through two of its subsidiaries, acquired substantially all of the assets of, and leased the real property related to, 12 new vehicle dealership franchises (eight dealership locations), two collision centers and an auto auction (collectively, the "Park Place acquisition").
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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.
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The Park Place acquisition was financed through a combination of cash, floor plan facilities and seller financing. The seller financing comprised $150.0 million in aggregate principal amount of a 4.00% promissory note due August 2021 and $50.0 million in aggregate principal amount of a 4.00% promissory note due 6 Table of Contents February 2022 (collectively, the "Seller Notes").
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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.
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In September 2020, the Company redeemed the Seller Notes with proceeds from the offering of 4.50% Notes due 2028 and 4.75% Notes due 2030.
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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.
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In addition to the Park Place acquisition during the year ended December 31, 2020, we acquired the assets of three franchises (one dealership location) in the Denver, Colorado market for a combined purchase price of $63.6 million.
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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.
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We funded this acquisition with an aggregate of $34.5 million of cash and $27.1 million of floor plan borrowings for the purchase of the related new vehicle inventory. There were no acquisitions during the year ended December 31, 2022. Divestitures During the year ended December 31, 2022, we sold one franchise (one dealership location) in St.
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Our collateral requirements may change from time-to-time based on, among other things, our claims experience. 17 Table of Contents
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Used Vehicle Sales We sell used vehicles at all our franchised dealership locations, seven stand-alone used vehicle dealerships, one used vehicle wholesale business and one auto auction.
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Further develop digital and omni-channel capabilities and drive Clicklane penetration across our coast-to-coast footprint . As part of our omni-channel strategy, we implemented Clicklane, the automotive retail industry’s first, end-to-end, 100% online vehicle retail tool, which offers our customers a convenient, seamless and transparent approach to purchase and sell vehicles completely online.
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Our Clicklane platform provides our customers with the ability to (i) select a new or used vehicle, (ii) arrange for and obtain financing from a variety of lenders, (iii) obtain an offer on their trade-in vehicle, (iv) obtain an exact pay-off amount on any existing loan on a trade-in vehicle, (v) select and purchase F&I products designed for the customer’s vehicle and then (vi) complete the vehicle purchase and financing by signing the transaction documents and scheduling in-store pickup or home delivery, with each step performed entirely online.
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We have implemented Clicklane across all of our stores. The 2021 acquisitions have extended our footprint across seven western U.S. states including Arizona, California, Idaho, New Mexico, Colorado, Utah, and Washington. Although we developed our Clicklane platform together with a third-party vendor, certain technology elements of the platform were developed solely by us and are subject to trade secret protection.
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In addition, our other omni-channel tools offer our customers the ability to arrange vehicle service appointments, receive service updates, and pay for maintenance and repair services online. We continue to invest in and develop omni-channel initiatives designed to deliver an exceptional customer experience. Grow F&I product penetration and expand TCA's service offerings across the full dealership portfolio.
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Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, vehicle manufacturer incentive programs, or adverse weather events.
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With the help and guidance of an outside consulting firm, we developed a diversity, equity and inclusion ("DE&I") initiative and launched a company-wide effort in November 2020 to identify our strengths and areas of opportunity related to our DE&I initiative.
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In May 2022, we hired a Vice President, Chief Diversity Equity and Inclusion Officer to help develop and guide our DEI strategy and practices. The goal of our DE&I initiative 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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

51 edited+22 added−21 removed156 unchanged
Biggest changeRisks Related to Our Business Operating Risks Disruptions in the production and delivery of new vehicles and parts from manufacturers due to the lack of availability of parts and key components from suppliers, such as semiconductor chips and other component parts and supplies, could have a material adverse effect on our business, results of operations, financial condition and cash flows. 17 Table of Contents Historically, we have generated a significant portion of our revenue through new vehicle sales, and new vehicle sales also tend to lead to sales of higher-margin products and services, such as F&I products and vehicle-related parts and service.
Biggest changeRisks Related to Our Business Operating Risks Disruptions in the production and delivery of new vehicles and parts from manufacturers due to the lack of availability of parts and key components from suppliers could have a material adverse effect on our business, results of operations, financial condition and cash flows.
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 provider 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 or (ii) our relationship with our DMS providers or any other third-party provider deteriorates.
However, we cannot accurately predict the amount and timing of any impairment charges at this time; however, any such impairment charge could have an adverse effect on our results of operations and stockholders' equity. See Note 10 "Goodwill and Intangible Franchise Rights" of the notes to consolidated financial statements for more information.
We cannot accurately predict the amount and timing of any additional impairment charges at this time; however, any such impairment charge could have an adverse effect on our results of operations and stockholders' equity. See Note 10 "Goodwill and Intangible Franchise Rights" of the notes to the consolidated financial statements for more information.
In addition to our ability to incur additional debt in the future, there are operating and financial restrictions and covenants, such as leverage covenants, in certain of our debt and mortgage agreements, including the agreement governing our 2019 Senior Credit Facility and our mortgage agreements and related mortgage guarantees, as well as certain other agreements to which we are a party that may adversely affect our ability to finance our future operations or capital needs or to pursue certain business activities.
In addition to our ability to incur additional debt in the future, there are operating and financial restrictions and covenants, such as leverage covenants, in certain of our debt and mortgage agreements, including the agreement governing our 2023 Senior Credit Facility and our mortgage agreements and related mortgage guarantees, as well as certain other agreements to which we are a party that may adversely affect our ability to finance our future operations or capital needs or to pursue certain business activities.
The integration process will 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.
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.
We expect to continue to sell electric, battery powered and hybrid gas/electric vehicles through our dealerships, however, the effect of these vehicles on the automotive retail business is uncertain and could include changes in the level of the new and used vehicle sales, the price of new and used vehicles and the levels of service required for such vehicles and the profitability of our parts and 24 Table of Contents service business, our finance and insurance business, including our TCA business, and the role of franchised dealers, any of which could materially adversely affect our business, financial condition, results of operations and cash flows.
We expect to continue to sell electric, battery powered and hybrid gas/electric vehicles through our dealerships, however, the effect of these vehicles on the automotive retail business is uncertain and could include changes in the level of the new and used vehicle sales, the price of new and used vehicles and the levels of service required for such vehicles and the profitability of our parts and service business, our finance and insurance business, including our TCA business, and the role of franchised dealers, any of which could materially adversely affect 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, 2022, 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, 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.
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.
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.
In certain circumstances, including as a condition to obtaining consent to a proposed acquisition, a manufacturer may require us to remodel, upgrade or move our facilities, and capitalize the subject dealership at levels we would not otherwise choose to fund, causing us to divert our financial resources away from uses that management believes may be of higher long-term value to us.
In certain circumstances, including as a condition to obtaining consent to a proposed acquisition and qualifying for certain financial incentives, a manufacturer may require us to remodel, upgrade or move our facilities, and capitalize the subject dealership at levels we would not otherwise choose to fund, causing us to divert our financial resources away from uses that management believes may be of higher long-term value to us.
To the extent we do not meet minimum score requirements, our future 23 Table of Contents payments may be materially reduced or we may be precluded from receiving certain incentives, which could materially adversely affect our business, financial condition, results of operations and cash flows. Manufacturers also typically establish facilities and minimum capital requirements for dealerships on a case-by-case basis.
To the extent we do not meet minimum score requirements, our future payments may be materially reduced or we may be precluded from receiving certain incentives, which could materially adversely affect our business, financial condition, results of operations and cash flows. Manufacturers also typically establish facilities and minimum capital requirements for dealerships on a case-by-case basis.
Failure of a manufacturer 28 Table of Contents to develop passenger vehicles and light trucks that meet these and other government standards could subject the manufacturer to substantial penalties, increase the cost of vehicles sold to us, and adversely affect our ability to market and sell vehicles to meet consumer needs and desires, which could have a material adverse effect on our business, results of operations, financial condition or cash flows.
Failure of a manufacturer to develop passenger vehicles and light trucks that meet these and other government standards could subject the manufacturer to substantial penalties, increase the cost of vehicles sold to us, and adversely affect our ability to market and sell vehicles to meet consumer needs and desires, which could have a material adverse effect on our business, results of operations, financial condition or cash flows.
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. Changes in general economic conditions may make it difficult for us to execute our business strategy.
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.
Any of these developments could also reduce the ability or willingness of the financial institutions that have extended credit commitments to 29 Table of Contents us, or that have entered into hedge or similar transactions with us, to fulfill their obligations to us, which also could have a material adverse effect on our liquidity, our ability to conduct our operations and our prospects.
Any of these developments could also reduce the ability or willingness of the financial institutions that have extended credit commitments to us, or that have entered into hedge or similar transactions with us, to fulfill their obligations to us, which also could have a material adverse effect on our liquidity, our ability to conduct our operations and our prospects.
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. Goodwill and manufacturer franchise rights comprise a significant portion of our total assets.
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.
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.
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.
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.
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.
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, 2022, each one percent increase in market interest rates would increase our total annual interest expense by approximately $1.0 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, 2023, each one percent increase in market interest rates would increase our total annual interest expense by approximately $18.1 million.
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.
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.
As such, supply chain disruptions resulting from natural disasters, adverse weather 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, labor stoppages and other events may affect the flow of vehicle and parts inventories to us or our manufacturing partners.
Additionally, changes in the cost or availability of insurance in the future could substantially increase our costs to maintain our 18 Table of Contents current level of coverage or could cause us to reduce our insurance coverage and increase our self-insured risks.
Additionally, changes in the cost or availability of insurance in the future could substantially increase our costs to maintain our current level of coverage or could cause us to reduce our insurance coverage and increase our self-insured risks.
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 a common dealer management system ("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 in the preparation of our consolidated financial and operating data. All of our dealerships currently operate on two dealer management systems ("DMS").
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. 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.
If we are unable to effectively use the internet to attract customers to our own online channels, such as our Clicklane platform, and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.
If we are unable to effectively use the internet to attract customers to our own online channels, and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.
Some state laws allow dealers to file protests or petitions or allow them to attempt to comply with the 26 Table of Contents manufacturer’s criteria within a notice period to avoid the termination or non-renewal.
Some state laws allow dealers to file protests or petitions or allow them to attempt to comply with the manufacturer’s criteria within a notice period to avoid the termination or non-renewal.
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, 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 an inflationary environment, depending on automotive industry 20 Table of Contents and other economic conditions, we may be unable to raise prices to keep up with the rate of inflation, which would reduce our profit margins. We have experienced, and continue to experience, increases in the prices of labor, fuel and other costs of providing service.
In an inflationary environment, depending on automotive industry and other economic conditions, we may be unable to raise prices to keep up with the rate of inflation, which would reduce our profit margins. We have experienced, and continue to experience, increases in the prices of labor, fuel and other costs of providing service. Continued inflationary pressures could impact our profitability.
We have invested and will continue to invest in our Clicklane platform and other online applications in furtherance of our strategic plan. We face increased competition for market share from other automotive retailers and other sales platforms that have also invested in digital channels.
We have invested and will continue to invest in our omni-channel and other online applications in furtherance of our strategic vision. We face increased competition for market share from other automotive retailers and other sales platforms that have also invested in digital channels.
"Controls and Procedures" below, we have 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.
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.
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 or other reasons (for example, shortages in the supply of semiconductor chips may continue to adversely impact the number of vehicles which manufacturers are able to produce); 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 or other reasons; and (vii) issues with respect to labor relations.
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. Specifically, with the consummation of the LHM acquisition, we have experienced 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. 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.
The occurrence of any one of these events may limit our ability to take strategic actions that would otherwise enable us to manage our business in a manner in which we otherwise would, absent such limitations, which could materially adversely affect our business, financial condition, results of operations and cash flows. 25 Table of Contents Our business, financial condition and results of operations may be materially adversely affected by increases in interest rates.
The occurrence of any one of these events may limit our ability to take strategic actions that would otherwise enable us to manage our business in a manner in which we otherwise would, absent such limitations, which could materially adversely affect our business, financial condition, results of operations and cash flows.
Our inability to execute a substantial portion of our business strategy, including our five-year strategic plan, could have an adverse effect on our business, results of operations, financial condition and cash flows .
Our inability to execute a substantial portion of our business strategy, including our mission to grow and transform our business, could have an adverse effect on our business, results of operations, financial condition and cash flows .
Continued inflationary pressures could impact our profitability. We also are subject to economic, competitive, and other conditions prevailing in the various markets in which we operate, even if those conditions are not prominent nationally.
We also are subject to economic, competitive, and other conditions prevailing in the various markets in which we operate, even if those conditions are not prominent nationally.
Alleged or actual data security breaches can increase costs of doing business, negatively affect customer satisfaction and loyalty, expose us to negative publicity, individual claims or consumer class actions, administrative, civil or criminal investigations or actions, and infringe on proprietary information, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows. 27 Table of Contents Our dealership operations and facilities are subject to extensive governmental laws and regulations.
Any such alleged or actual incident can increase costs of doing business, negatively affect customer satisfaction and loyalty, expose us to negative publicity, individual claims or consumer class actions, administrative, civil or criminal investigations or actions, and infringe on proprietary information, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
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.
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).
For the year ended December 31, 2022, manufacturers representing 5% or more of our revenues 21 Table of Contents 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 ) 26 % Stellantis N.V.
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.
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.
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.
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.
We generally finance our purchases of new vehicle inventory, have the ability to finance the purchases of used vehicle inventory, and have the availability to borrow funds for working capital under our senior secured credit facilities that charge interest at variable rates. Therefore, our interest expense from variable rate debt will rise with increases in interest rates.
Our business, financial condition and results of operations may be materially adversely affected by increases in interest rates. We generally finance our purchases of new vehicle inventory, have the ability to finance the purchases of used vehicle inventory, and have the availability to borrow funds for working capital under our senior secured credit facilities that charge interest at variable rates.
As of December 31, 2022, we had total debt of $3.33 billion and total floor plan notes payable, net of $51.0 million.
As of December 31, 2023, we had total debt of $3.23 billion and total floor plan notes payable, net of $1.79 billion.
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.
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.
We believe the automotive dealership industry is a particular target of identity thieves, as there are numerous opportunities for a data security breach, including cyber-security breaches, burglary, lost or misplaced data, scams, 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, 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.
Until such time as the coronavirus is fully contained and the supply chain shortages of semiconductor chips, parts and other key components are addressed, we may continue to experience disruptions in the supply of vehicle and parts inventories, which could have a material adverse effect on our business, results of operations, financial condition, and cash flows. 22 Table of Contents Substantial competition in automobile sales and services may have a material adverse effect on our results of operations.
If we experience disruptions in the supply of vehicle and parts inventories, such disruptions could have a material adverse effect on our business, results of operations, financial condition, and cash flows. Substantial competition in automobile sales and services may have a material adverse effect on our results of operations.
Many of the factors that impact our ability to execute our strategic plan, such as the advancement of certain technologies, general economic conditions and legal and regulatory obstacles are beyond our control. 19 Table of Contents Consumers are increasingly shopping for new and used vehicles, automotive repair and maintenance service and other automotive products and services online and through mobile applications, including through third-party online and mobile sales platforms, with which we compete, that are designed to generate consumer sales that are sold to automotive dealers.
Consumers are increasingly shopping for new and used vehicles, automotive repair and maintenance service and other automotive products and services online and through mobile applications, including through third-party online and mobile sales platforms, with which we compete, that are designed to generate consumer sales that are sold to automotive dealers.
Our inability to execute a substantial portion of our business strategy, including our five-year strategic plan, could adversely affect our business, results of operations, financial condition and cash flows.
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.
As a result, our profitability is dependent to a great extent on various aspects of vehicle manufacturers’ operations and timely delivery of new vehicles and parts. Certain vehicle manufacturers have suspended or slowed production of new vehicles, parts and other supplies due to significant shortages of semiconductor chips, parts and other key components.
In turn, our vehicle manufacturers rely on certain third-party suppliers to manufacture and deliver certain parts and key components for their vehicles. As a result, our profitability is dependent to a great extent on various aspects of vehicle manufacturers’ operations and timely delivery of new vehicles and parts.
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.
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.
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.
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.
As a result of management’s evaluation, 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. Management has developed its remediation plan and is in the process of implementing it.
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.
( Honda and Acura ) 11 % Ford Motor Company ( Ford and Lincoln ) 10 % Mercedes-Benz USA, LLC ( Mercedes-Benz and Sprinter ) 8 % Hyundai Motor North America ( Hyundai and Genesis ) 6 % General Motors Company ( Chevrolet, Buick and GMC) 5 % Nissan North America, Inc.
( 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.
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 and reliability and timeliness of our financial statements and have other consequences that could materially and adversely affect our business.
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.
Removed
These production delays have negatively impacted our new vehicle and parts inventory levels, with parts shortages in turn adversely impacting our service and collision repair business.
Added
Historically, we have generated a significant portion of our revenue through new vehicle sales, and new vehicle sales also tend to lead to sales of higher-margin products and services, such as F&I products and vehicle-related parts and service.
Removed
The shortage of new vehicle inventory has increased market demand for, and pricing of, used vehicles raising both revenue and gross profit per used vehicle retailed, but also has increased our costs of acquiring used vehicle inventory.
Added
Many of the factors that impact our ability to execute our strategic vision, such as the advancement of certain technologies, general economic conditions and legal and regulatory obstacles are beyond our control.
Removed
Any prolonged severe shortages or unavailability of new vehicle inventory could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
Added
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.
Removed
In addition, the abatement of the global supply chain issues relating to semiconductor chips, parts and other key components may lead to an increase in the supply of new vehicles, which could have a material adverse effect on the levels of profitability on both new and used vehicles.
Added
Certain of these agreements also require us to maintain compliance with certain financial ratios, including, but not limited to, our adjusted net leverage ratio.
Removed
We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these shortages or when normalized production will resume at the se manufacturers. The novel coronavirus disease (COVID-19) global pandemic had, and may continue to have, a material impact on our business, financial condition and results of operations.
Added
Therefore, our interest expense from variable rate debt will rise with increases in interest rates.
Removed
The COVID-19 global pandemic has negatively impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets. Consumer spending may also be negatively impacted by general macroeconomic conditions, consumer confidence, supply chain disruptions, macroeconomic inflation and efforts to curtail inflation, which may negatively impact revenues.
Added
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.
Removed
Our profitability is, to a great extent, dependent on various aspects of vehicle manufacturers' operations. As a result of significant shortages of semiconductor chips, parts and key components, certain vehicle manufacturers have ceased or slowed production of new vehicles.
Added
Cyber incidents can include, for example, phishing, credential harvesting or use of stolen access credentials, unauthorized access to systems, networks or devices (for example, through hacking activity), structured query language attacks, infection from or spread of 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, the use of fraudulent or fake websites, and other attacks (including, but not limited to, denial-of-service attacks on websites), which shut down, disable, slow, impair or otherwise disrupt operations, business processes, technology, connectivity or website or internet access, functionality or performance.
Removed
We cannot predict with any certainty how long these production slowdowns in the automotive retail industry will persist and when normalized production will resume at these manufacturers.
Added
In addition to intentional cyber incidents, unintentional cyber incidents can occur (for example, the inadvertent release of confidential or non-public personal information). Changes to our business, processes, systems, or technology, if not implemented properly, can increase our vulnerability to cyber incidents.
Removed
This disruption in our supply network has negatively impacted, and will continue to impact, our ability to maintain a desirable mix of popular new vehicles and parts that consumers demand at the time and in the volumes desired, all of which would adversely impact our revenues.
Added
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.
Removed
While the supply disruption has reduced our new vehicle inventory supply, it has positively impacted our gross profit per vehicle retailed. As new vehicle inventories return to historic levels we would expect our new vehicle gross profit to return to pre-COVID levels.
Added
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.
Removed
The extent of the impact of the COVID-19 global pandemic on our business will depend on numerous evolving factors that we cannot accurately predict or assess.
Added
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.
Removed
Even after the COVID-19 global pandemic has subsided, we may continue to experience adverse impacts to our business as a result of an economic recession or depression that has occurred or may occur in the future.
Added
An incident may not be detected until well after it occurs and the severity and potential impact may not be fully known for a substantial period of time after it has been discovered.
Removed
These adverse impacts could include the negative impact it has on global and regional economies and economic activity; financial and capital markets, foreign currency exchange rates, inflation, commodity prices and interest rates; changes in consumer behavior and household debt levels, as well as its short and longer-term impact on the levels of consumer confidence.
Added
Our dealership operations and facilities are subject to extensive governmental laws and regulations.
Removed
We seek to execute on our strategic plan using a variety of growth efforts including, driving same-store revenue growth, acquiring additional revenue through strategic acquisitions and adding incremental revenue through our Clicklane platform.
Added
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.
Removed
( Chrysler, Dodge, Jeep, Ram and Fiat ) 15 % American Honda Motor Co., Inc.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, our operations encompassed 139 franchised dealership locations, seven used car centers, 32 collision repair centers, one used vehicle wholesale business and one auto auction 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 2 (b) — — David McDavid Auto Group 5 — 2 — Greenville Automotive Group 4 — 1 — Hare, Bill Estes & Kahlo Automotive Groups 9 — 1 — Larry H.
Biggest changeAs 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.
Item 2. Properties We lease our corporate headquarters, which is located at 2905 Premiere Parkway, NW, Suite 300, Duluth, Georgia 30097. We also have corporate offices in Texas and Utah. The operations of our TCA segment are located in leased office space in Utah.
Item 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.
Miller Dealerships 49 6 7 3 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 121 25 24 8 ______________________________________ (a) Includes one dealership that leases a new vehicle facility and operates a separate used vehicle facility that is owned.
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe evaluate pending and threatened 30 Table of Contents claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. We do not believe that the ultimate resolution of the claims we are involved in will have a material adverse effect on our business, results of operations, financial condition, cash flow and prospects.
Biggest changeWe evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. We do not believe that the ultimate resolution of the claims we are involved in will have a material adverse effect on our business, results of operations, financial condition, cash flow and prospects.
Removed
Item 4. Mine Safety Disclosures Not applicable. 31 Table of Contents PART II
Added
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.
Added
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.
Added
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.
Added
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
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 32 Table of Contents investigation.
Added
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeInformation about the shares of our common stock that we repurchased during the quarter ended December 31, 2022 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 10/01/2022 - 10/31/2022 740 $ 157.95 — $ 200.0 11/01/2022 - 11/30/2022 38,445 $ 179.64 38,438 $ 193.1 12/01/2022 - 12/31/2022 527,398 $ 170.75 527,389 $ 103.0 Total 566,583 565,827 On January 26, 2023, our Board of Directors increased the Company's common stock share repurchase authorization by $108.0 million, to $200.0 million 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. 32 Table of Contents PERFORMANCE GRAPH The following graph furnished by us shows the value as of December 31, 2022, of a $100 investment in our common stock made on December 31, 2017, 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, 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.
("Bank of America"), as administrative agent, and the other agents and lenders party thereto (the "2019 Senior Credit Facility") and the Indentures governing the Senior Notes (as defined below) (collectively, the "Indentures") currently allow for us to make certain restricted payments, including payments to repurchase shares of our common stock, among other things, subject to our continued compliance with certain covenants.
("Bank of America"), as administrative agent, and the other agents and lenders party thereto (the "2023 Senior Credit Facility") and the Indentures governing the Senior Notes (as defined below) (collectively, the "Indentures") currently allow for us to make certain restricted payments, including payments to repurchase shares of our common stock, among other things, subject to our continued compliance with certain covenants.
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. 33 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. 35 Table of Contents Item 6. Reserved
For additional information, see the "Covenants and Defaults" section within "Liquidity and Capital Resources." Issuer Purchases of Equity Securities Share repurchases would be implemented through purchases made from time to time in either the open market or private transactions.
For additional information, see the "Covenants and Defaults" section within "Liquidity and Capital Resources." Issuer Purchases of Equity Securities Share repurchases are implemented through purchases made from time to time in either the open market or private transactions.
On February 23, 2023, the last reported sale price of our common stock on the NYSE was $229.39 per share, and there were approximately 505 record holders of our common stock. Our credit agreement with Bank of America, N.A.
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.

Item 7. Management's Discussion & Analysis

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

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Biggest changeRefer to Note 16 "Income Taxes" for additional information regarding income taxes. 44 Table of Contents CONSOLIDATED RESULTS OF OPERATIONS The Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020 For the Year Ended December 31, Increase (Decrease) % Change 2021 2020 (Dollars in millions, except per share data) REVENUE: New vehicle $ 4,934.1 $ 3,767.4 $ 1,166.7 31 % Used vehicle 3,315.6 2,169.5 1,146.1 53 % Parts and service 1,182.9 889.8 293.1 33 % Finance and insurance, net 405.1 305.1 100.0 33 % TOTAL REVENUE 9,837.7 7,131.8 2,705.9 38 % GROSS PROFIT: New vehicle 490.5 218.5 272.0 124 % Used vehicle 288.3 156.6 131.7 84 % Parts and service 721.9 543.2 178.7 33 % Finance and insurance, net 401.5 305.1 96.4 32 % TOTAL GROSS PROFIT 1,902.2 1,223.4 678.7 55 % OPERATING EXPENSES: Selling, general, and administrative 1,073.9 781.9 292.0 37 % Depreciation and amortization 41.9 38.5 3.4 9 % Franchise rights impairment — 23.0 (23.0) (100) % Other operating (income) expenses, net (5.4) 9.2 (14.6) (159) % INCOME FROM OPERATIONS 791.8 370.8 420.9 114 % OTHER EXPENSES (INCOME): Floor plan interest expense 8.2 17.7 (9.5) (54) % Other interest expense, net 93.9 56.8 37.2 65 % Loss on extinguishment of long-term debt, net — 20.6 (20.6) (100) Gain on dealership divestitures, net (8.0) (62.3) 54.3 (87) Total other expenses, net 94.1 32.7 61.4 188 % INCOME BEFORE INCOME TAXES 697.7 338.1 359.6 106 % Income tax expense 165.3 83.8 81.6 97 % NET INCOME $ 532.4 $ 254.4 $ 278.0 109 % Net income per common share—Diluted $ 26.49 $ 13.18 $ 13.31 101 % 45 Table of Contents For the Year Ended December 31, 2021 2020 REVENUE MIX PERCENTAGES: New vehicles 50.2 % 52.8 % Used retail vehicles 31.1 % 27.1 % Used vehicle wholesale 2.6 % 3.4 % Parts and service 12.0 % 12.5 % Finance and insurance, net 4.1 % 4.3 % Total revenue 100.0 % 100.0 % GROSS PROFIT MIX PERCENTAGES: New vehicles 25.8 % 17.9 % Used retail vehicles 13.8 % 11.9 % Used vehicle wholesale 1.4 % 0.9 % Parts and service 38.0 % 44.4 % Finance and insurance, net 21.1 % 24.9 % Total gross profit 100.0 % 100.0 % GROSS PROFIT MARGIN 19.3 % 17.2 % SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 56.5 % 63.9 % Total revenue during 2021 increased by $2.71 billion (38%) compared to 2020, due to a $1.17 billion (31%) increase in new vehicle revenue, $1.15 billion (53%) increase in used vehicle revenue, a $293.1 million (33%) increase in parts and service revenue and a $100.0 million (33%) increase in F&I revenue.
Biggest changeThe 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.
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" 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, 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.
Income from operations during 2022 increased by $480.8 million (61%) compared to 2021, primarily due to a $1.20 billion (63%) increase in gross profit, partially offset by a 689.4 (64%) increase in selling, general, and administrative expenses and a $27.1 million (65%) increase in depreciation and amortization expenses.
Income from operations during 2022 increased by $480.8 million (61%) compared to 2021, primarily due to a $1.20 billion (63%) increase in gross profit, partially offset by a $689.4 million (64%) increase in selling, general, and administrative expenses and a $27.1 million (65%) increase in depreciation and amortization expenses.
The $923.3 million (78%) increase in parts and service revenue was due to a $568.1 million (70%) increase in customer pay revenue, a $270.2 million (143%) increase in wholesale parts revenue, and a $85.0 million (47%) increase in warranty revenue. Same store parts and service revenue increased $126.3 (12%) from $1.06 billion in 2021 to $1.18 billion in 2022.
The $923.3 million (78%) increase in parts and service revenue was due to a $568.1 million (70%) increase in customer pay revenue, a $270.2 million (143%) increase in wholesale parts revenue and a $85.0 million (47%) increase in warranty revenue. Same store parts and service revenue increased $126.3 million (12%) from $1.06 billion in 2021 to $1.18 billion in 2022.
Parts and service gross profit, excluding reconditioning and preparation, increased by $380.2 million (67%) to $946.7 and same store gross profit, excluding reconditioning and preparation, increased by $57.5 million (11%) to $565.7 million.
Parts and service gross profit, excluding reconditioning and preparation, increased by $380.2 million (67%) to $946.7 million and same store gross profit, excluding reconditioning and preparation, increased by $57.5 million (11%) to $565.7 million.
See Note 14 "Debt" for further details. • 2018 Bank of America Facility —On November 13, 2018, we entered into a real estate term loan credit agreement (as amended, restated or supplemented from time to time, the "2018 BofA Real Estate Credit Agreement") with Bank of America, as lender, providing for term loans in an aggregate amount not to exceed $128.1 million, subject to customary terms and conditions (the "2018 BofA Real Estate Facility").
See Note 14 "Debt" for further details. • 2018 BofA Real Estate Facility —On November 13, 2018, we entered into a real estate term loan credit agreement (as amended, restated or supplemented from time to time, the "2018 BofA Real Estate Credit Agreement") with Bank of America, as lender, providing for term loans in an aggregate amount not to exceed $128.1 million, subject to customary terms and conditions (the "2018 BofA Real Estate Facility").
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.
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 aggregate, these acquisitions included purchase price holdbacks of $21.0 million for potential indemnity claims made by us with respect to the acquired franchises.
The Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except per share data) REVENUE: New vehicle $ 7,365.6 $ 4,934.1 $ 2,431.5 49 % Used vehicle 5,197.1 3,315.6 1,881.4 57 % Parts and service 2,074.2 1,182.9 891.4 75 % Finance and insurance, net 797.0 405.1 391.9 97 % TOTAL REVENUE 15,433.8 9,837.7 5,596.2 57 % GROSS PROFIT: New vehicle 844.0 490.5 353.5 72 % Used vehicle 353.2 288.3 64.9 22 % Parts and service 1,152.6 721.9 430.8 60 % Finance and insurance, net 750.7 401.5 349.2 87 % TOTAL GROSS PROFIT 3,100.6 1,902.2 1,198.4 63 % OPERATING EXPENSES: Selling, general, and administrative 1,763.4 1,073.9 689.4 64 % Depreciation and amortization 69.0 41.9 27.1 65 % Other operating income, net (4.4) (5.4) 1.0 (19) % INCOME FROM OPERATIONS 1,272.6 791.8 480.8 61 % OTHER (INCOME) EXPENSES: Floor plan interest expense 8.4 8.2 0.2 2 % Other interest expense, net 152.2 93.9 58.3 62 % Gain on dealership divestitures, net (207.1) (8.0) (199.1) NM Total other (income) expenses, net (46.5) 94.1 (140.6) NM INCOME BEFORE INCOME TAXES 1,319.1 697.7 621.4 89 % Income tax expense 321.8 165.3 156.5 95 % NET INCOME $ 997.3 $ 532.4 $ 464.9 87 % Net income per common share—Diluted $ 44.61 $ 26.49 $ 18.12 68 % ______________________________ NM — Not Meaningful 36 Table of Contents For the Year Ended December 31, 2022 2021 REVENUE MIX PERCENTAGES: New vehicles 47.7 % 50.2 % Used retail vehicles 31.3 % 31.1 % Used vehicle wholesale 2.4 % 2.6 % Parts and service 13.4 % 12.0 % Finance and insurance, net 5.2 % 4.1 % Total revenue 100.0 % 100.0 % GROSS PROFIT MIX PERCENTAGES: New vehicles 27.2 % 25.8 % Used retail vehicles 11.2 % 13.8 % Used vehicle wholesale 0.2 % 1.4 % Parts and service 37.2 % 38.0 % Finance and insurance, net 24.2 % 21.1 % Total gross profit 100.0 % 100.0 % GROSS PROFIT MARGIN 20.1 % 19.3 % SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 56.9 % 56.5 % Total revenue during 2022 increased by $5.60 billion (57%) compared to 2021, due to a $2.43 billion (49%) increase in new vehicle revenue, a $1.88 billion (57%) increase in used vehicle revenue, a $891.4 million (75%) increase in parts and service revenue and a $391.9 million (97%) increase in F&I revenue.
The Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except per share data) REVENUE: New vehicle $ 7,365.6 $ 4,934.1 $ 2,431.5 49 % Used vehicle 5,197.1 3,315.6 1,881.4 57 % Parts and service 2,074.2 1,182.9 891.4 75 % Finance and insurance, net 797.0 405.1 391.9 97 % TOTAL REVENUE 15,433.8 9,837.7 5,596.2 57 % GROSS PROFIT: New vehicle 844.0 490.5 353.5 72 % Used vehicle 353.2 288.3 64.9 22 % Parts and service 1,152.6 721.9 430.8 60 % Finance and insurance, net 750.7 401.5 349.2 87 % TOTAL GROSS PROFIT 3,100.6 1,902.2 1,198.4 63 % OPERATING EXPENSES: Selling, general, and administrative 1,763.4 1,073.9 689.4 64 % Depreciation and amortization 69.0 41.9 27.1 65 % Other operating income, net (4.4) (5.4) 1.0 (19) % INCOME FROM OPERATIONS 1,272.6 791.8 480.8 61 % OTHER (INCOME) EXPENSES: Floor plan interest expense 8.4 8.2 0.2 2 % Other interest expense, net 152.2 93.9 58.3 62 % Gain on dealership divestitures, net (207.1) (8.0) (199.1) NM Total other (income) expenses, net (46.5) 94.1 (140.6) NM INCOME BEFORE INCOME TAXES 1,319.1 697.7 621.4 89 % Income tax expense 321.8 165.3 156.5 95 % NET INCOME $ 997.3 $ 532.4 $ 464.9 87 % Net income per common share—Diluted $ 44.61 $ 26.49 $ 18.12 68 % ______________________________ NM — Not Meaningful 47 Table of Contents For the Year Ended December 31, 2022 2021 REVENUE MIX PERCENTAGES: New vehicles 47.7 % 50.2 % Used retail vehicles 31.3 % 31.1 % Used vehicle wholesale 2.4 % 2.6 % Parts and service 13.4 % 12.0 % Finance and insurance, net 5.2 % 4.1 % Total revenue 100.0 % 100.0 % GROSS PROFIT MIX PERCENTAGES: New vehicles 27.2 % 25.8 % Used retail vehicles 11.2 % 13.8 % Used vehicle wholesale 0.2 % 1.4 % Parts and service 37.2 % 38.0 % Finance and insurance, net 24.2 % 21.1 % Total gross profit 100.0 % 100.0 % GROSS PROFIT MARGIN 20.1 % 19.3 % SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 56.9 % 56.5 % Total revenue during 2022 increased by $5.60 billion (57%) compared to 2021, due to a $2.43 billion (49%) increase in new vehicle revenue, a $1.88 billion (57%) increase in used vehicle revenue, a $891.4 million (75%) increase in parts and service revenue and a $391.9 million (97%) increase in F&I revenue.
As a result of the shortage of new vehicle inventory, many customers have elected to keep their current vehicles longer which has generated additional customer pay and wholesale parts gross profit for the parts and service departments. 41 Table of Contents Finance and Insurance, net— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Finance and insurance, net $ 670.9 $ 402.7 $ 268.2 67 % Finance and insurance, net per vehicle sold $ 2,217 $ 1,872 $ 345 18 % Same Store: Finance and insurance, net $ 403.0 $ 362.7 $ 40.4 11 % Finance and insurance, net per vehicle sold $ 2,339 $ 1,883 $ 456 24 % F&I revenue, net increased by $268.2 million (67%) in 2022 when compared to 2021 primarily as a result of a 41% increase in new and used retail unit sales and an 18% increase in F&I per vehicle retailed.
As a result of the shortage of new vehicle inventory, many customers have elected to keep their current vehicles longer which has generated additional customer pay and wholesale parts gross profit for the parts and service departments. 52 Table of Contents Finance and Insurance, net— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Finance and insurance, net $ 670.9 $ 402.7 $ 268.2 67 % Finance and insurance, net per vehicle sold $ 2,217 $ 1,872 $ 345 18 % Same Store: Finance and insurance, net $ 403.0 $ 362.7 $ 40.4 11 % Finance and insurance, net per vehicle sold $ 2,339 $ 1,883 $ 456 24 % F&I revenue, net increased by $268.2 million (67%) in 2022 when compared to 2021 primarily as a result of a 41% increase in new and used retail unit sales and an 18% increase in F&I per vehicle retailed.
Overall, net income increased by $464.9 million (87%) from $532.4 million in 2021 to $997.3 million in 2022. 37 Table of Contents DEALERSHIP SEGMENT New Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Luxury $ 2,315.7 $ 2,183.0 $ 132.7 6 % Import 2,914.9 1,935.8 979.2 51 % Domestic 2,135.0 815.3 1,319.7 162 % Total new vehicle revenue $ 7,365.6 $ 4,934.1 $ 2,431.5 49 % Gross profit: Luxury $ 293.0 $ 241.1 $ 51.9 22 % Import 338.7 175.3 163.4 93 % Domestic 212.3 74.1 138.2 187 % Total new vehicle gross profit $ 844.0 $ 490.5 $ 353.5 72 % New vehicle units: Luxury 33,904 34,648 (744) (2) % Import 78,388 58,413 19,975 34 % Domestic 38,887 16,849 22,038 131 % Total new vehicle units 151,179 109,910 41,269 38 % Same Store: Revenue: Luxury $ 1,919.4 $ 2,031.4 $ (112.0) (6) % Import 1,532.2 1,739.1 (207.0) (12) % Domestic 563.7 652.5 (88.8) (14) % Total new vehicle revenue $ 4,015.2 $ 4,423.0 $ (407.8) (9) % Gross profit: Luxury $ 239.1 $ 225.4 $ 13.7 6 % Import 178.5 156.2 22.3 14 % Domestic 52.8 57.6 (4.8) (8) % Total new vehicle gross profit $ 470.4 $ 439.2 $ 31.2 7 % New vehicle units: Luxury 27,920 32,005 (4,085) (13) % Import 42,179 52,719 (10,540) (20) % Domestic 10,799 13,591 (2,792) (21) % Total new vehicle units 80,898 98,315 (17,417) (18) % 38 Table of Contents New Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 As Reported: Revenue per new vehicle sold $ 48,721 $ 44,892 $ 3,829 9 % Gross profit per new vehicle sold $ 5,583 $ 4,462 $ 1,120 25 % New vehicle gross margin 11.5 % 9.9 % 1.5 % Luxury: Gross profit per new vehicle sold $ 8,642 $ 6,958 $ 1,684 24 % New vehicle gross margin 12.7 % 11.0 % 1.6 % Import: Gross profit per new vehicle sold $ 4,320 $ 3,001 $ 1,319 44 % New vehicle gross margin 11.6 % 9.1 % 2.6 % Domestic: Gross profit per new vehicle sold $ 5,460 $ 4,397 $ 1,063 24 % New vehicle gross margin 9.9 % 9.1 % 0.9 % Same Store: Revenue per new vehicle sold $ 49,633 $ 44,988 $ 4,645 10 % Gross profit per new vehicle sold $ 5,815 $ 4,468 $ 1,348 30 % New vehicle gross margin 11.7 % 9.9 % 1.8 % Luxury: Gross profit per new vehicle sold $ 8,563 $ 7,041 $ 1,522 22 % New vehicle gross margin 12.5 % 11.1 % 1.4 % Import: Gross profit per new vehicle sold $ 4,233 $ 2,964 $ 1,269 43 % New vehicle gross margin 11.7 % 9.0 % 2.7 % Domestic: Gross profit per new vehicle sold $ 4,892 $ 4,241 $ 652 15 % New vehicle gross margin 9.4 % 8.8 % 0.5 % New vehicle revenue increased by $2.43 billion (49%), as a result of a 38% increase in new vehicle unit sales and a 9% increase in revenue per new vehicle sold.
Overall, net income increased by $464.9 million (87%) from $532.4 million in 2021 to $997.3 million in 2022. 48 Table of Contents DEALERSHIPS SEGMENT New Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Luxury $ 2,315.7 $ 2,183.0 $ 132.7 6 % Import 2,914.9 1,935.8 979.2 51 % Domestic 2,135.0 815.3 1,319.7 162 % Total new vehicle revenue $ 7,365.6 $ 4,934.1 $ 2,431.5 49 % Gross profit: Luxury $ 293.0 $ 241.1 $ 51.9 22 % Import 338.7 175.3 163.4 93 % Domestic 212.3 74.1 138.2 187 % Total new vehicle gross profit $ 844.0 $ 490.5 $ 353.5 72 % New vehicle units: Luxury 33,904 34,648 (744) (2) % Import 78,388 58,413 19,975 34 % Domestic 38,887 16,849 22,038 131 % Total new vehicle units 151,179 109,910 41,269 38 % Same Store: Revenue: Luxury $ 1,919.4 $ 2,031.4 $ (112.0) (6) % Import 1,532.2 1,739.1 (207.0) (12) % Domestic 563.7 652.5 (88.8) (14) % Total new vehicle revenue $ 4,015.2 $ 4,423.0 $ (407.8) (9) % Gross profit: Luxury $ 239.1 $ 225.4 $ 13.7 6 % Import 178.5 156.2 22.3 14 % Domestic 52.8 57.6 (4.8) (8) % Total new vehicle gross profit $ 470.4 $ 439.2 $ 31.2 7 % New vehicle units: Luxury 27,920 32,005 (4,085) (13) % Import 42,179 52,719 (10,540) (20) % Domestic 10,799 13,591 (2,792) (21) % Total new vehicle units 80,898 98,315 (17,417) (18) % 49 Table of Contents New Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 As Reported: Revenue per new vehicle sold $ 48,721 $ 44,892 $ 3,829 9 % Gross profit per new vehicle sold $ 5,583 $ 4,462 $ 1,120 25 % New vehicle gross margin 11.5 % 9.9 % 1.5 % Luxury: Gross profit per new vehicle sold $ 8,642 $ 6,958 $ 1,684 24 % New vehicle gross margin 12.7 % 11.0 % 1.6 % Import: Gross profit per new vehicle sold $ 4,320 $ 3,001 $ 1,319 44 % New vehicle gross margin 11.6 % 9.1 % 2.6 % Domestic: Gross profit per new vehicle sold $ 5,460 $ 4,397 $ 1,063 24 % New vehicle gross margin 9.9 % 9.1 % 0.9 % Same Store: Revenue per new vehicle sold $ 49,633 $ 44,988 $ 4,645 10 % Gross profit per new vehicle sold $ 5,815 $ 4,468 $ 1,348 30 % New vehicle gross margin 11.7 % 9.9 % 1.8 % Luxury: Gross profit per new vehicle sold $ 8,563 $ 7,041 $ 1,522 22 % New vehicle gross margin 12.5 % 11.1 % 1.4 % Import: Gross profit per new vehicle sold $ 4,233 $ 2,964 $ 1,269 43 % New vehicle gross margin 11.7 % 9.0 % 2.7 % Domestic: Gross profit per new vehicle sold $ 4,892 $ 4,241 $ 652 15 % New vehicle gross margin 9.4 % 8.8 % 0.5 % New vehicle revenue increased by $2.43 billion (49%), as a result of a 38% increase in new vehicle unit sales and a 9% increase in revenue per new vehicle sold.
Parts and Service— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions) As Reported: Parts and service revenue $ 2,107.5 $ 1,184.3 $ 923.3 78 % Parts and service gross profit: Customer pay 724.8 434.2 290.6 67 % Warranty 142.4 98.0 44.4 45 % Wholesale parts 79.4 34.3 45.1 132 % Parts and service gross profit, excluding reconditioning and preparation 946.7 566.5 380.2 67 % Parts and service gross margin, excluding reconditioning and preparation 44.9 % 47.8 % (2.9) % Reconditioning and preparation * 221.1 153.6 67.5 44 % Total parts and service gross profit $ 1,167.8 $ 720.1 $ 447.7 62 % Same Store: Parts and service revenue $ 1,181.8 $ 1,055.5 $ 126.3 12 % Parts and service gross profit: Customer pay 450.3 390.3 60.1 15 % Warranty 82.5 88.2 (5.7) (7) % Wholesale parts 32.9 29.7 3.2 11 % Parts and service gross profit, excluding reconditioning and preparation 565.7 508.1 57.5 11 % Parts and service gross margin, excluding reconditioning and preparation 47.9 % 48.1 % (0.3) % Reconditioning and preparation * 141.6 137.6 4.0 3 % Total parts and service gross profit $ 707.3 $ 645.7 $ 61.6 10 % * Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed and is included as a reduction of Parts and service cost of sales within the accompanying consolidated statements of income upon the sale of the vehicle.
Parts and Service— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions) As Reported: Parts and service revenue $ 2,107.5 $ 1,184.3 $ 923.3 78 % Parts and service gross profit: Customer pay 724.8 434.2 290.6 67 % Warranty 142.4 98.0 44.4 45 % Wholesale parts 79.4 34.3 45.1 132 % Parts and service gross profit, excluding reconditioning and preparation 946.7 566.5 380.2 67 % Parts and service gross margin, excluding reconditioning and preparation 44.9% 47.8% (2.9) % Reconditioning and preparation * 221.1 153.6 67.5 44 % Total parts and service gross profit $ 1,167.8 $ 720.1 $ 447.7 62 % Total parts and service gross margin 55.4% 60.8% (5.4) % Same Store: Parts and service revenue $ 1,181.8 $ 1,055.5 $ 126.3 12 % Parts and service gross profit: Customer pay 450.3 390.3 60.1 15 % Warranty 82.5 88.2 (5.7) (7) % Wholesale parts 32.9 29.7 3.2 11 % Parts and service gross profit, excluding reconditioning and preparation 565.7 508.1 57.5 11 % Parts and service gross margin, excluding reconditioning and preparation 47.9% 48.1% (0.3) % Reconditioning and preparation * 141.6 137.6 4.0 3 % Total parts and service gross profit $ 707.3 $ 645.7 $ 61.6 10 % Total parts and service gross margin 59.8% 61.2% (1.3) % * Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed and is included as a reduction of Parts and service cost of sales within the accompanying consolidated statements of income upon the sale of the vehicle.
The representations and covenants contained in the 2021 Real Estate Facility, 2021 BofA Real Estate Facility, 2018 BofA Real Estate Credit Agreement, 2018 Wells Fargo Master Loan Agreement, 2015 Wells Fargo Master Loan Agreement, 2013 BofA Real Estate Credit Agreement, and the related documents are customary for financing transactions of this nature, including, among others, requirements to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case, as applicable.
The representations and covenants contained in the 2021 Real Estate Facility, 2021 BofA Real Estate Credit Agreement, 2018 BofA Real Estate Credit Agreement, 2018 Wells Fargo Master Loan Agreement, 2015 Wells Fargo Master Loan Agreement, and the related documents are customary for financing transactions of this nature, including, among others, requirements to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case, as applicable.
We finished 2022 with a 26 day supply of new vehicle inventory which is below our targeted days supply primarily as a result of these manufacturer production challenges. 39 Table of Contents Used Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Used vehicle retail revenue $ 4,828.8 $ 3,055.9 $ 1,772.8 58 % Used vehicle wholesale revenue 368.3 259.7 108.6 42 % Used vehicle revenue $ 5,197.1 $ 3,315.6 $ 1,881.4 57 % Gross profit: Used vehicle retail gross profit $ 347.1 $ 262.0 $ 85.1 32 % Used vehicle wholesale gross profit 6.2 26.4 (20.2) (77) % Used vehicle gross profit $ 353.2 $ 288.3 $ 64.9 22 % Used vehicle retail units: Used vehicle retail units 151,464 105,206 46,258 44 % Same Store: Revenue: Used vehicle retail revenue $ 2,988.0 $ 2,761.1 $ 226.9 8 % Used vehicle wholesale revenue 154.3 232.4 (78.1) (34) % Used vehicle revenue $ 3,142.3 $ 2,993.6 $ 148.7 5 % Gross profit: Used vehicle retail gross profit $ 190.6 $ 238.0 $ (47.4) (20) % Used vehicle wholesale gross profit 1.6 24.5 (22.8) (93) % Used vehicle gross profit $ 192.3 $ 262.5 $ (70.2) (27) % Used vehicle retail units: Used vehicle retail units 91,433 94,336 (2,903) (3) % Used Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 As Reported: Revenue per used vehicle retailed $ 31,881 $ 29,047 $ 2,833 10 % Gross profit per used vehicle retailed $ 2,291 $ 2,490 $ (199) (8) % Used vehicle retail gross margin 7.2 % 8.6 % (1.4) % Same Store: Revenue per used vehicle retailed $ 32,679 $ 29,269 $ 3,411 12 % Gross profit per used vehicle retailed $ 2,085 $ 2,523 $ (438) (17) % Used vehicle retail gross margin 6.4 % 8.6 % (2.2) % Used vehicle revenue increased by $1.88 billion (57%), due to a $1.77 billion (58%) increase in used retail revenue and a $108.6 million (42%) increase in used vehicle wholesale revenue.
We finished 2022 with a 26 days of supply of new vehicle inventory which is below our targeted days supply primarily as a result of these manufacturer production challenges. 50 Table of Contents Used Vehicle— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 (Dollars in millions, except for per vehicle data) As Reported: Revenue: Used vehicle retail revenue $ 4,828.8 $ 3,055.9 $ 1,772.8 58 % Used vehicle wholesale revenue 368.3 259.7 108.6 42 % Used vehicle revenue $ 5,197.1 $ 3,315.6 $ 1,881.4 57 % Gross profit: Used vehicle retail gross profit $ 347.1 $ 262.0 $ 85.1 32 % Used vehicle wholesale gross profit 6.2 26.4 (20.2) (77) % Used vehicle gross profit $ 353.2 $ 288.3 $ 64.9 22 % Used vehicle retail units: Used vehicle retail units 151,464 105,206 46,258 44 % Same Store: Revenue: Used vehicle retail revenue $ 2,988.0 $ 2,761.1 $ 226.9 8 % Used vehicle wholesale revenue 154.3 232.4 (78.1) (34) % Used vehicle revenue $ 3,142.3 $ 2,993.6 $ 148.7 5 % Gross profit: Used vehicle retail gross profit $ 190.6 $ 238.0 $ (47.4) (20) % Used vehicle wholesale gross profit 1.6 24.5 (22.8) (93) % Used vehicle gross profit $ 192.3 $ 262.5 $ (70.2) (27) % Used vehicle retail units: Used vehicle retail units 91,433 94,336 (2,903) (3) % Used Vehicle Metrics— For the Year Ended December 31, Increase (Decrease) % Change 2022 2021 As Reported: Revenue per used vehicle retailed $ 31,881 $ 29,047 $ 2,833 10 % Gross profit per used vehicle retailed $ 2,291 $ 2,490 $ (199) (8) % Used vehicle retail gross margin 7.2 % 8.6 % (1.4) % Same Store: Revenue per used vehicle retailed $ 32,679 $ 29,269 $ 3,411 12 % Gross profit per used vehicle retailed $ 2,085 $ 2,523 $ (438) (17) % Used vehicle retail gross margin 6.4 % 8.6 % (2.2) % Used vehicle revenue increased by $1.88 billion (57%), due to a $1.77 billion (58%) increase in used retail revenue and a $108.6 million (42%) increase in used vehicle wholesale revenue.
Same store used vehicle revenue increased by $148.7 million (5%) due to an $226.9 million (8%) increase in used vehicle retail revenue, partially offset by a $78.1 million (34%) decrease in used vehicle wholesale revenue. In 2022, total Company and same store used vehicle retail gross profit margins both decreased 139 and 224 basis points to 7.2% and 6.4%, respectively.
Same store used vehicle revenue increased by $148.7 million (5%) due to a $226.9 million (8%) increase in used vehicle retail revenue, partially offset by a $78.1 million (34%) decrease in used vehicle wholesale revenue. In 2022, total Company and same store used vehicle retail gross profit margins both decreased 139 and 224 basis points to 7.2% and 6.4%, respectively.
The proceeds of the September 2020 Offering were used to redeem the 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. 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.
We continually evaluate our liquidity and capital resources based upon (i) our cash and cash equivalents on hand, (ii) the funds that we expect to generate through future operations, (iii) current and expected borrowing availability under our 2019 Senior Credit Facility (discussed further below), (iv) amounts in our new vehicle floor plan notes payable offset accounts, and (v) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, financings, acquisitions, dispositions, equity and/or debt repurchases, dividends, or other capital expenditures.
We continually evaluate our liquidity and capital resources based upon (i) our cash and cash equivalents on hand, (ii) the funds that we expect to generate through future operations, (iii) current and expected borrowing availability under our 2023 Senior Credit Facility (discussed further below), (iv) amounts in our new vehicle floor plan notes payable offset accounts, and (v) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, financings, acquisitions, dispositions, equity and/or debt repurchases, dividends, or other capital expenditures.
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. 34 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 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.
The representations and covenants contained in the agreement governing the 2019 Senior Credit Facility are customary for financing transactions of this nature including, among others, a requirement to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the agreement governing the 2019 Senior Credit Facility.
The representations and covenants contained in the agreement governing the 2023 Senior Credit Facility are customary for financing transactions of this nature including, among others, a requirement to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the agreement governing the 2023 Senior Credit Facility.
Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to our 2019 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturers from which we purchased the related inventory.
Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to our 2023 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturers from which we purchased the related inventory.
The 2029 Senior Notes and 2032 Senior Notes mature on November 15, 2024 and February 15, 2032, respectively. Interest is payable semiannually, on November 15 and May 15 of each year.
The 2029 Senior Notes and 2032 Senior Notes mature on November 15, 2029 and February 15, 2032, respectively. Interest is payable semiannually, on November 15 and May 15 of each year.
We attribute the decreases in used vehicle retail gross profit margin to a softening in the used 40 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 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.
Contractual Obligations As of December 31, 2022, 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, 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.
The 2019 Senior Credit Facility and the Indentures currently allow for restricted payments without limit so long as our Consolidated Total Leverage Ratio (as defined in the 2019 Senior Credit Facility and the Indentures) is no greater than 3.0 to 1.0 after giving effect to such proposed restricted payments.
The 2023 Senior Credit Facility and the Indentures currently allow for restricted payments without limit so long as our Consolidated Total Leverage Ratio (as defined in the 2023 Senior Credit Facility and the Indentures) is no greater than 3.0 to 1.0 after giving effect to such proposed restricted payments.
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, 2020 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, 2021 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, 2021. 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, 2022. OVERVIEW We are one of the largest automotive retailers in the United States.
The decrease in SG&A as a percentage of gross profit is primarily the result of higher gross profits earned across our Dealership segment, as well as maintaining expense discipline, particularly in personnel costs, with enhanced productivity of our team members.
The decrease in SG&A as a percentage of gross profit is primarily the result of higher gross profits earned across our Dealerships segment, as well as maintaining expense discipline, particularly in personnel costs, with enhanced productivity of our team members.
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 2019 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.
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.
As explained in Note 14 of the Company's consolidated financial statements as of and for the year ended December 31, 2021, 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 22, 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, 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").
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. Income Tax Expense — The $156.5 million (95%) increase in income tax expense was the result of a $621.4 million (89%) increase in income before income taxes.
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. 54 Table of Contents Income Tax Expense — The $156.5 million (95%) increase in income tax expense was the result of a $621.4 million (89%) increase in income before income taxes.
In addition to the payment of interest on borrowings outstanding under the 2019 Senior Credit Facility, we are required to pay a quarterly commitment fee on total unused commitments thereunder.
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.
The majority of our floor plan notes are payable to our 2019 Senior Credit Facility, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles and certain loaner vehicle programs.
The majority of our floor plan notes are payable to our 2023 Senior Credit Facility, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles and certain loaner vehicle programs.
We believe that the additional adjustments related to cash flows associated with our used vehicle borrowing base, floorplan offset accounts and the impact of acquisitions and divestitures eliminates cash flow volatility and provides an adjusted operating cash flow metric that best reflects our results of operations and our management of inventory and related financing activities.
Adjustments related to cash flows associated with our used vehicle borrowing base, floorplan offset accounts and the impact of acquisitions and divestitures eliminates cash flow volatility and provides an adjusted operating cash flow metric that best reflects our results of operations and our management of inventory and related financing activities.
The 2029 Senior Notes and the 2032 Senior Notes are not required to be registered under the Securities Act of 1933. • 2028 and 2030 Senior Notes —On February 19, 2020, the Company completed its offering of senior unsecured notes, consisting of $525.0 million aggregate principal amount of the Existing 2028 Notes and $600.0 million aggregate 55 Table of Contents principal amount of the Existing 2030 Notes.
The 2029 Senior Notes and the 2032 Senior Notes are not required to be registered under the Securities Act of 1933. • 2028 and 2030 Senior Notes —On February 19, 2020, the Company completed its offering of senior unsecured notes, consisting of $525.0 million aggregate principal amount of the Existing 2028 Notes and $600.0 million aggregate principal amount of the Existing 2030 Notes.
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.
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 an aggregate purchase price of $3.48 billion.
Guarantor Financial Information As of December 31, 2021, 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, 2023, the Company had outstanding $405 million of 4.500% Senior Notes due 2028 and $445 million of 4.750% Senior Notes due 2030.
Subject to compliance with certain conditions, the 2019 Senior Credit Agreement provides that we have the ability, at our option and subject to the receipt of additional commitments from existing or new lenders, to increase the size of the facilities by up to $350.0 million in the aggregate without lender consent.
Subject to compliance with certain conditions, the 2023 Senior Credit Agreement provides that we have the ability, at our option and subject to the receipt of additional commitments from existing or new lenders, to increase the size of the facilities by up to $750.0 million in the aggregate without lender consent.
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.
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.
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 market-based operating segments.
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.
On May 25, 2022, certain of our 56 Table of Contents subsidiaries entered into an amendment to the 2018 BofA Real Estate Credit Agreement to replace the benchmark reference rate of LIBOR to SOFR, effective June 1, 2022.
On May 25, 2022, certain of our subsidiaries entered into an amendment to the 2018 BofA Real Estate Credit Agreement to replace the benchmark reference rate of LIBOR to SOFR, effective June 1, 2022.
New Vehicle Floor Plan Facility — A $1.75 billion New Vehicle Floor Plan Facility which allows us to transfer cash as an offset to floor plan notes payable.
New Vehicle Floor Plan Facility — A $1.93 billion New Vehicle Floor Plan Facility which allows us to transfer cash as an offset to floor plan notes payable.
In addition, certain other covenants could restrict the Company's ability to incur additional debt, pay dividends or acquire or dispose of assets. The agreement governing the 2019 Senior Credit Facility also 57 Table of Contents provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness.
In addition, certain other covenants could restrict the Company's ability to incur additional debt, pay dividends or acquire or dispose of assets. The agreement governing the 2023 Senior Credit Facility also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness.
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.
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.
Cash Flows Classification of Cash Flows Associated with Floor Plan Notes Payable Borrowings and repayments of floor plan notes payable through our 2019 Senior Credit Facility ("Non-Trade"), and all floor plan notes payable relating to used vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities on the accompanying consolidated statements of cash flows, with borrowings reflected 58 Table of Contents separately from repayments.
Cash Flows Classification of Cash Flows Associated with Floor Plan Notes Payable Borrowings and repayments of floor plan notes payable through our 2023 Senior Credit Facility ("Non-Trade"), and all floor plan notes payable relating to used vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities on the accompanying consolidated statements of cash flows, with borrowings reflected separately from repayments.
As amended, the 2019 Senior Credit Agreement provides for the following: Revolving Credit Facility — A $450.0 million Revolving Credit Facility for, among other things, acquisitions, working capital and capital expenditures, including a $50.0 million sub-limit for letters of credit.
As amended, the 2023 Senior Credit Agreement provides for the following: Revolving Credit Facility — A $500.0 million Revolving Credit Facility for, among other things, acquisitions, working capital and capital expenditures, including a $50.0 million sub-limit for letters of credit.
Our restricted payment capacity balance as of December 31, 2022 and 2021 was $1.11 billion and $958.6 million, respectively. Share Repurchases and Dividend Restrictions Our ability to repurchase shares or pay dividends on our common stock is subject to our compliance with the covenants and restrictions described in "Covenants and Defaults" above.
Our restricted payment capacity balance as of December 31, 2023 and 2022 was $1.18 billion and $1.11 billion, respectively. Share Repurchases and Dividend Restrictions Our ability to repurchase shares or pay dividends on our common stock is subject to our compliance with the covenants and restrictions described in "Covenants and Defaults" above.
Floor Plan Interest Expense — Floor plan interest expense increased by $0.2 million (2%) to $8.4 million during 2022 compared to $8.2 million during 2021. 43 Table of Contents Other Interest Expense — Other interest expense increased $58.3 million (62%) from $93.9 million in 2021 to $152.2 million in 2022.
Floor Plan Interest Expense — Floor plan interest expense increased by $0.2 million (2%) to $8.4 million during 2022 compared to $8.2 million during 2021. Other Interest Expense — Other interest expense increased $58.3 million (62%) from $93.9 million in 2021 to $152.2 million in 2022.
Used Vehicle Floor Plan Facility — A $350.0 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 $294.0 million 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 no amounts drawn on our Used Vehicle Floor Plan Facility.
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 $94.6 million, $74.2 million, and $46.5 million for the years ended December 31, 2022, 2021 and 2020, 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 $142.3 million, $94.6 million, and $74.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.
As of December 31, 2022, we had remaining authorization to repurchase up to an additional $103.0 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, 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.
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, 2022, the outstanding balance under this agreement was $42.3 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, 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.
The F&I products offered by TCA are sold through affiliated dealerships. For the year ended December 31, 2022, our new vehicle revenue brand mix consisted of 40% imports, 31% luxury, and 29% 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, 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.
During the year ended December 31, 2022, TCA generated $245.8 million of revenue, consisting primarily of earned premium partially offset by a loss of $8.0 million in the investment portfolio. Direct expenses paid for the acquisition of contracts on which revenue has been received but not yet earned have been deferred and are amortized over the related contract period.
During the year ended December 31, 2022, TCA generated $126.0 million of revenue, consisting primarily of earned premium partially offset by a loss of $8.0 million in the investment portfolio. Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period.
Financing Activities— Net cash used in financing activities totaled $1.10 billion for the year ended December 31, 2022. Net cash provided by financing activities totaled $2.93 billion and $166.2 million for the years ended December 31, 2021 and 2020, respectively.
Financing Activities— Net cash provided by financing activities totaled $1.18 billion and $2.93 billion for the years ended December 31, 2023 and 2021, respectively. Net cash used in financing activities totaled $1.10 billion year ended December 31, 2022.
For the Year Ended December 31, 2022 2021 2020 (In millions) Reconciliation of cash provided by operating activities to cash provided by operating activities, as adjusted Cash provided by operating activities, as reported $ 696.0 $ 1,163.7 $ 652.5 Change in Floor Plan Notes Payable Non-Trade, net (191.1) (608.7) (155.3) Change in Floor Plan Notes Payable Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures 462.4 131.1 9.1 Change in Floor Plan Notes Payable Trade associated with floor plan offset and acquisitions and divestitures, net 19.7 (54.0) (63.7) Adjusted cash flow provided by operating activities $ 987.0 $ 632.1 $ 442.6 Operating Activities— Net cash provided by operating activities totaled $696.0 million, $1.16 billion, and $652.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.
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.
During the years ended December 31, 2022, 2021, and 2020, we had non-trade floor plan borrowings of $7.41 billion, $5.04 billion, and $4.31 billion, respectively. Included in our non-trade floor plan borrowings, were borrowings of $294.0 million, and $220.0 million for the years ended December 31 2021, and 2020, respectively, related to our used vehicle floor plan facility.
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.
As of December 31, 2022 we had total mortgage notes payable outstanding of $41.0 million which includes $2.7 million classified as liabilities associated with assets held for sale that 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, 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, 2022, we had $173.3 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, 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.
During the year ended December 31, 2022, we repurchased 1,635,030 shares of our common stock under our repurchase program for a total of $297.0 million and an additional 56,024 shares of our common stock for $9.2 million from employees in connection with a net share settlement feature of employee equity-based awards.
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.
Investing Activities— Net cash provided by investing activities totaled $464.7 million for the year ended December 31, 2022 compared to net cash used in investing activities of $3.92 billion and $820.8 million for the years ended December 31, 2021 and 2020, respectively.
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.
Purchases of real estate totaled $13.3 million, $7.8 million, and $2.3 million for the years ended December 31, 2022, 2021, and 2020, 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 $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.
As of December 31, 2022, we had $76.9 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, 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.
Same store new vehicle revenue increased by $496.3 million (13%) as a result of a 4% increase in new vehicle units sold and a 9% increase in revenue per new vehicle sold.
Same store new vehicle revenue increased by $500.6 million (7%) as a result of a 4% increase in revenue per new vehicle sold and a 3% increase in new vehicle units sold.
In the event that our Consolidated Total Leverage Ratio does (or would) exceed 3.0 to 1.0, the 2019 Senior Credit Facility and the Indentures would then also allow for restricted payments under mutually exclusive parameters, subject to certain exclusions.
In the event that our Consolidated Total Leverage Ratio does (or would) exceed 3.0 to 1.0, the 2023 Senior Credit Facility and the Indentures would then also allow for restricted payments under mutually exclusive parameters, subject to certain exclusions. The Company may otherwise make restricted payments only up to the aforementioned cumulative capacity.
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").
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").
We began the year with $169.0 million drawn on our revolving credit facility. During the year ended December 31, 2022, we had additional borrowings of $330.0 million and $499.0 million in repayments, resulting in no outstanding borrowing as of December 31, 2022.
We began the year with no amounts drawn on our revolving credit facility. During the year ended December 31, 2023, we had borrowings of $329.0 million and $329.0 million in repayments, resulting in no outstanding borrowings as of December 31, 2023.
During the years ended December 31, 2022 and 2021, we also received proceeds of $69.7 million and $0.8 million from the sale of debt securities and $50.3 million and $0.4 million, from the sale of equity securities, respectively. We did not hold debt or equity securities during the year ended December 31, 2020.
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.
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.
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.
Accordingly, the significant increases in revenue, gross profit and income from operations for 2022 compared to 2021 are largely a result of these acquisitions. We assess the organic growth of our revenue and gross profit on a same store basis.
Accordingly, the significant increases in revenue, gross profit and income from operations for 2022 compared to 2021 are largely a result of these acquisitions.
We believe we will have sufficient liquidity to meet our debt service and working capital requirements; commitments and contingencies; debt repayment, maturity and repurchase obligations; acquisitions; capital expenditures; and any operating requirements for at least the next twelve months. Material Indebtedness We currently are party to the following material credit facilities and agreements and have the following material indebtedness outstanding.
We believe we will have sufficient liquidity to meet our debt service and working capital requirements; commitments and contingencies; debt repayment, maturity and repurchase obligations; acquisitions; capital expenditures; and any operating requirements for at least the next twelve months and the foreseeable future.
As of December 31, 2022, we had $24.9 million of outstanding borrowings under the 2013 BofA Real Estate Facility. There is no further borrowing availability under the 2013 Real Estate Facility.
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, 2022, we converted $389.0 million of availability from the Revolving Credit facility to the New Vehicle Floor Plan Facility (as defined below), resulting in $61.0 million of borrowing capacity. In addition, as of December 31, 2022, we had $12.7 million in outstanding letters of credit, resulting in $48.3 million of borrowing availability.
As of December 31, 2023, we converted $389.0 million of availability from the New Vehicle Floor Plan Facility (as defined below) back to the Revolving Credit facility resulting in $346.1 million in borrowing capacity. In addition, as of December 31, 2023, we had $14.0 million in outstanding letters of credit, resulting in $332.1 million of borrowing availability.
As of December 31, 2022, we had $660.6 million of outstanding borrowings under the 2021 Real Estate Facility.
As of December 31, 2023, we had $614.4 million of outstanding borrowings under the 2021 Real Estate Facility.
For a more detailed description of the material terms of these agreements and facilities, and this indebtedness, see Note 14 "Debt" footnote included in the notes to consolidated financial statements. • 2019 Senior Credit Facility —On September 25, 2019, the Company and certain of its subsidiaries entered into the 2019 third amended and restated credit agreement with Bank of America, as administrative agent, and the other lenders party thereto (the "2019 Senior Credit Facility").
For a more detailed description of the material terms of these agreements and facilities, and this indebtedness, see Note 14 "Debt" included in the notes to consolidated financial statements. • 2023 Senior Credit Facility —On October 20, 2023, the Company and certain of its subsidiaries entered into a fourth amended and restated credit agreement with Bank of America, N.A.
Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries As of December 31, 2022 (In millions) Current assets $ 1,790.1 Current assets - affiliates — Non-current assets 5,380.7 Current liabilities 819.1 Current liabilities - affiliates 10.0 Non-current liabilities 3,566.3 62 Table of Contents Summarized Statement of Operations Data for Asbury and Guarantor Subsidiaries For the Year Ended December 31, 2022 (In millions) Net sales $ 15,341.1 Gross profit 3,036.0 Income from operations 1,192.5 Net income 925.8 CRITICAL ACCOUNTING POLICIES AND ESTIMATES Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions, that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the financial statements, and reported amounts of revenues and expenses during the periods presented.
Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries As of December 31, 2023 (In millions) Current assets $ 2,969.8 Current assets - affiliates 4.8 Non-current assets 6,382.4 Current liabilities 2,470.6 Current liabilities - affiliates 13.0 Non-current liabilities 3,595.6 Summarized Statement of Operations Data for Asbury and Guarantor Subsidiaries For the Year Ended December 31, 2023 (In millions) Net sales $ 14,699.0 Gross profit 2,671.1 Income from operations 862.6 Net income 529.5 CRITICAL ACCOUNTING POLICIES AND ESTIMATES Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the financial statements, and reported amounts of revenues and expenses during the periods presented.
On a same store basis F&I revenue, net increased by $64.9 million (22%) in 2021 when compared to 2020 primarily as a result of a 11% decrease in new and used retail unit sales and a 9% increase in F&I per vehicle retailed.
On a same store basis F&I revenue, net decreased by $94.4 million (12%) in 2023 when compared to 2022 primarily as a result of a 4% decrease in new and used retail unit sales and a 9% decrease in F&I per vehicle retailed.
Adjusted cash flow provided by operating activities totaled $987.0 million, 59 Table of Contents $632.1 million, and $442.6 million for the years ended December 31, 2022, 2021, and 2020, respectively.
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.
TCA SEGMENT For the Year Ended December 31, 2022 2021 As Reported Dealership Inter-company Eliminations TCA After Dealership Eliminations As Reported Dealership Inter-company Eliminations TCA After Dealership Eliminations (Dollars in millions) Finance and insurance, revenue $ 245.8 $ (119.8) $ 126.0 $ 12.0 $ (9.6) $ 2.3 Finance and insurance, cost of sales $ 191.9 $ (145.7) $ 46.3 $ 6.4 $ (2.8) $ 3.6 Finance and insurance, gross profit $ 53.8 $ 25.9 $ 79.7 $ 5.5 $ (6.8) $ (1.3) 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 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.
On December 17, 2021, we completed the acquisition of LHM and TCA for a total purchase price of approximately $3.48 billion. The sources of the purchase price included 2029 Notes, 2032 Notes, 2021 Real Estate Facility, proceeds from our common stock offering, new floorplan notes payable trade and non-trade, used vehicle floorplan notes payable, payables to Seller and cash.
The sources of the purchase price included 2029 Notes, 2032 Notes, 2021 Real Estate Facility, proceeds from our common stock offering, new floorplan notes payable trade and non-trade, used vehicle floorplan notes payable, payables to Seller and cash.
The $354.9 million increase in 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 in $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.
The $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.
We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative assessment for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit.
The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table provides information on the attributes of each swap as of December 31, 2022: Inception Date Notional Value at Inception Notional Value Notional Value at Maturity Maturity Date (In millions) (In millions) (In millions) January 2022 $ 300.0 $ 288.8 $ 228.8 December 2026 January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031 May 2021 $ 184.4 $ 173.3 $ 110.6 May 2031 July 2020 $ 93.5 $ 81.4 $ 50.6 December 2028 July 2020 $ 85.5 $ 73.4 $ 57.3 November 2025 June 2015 $ 100.0 $ 64.0 $ 53.1 February 2025 November 2013 $ 75.0 $ 41.5 $ 38.7 September 2023 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.
Biggest changeThe 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.
All of our interest rate swaps qualify for cash flow hedge accounting treatment and do not contain any ineffectiveness. As of December 31, 2022 we had seven 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.
All 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.
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. 64 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. 65 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, 2022, 2021, and 2020, by $85.8 million, $57.5 million, and $44.0 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, 2023, 2022, and 2021, by $87.0 million, $85.8 million, and $57.5 million, respectively.
Based on $102.8 million 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, 2022, a 100 basis point change in interest rates would result in a change of $1.0 million in annual interest expense.
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.

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