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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20212022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to
Commission file number: 001-31262  
ASBURY AUTOMOTIVE GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware01-0609375
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2905 Premiere Parkway NW,Suite 300 
Duluth, Georgia30097
(Address of principal executive offices) (Zip Code)
(770) 418-8200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Trading
Title of each classSymbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareABGNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer  Accelerated Filer
Non-Accelerated FilerSmaller Reporting Company
Emerging Growth Company


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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: The number of shares of common stock outstanding as of October 25, 2021July 27, 2022 was 19,340,704.22,131,513.


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ASBURY AUTOMOTIVE GROUP, INC.

TABLE OF CONTENTS

  Page
PART I—Financial Information
PART II—Other Information








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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value and share data)
(Unaudited)
September 30, 2021December 31, 2020 June 30, 2022December 31, 2021
ASSETSASSETSASSETS
CURRENT ASSETS:CURRENT ASSETS:CURRENT ASSETS:
Cash and cash equivalentsCash and cash equivalents$330.6 $1.4 Cash and cash equivalents$100.1 $178.9 
Short-term investmentsShort-term investments10.8 11.0 
Contracts-in-transitContracts-in-transit100.3 161.5 Contracts-in-transit212.7 212.5 
Accounts receivable, netAccounts receivable, net106.6 155.5 Accounts receivable, net176.6 229.8 
InventoriesInventories413.8 875.2 Inventories783.2 718.4 
Assets held for saleAssets held for sale15.8 28.3 Assets held for sale60.6 375.1 
Other current assetsOther current assets183.4 183.8 Other current assets257.5 203.7 
Total current assetsTotal current assets1,150.5 1,405.7 Total current assets1,601.5 1,929.4 
INVESTMENTSINVESTMENTS105.3 123.5 
PROPERTY AND EQUIPMENT, netPROPERTY AND EQUIPMENT, net1,196.8 956.2 PROPERTY AND EQUIPMENT, net1,974.0 1,990.0 
OPERATING LEASE RIGHT-OF-USE ASSETSOPERATING LEASE RIGHT-OF-USE ASSETS215.9 317.4 OPERATING LEASE RIGHT-OF-USE ASSETS246.1 261.0 
GOODWILLGOODWILL569.5 562.2 GOODWILL2,230.8 2,271.7 
INTANGIBLE FRANCHISE RIGHTSINTANGIBLE FRANCHISE RIGHTS425.2 425.2 INTANGIBLE FRANCHISE RIGHTS1,327.3 1,335.7 
DEFERRED INCOME TAXES, net of current portionDEFERRED INCOME TAXES, net of current portion54.8 69.1 
OTHER LONG-TERM ASSETSOTHER LONG-TERM ASSETS13.5 9.6 OTHER LONG-TERM ASSETS99.0 22.2 
Total assetsTotal assets$3,571.4 $3,676.3 Total assets$7,638.8 $8,002.6 
LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:CURRENT LIABILITIES:CURRENT LIABILITIES:
Floor plan notes payable—trade, netFloor plan notes payable—trade, net$22.1 $64.9 Floor plan notes payable—trade, net$27.7 $37.3 
Floor plan notes payable—non-trade, netFloor plan notes payable—non-trade, net116.1 637.3 Floor plan notes payable—non-trade, net16.7 527.2 
Current maturities of long-term debtCurrent maturities of long-term debt43.3 36.6 Current maturities of long-term debt69.6 62.5 
Current maturities of operating leasesCurrent maturities of operating leases18.2 24.8 Current maturities of operating leases24.4 25.8 
Accounts payable and accrued liabilitiesAccounts payable and accrued liabilities459.5 450.9 Accounts payable and accrued liabilities812.8 742.9 
Deferred revenue—currentDeferred revenue—current201.2 181.5 
Liabilities associated with assets held for saleLiabilities associated with assets held for sale— 8.9 Liabilities associated with assets held for sale4.5 20.8 
Total current liabilitiesTotal current liabilities659.2 1,223.4 Total current liabilities1,156.9 1,598.0 
LONG-TERM DEBTLONG-TERM DEBT1,327.7 1,165.2 LONG-TERM DEBT3,315.5 3,520.1 
OPERATING LEASE LIABILITIESOPERATING LEASE LIABILITIES202.3 296.7 OPERATING LEASE LIABILITIES227.9 242.0 
DEFERRED INCOME TAXES35.3 34.6 
DEFERRED REVENUEDEFERRED REVENUE476.0 466.3 
OTHER LONG-TERM LIABILITIESOTHER LONG-TERM LIABILITIES45.6 50.9 OTHER LONG-TERM LIABILITIES52.1 60.7 
COMMITMENTS AND CONTINGENCIES (Note 12)00
COMMITMENTS AND CONTINGENCIES (Note 13)COMMITMENTS AND CONTINGENCIES (Note 13)00
SHAREHOLDERS' EQUITY:SHAREHOLDERS' EQUITY:SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstandingPreferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding— — Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding— — 
Common stock, $.01 par value; 90,000,000 shares authorized; 41,254,248 and 41,133,668 shares issued, including shares held in treasury, respectively0.4 0.4 
Common stock, $.01 par value; 90,000,000 shares authorized; 44,100,010 and 45,052,293 shares issued, including shares held in treasury, respectivelyCommon stock, $.01 par value; 90,000,000 shares authorized; 44,100,010 and 45,052,293 shares issued, including shares held in treasury, respectively0.4 0.4 
Additional paid-in capitalAdditional paid-in capital607.7 595.5 Additional paid-in capital1,278.8 1,278.6 
Retained earningsRetained earnings1,740.8 1,348.9 Retained earnings2,133.3 1,881.3 
Treasury stock, at cost; 21,913,437 and 21,848,314 shares, respectively(1,043.9)(1,033.7)
Accumulated other comprehensive loss(3.7)(5.6)
Treasury stock, at cost; 21,968,497 and 21,914,251 shares, respectivelyTreasury stock, at cost; 21,968,497 and 21,914,251 shares, respectively(1,053.1)(1,044.1)
Accumulated other comprehensive gain (loss)Accumulated other comprehensive gain (loss)51.0 (0.7)
Total shareholders' equityTotal shareholders' equity1,301.3 905.5 Total shareholders' equity2,410.4 2,115.5 
Total liabilities and shareholders' equityTotal liabilities and shareholders' equity$3,571.4 $3,676.3 Total liabilities and shareholders' equity$7,638.8 $8,002.6 


See accompanying Notes to Condensed Consolidated Financial Statements
4

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ASBURY AUTOMOTIVE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
For the Three Months Ended September 30,For the Nine Months Ended September 30, For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020 2022202120222021
REVENUE:REVENUE:REVENUE:
New vehicleNew vehicle$1,129.5 $957.9 $3,649.6 $2,541.8 New vehicle$1,864.5 $1,368.4 $3,720.1 $2,520.1 
Used vehicleUsed vehicle879.0 569.5 2,386.1 1,510.2 Used vehicle1,362.5 816.2 2,713.4 1,507.1 
Parts and serviceParts and service297.1 237.2 851.5 628.0 Parts and service520.2 292.4 1,022.1 554.4 
Finance and insurance, netFinance and insurance, net100.4 80.8 295.7 217.8 Finance and insurance, net203.0 107.0 406.4 195.3 
TOTAL REVENUETOTAL REVENUE2,406.0 1,845.4 7,182.9 4,897.8 TOTAL REVENUE3,950.2 2,584.0 7,862.0 4,776.9 
COST OF SALES:COST OF SALES:COST OF SALES:
New vehicleNew vehicle1,003.5 897.3 3,324.0 2,406.2 New vehicle1,644.1 1,244.3 3,275.7 2,320.5 
Used vehicleUsed vehicle806.8 520.3 2,174.6 1,393.2 Used vehicle1,258.3 732.7 2,509.9 1,367.8 
Parts and serviceParts and service115.7 91.9 324.4 247.3 Parts and service229.8 109.8 455.2 208.7 
Finance and insuranceFinance and insurance15.3 — 26.5 — 
TOTAL COST OF SALESTOTAL COST OF SALES1,926.0 1,509.5 5,823.0 4,046.7 TOTAL COST OF SALES3,147.5 2,086.8 6,267.3 3,897.0 
GROSS PROFITGROSS PROFIT480.0 335.9 1,359.9 851.1 GROSS PROFIT802.7 497.2 1,594.7 879.9 
OPERATING EXPENSES:OPERATING EXPENSES:OPERATING EXPENSES:
Selling, general, and administrativeSelling, general, and administrative268.7 206.5 778.2 553.4 Selling, general, and administrative448.3 269.7 903.8 509.5 
Depreciation and amortizationDepreciation and amortization10.7 9.8 30.6 29.0 Depreciation and amortization18.1 10.1 36.5 19.9 
Franchise rights impairment— — — 23.0 
Other operating (income) expense, net(0.4)0.5 (4.6)9.4 
Other operating expense (income), netOther operating expense (income), net0.8 (1.0)(1.9)(4.2)
INCOME FROM OPERATIONSINCOME FROM OPERATIONS201.0 119.1 555.7 236.3 INCOME FROM OPERATIONS335.5 218.4 656.3 354.7 
OTHER EXPENSES (INCOME):
OTHER EXPENSES:OTHER EXPENSES:
Floor plan interest expenseFloor plan interest expense1.5 3.0 6.5 14.1 Floor plan interest expense1.5 2.1 4.1 5.0 
Other interest expense, netOther interest expense, net14.8 12.9 43.2 41.7 Other interest expense, net37.6 14.4 75.2 28.4 
Loss on extinguishment of long-term debt— — — 20.6 
Gain on dealership divestitures, net(8.0)(24.7)(8.0)(58.4)
Total other expenses (income), net8.3 (8.8)41.7 18.0 
(Gain) loss on dealership divestitures, net(Gain) loss on dealership divestitures, net28.7 — (4.4)— 
Total other expenses, netTotal other expenses, net67.8 16.5 74.9 33.4 
INCOME BEFORE INCOME TAXESINCOME BEFORE INCOME TAXES192.7 127.9 514.0 218.3 INCOME BEFORE INCOME TAXES267.7 201.9 581.4 321.3 
Income tax expenseIncome tax expense45.7 31.7 122.1 53.0 Income tax expense66.3 49.8 142.3 76.4 
NET INCOMENET INCOME$147.0 $96.2 $391.9 $165.3 NET INCOME$201.4 $152.1 $439.1 $244.9 
EARNINGS PER SHARE:EARNINGS PER SHARE:EARNINGS PER SHARE:
Basic—Basic—Basic—
Net incomeNet income$7.62 $5.01 $20.31 $8.61 Net income$9.11 $7.88 $19.60 $12.69 
Diluted—Diluted—Diluted—
Net incomeNet income$7.54 $4.96 $20.10 $8.56 Net income$9.07 $7.80 $19.52 $12.56 
WEIGHTED AVERAGE SHARES OUTSTANDING:WEIGHTED AVERAGE SHARES OUTSTANDING:WEIGHTED AVERAGE SHARES OUTSTANDING:
BasicBasic19.319.219.319.2Basic22.119.322.419.3
Restricted stockRestricted stock0.10.10.1Restricted stock0.10.1
Performance share unitsPerformance share units0.10.10.10.1Performance share units0.10.10.10.1
DilutedDiluted19.519.419.519.3Diluted22.219.522.519.5





 See accompanying Notes to Condensed Consolidated Financial Statements
5

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ASBURY AUTOMOTIVE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 202120202021 2020
Net income$147.0 $96.2 $391.9 $165.3 
Other comprehensive (loss) income:
Change in fair value of cash flow swaps2.9 — 2.6 (5.1)
Income tax benefit associated with cash flow swaps(0.7)— (0.7)1.3 
Comprehensive income$149.2  $96.2 $393.8  $161.5 





 For the Three Months Ended June 30,For the Six Months Ended June 30,
 202220212022 2021
Net income$201.4 $152.1 $439.1 $244.9 
Other comprehensive income:
Change in fair value of cash flow swaps28.6 (6.5)70.9 (0.3)
Income tax (charge) benefit associated with cash flow swaps(6.9)1.6 (17.4)— 
Change in accumulated losses on available-for-sale debt securities— — (2.1)— 
Income tax benefit associated with available-for-sale debt securities0.2 — 0.4 — 
Comprehensive income$223.3  $147.2 $490.9  $244.6 






































See accompanying Notes to Condensed Consolidated Financial Statements
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ASBURY AUTOMOTIVE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in millions)
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive
Income (Loss)
Total
 SharesAmountSharesAmount
Balances, December 31, 202041,133,668 $0.4 $595.5 $1,348.9 21,848,314 $(1,033.7)$(5.6)$905.5 
Comprehensive Income:
Net income— — — 92.8 — — — 92.8 
Change in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax charge— — — — — — 4.6 4.6 
Comprehensive income— — — 92.8 — — 4.6 97.4 
Share-based compensation— — 4.7 — — — — 4.7 
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements115,881 — — — — — — — 
Repurchase of common stock associated with net share settlement of employee share-based awards— — — — 61,893 (9.6)— (9.6)
Balances, March 31, 202141,249,549 $0.4 $600.2 $1,441.7 21,910,207 $(1,043.3)$(1.0)$998.0 
Comprehensive Income:
Net income— — — 152.1 — — — 152.1 
Change in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax benefit— — — — — — (4.9)(4.9)
Comprehensive income— — — 152.1 — — (4.9)147.2 
Share-based compensation— — 3.7 — — — — 3.7 
Issuance of common stock, net of forfeitures in connection with share-based payment arrangements5,166 — — — — — — — 
Repurchase of common stock associated with net share settlement of employee share-based awards— — — — 3,134 (0.6)— (0.6)
Balances, June 30, 202141,254,715 $0.4 $603.9 $1,593.8 21,913,341 $(1,043.9)$(5.9)$1,148.3 
Comprehensive Income:
Net income— — — 147.0 — — — 147.0 
Change in fair value of cash flow swaps, net of reclassification adjustment and $0.7 tax expense— — — — — — 2.2 2.2 
Comprehensive income— — — 147.0 — — 2.2 149.2 
Share-based compensation— — 3.8 — — — — 3.8 
Issuance of common stock, net of forfeitures in connection with share-based payment arrangements(467)— — — — — — — 
Repurchase of common stock associated with net share settlement of employee share-based awards— — — — 96 — — — 
Balances, September 30, 202141,254,248 $0.4 $607.7 $1,740.8 21,913,437 $(1,043.9)$(3.7)$1,301.3 

 Common StockAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive
Income (Loss)
Total
 SharesAmountSharesAmount
Balances, December 31, 202145,052,293 $0.4 $1,278.6 $1,881.3 21,914,251 $(1,044.1)$(0.7)$2,115.5 
Comprehensive Income:
Net income— — — 237.7 — — — 237.7 
Change in fair value of cash flow swaps, net of reclassification adjustment and $10.4 tax charge— — — — — — 31.8 31.8 
Loss on changes in fair value of debt securities, net of $0.2 tax benefit— — — — — — (2.0)(2.0)
Comprehensive income— — — 237.7 — — 29.8 267.5 
Share-based compensation— — 7.0 — — — — 7.0 
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements115,435 — — — — — — — 
Repurchase of common stock associated with net share settlements of employee share-based awards— — — — 53,810 (8.9)— (8.9)
Share issues (repurchases)— — 1.4 — 1,069,203 (200.0)— (198.6)
Retirement of common stock(1,069,203)— (12.9)(187.1)(1,069,203)200.0 $— $— 
Balances, March 31, 202244,098,525 $0.4 $1,274.1 $1,931.9 21,968,061 $(1,053.0)$29.1 $2,182.5 
Comprehensive Income:
Net income— — 201.4 — — — 201.4 
Change in fair value of cash flow swaps, net of reclassification adjustment and $6.9 tax charge— — — — — — 21.7 21.7 
Changes in fair value of debt securities, net of $0.2 tax benefit0.2 0.2 
Comprehensive income— — — 201.4 — — 21.9 223.3 
Share-based compensation— — 4.7 — — — — 4.7 
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements1,485 — — — — — — — 
Repurchase of common stock associated with net share settlements of employee share-based awards— — — — 436 (0.1)— (0.1)
Balances, June 30, 202244,100,010 $0.4 $1,278.8 $2,133.3 21,968,497 $(1,053.1)$51.0 $2,410.4 


7

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Common StockAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive
Income (Loss)
Total Common StockAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive
Income (Loss)
Total
SharesAmountSharesAmount SharesAmountSharesAmount
Balances, December 31, 201941,072,080 $0.4 $582.9 $1,094.5 21,791,707 $(1,028.6)$(2.9)$646.3 
Balances, December 31, 2020Balances, December 31, 202041,133,668 $0.4 $595.5 $1,348.9 21,848,314 $(1,033.7)$(5.6)$905.5 
Comprehensive Income:Comprehensive Income:Comprehensive Income:
Net incomeNet income— — — 19.5 — — — 19.5 Net income— — — 92.8 — — — 92.8 
Change in fair value of cash flow swaps, net of reclassification adjustment and $1.1 tax benefit— — — — — — (3.4)(3.4)
Change in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax chargeChange in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax charge— — — — — — 4.6 4.6 
Comprehensive incomeComprehensive income— — — 92.8 — — 4.6 97.4 
Share-based compensationShare-based compensation— — 4.7 — — — — 4.7 
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangementsIssuance of common stock, net of forfeitures, in connection with share-based payment arrangements115,881 — — — — — — — 
Repurchase of common stock associated with net share settlement of employee share-based awardsRepurchase of common stock associated with net share settlement of employee share-based awards— — — — 61,893 (9.6)— (9.6)
Balances, March 31, 2021Balances, March 31, 202141,249,549 $0.4 $600.2 $1,441.7 21,910,207 $(1,043.3)$(1.0)$998.0 
Comprehensive Income:Comprehensive Income:
Net incomeNet income— — — 152.1 — — — 152.1 
Change in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax benefitChange in fair value of cash flow swaps, net of reclassification adjustment and $1.6 tax benefit— — — — — — (4.9)(4.9)
Comprehensive incomeComprehensive income— — — 19.5 — — (3.4)16.1 Comprehensive income— — — 152.1 — — (4.9)147.2 
Share-based compensationShare-based compensation— — 3.8 — — — — 3.8 Share-based compensation— — 3.7 — — — — 3.7 
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements68,577 — (0.3)— — — — (0.3)
Repurchase of common stock associated with net share settlements of employee share-based awards— — — — 53,915 (5.0)— (5.0)
Issuance of common stock, net of forfeitures in connection with share-based payment arrangementsIssuance of common stock, net of forfeitures in connection with share-based payment arrangements5,166 — — — — — — — 
Repurchase of common stock associated with net share settlement of employee share-based awardsRepurchase of common stock associated with net share settlement of employee share-based awards— — — — 3,134 (0.6)— (0.6)
Balances, March 31, 202041,140,657 $0.4 $586.4 $1,114.0 21,845,622 $(1,033.6)$(6.3)$660.9 
Comprehensive Income:
Net income— — 49.6 — — — 49.6 
Change in fair value of cash flow swaps, net of reclassification adjustment and $0.2 tax benefit— — — — — — (0.4)(0.4)
Comprehensive income— — — 49.6 — — (0.4)49.2 
Share-based compensation— — 3.1 — — 3.1 
Forfeitures in connection with share-based payment arrangements(2,916)— — — — — — — 
Repurchase of common stock associated with net share settlements of employee share-based awards— — — — 2,552 (0.1)— (0.1)
Balances, June 30, 2021Balances, June 30, 202141,254,715 $0.4 $603.9 $1,593.8 21,913,341 $(1,043.9)$(5.9)$1,148.3 
Balances, June 30, 202041,137,741 $0.4 $589.5 $1,163.6 21,848,174 $(1,033.7)$(6.7)$713.1 
Comprehensive Income:
Net income— — 96.2 — — — 96.2 
Comprehensive income— — — 96.2 — — — 96.2 
Share-based compensation— — 2.8 — — — — 2.8 
Forfeitures in connection with share-based payment arrangements(3,879)— (0.2)— — — — (0.2)
Repurchase of common stock associated with net share settlements of employee share-based awards— — — — 140 — — — 
Balances, September 30, 202041,133,862 $0.4 $592.1 $1,259.8 21,848,314 $(1,033.7)$(6.7)$811.9 
























See accompanying Notes to Condensed Consolidated Financial Statements
8

Table of Contents
ASBURY AUTOMOTIVE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 For the Six Months Ended June 30,
 20222021
CASH FLOW FROM OPERATING ACTIVITIES:
Net income$439.1 $244.9 
Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization36.5 19.9 
Share-based compensation11.7 8.3 
Deferred income taxes(2.7)— 
Unrealized losses on investments12.0 — 
Amortization of debt securities discount/premium0.6 — 
Loaner vehicle amortization5.8 12.5 
Gain on divestitures(4.4)— 
Change in right-of-use assets13.8 11.1 
Other adjustments, net0.5 (0.5)
Changes in operating assets and liabilities, net of acquisitions and divestitures—
Contracts-in-transit(8.9)15.7 
Accounts receivable45.2 42.3 
Inventories54.2 424.6 
Other current assets(189.7)(121.7)
Floor plan notes payable—trade, net(9.6)(51.0)
Deferred revenue29.4 — 
Accounts payable and accrued liabilities82.5 (3.1)
Operating lease liabilities(14.5)(11.2)
Other long-term assets and liabilities, net(4.9)(4.5)
Net cash provided by operating activities496.6 587.3 
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures—excluding real estate(39.5)(26.7)
Capital expenditures—real estate— (5.5)
Purchases of previously leased real estate— (217.1)
Acquisitions— (1.0)
Divestitures379.7 — 
Purchases of debt securities—available-for-sale(25.9)— 
Purchases of equity securities(8.4)— 
Proceeds from the sale of debt securities—available-for-sale29.4 — 
Proceeds from the sale of equity securities8.9 — 
Proceeds from the sale of assets— 21.5 
Net cash provided by (used in) investing activities344.2 (228.8)
CASH FLOW FROM FINANCING ACTIVITIES:
Floor plan borrowings—non-trade3,618.4 2,401.0 
Floor plan repayments—non-trade(4,115.4)(2,808.9)
Floor plan repayments—divestitures(21.6)— 
Proceeds from borrowings— 184.4 
Repayments of borrowings(24.1)(23.9)
Proceeds from revolving credit facility330.0 — 
Repayments of revolving credit facility(499.0)— 
Proceeds from issuance of common stock1.4 — 
Payment of debt issuance costs(0.4)— 
Purchases of treasury stock(200.0)— 
 For the Nine Months Ended September 30,
 20212020
CASH FLOW FROM OPERATING ACTIVITIES:
Net income$391.9 $165.3 
Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization30.6 29.0 
Share-based compensation12.2 9.2 
Franchise rights impairment— 23.0 
Loss on extinguishment of long-term debt— 20.6 
Loaner vehicle amortization17.7 15.5 
Gain on divestitures, net(8.0)(58.4)
Change in right-of-use assets15.7 13.0 
Other adjustments, net0.1 1.4 
Changes in operating assets and liabilities, net of acquisitions and divestitures—
Contracts-in-transit61.2 75.6 
Accounts receivable48.6 10.2 
Inventories620.6 420.5 
Other current assets(177.2)(110.7)
Floor plan notes payable—trade, net(42.7)(68.3)
Accounts payable and other current liabilities7.6 84.4 
Operating lease liabilities(15.7)(13.0)
Other long-term assets and liabilities, net(4.0)7.9 
Net cash provided by operating activities958.6 625.2 
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures—excluding real estate(49.4)(27.5)
Capital expenditures—real estate(7.8)(2.3)
Purchase of previously leased real estate(217.1)— 
Acquisitions(17.1)(954.1)
Divestitures21.3 161.6 
Proceeds from the sale of assets21.5 4.2 
Net cash provided by (used in) investing activities(248.6)(818.1)
CASH FLOW FROM FINANCING ACTIVITIES:
Floor plan borrowings—non-trade3,404.8 2,838.3 
Floor plan borrowings—acquisitions0.3 131.6 
Floor plan repayments—non-trade(3,925.5)(2,995.7)
Floor plan repayments—non-trade divestitures(0.8)(55.3)
Proceeds from borrowings184.4 1,875.3 
Repayments of borrowings(33.7)(1,599.7)
Proceeds from sale and leaseback transaction— 7.3 
Payment of debt issuance costs— (3.1)
Repurchases of common stock, including shares associated with net share settlement of
employee share-based awards
(10.3)(5.2)
Net cash provided by (used in) financing activities(380.8)193.5 
Net increase in cash and cash equivalents329.2 0.6 
CASH AND CASH EQUIVALENTS, beginning of period1.4 3.5 
CASH AND CASH EQUIVALENTS, end of period$330.6 $4.1 
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 For the Six Months Ended June 30,
 20222021
Repurchases of common stock, including amounts associated with net share settlements of
employee share-based awards
(8.9)(10.2)
Net cash used in financing activities(919.6)(257.6)
Net (decrease) increase in cash and cash equivalents(78.8)100.9 
CASH AND CASH EQUIVALENTS, beginning of period178.9 1.4 
CASH AND CASH EQUIVALENTS, end of period$100.1 $102.3 








































See Note 11 "Supplemental Cash Flow Information" for further details
See accompanying Notes to Condensed Consolidated Financial Statements
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ASBURY AUTOMOTIVE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
We areAsbury Automotive Group, Inc., a Delaware corporation organized in 2002, is one of the largest automotive retailers in the United States. Our store operations are conducted by our subsidiaries.
As of SeptemberJune 30, 2021,2022, we ownedown and operated 112198 new vehicle franchises, (91 dealership locations) representing 31 automobile brands and 25of automobiles at 148 new vehicle dealership locations in 15 states. We also operated 34 collision repair centers, and 17 stand-alone used vehicle stores, one used vehicle wholesale business, one auto auction, in 15 metropolitan markets within 9 states.and Total Care Auto, Powered by Landcar ("TCA"), a finance and insurance ("F&I") product provider. As of June 30, 2022, our new vehicle revenue brand mix consisted of 30% luxury, 40% imports and 30% domestic brands. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services;services (collectively referred to as "parts and services" or "P&S"); and F&I, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection ("GAP") debt cancellation and prepaid maintenance. The finance and insurance products.products are provided by independent third parties and TCA. The F&I products offered by TCA are primarily sold through Larry H. Miller Dealerships ("LHM"). As a result of September 30, 2021, our new vehicle revenue brand mix consisted of 45% luxury, 40% importsthe LHM Acquisition, the Company now reflects its operations in 2 reportable segments: Dealerships and 15% domestic brands.
Our retail network is made up of dealerships operating primarily under the following locally-branded dealership groups:
Coggin dealerships operating primarily in Jacksonville, Fort Pierce and Orlando, Florida;
Courtesy dealerships operating in Tampa, Florida;
Crown dealerships operating in North Carolina, South Carolina and Virginia;
Greenville Automotive dealerships operating in Greenville, South Carolina;
Hare and Estes dealerships operating in the Indianapolis, Indiana area;
McDavid dealerships operating in metropolitan Austin and Dallas-Fort Worth, Texas;
Mike Shaw dealerships in the Denver, Colorado area;
Nalley dealerships operating in metropolitan Atlanta, Georgia;
Park Place dealerships operating in the Dallas-Fort Worth, Texas area; and
Plaza dealerships operating in metropolitan St. Louis, Missouri.TCA.
On September 28,December 17, 2021, the Company through onecompleted the acquisition of its subsidiaries, entered into (i) a Purchase Agreement ("Equity Purchase Agreement") with certain members of the Larry H. Miller Dealership family of entities (“LHM, Dealerships”), (ii) a Real Estate Purchase Agreement ("Real Estate Agreement") with Miller Family Real Estate L.L.C., and (iii) a Purchase Agreement ("Insurance Purchase Agreement" and together with the Real Estate Purchase Agreement and the Equity Purchase Agreement, the "Transaction Agreements") with certain equity owners of the Total Care Auto, Powered by Landcar (“TCA”) insurance business affiliated with the Larry H. Miller Dealership family of entities. LHM Dealerships operateswhich included 54 new vehicle dealerships, 7 used vehicle dealerships,stores, 11 collision centers, and a used vehicle wholesale business. Total Care Auto,business, the real property related thereto, and the entities comprising the F&I product and service offerings include extended vehicle service contracts, prepaid maintenance contracts, vehicle theft assistance contracts, key replacement contracts, guaranteed asset protection (“GAP”) contracts, and paintless dent repair contracts. The aggregateprovider, TCA, for a total purchase price of approximately $3.2$3.48 billion includes approximately $740.0 million(the "LHM Acquisition"). The purchase price was financed through a combination of cash, debt, including senior notes, real estate. The acquisition of these entities is anticipated to close inestate facilities, new and used vehicle floor plan facilities and the fourth quarter of 2021 and is subject to various customary closing conditions, including approvalproceeds from the applicable automotive manufacturers.
Asissuance of September 30, 2021, the Company was under contract to acquire an additional 10 dealerships with combined annual revenues of approximately $900 million. These acquisitions are expected to close during the fourth quarter of 2021 and are subject to customary closing conditions.common stock.
Basis of Presentation
The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and reflect the consolidated accounts of Asbury Automotive Group, Inc. (the "Company") and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. If necessary, reclassifications of amounts previously reported have been made to the accompanying Condensed Consolidated Financial Statements in order to conform to current presentation.
In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair statement of the Condensed Consolidated Financial Statements as of SeptemberJune 30, 2021,2022, and for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, have been included, unless otherwise indicated. The results of operations for the three and ninesix months ended SeptemberJune 30, 20212022 are not necessarily indicative of the results that may be expected for any other interim period, or any full year period. Our Condensed Consolidated Financial Statements should be read together with our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020.
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2021.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly and the effects of any revisions are reflected in the Consolidated Financial Statements in the period they are determined to be necessary. Significant estimates made in the accompanying Condensed Consolidated Financial Statements include, but are not limited to, those relating to inventory valuation reserves, variable consideration and constraint considerations related to retro-commission arrangements, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for insuranceself-insurance programs, certain assumptions related to intangible and long-lived assets, and reserves for certain legal or similar proceedings relating to our business operations.
Cash and Cash Equivalents
Cash and cash equivalents include investments in money market accounts and short-term certificates of deposit which have maturity dates of less than 90 days when purchased.


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Restricted Cash and Securities
TCA places securities on statutory deposit with certain state agencies to retain the right to do business in those states. Securities held on deposit with various state regulatory authorities had a fair value of $2.7 million as of June 30, 2022.
Short-Term Investments
Short-term investments consist of debt securities that are callable or have a maturity date within the next 12 months and are classified as current assets. Debt securities classified as short-term investments are designated as available-for-sale as management intends to hold these securities for indefinite periods of time or may sell the securities in response to changes in interest rates, prepayments, or other similar factors. Available-for-sale debt securities are reported at fair market value with any unrealized gain or loss, net of applicable income tax, reported in other comprehensive income, as a separate component of shareholders’ equity. Premiums and discounts on debt securities classified as short-term investments are amortized or accreted using the effective interest method over the period from the purchase date to the expected maturity or call date of the related security and are reported in net income.
Investments
Investments consist of available-for-sale debt securities, equity securities, and other investments. These securities are classified as non-current investments as they are not intended to fund current operations or have stated call dates or maturity dates beyond the next 12 months. Equity securities may consist of both preferred stock and common stock. Other investments consist of hedge funds and partnerships.
Debt securities classified as non-current investments are designated as available-for-sale as management intends to hold these securities for indefinite periods of time or may sell the securities in response to changes in interest rates, prepayments, or other similar factors. Available-for-sale debt securities included in non-current investments are reported at fair market value with any unrealized gain or loss, net of applicable income tax, reported in other comprehensive income, as a separate component of shareholders’ equity. Premiums and discounts on debt securities included in non-current investments are amortized or accreted, as applicable, using the effective interest method over the period from the purchase date to the expected maturity or call date of the related security and are reported in net income.
Equity securities included in non-current investments are reported at fair market value with the change in value recognized in net income.
Other investments are measured at net asset value as a practical expedient with the net change in net asset value recognized in net income.
We review the debt securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors. Some factors evaluated include changes in credit ratings, financial conditions of the issuer, recent payment activity, and other industry specific economic conditions. If a security is considered to have a potential credit loss, we compare the present value of expected cash flows to the amortized cost basis of the security to estimate the allowance for credit losses. The amount of the allowance is limited to the gross unrealized loss on an individual security. An unrealized loss on a debt security is generally considered to not be related to credit when the fair value of the security is below the carrying value of the security primarily due to changes in risk-free interest rates and when there has not been a significant deterioration in the financial condition of the issuer. If the Company no longer has the intent or ability to hold a security in an unrealized loss position until recovery of the security’s cost basis, a loss is realized immediately in net income.
Contracts-In-Transit
Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us.
Accounts Receivable
The allowance for credit losses is estimated using an annual loss rate approach, by type of receivable, utilizing historical loss rates which have been adjusted for expectations of future economic conditions.
Acquisitions
Acquisitions are accounted for under the acquisition method of accounting and the assets acquired and liabilities assumed are recorded at their fair value at the acquisition date. The results of operations of acquired dealerships and other businesses are included in the accompanying Consolidated Statements of Income, commencing on the date of acquisition.
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Revenue Recognition
Please referWe recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (Topic 606). Under that guidance, the transaction price is attributed to Note 2 "Revenue Recognition."the underlying performance obligations in the contract and revenue is deferred and recognized as income as the Company satisfies the performance obligations in the contract. Incremental costs of obtaining a contract are capitalized and amortized to the extent that the Company expects to recover those costs. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or performing a service to a customer. Sales and other taxes we collect, concurrent with revenue-producing activities, are excluded from revenue.
New vehicle and used vehicle retail
Revenue from the sale of new and used vehicles is recognized when the terms of the customer contract are satisfied which generally occurs with the signing of the sales contract and transfer of control of the vehicle to the customer. Payment is generally received at the time of sale or from a third-party financial institution within a short period of time following the sale of the vehicle. Amounts due from third-party financial institutions are reflected in Contracts-in-transit or vehicle receivables within Accounts receivable, net on our Condensed Consolidated Balance Sheets. Costs associated with incidental items that are immaterial in the context of the contract are accrued at the time of sale.
Used vehicle wholesale
Proceeds from the sale of these vehicles are recognized in used vehicle revenue upon transfer of control to end-users at auction.
Sale of vehicle parts and accessories
The Company recognizes revenue upon transfer of control to the customer which occurs at a point in time. Payment is typically received when control of the parts and accessories transfers to the customer or within 30 days of such time. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized.
Vehicle repair and maintenance services
The Company provides vehicle repair and maintenance services to its customers pursuant to the terms and conditions included within the customer contract ("repair order"). Payment for services are typically received upon completion of the services or within 30 days following the completion of the services. Certain of these services are provided by the Dealerships segment to TCA customers in connection with claims related to TCA's vehicle protection products. Revenues recorded by the Dealerships segment and the associated claims expenses recorded by the TCA segment are eliminated upon consolidation. Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. As such, the Company recognizes revenue over time as the Company satisfies its performance obligation. Additionally, the Company has determined that parts and labor are not individually distinct in the context of a repair order and therefore treated as a single performance obligation.
Finance and insurance, net
Within the Dealerships segment, we receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed asset protection debt cancellation, and other products, to end-users. In addition, we record commissions received from our TCA segment related to the sale of TCA's various vehicle protection F&I products. Finance and insurance commission revenue is recognized at the point of sale since our performance obligation is to arrange financing or facilitate the sale of a third-party's products or services to our customers.
The dealerships' commission arrangements with TCA, third-party lenders and insurance administrators consists of fixed ("upfront") and variable consideration. Variable consideration includes commission chargebacks ("chargebacks") in the event a contract is prepaid, defaulted upon, or terminated by the end-user. The Company reserves for future chargebacks based on historical chargeback experience and the termination provisions of the applicable contract, and these reserves are established in the same period that the related revenue is recognized. Commissions revenue and related reserves for future chargebacks in connection with the sale of TCA F&I products by our dealerships, are eliminated in consolidation.
We also participate in future profits pursuant to retrospective commission arrangements, which meet the definition of variable consideration, for certain insurance products associated with a third-party portfolio. The Company estimates the amount of variable consideration to be included in the transaction price based on historical payment trends and further
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constrains the variable consideration such that it is probable a significant reversal of previously recognized revenue will not occur. In making these assessments the Company considers the likelihood and magnitude of a potential reversal of revenue and updates its assessment when uncertainties associated with the constraint are removed.
Within our TCA segment, all revenue, other than investment and interest income, is the result of contracts with customers. Each contract is considered to have a single performance obligation which extends over the life of the contract. Revenue is recognized ratably over the contract term based on earnings factors that align with the performance obligation. Expenses are matched with earned premiums resulting in recognition of profits over the life of the contracts. These expenses include the incremental costs incurred, primarily in the form of commissions, to obtain the contracts with customers. These commissions are primarily paid to affiliated dealerships and are therefore eliminated upon consolidation. Unearned premium reserves are established to cover the unexpired portion of premiums written.
Deferred Revenue
We earn and recognize premium revenue related to the TCA segment over the period of the related service contract. Accordingly, we record deferred revenue as we ratably recognize revenue over the service contract period.
Internal Profit
Revenues and expenses associated with internal work performed by our parts and service departments on new and used vehicle inventory are eliminated in consolidation. The gross profit earned by our parts and service departments for internal work performed is included as a reduction of Parts and Service Cost of Sales in the accompanying Condensed Consolidated Statements of Income upon the sale of the vehicle. The costs incurred by our new and used vehicle departments for work performed by our parts and service departments is included in either New Vehicle Cost of Sales or Used Vehicle Cost of Sales in the accompanying Condensed Consolidated Statements of Income, depending on the classification of the vehicle serviced. We eliminate the internal profit on vehicles that remain in inventory.
Intersegment Elimination
TCA's vehicle protection products are sold primarily through affiliated dealerships and the revenue from the related commissions are included in F&I revenue in the Dealership segment before consolidation. The corresponding claims expense incurred and the amortization of deferred acquisition costs is recorded as a cost of sales in the TCA segment. The Dealership segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's vehicle protection products. Revenues recorded by the Dealership segment and the associated claims expenses recorded by the TCA segment are eliminated upon consolidation. Intersegment revenues and profits from contracts and services are eliminated in consolidation. See Note 12 "Segment Information" for further details.
Income Taxes
We use the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates.
Share Repurchases
Share repurchases may be made from time-to-time in open market transactions or through privately negotiated transactions under the authorization approved by the Board of Directors. Periodically, the Company may retire repurchased shares of common stock previously held by the Company as treasury stock. In accordance with our accounting policy, we allocate any excess share repurchase price over par value between additional paid-in capital, which is limited to amounts initially recorded for the same issue, and retained earnings. There were no shares repurchased during the three months ended June 30, 2022. During the six months ended June 30, 2022, the Company repurchased and retired 1,069,203 shares of our common stock under our share repurchase program.
Earnings per Share
Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. The Company excluded 32473 and 113 restricted share units and 0 performance share units18,339 and 1,271 restricted share units and 43712 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from its computation of diluted earnings per share for the three and nine months ended SeptemberJune 30, 2022 and 2021, respectively, because they were anti-dilutive. Therespectively. During the six months ended June 30, 2022 and 2021, the Company excluded 01,669 and 78,180904 restricted share units and 89 and 324 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from
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its computation of diluted earnings per share, for the three and nine months ended September 30, 2020, respectively.respectively, because they were anti-dilutive. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share.
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Assets Held for Sale and Liabilities Associated with Assets Held for Sale
Certain amounts have been classified as Assets Held for Sale as of June 30, 2022 and December 31, 2021 in the accompanying Condensed Consolidated Balance Sheets. Assets and liabilities classified as held for sale may include assets and liabilities associated with pending dealership disposals, real estate we are actively marketing to sell, and any related mortgage notes payable or other liabilities, if applicable. Classification as held for sale begins on the date that we have met all of the criteria for classification as held for sale.
At the time of classifying assets as held for sale, we compare the carrying value of these assets to estimates of fair value to assess for impairment. We compare the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value and third-party desktop appraisals to assist in our fair value estimates related to real estate properties.
Statements of Cash Flows
Borrowings and repayments of floor plan notes payable to a lender unaffiliatedthrough our senior secured credit agreement with Bank of America, as administrative agent, and the manufacturer from which we purchase a particular new vehicle ("Non-Trade"other agents and lenders party thereto (as amended, the "2019 Senior Credit Facility") and all floor plan notes payable relating to pre-ownedused vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities in the accompanying Condensed Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "Floor Plan Notes Payable—Trade") is classified as an operating activity in the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activitiesactivity in the accompanying Condensed Consolidated Statements of Cash Flows. 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 a lenderour 2019 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturer from which we purchased the related inventory. 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.
Loaner vehicles account for a significant portion of Other current assets. We acquire loaner vehicles either with available cash or through borrowing from either our manufacturer affiliated lenders or through our senior secured credit agreement with Bank of America, as administrative agent, and the other agents and lenders party thereto (as amended, the "20192019 Senior Credit Facility").Facility. Loaner vehicles are initially used by our service department for a short period of time (typically six6 to twelve12 months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles in Other current assets and the borrowings and repayments of loaner vehicle notes payable in Accounts payable and accrued liabilities in the accompanying Condensed Consolidated Statements of Cash Flows. Loaner vehicles are depreciated over the service period to their estimated value. At the end of the loaner service period, loaner vehicles are transferred from Other current assets to used vehicle inventory. These transfers are reflected as non-cash transfers between Other current assets and InventoriesInventory in the accompanying Condensed Consolidated Statements of Cash Flows.
Segment Reporting
As of June 30, 2022, the Company had 2 reportable segments: (1) Dealerships and (2) TCA. Prior to the acquisition of TCA as part of the LHM Acquisition, we had 1 reportable segment as the geographic dealership groups are aggregated into 1 reportable segment. See Note 12 "Segment Information" for further details.
Recent Accounting Pronouncements
Effective October 1, 2021, the Company adopted Financial Accounting Standard Board ("FASB") Accounting Standards Update 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquiring entity to apply ASC Topic 606 to recognize and measure contract assets acquired and contract liabilities assumed in a business combination. The Company applied ASC Topic 606 in recording contract assets acquired and contract liabilities assumed in business combinations that occurred in the quarter ended December 31, 2021. We assumed contract liabilities or deferred revenue of $644.3 million in connection with the LHM Acquisition which closed in December 2021.
In March 2020, the Financial Accounting Standards Board ("FASB")FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). In January 2021, the FASB issued Accounting Standards Update No. 2021-01, Reference Rate Reform (Topic 848): Scope,, which clarified the scope and application of the original guidance. The guidance in these standards apply to contract accounting, hedging relationships, and
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other transactions affected by reference rate reform if certain criteria are met, and provides optional expedients and exceptions for a limited time to ease the potential burden in accounting for reference rate reform. The amendments apply only to contracts and hedging relationships that reference LIBORLondon Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. ASU 2020-04 is effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. LIBOR benchmarking is utilized in our debt (including mortgages), revolving credit facilities, floorplan facilities, and interest rate swaps. We are in
During the processquarter ended June 30, 2022, we amended our LIBOR-based debt arrangements and related hedging financial instruments to revise their interest basis from LIBOR to a Secured Overnight Financing Rate ("SOFR"). See Note 9 "Debt" for further details. The impact of completingthese proposed amendments to our evaluation of the impact thatdebt arrangements and related interest rate swap derivative agreements, along with the adoption of the provisions from this standard, willdid not have a material impact on our Condensed Consolidated Financial Statements.
2. REVENUE RECOGNITION
The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or performing a service to a customer. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.

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Disaggregation of Revenue
The following table summarizes revenueRevenue from contracts with customers for the three and ninesix months ended SeptemberJune 30, 2022 and 2021 and 2020:consists of the following:
For the Three Months Ended June 30,
20222021
(In millions)
Revenue:
   New vehicle$1,864.5 $1,368.4 
   Used vehicle retail1,272.8 759.4 
   Used vehicle wholesale89.7 56.8 
New and used vehicle3,227.0 2,184.6 
  Sale of vehicle parts and accessories125.4 49.0 
  Vehicle repair and maintenance services394.8 243.4 
Parts and services520.2 292.4 
Finance and insurance, net203.0 107.0 
Total revenue$3,950.2 $2,584.0 
For the Three Months Ended September 30,
20212020
(In millions)
Revenue:
   New vehicle$1,129.5 $957.9 
   Used vehicle retail823.7 507.4 
   Used vehicle wholesale55.3 62.1 
New and used vehicle2,008.5 1,527.4 
  Sale of vehicle parts and accessories52.4 36.8 
  Vehicle repair and maintenance services244.7 200.4 
Parts and services297.1 237.2 
Finance and insurance, net100.4 80.8 
Total revenue$2,406.0 $1,845.4 
For the Nine Months Ended September 30,
20212020
(In millions)
Revenue:
   New vehicle$3,649.6 $2,541.8 
   Used vehicle retail2,190.6 1,366.0 
   Used vehicle wholesale195.5 144.2 
New and used vehicle6,035.7 4,052.0 
  Sale of vehicle parts and accessories144.3 99.5 
  Vehicle repair and maintenance services707.2 528.5 
Parts and services851.5 628.0 
Finance and insurance, net295.7 217.8 
Total revenue$7,182.9 $4,897.8 

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For the Six Months Ended June 30,
20222021
(In millions)
Revenue:
   New vehicle$3,720.1 $2,520.1 
   Used vehicle retail2,489.7 1,366.9 
   Used vehicle wholesale223.7 140.2 
New and used vehicle6,433.5 4,027.2 
  Sale of vehicle parts and accessories255.6 91.8 
  Vehicle repair and maintenance services766.5 462.6 
Parts and service1,022.1 554.4 
Finance and insurance, net406.4 195.3 
Total revenue$7,862.0 $4,776.9 
Contract Assets
Changes in contract assets during the period are reflected in the table below. Contract assets related to vehicle repair and maintenance services are transferred to receivables when a repair order is completed and invoiced to the customer. Certain
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Vehicle Repair and Maintenance ServicesFinance and Insurance, netTotal
(In millions)
Contract Assets (Current), January 1, 2021$7.1 $13.3 $20.4 
Transferred to receivables from contract assets recognized at the beginning of the period(7.1)(3.3)(10.4)
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period8.2 3.0 11.2 
Contract Assets (Current), March 31, 2021$8.2 $13.0 $21.2 
Transferred to receivables from contract assets recognized at the beginning of the period(8.2)(3.5)(11.7)
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period10.0 3.3 13.3 
Contract Assets (Current), June 30, 202110.0 12.8 22.8 
Transferred to receivables from contract assets recognized at the beginning of the period(10.0)(3.8)(13.8)
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period12.1 3.8 15.9 
Contract Assets (Current), September 30, 202112.1 12.8 24.9 
incremental sales commissions payable to obtain an F&I revenue contract with a customer have been capitalized and are amortized using the same pattern of recognition applicable to the associated F&I revenue contract.
Vehicle Repair and Maintenance ServicesFinance and Insurance, netDeferred Sales CommissionsTotal
(In millions)
Balance as of January 1, 2022$12.3 $13.5 $1.4 $27.2 
Transferred to receivables from contract assets recognized at the beginning of the period(12.3)(5.4)— (17.7)
Amortization of costs to obtain a contract with a customer— — (0.5)(0.5)
Costs incurred to obtain a contract with a customer— — 10.0 10.0 
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period12.8 5.9 — 18.7 
Balance as of March 31, 202212.8 14.0 10.9 37.7 
Transferred to receivables from contract assets recognized at the beginning of the period(12.8)(4.3)— (17.1)
Amortization of costs to obtain a contract with a customer— — (0.9)(0.9)
Costs incurred to obtain a contract with a customer— — 10.1 10.1 
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period13.4 5.0 — 18.4 
Balance as of June 30, 2022$13.4 $14.7 $20.1 $48.2 
Deferred Revenue
The Company acquired $644.3 million in Deferred revenue as part of the LHM Acquisition in December 2021. The Condensed Consolidated Balance Sheets reflect $677.2 million and $647.8 million as of June 30, 2022 and December 31, 2021, respectively. Approximately $108.0 million of Deferred revenue at December 31, 2021 was recorded in Finance and insurance, net revenue in the Condensed Consolidated Statements of Income during the six months ended June 30, 2022.
3. ACQUISITIONS AND DIVESTITURES
Results of acquired businesses, which are primarily dealerships, are included in our accompanying Condensed Consolidated Statements of Income commencing on the date of acquisition. Our acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. TheUpon the completion of purchase accounting, the fair value of our manufacturer franchise rights are determined as of the acquisition date, by discounting the projected cash flows specific to each franchise. Included in this analysis are market participant assumptions related to the cash flows directly attributable to the franchise rights, including year-over-year and terminal growth rates, working capital requirements, weighted average cost of capital, future gross margins, and future selling, general, and administrative expenses.
Park PlaceLHM Acquisition
On December 11, 2019,17, 2021, we announcedcompleted the proposed acquisition of substantially allthe equity interests of, the assets of the businesses of the Park Place Dealership family of entities (collectively, "Park Place") pursuant to that certain Asset Purchase Agreement, dated as of December 11, 2019, among the Company, Park Place and the other parties thereto (the "2019 Asset Purchase Agreement"), and related agreements and transactions (collectively, the "2019 Acquisition"). On March 24, 2020, as a result of the uncertainties related to the COVID-19 pandemic, we delivered notice to the sellers terminating the 2019 Acquisition pursuant to the terms of the related agreements and transactions in exchange for the payment of $10.0 million of liquidated damages which is reflected in our accompanying Condensed Consolidated Statements of Income as Other operating expense (income), net. 
On July 6, 2020, the Company, through 2 of its subsidiaries, entered into an Asset Purchase Agreement with certain members of the Park Place Dealership group, to acquire substantially all of the assets of, and lease the real property related to 12 new vehicle dealership franchises (8 dealership locations), 2 collision centersthe businesses of the Larry H. Miller Dealerships and an auto auction (collectively, the "Park Place acquisition").Total Care Auto, Powered by Landcar business. The Park Place acquisition was completed on August 24, 2020diversifies Asbury's geographic mix, with entry into six Western states; Arizona, Utah, New Mexico, Idaho, California and financed through a combination of cash, floor plan facilitiesWashington, 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 4.00% promissory note due February 2022 (collectively,adds to the "Seller Notes"). 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.

Company’s growing Colorado presence.
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As a result of the LHM Acquisition, we acquired 54 new vehicle dealerships, 7 used vehicle 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 approximately $3.48 billion. The preliminary purchase price was paid in cash.
The sources of the preliminary purchase consideration are as follows:
(In millions)
Cash, net of cash acquired$527.4195.0 
Seller NotesCommon stock offering200.0666.9 
Senior notes1,578.5 
Real estate facility513.0 
New Vehicle Floor Plan Facilityvehicle floor plan facility127.5183.5 
Used Vehicle Floor Plan Facilityvehicle floor plan facility35.051.0 
PurchasePayable to sellers6.0 
Preliminary purchase price, net of cash acquired$889.93,193.9 
Under the acquisition method of accounting, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed are recorded at their estimated fair value based on information currently available. During the nine months ended September 30, 2021, we recorded a $1.5 million measurement period adjustment to Property and equipment and Goodwill, respectively. The following table summarizes the allocationamounts recorded based on preliminary estimates of the purchase price:fair value:
(In millions)
Summary of Assets Acquired and Liabilities Assumed
Assets(In millions)
InventoriesCash and cash equivalents$120.8287.4 
Loaner vehiclesInvestments57.0133.5 
Contracts-in-transit, net99.5 
Accounts receivable, net110.0 
Inventories, net282.1 
Other current assets25.4 
Total current assets937.9 
Property and equipment, net36.5792.6 
Goodwill and intangible assets360.41,642.2 
ManufacturerIntangible franchise rights324.0870.0 
Operating lease right-of-use assets202.734.1 
Deferred income taxes136.5 
Other long-term assets5.6 
Total assets acquired1,101.44,418.9 
Liabilities
Accounts payable and accrued liabilities234.0 
Operating lease liabilities(202.2)34.1 
Deferred revenue644.3 
Other long-term liabilities(9.3)25.2 
Total liabilities assumed(211.5)937.6 
Net assets acquired$889.93,481.3 
On May 20, 2021, we exercisedThe preliminary acquisition accounting is based upon the purchase option for certain Park Place real estate leases whose original operating lease right-of-useCompany’s estimates of fair value. The estimated fair values of the assets acquired and liabilities totaled $99.5 million.assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management, including the books and records of Larry H. Miller. Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The purchase option priceareas of acquisition accounting that are not yet finalized primarily relate to the following significant items: (i)finalizing the review and valuation of land, land improvements, buildings and non-real property and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the
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depreciable assets, (ii) finalizing the review and valuation of manufacturer franchise rights (including key assumptions, inputs and estimates), (iii) finalizing the review of the actuarial inputs to the value of business added intangible asset for TCA, (iv) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period, (v) finalizing our review of certain assets acquired and liabilities assumed, (vi) finalizing the evaluation and valuation of certain legal matters and/or other loss contingencies, including those that we may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, and (vii) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the initial acquisition accounting is based on our preliminary assessments, actual values may differ (possibly materially) from our current estimates when final information becomes available. Additionally, the total consideration transferred is subject to certain post-close adjustments. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these properties was $216.9 million which was partly financed throughitems until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the 2021 BofA Real Estate Facility. See Note 9 "Debt" for further details.allowable measurement period.
The Company's Condensed Consolidated Statements of Income included revenue attributable to Park PlaceLHM Acquisition for the ninesix months ended SeptemberJune 30, 20212022 of $1.33$2.82 billion.
The Company recorded $1.3 million of acquisition related costs during the three months ended September 30, 2020. These costs are included in Selling, general,Other Acquisitions and administrative in the Condensed Consolidated Statements of Income.
The following represents the unaudited pro forma information as if Park Place had been included in the consolidated results of the Company since January 1, 2019:
Divestitures
For the Three Months Ended September 30, 2020
(In millions)
(Unaudited)
Pro Forma Revenue$2,045.7 
Pro Forma Net Income$107.0 
For the Nine Months Ended September 30, 2020
(In millions)
(Unaudited)
Pro Forma Revenue$5,755.6 
Pro Forma Net Income$187.4 
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This pro forma information incorporatesThere were no acquisitions during the Company's accounting policiessix months ended June 30, 2022 and adjusts the results of Park Place for depreciation, rent expense, and interest expense assuming that the fair value adjustments and indebtedness incurred in connection with the Revised Transaction had occurred on January 1, 2019. The pro forma information also assumes that the September 2020 divestiture of the Lexus Greenville dealership, which was related to the Park Place acquisition, occurred on January 1, 2019.
Other Acquisitions and Divestitures2021.
During the ninesix months ended SeptemberJune 30, 2021, we acquired the assets of 1 franchise (1 dealership location) in the Denver, Colorado market for a purchase price of $15.9 million. We funded this acquisition with an aggregate of $15.6 million of cash and $0.3 million of floor plan borrowings for the purchase of the related new vehicle inventory. In addition to the acquisition amount above, we released $1.0 million of purchase price holdbacks related to a prior year acquisition during the nine months ended September 30, 2021.
During the nine months ended September 30, 2020, we acquired the assets of 3 franchises (1 dealership location) in the Denver, Colorado market for a purchase price of $63.6 million. 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. This acquisition included purchase price holdbacks of $2.0 million for potential indemnity claims made by us with respect to the acquired franchises. In addition to the acquisition amount above, we released $2.5 million of purchase price holdbacks related to a prior year acquisition during the nine months ended September 30, 2020.
The goodwill and manufacturer franchise rights associated with our acquisitions will be deductible for federal and state income tax purposes ratably over a 15 year period.
Below is the allocation of purchase price for the other acquisitions completed during the nine months ended September 30, 2021 and 2020, respectively.
For the Nine Months Ended September 30,
20212020
(In millions)
Inventory$1.4 $29.8 
Real estate7.6 14.5 
Property and equipment0.3 0.4 
Goodwill and manufacturer franchise rights6.3 19.2
Loaner vehicles0.4 — 
Other(0.1)(0.3)
Total purchase price$15.9 $63.6 
During the nine months ended September 30, 2021,2022, we sold 1 franchise (1 dealership location) in the Charlottesville, Virginia market.St. Louis, Missouri, 3 franchises (3 dealership locations) and one collision center in Denver, Colorado, 2 franchises (2 dealership locations) in Spokane, Washington and 1 franchise (1 dealership location) in Albuquerque, New Mexico. The Company recorded a pre-tax gain totaling $8.0$4.4 million during the six months ended June 30, 2022, which is presented in our accompanying Condensed Consolidated Statements of Income as Gain on dealership divestitures, net.
During the nine months ended September 30, 2020, we sold 1 franchise (1 dealership location) in the Atlanta, Georgia market and we sold 6 franchises (5 dealership locations) and 1 collision center in the Jackson, Mississippi market, and we sold 1 franchise (1 dealership location) in the Greenville, South Carolina market. The Company recorded a pre-tax gain totaling $58.4 million, which is presented in our accompanying Condensed Consolidated Statements of Income as Gain(Gain) loss on dealership divestitures, net. The gain or loss on dealership divestitures related to the six dealerships divested in the Denver, Colorado, Spokane, Washington and Albuquerque, New Mexico markets is preliminary, pending final purchase accounting entries in connection with the Larry H. Miller acquisition. None of the divested businesses would not be considered significant subsidiaries as defined in Rule 1-02(w) of Regulation S-X.
We did not divest any dealerships during the six months ended June 30, 2021; however, we did release $1.0 million of purchase price holdbacks related to a prior year acquisition.

4. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
 As of
 June 30, 2022December 31, 2021
 (In millions)
Vehicle receivables$47.3 $73.1 
Manufacturer receivables38.4 44.0 
Other receivables92.9 114.3 
     Total accounts receivable178.6 231.4 
Less—Allowance for credit losses(2.0)(1.6)
     Accounts receivable, net$176.6 $229.8 










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4. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
 As of
 September 30, 2021December 31, 2020
 (In millions)
Vehicle receivables$33.9 $61.2 
Manufacturer receivables24.0 57.1 
Other receivables50.2 38.4 
     Total accounts receivable108.1 156.7 
Less—Allowance for credit losses(1.5)(1.2)
     Accounts receivable, net$106.6 $155.5 
5. INVENTORIES
Inventories consisted of the following:
As ofAs of
September 30, 2021December 31, 2020 June 30, 2022December 31, 2021
(In millions) (In millions)
New vehiclesNew vehicles$121.9 $640.0 New vehicles$237.5 $206.5 
Used vehiclesUsed vehicles236.4 188.5 Used vehicles424.8 402.0 
Parts and accessoriesParts and accessories55.5 46.7 Parts and accessories120.9 109.9 
Total inventories$413.8 $875.2 
Total inventories, net (a)Total inventories, net (a)$783.2 $718.4 
____________________________
(a) Amounts reflected for inventory as of June 30, 2022 and December 31, 2021, excluded $5.6 million and $24.1 million classified as Assets held for sale, respectively.
The lower of cost and net realizable value reserves reduced total inventories by $4.5$8.2 million and $6.7$7.7 million as of SeptemberJune 30, 20212022 and December 31, 2020,2021, respectively. As of SeptemberJune 30, 20212022 and December 31, 2020,2021, certain automobile manufacturer incentives reduced new vehicle inventory cost by $1.6$1.2 million and $8.3$1.2 million, respectively, and reduced new vehicle cost of sales for the ninesix months ended SeptemberJune 30, 2022 and 2021 and 2020 by $44.7$48.8 million and $31.5$31.3 million, respectively. New vehicle inventories as of September 30, 2021 have decreased from December 31, 2020 as a result of manufacturer production challenges caused by the semiconductor chip shortage.

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6. ASSETS AND LIABILITIES HELD FOR SALE
Assets and liabilities classified as held for sale include (i) assets and liabilities associated with pending dealership disposals, (ii) real estate not currently used in our operations that we are actively marketing to sell and (iii) the related mortgage notes payable, if applicable.
A summary of assets held for sale and liabilities associated with assets held for sale is as follows:
As of
September 30, 2021December 31, 2020
(In millions)
Assets:
Property and equipment, net15.8 28.3 
Total Assets held for sale15.8 28.3 
Liabilities:
Current maturities of long-term debt— 0.5 
Long-term debt— 8.4 
Total Liabilities associated with assets held for sale— 8.9 
Net assets held for sale$15.8 $19.4 

As of
June 30, 2022December 31, 2021
(In millions)
Assets:
Inventory$5.6 $24.1 
Loaner vehicles1.0 4.6 
Property and equipment, net38.8 110.8 
Operating lease right-of-use assets0.2 7.1 
Goodwill8.2 118.5 
Intangible franchise rights6.8 110.0 
Total assets held for sale60.6 375.1 
Liabilities:
Floor plan notes payable—non-trade1.1 9.1 
Loaner vehicles payable0.4 4.6 
Current maturities of long-term debt0.2 — 
Current maturities of operating leases— 2.7 
Long-term debt2.6 — 
Operating lease liabilities0.2 4.4 
Total liabilities associated with assets held for sale4.5 20.8 
Net assets held for sale$56.1 $354.3 
As of SeptemberJune 30, 20212022, assets held for sale consisted of 2 franchises (2 dealership locations) in addition to 1 real estate property not currently used in our operations. There were noAssets and liabilities associated with this property.these dealerships and properties totaled $60.6 million and $4.5 million respectively.
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As of December 31, 2020,2021, assets held for sale consisted of 38 franchises (8 dealership locations) in addition to 1 real estate properties that wereproperty not beingcurrently used in our operations. The assetsAssets and liabilities associated with these dealerships and property totaled $28.3$375.1 million and $8.9$20.8 million, respectively.
During the ninesix months ended SeptemberJune 30, 2021,2022, the Company sold 1 franchise (17 franchises (7 dealership location)locations) and one collision center for a pre-tax gain totaling $8.0 million and$4.4 million.
During the six months ended June 30, 2021, the Company sold 2 vacant properties with a net book value of $12.5 million.
During the nine months ended September 30, 2020, the Company sold 7 franchises (6 dealership locations) and 1 collision center for a pre-tax gain totaling $58.4 million. Additionally, we sold 1 vacant property with a net book value of $3.7 million.
7. GOODWILL AND INTANGIBLE FRANCHISE RIGHTS
Our acquisitions have resulted in the recording of goodwill and intangible franchise rights. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Franchise rights are indefinite-lived intangible assets representing our rights under franchise agreements with vehicle manufacturers. Goodwill and intangible franchise rights are tested annually as of October 1st, or more frequently in the event that facts and circumstances indicate a triggering event has occurred.INVESTMENTS
The resultsacquisition of the quantitative impairment testing for certain franchise rights as of March 31, 2020, identified that the carryingTCA included an investment portfolio funded primarily by product premiums. The amortized cost, gross unrealized gains and losses and estimated fair values of certain of our franchise rights assets exceeded their fair value. As a result, we recognized a $23.0 million pre-tax non-cash impairment charge during the three months ended March 31, 2020. We did not perform impairment testing related to goodwilldebt securities available-for-sale, equity securities, and franchise rights for the nine months ended September 30, 2021other investments measured at net asset value are as no triggering events have occurred.follows:
As of June 30, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(In millions)
Short-term investments$10.8 $— $— $10.8 
U.S. Treasury6.3 — (0.2)6.1 
Municipal29.8 — (0.8)29.0 
Corporate11.9 — (0.7)11.2 
Mortgage and other asset-backed securities4.9 — (0.2)4.7 
Total debt securities63.7 — (1.9)61.8 
Common stock52.9 — — 52.9 
Other investments measured at net asset value1.4 — — 1.4 
Total investments$118.0 $— $(1.9)$116.1 

As of December 31, 2021
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(In millions)
Short-term investments$11.0 $— $— $11.0 
U.S. Treasury7.5 — (0.1)7.4 
Municipal27.9 0.4 (0.1)28.2 
Corporate9.5 0.1 (0.1)9.5 
Mortgage and other asset-backed securities8.8 0.1 (0.1)8.8 
Total debt securities64.7 0.6 (0.4)64.9 
Common stock65.2 — — 65.2 
Other investments measured at net asset value4.4 — — 4.4 
Total investments$134.3 $0.6 $(0.4)$134.5 
As of June 30, 2022 and December 31, 2021, the Company had $0.7 million and $0.6 million of accrued interest receivable, which is included in Other current assets on the Condensed Consolidated Balance Sheets. The Company does not consider accrued interest receivable in the carrying amount of financial assets held at amortized cost basis or in the allowance for credit losses calculation. As of June 30, 2022 and December 31, 2021, the Company did not have any allowance for credit losses.
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A summary of amortized costs and fair value of investments by time to maturity, is as follows:
 As of June 30, 2022
 Amortized CostFair Value
 (In millions)
Due in 1 year or less$10.8 $10.8 
Due in 1-5 years46.3 44.6 
Due in 5-10 years1.7 1.7 
Due after 10 years— — 
Total by maturity58.8 57.1 
Mortgage and other asset-backed securities4.9 4.7 
Common stock52.9 52.9 
Preferred stock— — 
Other investments measured at net asset value1.4 1.4 
Total investment securities$118.0 $116.1 
There were no gross gains and $0.5 million gross losses realized related to the sale of available-for-sale debt securities carried at fair value for the three months ended June 30, 2022. Gross gains and gross losses realized related to the sale of equity securities carried at fair value for the three months ended June 30, 2022 were $1.4 million and $1.0 million respectively.
The following tables summarize the amount of unrealized losses, defined as the amount by which the amortized cost exceeds fair value, and the related fair value of investments with unrealized losses as of June 30, 2022 and December 31, 2021. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. The reference point for determining how long an investment was in an unrealized loss position was June 30, 2022. All investments were acquired in the LHM Acquisition on or after December 17, 2021, thus there are no unrealized losses greater than 12 months at June 30, 2022 or at December 31, 2021.
As of June 30, 2022
Less than 12 MonthsGreater than 12 MonthsTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
(In millions)
U.S Treasury$6.0 $(0.2)$— $— $6.0 $(0.2)
Municipal20.7 (0.8)— — 20.7 (0.8)
Corporate11.1 (0.7)— — 11.1 (0.7)
Mortgage and other asset-backed securities4.7 (0.2)— — 4.7 (0.2)
Total debt securities$42.5 $(1.9)$— $— $42.5 $(1.9)
As of December 31, 2021
Less than 12 MonthsGreater than 12 MonthsTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
(In millions)
U.S Treasury7.1 (0.1)— — 7.1 (0.1)
Municipal10.0 (0.1)— — 10.0 (0.1)
Corporate6.4 (0.1)— — 6.4 (0.1)
Mortgage and other asset-backed securities5.8 (0.1)— — 5.8 (0.1)
Total debt securities$29.3 $(0.4)$— $— $29.3 $(0.4)
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On January 1, 2020, the Company adopted the amendments within ASU 2016-13, which replaced the legacy GAAP other-than-temporary impairment (“OTTI”) model with a credit loss model. The credit loss model under ASC 326-30, applicable to the available-for-sale debt securities, requires the recognition of credit losses through an allowance account, but retains the concept from the OTTI model that credit losses are recognized once securities become impaired. The Company reviews the investment securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors as described in Note 1. The decline in fair value identified in the tables above are a result of widening market spreads and not a result of credit quality. Additionally, the Company has determined it has both the intent and ability to hold these investments until the market price recovers or until maturity and does not believe it will be required to sell the securities before maturity. Accordingly, no credit losses were recognized on these securities during the three and six months ended June 30, 2022.
8. FLOOR PLAN NOTES PAYABLE
Floor plan notes payable consisted of the following:
As ofAs of
September 30, 2021December 31, 2020 June 30, 2022December 31, 2021
(In millions) (In millions)
Floor plan notes payable—tradeFloor plan notes payable—trade$23.7 $71.7 Floor plan notes payable—trade$31.7 $39.3 
Floor plan notes payable offset accountFloor plan notes payable offset account(1.6)(6.8)Floor plan notes payable offset account(4.0)(2.0)
Floor plan notes payable—trade, netFloor plan notes payable—trade, net$22.1 $64.9 Floor plan notes payable—trade, net$27.7 $37.3 
Floor plan notes payable—new non-trade(a)Floor plan notes payable—new non-trade(a)$161.3 $715.9 Floor plan notes payable—new non-trade(a)$317.0 $314.7 
Floor plan notes payable—used non-tradeFloor plan notes payable—used non-trade— 294.0 
Floor plan notes payable offset accountFloor plan notes payable offset account(45.2)(78.6)Floor plan notes payable offset account(300.3)(81.5)
Floor plan notes payable—non-trade, netFloor plan notes payable—non-trade, net$116.1 $637.3 Floor plan notes payable—non-trade, net$16.7 $527.2 
____________________________
(a) Amounts reflected for Floor plan notes payable—new non-trade as of June 30, 2022 and December 31, 2021, excluded $1.1 million and $9.1 million classified as Liabilities associated with assets held for sale, respectively.
We have a floor plan facility with Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory. Our floor plan facility with Ford Credit was amended in July 2020 and can be terminated by either the Company or Ford Credit with a 30-day notice period. We have established a floor plan notes payable offset account with Ford Credit that allows us to transfer cash to the account as an offset to our outstanding Floor Plan Notes Payable—Trade. Our floor plan facility with Ford Credit was amended in July 2020 and can be terminated by either the Company or Ford Credit with a 30-day notice period.
In addition, we have a similar floor plan offset account with Bank of America that allows us to offset our Floor Plan Notes Payable—Non-Trade. These accounts allow us to transfer cash to reduce the amount of outstanding floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts.accounts within the same day. As of SeptemberJune 30, 20212022 and December 31, 2020,2021, we had $46.8$304.3 million and $85.4$83.5 million, respectively, in these floor plan offset accounts.
At our option, weWe have the ability to re-designateconvert a portion of our availability under the Revolving Credit Facility to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility. The maximum amount we are allowed to re-designateconvert is determined based on our aggregate revolving commitment under the Revolving Credit Facility, less $50.0 million. In addition, we are able to re-designateconvert any amounts moved to the New Vehicle Floor Plan Facility or Used Vehicle Floor Plan Facility back to the Revolving Credit Facility.
On April 6, 2021, $190.0May 25, 2022, we and certain of our subsidiaries, as applicable, entered into an amendment to our 2019 Syndicated Revolving Credit Facility to revise the benchmark reference rate of LIBOR to SOFR applicable to interest payable under the New Vehicle Floor Plan Facility and the Used Vehicle Floor Plan Facility. See Note 9 "Debt" for further details of the revisions to the applicable facility.
On May 27, 2022, $389.0 million of our availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan Facility to take advantage of lower commitment fee rates.
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9. DEBT
Long-term debt consisted of the following:
As of As of
September 30, 2021December 31, 2020June 30, 2022December 31, 2021
(In millions)(In millions)
4.50% Senior Notes due 20284.50% Senior Notes due 2028$405.0 $405.0 4.50% Senior Notes due 2028$405.0 $405.0 
4.625% Senior Notes due 20294.625% Senior Notes due 2029800.0 800.0 
4.75% Senior Notes due 20304.75% Senior Notes due 2030445.0 445.0 4.75% Senior Notes due 2030445.0 445.0 
Mortgage notes payable bearing interest at fixed rates73.1 79.2 
5.00% Senior Notes due 20325.00% Senior Notes due 2032600.0 600.0 
Mortgage notes payable bearing interest at fixed rates (a)Mortgage notes payable bearing interest at fixed rates (a)66.2 71.7 
2021 Real Estate Facility2021 Real Estate Facility677.9 689.7 
2021 BofA Real Estate Facility2021 BofA Real Estate Facility182.5 — 2021 BofA Real Estate Facility177.0 180.7 
2018 Bank of America Facility2018 Bank of America Facility80.1 84.2 2018 Bank of America Facility76.1 78.8 
2018 Wells Fargo Master Loan Facility (a)83.1 86.9 
2018 Wells Fargo Master Loan Facility2018 Wells Fargo Master Loan Facility79.4 81.9 
2013 BofA Real Estate Facility2013 BofA Real Estate Facility31.7 33.6 2013 BofA Real Estate Facility29.8 31.1 
2015 Wells Fargo Master Loan Facility (b)54.5 61.7 
2015 Wells Fargo Master Loan Facility2015 Wells Fargo Master Loan Facility50.7 53.2 
2019 Syndicated Revolving Credit Facility2019 Syndicated Revolving Credit Facility— 169.0 
Finance lease liabilityFinance lease liability24.9 16.6 Finance lease liability8.4 8.4 
Total debt outstandingTotal debt outstanding1,379.9 1,212.2 Total debt outstanding3,415.5 3,614.5 
Add—unamortized premium on 4.50% Senior Notes due 2028Add—unamortized premium on 4.50% Senior Notes due 20281.1 1.2 Add—unamortized premium on 4.50% Senior Notes due 20280.9 1.0 
Add—unamortized premium on 4.75% Senior Notes due 2030Add—unamortized premium on 4.75% Senior Notes due 20301.9 2.1 Add—unamortized premium on 4.75% Senior Notes due 20301.7 1.8 
Less—debt issuance costsLess—debt issuance costs(11.9)(13.7)Less—debt issuance costs(33.0)(34.7)
Long-term debt, including current portionLong-term debt, including current portion1,371.0 1,201.8 Long-term debt, including current portion3,385.1 3,582.6 
Less—current portion, net of current portion of debt issuance costsLess—current portion, net of current portion of debt issuance costs(43.3)(36.6)Less—current portion, net of current portion of debt issuance costs(69.6)(62.5)
Long-term debtLong-term debt$1,327.7 $1,165.2 Long-term debt$3,315.5 $3,520.1 
____________________________
(a) Amounts reflected for the 2018 Wells Fargo Master Loan Facility (as defined herein)Mortgage notes payable as of December 31, 2020,June 30, 2022, exclude $5.1$2.8 million classified as
Liabilities associated with assets held for sale.
(b) Amounts reflected forDuring the 2015 Wells Fargo Master Loan Facility (as defined herein) as of December 31, 2020, exclude $3.8 million classified as Liabilities associated with assets held for sale.
In connection with entering into the Transaction Agreements related to the acquisition of the Larry H. Miller Dealershipsquarter ended June 30, 2022, we and Total Care Auto businesses and related real estate, the Company entered into a commitment letter, dated September 28, 2021 (the “Commitment Letter”), with Bank of America, N.A., BofA Securities, Inc. and JPMorgan Chase Bank N.A. (collectively, the “Commitment Parties”), pursuant to which, among other things, the Commitment Parties have committed to provide debt financing for the Transactions, consisting of (i) a $2.35 billion bridge loan (the “HY Bridge Facility”); and (ii) a $900.0 million 364-day bridge loan (the “364-Bridge Facility”), on the terms and subject to the conditions set forth in the Commitment Letter. Each of the HY Bridge Facility and 364-Day Bridge Facility is subject to reduction as set forth in the Commitment Letter upon the completion of certain debt and equity financings, as applicable, and upon other specified events. The obligation of the Commitment Parties to provide this debt financing is subject to a number of customary conditions, including, without limitation, execution and delivery of certain definitive documentation.
We are a holding company with no independent assets or operations. For all relevant periods presented, our 4.50% Senior Notes due 2028 and 4.75% Senior Notes due 2030 have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries. Any subsidiaries that have not guaranteed such notes are "minor" (as defined in Rule 3-10(h) of Regulation S-X). As of September 30, 2021, there were no significant restrictions on the ability of our subsidiaries, as applicable entered into amendments to distribute cashour 2019 Syndicated Revolving Credit Facility and certain real estate loan agreements to us or our guarantor subsidiaries.replace the benchmark reference rate of LIBOR to SOFR as published by the Federal Reserve Bank of New York. All LIBOR-based debt arrangements have now been amended to replace LIBOR benchmark rates with SOFR benchmark rates, effective June 1, 2022. Details of these changes are outlined below.
2021 BofA Real Estate2019 Senior Credit Facility
On May 20, 2021,25, 2022, the Company and certain of its subsidiaries borrowed $184.4 million under a real estate term loanentered into the fourth amendment to the 2019 third amended and restated credit agreement dated as of May 10, 2021 (the “2021 BofA Real Estate Credit Agreement”), by and among the Company and certain of its subsidiaries,with Bank of America, N.A., as administrative agent, and the various financial institutionsother lenders party thereto (the "2019 Senior Credit Facility"). The fourth amendment revised the benchmark reference rate from one-month LIBOR to SOFR. Borrowings under the 2019 Senior Credit Facility bear interest, at our option, based on Daily Simple SOFR, as lenders, which providesdefined withing the agreement, or the Base Rate, in each case, plus an Applicable Rate. The Base Rate is the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the Bank of America prime rate, (iii) SOFR plus 0.10%, plus 1.00%, and (iv) 1.00%. Applicable Rate means with respect to the revolving credit facility under the 2019 Senior Credit Facility, a range from 1.00% to 2.00% for termDaily Simple SOFR loans and 0.15% to 1.00% for Base Rate loans, in an aggregate amount equal to $184.4 million, subject to customary terms and conditions (the “2021 BofA Real Estate Facility”). The Company usedeach case based on the proceeds from these borrowings to finance the exercise of its option to purchase certain of the leased real propertyCompany's consolidated total lease adjusted leverage ratio. Borrowings under the definitive agreements entered into in connection withnew vehicle floorplan facility under the acquisition of2019 Senior Credit Facility bear interest, at our option, based on SOFR plus 0.10%, plus 1.10% or the Park Place dealerships. The Company completedBase Rate plus 0.10%. Borrowings under the purchase ofused vehicle floorplan facility under the leased real property2019 Senior Credit Facility bear interest, at our option, based on May 20, 2021.SOFR plus 0.10%, plus 1.40% or the Base Rate plus 0.40%.


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Term2021 BofA Real Estate Facility
On May 25, 2022, we entered into the second amendment to the credit agreement to, amount other things, revise the benchmark interest rate payable on term loans under our 2021 BofA Real Estate Facility bear interest,Facility. Interest is payable, at our option, based on (1) LIBORSOFR plus 0.10%, plus 1.65% per annum or (2) the Base Rate (as described below) plus 0.65% per annum. The Base Rate is the highest of (i) the Federal Funds rate plus 0.50%, (ii) the Bank of America prime rate, (iii) SOFR plus 0.10%, plus 1.00%, and (iii) one month LIBOR plus 1.0%(iv) 1.00%. We will be required to make 39 consecutive quarterly principal payments of 1.00% of the initial amount of each loan, with a balloon repayment of the outstanding principal amount of loans due on the maturity date. The 2021 BofA Real Estate
2018 Wells Fargo Master Loan Facility matures ten years from the initial funding date. Borrowings under the 2021 BofA Real Estate Facility are guaranteed by us and each
On June 1, 2022, certain of our operating dealership subsidiaries that leasedentered into the real estate now financed underSecond Amendment to the 2021 BofA Real Estate Facility, and are collateralized by first priority liens, subjectmaster loan agreement which revised interest payable from a LIBOR reference rate to certain permitted exceptions,SOFR plus 0.10%, plus an applicable margin based on all of the real property financed thereunder.

The representations and covenants in the 2021 BofA Real Estate Credit Agreement are customary for financing transactions of this nature, including, among others, a requirementpricing grid ranging from 1.50% to comply with a minimum consolidated current ratio, minimum consolidated fixed charge coverage ratio and maximum1.85% per annum based on our consolidated total lease adjusted leverage ratio, in each case as set out in the 2021ratio.
2018 BofA Real Estate Credit Agreement. In addition, certain other covenants could restrictFacility
On May 25, 2022, we entered into the third amendment to the credit agreement to revise the benchmark interest rate payable on term loans under our ability to incur additional debt, pay dividends or acquire or dispose of assets. The 20212018 BofA Real Estate Credit Agreement also provides for eventsFacility. Interest is payable, at our option, based on SOFR plus 0.10%, plus 1.50% or the Base Rate (as described below) plus 0.50%. The Base Rate is the highest of default that are customary for financing transactions(i) the Federal Funds rate plus 0.50%, (ii) the Bank of this nature, including cross-defaultsAmerica prime rate, (iii) SOFR plus 0.10%, plus 1.00%, and (iv) 1.00%.
2015 Wells Fargo Master Loan Facility
On June 1, 2022, certain of our subsidiaries entered into the Second Amendment to other material indebtedness. Upon the occurrence of an event of default, we could be required by the 2021master loan agreement which revised interest payable from a LIBOR reference rate to SOFR plus 0.10%, plus 1.85% per annum.
2013 BofA Real Estate Credit AgreementFacility
On May 25, 2022, we entered into the third amendment to immediately repaythe credit agreement to revise the benchmark interest rate payable on term loans under our 2013 BofA Real Estate Facility. Interest is payable, at our option, based on SOFR plus 0.10%, plus 1.50% or the Base Rate (as described below) plus 0.50%. The Base Rate is the highest of (i) the Federal Funds rate plus 0.50%, (ii) the Bank of America prime rate, (iii) SOFR plus 0.10%, plus 1.00%, and (iv) 1.00%. Our right to make draws under the 2013 BofA Real Estate Facility terminated on December 26, 2013.

We are a holding company with no independent assets or operations. For all amounts outstanding thereunder.relevant periods presented, our 2028 Notes and 2030 Notes have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries other than Landcar Administration Company, Landcar Agency, Inc., and Landcar Casualty Company (collectively, the “TCA Non-Guarantor Subsidiaries”).
10. FINANCIAL INSTRUMENTS AND FAIR VALUE
In determining fair value, we use various valuation approaches, including market and income approaches. Accounting standards establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the presumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.
Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include interest rate swap instruments, exchange-traded debt securities that are not actively traded or do not have a high trading volume, mortgage notes payable, and certain real estate properties on a non-recurring basis.
Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating the fair value of certain non-financial assets and non-financial liabilities in purchase acquisitions and those used in the assessment of impairment for goodwill and manufacturer franchise rights.
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The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required to determine fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.
Fair value is a market-based exit price measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. We use inputs that are current as of the measurement date, including during periods of significant market fluctuations.
Financial instruments consist primarily of cash and cash equivalents, contracts-in-transit, accounts receivable, cash surrender value of corporate-owned life insurance policies, accounts payable, floor plan notes payable, subordinated long-term debt, mortgage notes payable, and interest rate swap instruments. The carrying values of our financial instruments, with the exception of subordinated long-term debt and mortgage notes payable, approximate fair value due to (i) their short-term nature, (ii) recently completed market transactions, or (iii) existence of variable interest rates, which approximate market rates. The fair value of our subordinated long-term debt is based on reported market prices in an inactive market that reflects Level 2 inputs. We estimate the fair value of our mortgage notes payable using a present value technique based on current market interest rates for similar types of financial instruments that reflect Level 2 inputs.
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A summary of the carrying values and fair values of our Notes and our Mortgagemortgage notes payable is as follows: 
As of As of
September 30, 2021December 31, 2020 June 30, 2022December 31, 2021
(In millions) (In millions)
Carrying Value:Carrying Value:Carrying Value:
4.50% Senior Notes due 20284.50% Senior Notes due 2028401.5 400.9 4.50% Senior Notes due 2028$401.9 $401.6 
4.625% Senior Notes due 20294.625% Senior Notes due 2029788.4 787.9 
4.75% Senior Notes due 20304.75% Senior Notes due 2030441.0 440.6 4.75% Senior Notes due 2030441.5 441.2 
5.00% Senior Notes due 20325.00% Senior Notes due 2032591.0 590.9 
Mortgage notes payable (a)Mortgage notes payable (a)503.6 343.7 Mortgage notes payable (a)1,153.9 1,183.6 
Total carrying valueTotal carrying value$1,346.1 $1,185.2 Total carrying value$3,376.7 $3,405.2 
Fair Value:Fair Value:Fair Value:
4.50% Senior Notes due 20284.50% Senior Notes due 2028414.1 423.2 4.50% Senior Notes due 2028$350.3 $413.6 
4.625% Senior Notes due 20294.625% Senior Notes due 2029658.0 815.0 
4.75% Senior Notes due 20304.75% Senior Notes due 2030462.8 476.2 4.75% Senior Notes due 2030366.0 455.0 
5.00% Senior Notes due 20325.00% Senior Notes due 2032487.5 621.8 
Mortgage notes payable (a)Mortgage notes payable (a)517.4 354.5 Mortgage notes payable (a)1,163.7 1,196.6 
Total fair valueTotal fair value$1,394.3 $1,253.9 Total fair value$3,025.5 $3,502.0 
____________________________
(a) December 31, 2020 Excludes amountsAmounts reflected for the Mortgage notes payable as of June 30, 2022, exclude $2.8 million classified as Liabilities associated with assets held for sale.

Interest Rate Swap Agreements

We currently have 57 interest rate swap agreements. In May 2021,January 2022, we entered into a2 new interest rate swap agreementagreements with a combined notional principal amount of $184.4 million which will reduce to $110.6 million at maturity. This swap, along with our existing$550.0 million. These swaps wasare designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month LIBORSOFR rate. All interest rate through each swap's maturityswap agreements with an inception date of 2021 and prior were amended on June 1, 2022 to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR as notedcompared to the previous benchmark rate of one-month LIBOR. The revisions to the interest rate swap agreements did not impact our hedge accounting because we applied the accounting expedients outlined in the table below.ASU 2020-04 and
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ASU 2021-01 of ASC Topic 848, Reference Rate Reform. The following table provides information on the attributes of each swap as of SeptemberJune 30, 2021:2022:
Inception DateInception DateNotional Principal at InceptionNotional Value as of September 30, 2021Notional Principal at MaturityMaturity DateInception DateNotional Principal at InceptionNotional Value as of June 30, 2022Notional Principal at MaturityMaturity Date
(In millions)(In millions)
January 2022January 2022$300.0 $296.3 $228.8 December 2026
January 2022January 2022$250.0 $250.0 $250.0 December 2031
May 2021May 2021$184.4 $182.5 $110.6 May 2031May 2021$184.4 $177.0 $110.6 May 2031
July 2020July 2020$93.5 $87.9 $50.6 December 2028July 2020$93.5 $84.0 $50.6 December 2028
July 2020July 2020$85.5 $80.1 $57.3 November 2025July 2020$85.5 $76.1 $57.3 November 2025
June 2015June 2015$100.0 $70.6 $53.1 February 2025June 2015$100.0 $66.7 $53.1 February 2025
November 2013November 2013$75.0 $46.2 $38.7 September 2023November 2013$75.0 $43.3 $38.7 September 2023
The fair value of cash flow swaps is calculated as the present value of expected future cash flows, determined on the basis of forward interest rates and present value factors. Fair value estimates reflect a credit adjustment to the discount rate applied to all expected cash flows under the swaps. Other than this input, all other inputs used in the valuation of these swaps are designated to be Level 2 fair values. The fair value of our swaps was a $4.6$70.0 million net asset and a $7.2$0.9 million net liability as of SeptemberJune 30, 20212022 and December 31, 2020,2021, respectively.
The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the Condensed Consolidated Balance Sheets:
As of
September 30, 2021December 31, 2020
(In millions)
Other current liabilities$(5.1)$(2.8)
Other long-term assets$4.7 — 
Other long-term liabilities(4.2)(4.4)
Total fair value$(4.6)$(7.2)

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As of
June 30, 2022December 31, 2021
(In millions)
Other current liabilities$(14.2)$(3.8)
Other long-term assets84.2 5.5 
Other long-term liabilities— (2.6)
Total fair value$70.0 $(0.9)
Our interest rate swaps qualify for cash flow hedge accounting treatment. 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 interest expense in the same period or periods during which the hedged transactions affect earnings. Information about the effect of our interest rate swap agreements in the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income, is as follows (in millions):
For the Three Months Ended September 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2021$4.3 Other interest expense, net$1.5 
2020$— Other interest expense, net$0.7 
For the Three Months Ended June 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2022$30.3 Other interest expense, net$1.7 
2021$(7.3)Other interest expense, net$0.9 

For the Nine Months Ended September 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2021$5.8 Other interest expense, net$3.2 
2020$(5.1)Other interest expense, net$1.6 
For the Six Months Ended June 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2022$75.7 Other interest expense, net$4.8 
2021$(1.9)Other interest expense, net$1.7 
 On the basis of yield curve conditions as of SeptemberJune 30, 20212022 and including assumptions about future changes in fair value, we expect the amount to be reclassified out of Accumulated Other Comprehensive Loss into earnings within the next 12 months will be losses of $5.1$14.2 million.
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Investments
The table below presents the Company’s investment securities that are measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy within which those measurements fall:
As of June 30, 2022
 Level 1Level 2Level 3Total
 (In millions)
Cash equivalents$12.5 $— $— $12.5 
Short-term investments2.7 8.1 — 10.8 
U.S Treasury6.1 — — 6.1 
Municipal— 29.1 — 29.1 
Corporate— 11.1 — 11.1 
Mortgage and other asset-backed securities— 4.7 — 4.7 
Total debt securities8.8 53.0 — 61.8 
Common stock52.9 — — 52.9 
Preferred stock— — — — 
Total$61.7 $53.0 $— $114.7 
Investments measured at net asset value (a)1.4
Total investments, at fair value$116.1 


As of December 31, 2021
 Level 1Level 2Level 3Total
 (In millions)
Cash equivalents$6.0 $— $— $6.0 
Short-term investments2.9 8.1 — 11.0 
U.S Treasury7.4— — 7.4 
Municipal— 28.2 — 28.2 
Corporate— 9.5 — 9.5 
Mortgage and other asset-backed securities— 8.8 — 8.8 
Total debt securities10.3 54.6 — 64.9 
Common stock65.2— — 65.2 
Preferred stock— — — — 
Total$75.5 $54.6 $— $130.1 
Investments measured at net asset value (a)4.4 
Total investments, at fair value$134.5 
(a) In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding and is determined by the fund investment manager or custodian.
Other investment securities measured at net asset value as a practical expedient in the amount of $1.4 million are excluded from the fair value leveling disclosure above. We do not have any significant restrictions on our ability to liquidate our positions on these investments, nor do we believe it is probable a price less than NAV would be received in the event of a liquidation.




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Available-for-sale debt securities are recorded at fair value andany unrealized gains or losses are included in accumulated other comprehensive income and reclassified to Finance and insurance, net revenue in the period or periods during which the debt securities are sold and the gains or losses are realized. Information about the effect of our available-for-sale debt securities in the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income, is as follows (in millions):
For the Three Months Ended June 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2022$(0.4)Revenue-Finance and Insurance, net$(0.4)
2021$— Revenue-Finance and Insurance, net$— 

For the Six Months Ended June 30,Results Recognized in Accumulated Other Comprehensive Income/(Loss)Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to EarningsAmount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
2022$(2.8)Revenue-Finance and Insurance, net$(0.7)
2021$— Revenue-Finance and Insurance, net$— 
11. SUPPLEMENTAL CASH FLOW INFORMATION
During the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we made interest payments, including amounts capitalized, totaling $58.9$74.4 million and $54.7$32.8 million, respectively. Included in these interest payments are $7.4$5.2 million and $16.1$5.8 million, of floor plan interest payments during the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively.
During the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we made income tax payments, net of refunds received, totaling $94.2 million$120.9 million. and $34.7$74.9 million, respectively.
During the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we transferred $159.6$128.7 million and $111.1$112.6 million, respectively, of loaner vehicles from Other current assets to Inventories on our Condensed Consolidated Balance Sheets.

12. SEGMENT INFORMATION
As of June 30, 2022, the Company had 2 reportable segments: (1) Dealerships and (2) TCA. Prior to the acquisition of TCA in connection with the LHM Acquisition, we had one reportable segment whereby the geographic dealership groups were aggregated into one reportable segment.
On December 17, 2021, we completed the LHM Acquisition which included 54 new vehicle dealerships, 7 used vehicle stores, 11 collision centers, a used vehicle wholesale business, the real property related thereto, and the entities comprising TCA. The dealerships acquired in the LHM Acquisition are located in Utah, Arizona, New Mexico, Colorado, Idaho, California and Washington.
Our dealership operations are organized by management into geographic market-based groups within the Dealership segment. The operations of our F&I product provider is reflected within our TCA segment. Our Chief Operating Decision Maker is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic market level for our dealerships and at the TCA segment level for our F&I product provider's operations. The geographic dealership group operating segments have been aggregated into one reportable segment as their operations (i) have similar economic characteristics (our markets all have similar long-term average gross margins), (ii) offer similar products and services (all of our markets offer new and used vehicles, parts and service, and finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our markets distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments.
Goodwill acquired in the LHM Acquisition of $929.0 million and $710.3 million was allocated to the Dealership and TCA segments, respectively, and is consistent with how the Chief Operating Decision Maker reviews financial information and allocates resources. The allocation was based on the net assets acquired in the Dealership and TCA segments. This allocation is preliminary and subject to change once the purchase price allocation is finalized.
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The majority of TCA’s revenue is generated from sales through our affiliated dealerships. Intercompany profits and losses are eliminated in consolidation.
Reportable segment financial information for the three and six months ended June 30, 2022 and 2021, are as follows:

Three Months Ended June 30, 2022
DealershipsTCAEliminationsTotal Company
(In millions)
Revenue$3,930.0 $51.9 $(31.7)$3,950.2 
Gross profit$793.7 $41.8 $(32.8)$802.7 
Three Months Ended June 30, 2021
DealershipsTCAEliminationsTotal Company
(In millions)
Revenue$2,584.0 $— $— $2,584.0 
Gross profit$497.2 $— $— $497.2 

Six Months Ended June 30, 2022
DealershipsTCAEliminationsTotal Company
(In millions)
Revenue$7,824.2 $109.2 $(71.4)$7,862.0 
Gross profit$1,575.1 $98.3 $(78.7)$1,594.7 

Six Months Ended June 30, 2021
DealershipsTCAEliminationsTotal Company
(In millions)
Revenue$4,776.9 $— $— $4,776.9 
Gross profit$879.9 $— $— $879.9 


Total Assets by segment as of June 30, 2022 and as of December 31, 2021 are as follows:

As of June 30, 2022
DealershipsTCAEliminationsTotal Company
(In millions)
Total Assets$6,871.2 $810.1 $(42.5)$7,638.8 

As of December 31, 2021
DealershipsTCAEliminationsTotal Company
(In millions)
Total Assets$7,289.7 $762.6 $(49.7)$8,002.6 

13. COMMITMENTS AND CONTINGENCIES
Our dealerships are party to dealer and framework agreements with applicable vehicle manufacturers. In accordance with these agreements, each dealership has certain rights and is subject to restrictions typical in the industry. The ability of these manufacturers to influence the operations of the dealerships or the loss of any of these agreements could have a materially negative impact on our operating results.
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In some instances, manufacturers may have the right, and may direct us, to implement costly capital improvements to dealerships as a condition to entering into, renewing, or extending franchise agreements with them. Manufacturers also typically require that their franchises meet specific standards of appearance. These factors, either alone or in combination, could cause us to use our financial resources on capital projects that we might not have planned for or otherwise determined to undertake.
From time to time,time-to-time, we and our dealerships are or may become involved in various claims relating to, and arising out of, our business and our operations. These claims may involve, but not be limited to, financial and other audits by vehicle manufacturers or lenders and certain federal, state, and local government authorities, which have historically related primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants, and (iii) payments made to government authorities relating to federal, state, and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings, and other dispute resolution processes. Such claims, including class actions, could relate to, but may not be limited to, the practice of charging administrative fees and other fees and commissions, employment-related matters, truth-in-lending and other dealer assisted financing obligations, contractual disputes, actions brought by governmental authorities, and other matters.
We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable.
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We believe we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Based on our review of the various types of claims currently known to us, there is no indication of material reasonably possible losses in excess of amounts accrued in the aggregate. We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity, or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity, or results of operations.
A significant portion of our business involves the sale of vehicles, parts, or vehicles composed of parts that are manufactured outside the United States. As a result, our operations are subject to customary risks of importing merchandise, including fluctuations in the relative values of currencies, import duties, exchange controls, trade restrictions, work stoppages, and general political and socio-economic conditions in foreign countries. The United States or the countries from which our products are imported may, from time to time,time-to-time, impose new quotas, duties, tariffs, or other restrictions, or adjust presently prevailing quotas, duties, or tariffs, which may affect our operations, and our ability to purchase imported vehicles and/or parts at reasonable prices.
Substantially all of our facilities are subject to federal, state and local provisions regarding the discharge of materials into the environment. Compliance with these provisions has not had, nor do we expect such compliance to have, any material effect upon our capital expenditures, net earnings, financial condition, liquidity or competitive position. We believe that our current practices and procedures for the control and disposition of such materials comply with applicable federal, state, and local requirements. No assurances can be provided, however, that future laws or regulations, or changes in existing laws or regulations, would not require us to expend significant resources in order to comply therewith.
As of September 30, 2021, weWe had $10.8$12.7 million of letters of credit outstanding andas of June 30, 2022, which are required by certain of our insurance providers. In addition, as of June 30, 2022, we maintained a $8.6$16.0 million surety bond line in the ordinary course of our business, both of which are also required by certain of our insurance providers.business. Our letters of credit and surety bond line are considered to be off balance sheet arrangements.
Our other material commitments include (i) floor plan notes payable, (ii) operating leases, (iii) long-term debt and (iv) interest on long-term debt, as described elsewhere herein.
13. SUBSEQUENT EVENTS
In October 2021, we closed on the acquisition of a dealership location (comprising 3 franchises) in the Indianapolis, Indiana market and a dealership location (comprising 2 franchises) in the Denver, Colorado market for an aggregate purchase price of approximately $59.9 million. We funded this acquisition with an aggregate of $52.4 million of cash and $7.5 million of floor plan borrowings for the purchase of the related new vehicle inventory.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Information
Certain of the discussions and information included or incorporated by reference in this report may constitute "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are statements that are not historical in nature and may include statements relating to our goals, plans and projections regarding industry and general economic trends, our expected financial position, results of operations or market position and our business strategy. Such statements can generally be identified by words such as "may," "target," "could," "would," "will," "should," "believe," "expect," "anticipate," "plan," "intend," "foresee," and other similar words or phrases. Forward-looking statements may also relate to our expectations and assumptions with respect to, among other things:

the seasonally adjusted annual rate of new vehicle sales in the United States;
general economic conditions and its expected impact on our revenue and expenses;
our expected parts and service revenue due to, among other things, improvements in vehicle technology;
our ability to limit our exposure to regional economic downturns due to our geographic diversity and brand mix;
manufacturers' continued use of incentive programs to drive demand for their product offerings;
our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;
our revenue growth strategy;

the growth of the brands that comprise our portfolio over the long-term;
disruptions in the production and supply of vehicles and parts from our vehicle and parts manufacturers and other suppliers due to any ongoing impact of supply issues, including the global semiconductor shortage, which can disrupt our operations;
disruptions in our operations, the operations of our vehicle and parts manufacturers and other suppliers, vendors and business partners, and the global economy in general due to the global COVID-19 pandemic, including due to any new strains of the virus and the efficacy and rate of vaccinations; and
our estimated future capital expenditures, which can be impacted by increasing prices and labor shortages.shortages and acquisitions and divestitures.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual future results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to:
the degreeability to which disruptions in our operations,successfully integrate the operations of the LHM Acquisition into our vehicle and parts manufacturers and other suppliers, vendors and business partners,existing operations and the global economy in general duediversion of management's attention from ongoing business and regular business responsibilities to any ongoing effects of the COVID-19 pandemic may adversely impact our business, results of operations, financial condition and cash flows;effect such integration;

the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to our acquisitions or divestitures;

changes in general economic and business conditions, including the current inflationary environment, the current rising interest rate environment, changes in employment levels, consumer confidence levels, consumer demand and preferences, the availability and cost of credit, fuel prices and levels of discretionary personal income and interest rates;income;
our ability to generate sufficient cash flows, maintain our liquidity and obtain any necessary additional funds for working capital, capital expenditures, acquisitions, stock repurchases, debt maturity payments and other corporate purposes, if necessary or desirable;
significant disruptions in the production and delivery of vehicles and parts for any reason, including the COVID-19 pandemic, supply shortages (including semiconductor chips), the ongoing conflict in Russia and Ukraine, including any government sanctions imposed in connection therewith, natural disasters, severe weather, civil unrest, product recalls, work stoppages or other occurrences that are outside of our control;
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our ability to execute our automotive retailing and service business strategy while operating under restrictions and best practices imposed or encouraged by governmental and other regulatory authorities;
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our ability successfully to attract and retain skilled employees;
our ability to successfully operate, including our ability to maintain, and obtain future, necessary regulatory approvals, for Total Care Auto, Powered by Landcar ("TCA"), our recently acquired F&I products provider;
adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver and market their vehicles successfully;
the degree to which disruptions in our operations, the operations of our vehicle and parts manufacturers and other suppliers, vendors and business partners, and the global economy in general due to any ongoing effects of the COVID-19 pandemic may adversely impact our business, results of operations, financial condition and cash flows;
changes in the mix, and total number, of vehicles we are able to sell;
our outstanding indebtedness and our continued ability to comply with applicable covenants in our various financing and lease agreements, or to obtain waivers of these covenants as necessary;
high levels of competition in our industry, which may create pricing and margin pressures on our products and services;
our relationships with manufacturers of the vehicles we sell and our ability to renew, and enter into new framework and dealer agreements with vehicle manufacturers whose brands we sell, on terms acceptable to us;
the availability of manufacturer incentive programs and our ability to earn these incentives;
failure of our, or those of our third-party service providers, management information systems;
any data security breaches occurring, including with regard to personally identifiable information ("PII");
changes in laws and regulations governing the operation of automobile franchises, including trade restrictions, consumer protections, accounting standards, taxation requirements and environmental laws;
changes in, or the imposition of, new tariffs or trade restrictions on imported vehicles or parts;
adverse results from litigation or other similar proceedings involving us;
our ability to consummate planned mergers, acquisitions and dispositions;
any disruptions in the financial markets, which may impact our ability to access capital;
our relationships with, and the financial stability of, our lenders and lessors;
our ability to execute our initiatives and other strategies;
our ability to leverage gains from our dealership portfolio; and
our ability to successfully integrate businesses we may acquire, or that any business we acquire may not perform as we expected at the time we acquired it.
Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. Forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation to update any forward-looking statement contained herein.

OVERVIEW
We are one of the largest automotive retailers in the United States. As of SeptemberJune 30, 2021,2022, through our Dealerships segment, we owned and operated 112198 new vehicle franchises (91(148 new vehicle dealership locations), representing 31 brands of automobile, 25automobiles, within 15 states. We also operated 34 collision centers, andseven stand-alone used vehicle stores, one used vehicle wholesale business, one auto auction, in 15 metropolitan markets within nine states.and TCA, our leading F&I product provider. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services; and finance and insurance products. For the nine months ended September 30, 2021, our new vehicle revenue brand mix consisted of 45% luxury, 40% importsThe finance and 15% domestic brands.
Our retail network is made up of dealerships operating primarily under the following locally-branded dealership groups:
Coggin dealerships operating primarily in Jacksonville, Fort Pierce and Orlando, Florida;
Courtesy dealerships operating in Tampa, Florida;
Crown dealerships operating in North Carolina, South Carolina and Virginia;
Greenville Automotive dealerships operating in Greenville, South Carolina;
Hare and Estes dealerships operating in the Indianapolis, Indiana area;insurance
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McDavid dealerships operatingproducts are provided by independent third parties and TCA. The F&I products offered by TCA are primarily sold through Larry H. Miller Dealerships. As of June 30, 2022, our new vehicle revenue brand mix consisted of 30% luxury, 40% imports and 30% domestic brands. As a result of the LHM Acquisition on December 17, 2021, as outlined below, the Company now reflects its operations in metropolitan Austintwo reportable segments: Dealerships and Dallas-Fort Worth, Texas;
Mike Shaw dealerships in the Denver, Colorado area;
Nalley dealerships operating in metropolitan Atlanta, Georgia;
Park Place dealerships operating in the Dallas-Fort Worth, Texas area; and
Plaza dealerships operating in metropolitan St. Louis, Missouri.TCA.
Our Dealership 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. F&I products (defined below and collectively referredare offered by dealerships to as "F&I").customers in connection with the purchase of vehicles through either TCA or independent third parties. F&I revenue recorded by the Dealership segment related to TCA products is eliminated upon consolidation. We evaluate the results of our new and used vehicle sales based on unit volumes and gross profit per vehicle sold, our parts and service operations based on aggregate gross profit, and our F&I business based on F&I gross profit per vehicle sold.
Our dealerships' gross profit margin varies with our revenue mix. SalesHistorically, the sales of new vehicles have historically resultedgenerally results in a lower gross profit margin than used vehicle sales, sales of parts and service, and sales of F&I products. As a result, when used vehicle, parts and service, and F&I revenue increase as a percentage of total revenue, we expect our overall gross profit margin to increase.
Our TCA segment revenues, reflected in F&I Revenues, are derived from the sale of various vehicle protection products including vehicle service contracts, guaranteed asset protection insurance, prepaid maintenance contracts, vehicle theft assistance contracts and appearance protection contracts. These products are sold primarily through LHM Dealerships. TCA's F&I Revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio.
Our TCA segment gross profit margin can vary due to incurred claims expense and the performance of our investment portfolio. Certain F&I products may result in higher gross profit margins to TCA. Therefore, the product mix of F&I products sold by TCA can affect the gross profits earned. In addition, interest rate volatility based on economic and market conditions outside the control of the Company, may increase or reduce TCA segment gross profit margins as well as the fair market values of certain securities within our investment portfolio. Fair market values typically fluctuate inversely to the fluctuations in interest rates.
Selling, general, and administrative ("SG&A") expenses consist primarily of fixed and incentive-based compensation, advertising, rent, insurance, utilities, and other customary operating expenses. A significant portion of our cost structure is variable (such as sales commissions) or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long-term. We evaluate commissions paid to salespeople as a percentage of retail vehicle gross profit, advertising expense on a per vehicle retailed ("PVR") basis, and all other SG&A expenseexpenses in the aggregate as a percentage of total gross profit. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I Revenue in our Dealerships segment is eliminated upon consolidation.
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. Our vehicle sales have historically fluctuated with product availability as well as local and national economic conditions, including consumer confidence, availability of consumer credit, fuel prices, and employment levels. Our vehicle sales may also be impacted by manufacturer imposed stop-sales or open safety recalls.
OurIn addition, our ability to sell certain new and used vehicles can be negatively impacted by a number of factors, some of which are outside of our control. Significant shortagesManufacturers continue to be hampered by the lack of availability of parts and key components from suppliers, such as semiconductor chips, and other component parts and supplies have forced many automotive manufacturers and their suppliers to suspend or curtail production. Furthermore, as a result of the COVID-19 global pandemic, certain vehicle manufacturers and their suppliers slowed or temporarily halted production for the safety of their workers. The impact of these factorswhich has negatively impacted our new vehicle inventory levels.levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these shortagesproduction slowdowns or when normalized production will resume at these manufacturers.
We also cannot predict the duration or scope, and future effects, of the impacts from the COVID-19 global pandemic, which may adversely impact our financial condition, liquidity and cash flow. Vaccine efficacy to new strains of the virus, the public's willingness to get vaccinated, and government imposed vaccine mandates on the workforce all remain challenges, which could lengthen the duration of the impacts of the pandemic. We continue to monitor and respond as necessary to the Company’s operational needs and financial flexibility during the ongoing outbreak of the COVID-19 global pandemic and the resulting economic uncertainty. Our top priority continues to be the safety and protection of our customers, team members and their families. We have modified certain business practices to conform to government restrictions and are taking precautionary measures as directed by government and regulatory authorities.
We continue to believe that any future negative trends in new vehicle sales caused by lack of inventory availability would be partially mitigated by (i) increased demand and higher margins on pre-owned vehicles, (ii) the expected relative stability of our parts and service operations over the long-term, (iii) the variable nature of significant components of our cost structure, and (iv) our diversified brand and geographic mix.
The seasonally adjusted annual rate ("SAAR") of new vehicle sales in the U.S. during the three months ended SeptemberJune 30, 20212022 was 13.413.5 million compared to 15.517.1 million during the three months ended SeptemberJune 30, 2020.2021. On a same-store basis, alleach of our revenue streams, with the exception of new vehicles, increased from the prior year quarter and we experienced a significant increase in both new and used vehicle gross profit during the three months ended September 30, 2021 when compared to the prior year period. New vehicle supply disruptions as a resultquarter. The lack of the semiconductor chip shortage and the COVID-19 global pandemic have reduced the availability of new vehicle inventory which has driven up demand for used vehicles. Our parts
We had total available liquidity of $1.01 billion as of June 30, 2022, which consisted of cash and service business has returnedcash equivalents of $14.8 million (excluding $85.3 million held by TCA), $229.3 million (excluding $75.0 million held by TCA) of available funds in our floor plan offset accounts, $389.0 million of availability under our new vehicle floorplan facility that is able to pre-pandemic levelsbe converted to revolving credit facility, $48.3 million of activityavailability under our revolving credit facility, and profitability.$327.8 million of availability
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We had total available liquidity of $776.6 million as of September 30, 2021, which consisted of cash and cash equivalents of $330.6 million, $46.8 million of funds in our floor plan offset accounts, $190.0 million availability under our new vehicle floor plan facility that is able to be converted to our revolving credit facility, $49.2 million of availability under our revolving credit facility, and $160.0 million of availability under our used vehicle revolving floor plan facility. For further discussion of our liquidity, please refer to "Liquidity and Capital Resources" below. 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.
Equity Purchase Agreement, Real Estate Purchase Agreement and Insurance Purchase Agreement
On September 28, 2021, Asbury Automotive Group, LLC (“Purchaser”), a Delaware limited liability company and a wholly-owned subsidiary of Asbury Automotive Group, Inc., a Delaware corporation (the “Company”), entered into (i) a Purchase Agreement (the “Equity Purchase Agreement”) with certain members of the Larry H. Miller Dealership family of entities; (ii) a Real Estate Purchase and Sale Agreement (the “Real Estate Purchase Agreement”) with Miller Family Real Estate, L.L.C. and (iii) a Purchase Agreement (the “Insurance Purchase Agreement” and together with the Equity Purchase Agreement and the Real Estate Purchase Agreement, the “Transaction Agreements”) with certain equity owners of the Total Care Auto, Powered by Landcar (“TCA”) insurance business affiliated with the Larry H. Miller Dealership family of entities. Pursuant to the Transaction Agreements, Purchaser will acquire the equity interests of, and the real property related to (collectively, the “Transactions”), the businesses of the Larry H. Miller Dealerships and TCA (collectively, the “Businesses”), each described in the Equity Purchase Agreement, the Real Estate Purchase Agreement and the Insurance Purchase Agreement, for an aggregate purchase price of approximately $3.2 billion,which includes approximately $740.0 million of real estate and leasehold improvements.
The Transaction Agreements contain customary representations and warranties made by each of the parties. The parties have also agreed to various covenants in the Transaction Agreements, including covenants by the sellers, the various seller affiliates and the principal to conduct the material operations of the Businesses in the ordinary course of business consistent with past practice and to cooperate with the Company’s efforts to secure permanent financing prior to closing of the Transactions. Purchaser and Sellers have agreed to indemnify one another against certain damages (subject to certain exceptions and limitations).
The closing of the Transactions is subject to various customary closing conditions, including (i) receipt of approval of the Transactions by certain automotive manufacturers, (ii) receipt of certain governmental clearances, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and certain required approvals related to the insurance business, (iii) the continued accuracy of the representations and warranties of the parties (subject to specified materiality standards) and (iv) the absence of a material adverse effect with respect to the Businesses. The Transaction Agreements are not subject to any financing condition.
The closing of the Transactions is expected to be consummated during the fourth quarter of 2021, subject to receipt of regulatory and other approvals and customary closing conditions.
Other acquisitions under contract
As of September 30, 2021, the Company was under contract to acquire ten dealerships with combined annual revenues of approximately $900 million. These acquisitions are expected to close during the fourth quarter of 2021 and are subject to customary closing conditions.
Park Place Acquisition
On July 6, 2020, the Company, through two of its subsidiaries, entered into an Asset Purchase Agreement with certain members of the Park Place Dealership group, to acquire substantially all of the assets of, and lease 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"). The Park Place acquisition was completed on August 24, 2020 and 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 4.00% promissory note due February 2022 (collectively, the "Seller Notes"). 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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CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended SeptemberJune 30, 20212022 Compared to the Three Months Ended SeptemberJune 30, 20202021
For the Three Months Ended September 30,Increase
(Decrease)
%
Change
For the Three Months Ended June 30,Increase
(Decrease)
%
Change
20212020 20222021
(Dollars in millions, except per share data) (Dollars in millions, except per share data)
REVENUE:REVENUE:REVENUE:
New vehicleNew vehicle$1,129.5 $957.9 $171.6 18 %New vehicle$1,864.5 $1,368.4 $496.1 36 %
Used vehicleUsed vehicle879.0 569.5 309.5 54 %Used vehicle1,362.5 816.2 546.3 67 %
Parts and serviceParts and service297.1 237.2 59.9 25 %Parts and service520.2 292.4 227.8 78 %
Finance and insurance, netFinance and insurance, net100.4 80.8 19.6 24 %Finance and insurance, net203.0 107.0 96.0 90 %
TOTAL REVENUETOTAL REVENUE2,406.0 1,845.4 560.6 30 %TOTAL REVENUE3,950.2 2,584.0 1,366.2 53 %
GROSS PROFIT:GROSS PROFIT:GROSS PROFIT:
New vehicleNew vehicle126.0 60.6 65.4 108 %New vehicle220.4 124.1 96.3 78 %
Used vehicleUsed vehicle72.2 49.2 23.0 47 %Used vehicle104.2 83.5 20.7 25 %
Parts and serviceParts and service181.4 145.3 36.1 25 %Parts and service290.4 182.6 107.8 59 %
Finance and insurance, netFinance and insurance, net100.4 80.8 19.6 24 %Finance and insurance, net187.7 107.0 80.7 75 %
TOTAL GROSS PROFITTOTAL GROSS PROFIT480.0 335.9 144.1 43 %TOTAL GROSS PROFIT802.7 497.2 305.5 61 %
OPERATING EXPENSES:OPERATING EXPENSES:OPERATING EXPENSES:
Selling, general, and administrativeSelling, general, and administrative268.7 206.5 62.2 30 %Selling, general, and administrative448.3 269.7 178.6 66 %
Depreciation and amortizationDepreciation and amortization10.7 9.8 0.9 %Depreciation and amortization18.1 10.1 8.0 79 %
Other operating (income) expense, net(0.4)0.5 (0.9)(180)%
Other operating expense (income), netOther operating expense (income), net0.8 (1.0)1.8 180 %
INCOME FROM OPERATIONSINCOME FROM OPERATIONS201.0 119.1 81.9 69 %INCOME FROM OPERATIONS335.5 218.4 117.1 54 %
OTHER EXPENSES (INCOME):
OTHER EXPENSES:OTHER EXPENSES:
Floor plan interest expenseFloor plan interest expense1.5 3.0 (1.5)(50)%Floor plan interest expense1.5 2.1 (0.6)(29)%
Other interest expense, netOther interest expense, net14.8 12.9 1.9 15 %Other interest expense, net37.6 14.4 23.2 161 %
Gain on dealership divestitures, net(8.0)(24.7)16.7 (68)%
Total other expenses (income), net8.3 (8.8)17.1 (194)%
Loss on dealership divestitures, netLoss on dealership divestitures, net28.7 — 28.7 — %
Total other expenses, netTotal other expenses, net67.8 16.5 51.3 311 %
INCOME BEFORE INCOME TAXESINCOME BEFORE INCOME TAXES192.7 127.9 64.8 51 %INCOME BEFORE INCOME TAXES267.7 201.9 65.8 33 %
Income tax expenseIncome tax expense45.7 31.7 14.0 44 %Income tax expense66.3 49.8 16.5 33 %
NET INCOMENET INCOME$147.0 $96.2 $50.8 53 %NET INCOME$201.4 $152.1 $49.3 32 %
Net income per common share—DilutedNet income per common share—Diluted$7.54 $4.96 $2.58 52 %Net income per common share—Diluted$9.07 $7.80 $1.27 16 %

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For the Three Months Ended September 30, For the Three Months Ended June 30,
20212020 20222021
REVENUE MIX PERCENTAGES:REVENUE MIX PERCENTAGES:REVENUE MIX PERCENTAGES:
New vehicleNew vehicle46.9 %51.9 %New vehicle47.2 %53.0 %
Used vehicle retailUsed vehicle retail34.3 %27.4 %Used vehicle retail32.2 %29.4 %
Used vehicle wholesaleUsed vehicle wholesale2.3 %3.4 %Used vehicle wholesale2.3 %2.2 %
Parts and serviceParts and service12.3 %12.9 %Parts and service13.2 %11.3 %
Finance and insurance, netFinance and insurance, net4.2 %4.4 %Finance and insurance, net5.1 %4.1 %
Total revenueTotal revenue100.0 %100.0 %Total revenue100.0 %100.0 %
GROSS PROFIT MIX PERCENTAGES:GROSS PROFIT MIX PERCENTAGES:GROSS PROFIT MIX PERCENTAGES:
New vehicleNew vehicle26.3 %18.0 %New vehicle27.5 %25.0 %
Used vehicle retailUsed vehicle retail14.3 %12.8 %Used vehicle retail12.5 %14.8 %
Used vehicle wholesaleUsed vehicle wholesale0.7 %1.8 %Used vehicle wholesale0.4 %2.0 %
Parts and serviceParts and service37.8 %43.3 %Parts and service36.2 %36.7 %
Finance and insurance, netFinance and insurance, net20.9 %24.1 %Finance and insurance, net23.4 %21.5 %
Total gross profitTotal gross profit100.0 %100.0 %Total gross profit100.0 %100.0 %
GROSS PROFIT MARGINGROSS PROFIT MARGIN20.0 18.2 GROSS PROFIT MARGIN20.3 19.2 
SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFITSG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT56.0 %61.5 %SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT55.8 %54.2 %
Total revenue during the thirdsecond quarter of 20212022 increased by $560.6 million (30%$1.37 billion (53%) compared to the thirdsecond quarter of 2020,2021, due to a $171.6$496.1 million (18%(36%) increase in new vehicle revenue, a $309.5$546.3 million (54%(67%) increase in used vehicle revenue, a $59.9$227.8 million (25%(78%) increase in parts and service revenue and a $19.6$96.0 million (24%(90%) increase in F&I, net revenue. During the three months ended SeptemberJune 30, 2021,2022, gross profit increased by $144.1$305.5 million (43%(61%) driven by an $65.4$96.3 million (108%(78%) increase in new vehicle gross profit, a $23.0$20.7 million (47%(25%) increase in used vehicle gross profit, an $36.1$107.8 million (25%(59%) increase in parts and service gross profit and a $19.6$80.7 million (24%(75%) increase in F&I gross profit.
Income from operations during the thirdsecond quarter of 20212022 increased by $81.9$117.1 million (69%(54%) compared to the thirdsecond quarter of 2020,2021, primarily due to the $144.1$305.5 million (43%(61%) increase in gross profit, partially offset by a $62.2$178.6 million (30%(66%) increase in SG&A expense, a $0.9$8.0 million (9%(79%) increase in depreciation and amortization expenses partially offset byexpense and a $0.9$1.8 million (180%) increase in other operating (income) expense, net. Total other expenses, net increased by $17.1$51.3 million (194%(311%), primarily due to a $16.7 million (68%) decrease on the gainloss on dealership divestitures, $1.9a $23.2 million (15%(161%) increase in other interest expense, net partially offset by a $1.5$0.6 million (50%(29%) decrease in floor plan interest expense during the thirdsecond quarter of 2021.2022. As a result, income before income taxes increased $64.8$65.8 million (51%(33%). Overall, net income increased by $50.8$49.3 million (53%(32%) during the thirdsecond quarter of 20212022 as compared to the thirdsecond quarter of 2020.2021.
The Company's results for the second quarter of 2022 include the full quarter results of our dealerships acquired in the fourth quarter of 2021. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

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DEALERSHIP SEGMENT
New Vehicle—
For the Three Months Ended September 30,Increase (Decrease)%
Change
For the Three Months Ended June 30,Increase (Decrease)%
Change
20212020 20222021
(Dollars in millions, except for per vehicle data) (Dollars in millions, except for per vehicle data)
As Reported:As Reported:As Reported:
Revenue:Revenue:Revenue:
LuxuryLuxury$508.1 $345.9 $162.2 47 %Luxury$592.3 $608.2 $(15.9)(3)%
ImportImport459.0 414.0 45.0 11 %Import719.4 556.1 163.3 29 %
DomesticDomestic162.4 198.0 (35.6)(18)%Domestic552.8 204.1 348.7 171 %
Total new vehicle revenueTotal new vehicle revenue$1,129.5 $957.9 $171.6 18 %Total new vehicle revenue$1,864.5 $1,368.4 $496.1 36 %
Gross profit:Gross profit:Gross profit:
LuxuryLuxury$60.2 $28.4 $31.8 112 %Luxury$76.5 $61.9 $14.6 24 %
ImportImport50.1 19.3 30.8 160 %Import87.7 44.0 43.7 99 %
DomesticDomestic15.7 12.9 2.8 22 %Domestic56.2 18.2 38.0 209 %
Total new vehicle gross profitTotal new vehicle gross profit$126.0 $60.6 $65.4 108 %Total new vehicle gross profit$220.4 $124.1 $96.3 78 %
New vehicle units:New vehicle units:New vehicle units:
LuxuryLuxury7,972 6,157 1,815 29 %Luxury8,899 10,085 (1,186)(12)%
ImportImport13,491 13,818 (327)(2)%Import19,564 17,257 2,307 13 %
DomesticDomestic3,300 4,580 (1,280)(28)%Domestic10,234 4,383 5,851 133 %
Total new vehicle unitsTotal new vehicle units24,763 24,555 208 %Total new vehicle units38,697 31,725 6,972 22 %
Same Store:Same Store:Same Store:
Revenue:Revenue:Revenue:
LuxuryLuxury$371.3 $334.5 $36.8 11 %Luxury$511.2 $590.9 $(79.7)(13)%
ImportImport452.1 413.9 38.2 %Import386.2 556.0 (169.8)(31)%
DomesticDomestic162.4 192.6 (30.2)(16)%Domestic160.7 204.1 (43.4)(21)%
Total new vehicle revenueTotal new vehicle revenue$985.8 $941.0 $44.8 %Total new vehicle revenue$1,058.1 $1,351.0 $(292.9)(22)%
Gross profit:Gross profit:Gross profit:
LuxuryLuxury$43.3 $27.3 $16.0 59 %Luxury$63.4 $59.7 $3.7 %
ImportImport49.4 19.4 30.0 155 %Import47.2 44.0 3.2 %
DomesticDomestic15.7 12.4 3.3 27 %Domestic14.5 18.2 (3.7)(20)%
Total new vehicle gross profitTotal new vehicle gross profit$108.4 $59.1 $49.3 83 %Total new vehicle gross profit$125.1 $121.9 $3.2 %
New vehicle unitsNew vehicle unitsNew vehicle units
LuxuryLuxury5,918 5,951 (33)(1)%Luxury7,703 9,780 (2,077)(21)%
ImportImport13,329 13,818 (489)(4)%Import10,741 17,257 (6,516)(38)%
DomesticDomestic3,300 4,464 (1,164)(26)%Domestic3,150 4,383 (1,233)(28)%
Total new vehicle unitsTotal new vehicle units22,547 24,233 (1,686)(7)%Total new vehicle units21,594 31,420 (9,826)(31)%

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New Vehicle Metrics—
For the Three Months Ended September 30,Increase (Decrease)%
Change
For the Three Months Ended June 30,Increase (Decrease)%
Change
20212020 20222021
As Reported:As Reported:As Reported:
Revenue per new vehicle soldRevenue per new vehicle sold$45,612 $39,010 $6,602 17 %Revenue per new vehicle sold$48,182 $43,133 $5,049 12 %
Gross profit per new vehicle soldGross profit per new vehicle sold$5,088 $2,468 $2,620 106 %Gross profit per new vehicle sold$5,696 $3,912 $1,784 46 %
New vehicle gross marginNew vehicle gross margin11.2 %6.3 %4.9 %New vehicle gross margin11.8 %9.1 %2.7 %
Luxury:Luxury:Luxury:
Gross profit per new vehicle soldGross profit per new vehicle sold$7,551 $4,613 $2,938 64 %Gross profit per new vehicle sold$8,596 $6,138 $2,458 40 %
New vehicle gross marginNew vehicle gross margin11.8 %8.2 %3.6 %New vehicle gross margin12.9 %10.2 %2.7 %
Import:Import:Import:
Gross profit per new vehicle soldGross profit per new vehicle sold$3,714 $1,397 $2,317 166 %Gross profit per new vehicle sold$4,483 $2,550 $1,933 76 %
New vehicle gross marginNew vehicle gross margin10.9 %4.7 %6.2 %New vehicle gross margin12.2 %7.9 %4.3 %
Domestic:Domestic:Domestic:
Gross profit per new vehicle soldGross profit per new vehicle sold$4,758 $2,817 $1,941 69 %Gross profit per new vehicle sold$5,491 $4,152 $1,339 32 %
New vehicle gross marginNew vehicle gross margin9.7 %6.5 %3.2 %New vehicle gross margin10.2 %8.9 %1.3 %
Same Store:Same Store:Same Store:
Revenue per new vehicle soldRevenue per new vehicle sold$43,722 $38,831 $4,891 13 %Revenue per new vehicle sold$49,000 $42,998 $6,002 14 %
Gross profit per new vehicle soldGross profit per new vehicle sold$4,808 $2,439 $2,369 97 %Gross profit per new vehicle sold$5,793 $3,880 $1,913 49 %
New vehicle gross marginNew vehicle gross margin11.0 %6.3 %4.7 %New vehicle gross margin11.8 %9.0 %2.8 %
Luxury:Luxury:Luxury:
Gross profit per new vehicle soldGross profit per new vehicle sold$7,317 $4,587 $2,730 60 %Gross profit per new vehicle sold$8,231 $6,104 $2,127 35 %
New vehicle gross marginNew vehicle gross margin11.7 %8.2 %3.5 %New vehicle gross margin12.4 %10.1 %2.3 %
Import:Import:Import:
Gross profit per new vehicle soldGross profit per new vehicle sold$3,706 $1,404 $2,302 164 %Gross profit per new vehicle sold$4,394 $2,550 $1,844 72 %
New vehicle gross marginNew vehicle gross margin10.9 %4.7 %6.2 %New vehicle gross margin12.2 %7.9 %4.3 %
Domestic:Domestic:Domestic:
Gross profit per new vehicle soldGross profit per new vehicle sold$4,758 $2,778 $1,980 71 %Gross profit per new vehicle sold$4,603 $4,152 $451 11 %
New vehicle gross marginNew vehicle gross margin9.7 %6.4 %3.3 %New vehicle gross margin9.0 %8.9 %0.1 %
New vehicle revenue increased by $171.6$496.1 million (18%(36%) due to a $162.2$348.7 million (47%(171%) increase in luxurydomestic brands revenue, a $45.0$163.3 million (11%(29%) increase in import brands revenue, partially offset by a $35.6$15.9 million (18%(3%) decrease in domesticluxury brands revenue. Luxury brand revenue benefited from the acquisition of the Park Place Dealership group which occurred during the third quarter of 2020. The 18%36% increase in new vehicle revenue is the result of a 1%22% increase in new vehicle units sold and a 17%12% increase in revenue per new vehicle sold. Same store new vehicle revenue increaseddecreased by $44.8$292.9 million (5%(22%) due to a $36.8$79.7 million (11%(13%) increasedecrease in luxury brands revenue, a $38.2$169.8 million (9%(31%) increasedecrease in import brands revenue partially offset by a $30.2and $43.4 million (16%(21%) decrease in domestic brands revenue.
New vehicle gross profit increased by $65.4$96.3 million (108%(78%) for the three months ended SeptemberJune 30, 20212022 and same store new vehicle gross profit increased $49.3$3.2 million (83%(3%) over the same period. Same store new vehicle gross profit margin for the three months ended SeptemberJune 30, 20212022 increased 470280 basis points to 11.0%11.8%. The increase in our same store gross profit margin was primarily attributable to our efforts to focus on optimizing margin as new inventory levels declined as a result of manufacturer production disruptions.
We ended the quarter with approximately 1213 days of supply of new vehicle inventory, well below our target range of 70-75 days.historical levels. Our new vehicle inventory levels have been negatively impacted by production disruptions at the manufacturers caused primarily by the significant shortage of semiconductor chip shortage.chips, parts and other key components.

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Used Vehicle— 
For the Three Months Ended September 30,Increase (Decrease)%
Change
For the Three Months Ended June 30,Increase (Decrease)%
Change
20212020 20222021
(Dollars in millions, except for per vehicle data) (Dollars in millions, except for per vehicle data)
As Reported:As Reported:As Reported:
Revenue:Revenue:Revenue:
Used vehicle retail revenueUsed vehicle retail revenue$823.7 $507.4 $316.3 62 %Used vehicle retail revenue$1,272.8 $759.4 $513.4 68 %
Used vehicle wholesale revenueUsed vehicle wholesale revenue55.3 62.1 (6.8)(11)%Used vehicle wholesale revenue89.7 56.8 32.9 58 %
Used vehicle revenueUsed vehicle revenue$879.0 $569.5 $309.5 54 %Used vehicle revenue$1,362.5 $816.2 $546.3 67 %
Gross profit:Gross profit:Gross profit:
Used vehicle retail gross profitUsed vehicle retail gross profit$68.7 $43.3 $25.4 59 %Used vehicle retail gross profit$100.8 $73.5 $27.3 37 %
Used vehicle wholesale gross profitUsed vehicle wholesale gross profit3.5 5.9 (2.4)(41)%Used vehicle wholesale gross profit3.4 10.0 (6.6)(66)%
Used vehicle gross profitUsed vehicle gross profit$72.2 $49.2 $23.0 47 %Used vehicle gross profit$104.2 $83.5 $20.7 25 %
Used vehicle retail units:Used vehicle retail units:Used vehicle retail units:
Used vehicle retail unitsUsed vehicle retail units27,761 20,464 7,297 36 %Used vehicle retail units39,848 26,856 12,992 48 %
Same Store:Same Store:Same Store:
Revenue:Revenue:Revenue:
Used vehicle retail revenueUsed vehicle retail revenue$728.2 $496.1 $232.1 47 %Used vehicle retail revenue$837.2 $748.6 $88.6 12 %
Used vehicle wholesale revenueUsed vehicle wholesale revenue38.4 61.4 (23.0)(37)%Used vehicle wholesale revenue38.6 56.5 (17.9)(32)%
Used vehicle revenueUsed vehicle revenue$766.6 $557.5 $209.1 38 %Used vehicle revenue$875.8 $805.1 $70.7 %
Gross profit:Gross profit:Gross profit:
Used vehicle retail gross profitUsed vehicle retail gross profit$61.1 $42.2 $18.9 45 %Used vehicle retail gross profit$57.3 $72.7 $(15.4)(21)%
Used vehicle wholesale gross profitUsed vehicle wholesale gross profit2.6 5.9 (3.3)(56)%Used vehicle wholesale gross profit1.3 9.9 (8.6)(87)%
Used vehicle gross profitUsed vehicle gross profit$63.7 $48.1 $15.6 32 %Used vehicle gross profit$58.6 $82.6 $(24.0)(29)%
Used vehicle retail units:Used vehicle retail units:Used vehicle retail units:
Used vehicle retail unitsUsed vehicle retail units25,442 20,050 5,392 27 %Used vehicle retail units25,891 26,505 (614)(2)%

Used Vehicle Metrics—
For the Three Months Ended September 30,Increase (Decrease)%
Change
For the Three Months Ended June 30,Increase (Decrease)%
Change
20212020 20222021
As Reported:As Reported:As Reported:
Revenue per used vehicle retailedRevenue per used vehicle retailed$29,671 $24,795 $4,876 20 %Revenue per used vehicle retailed$31,941 $28,277 $3,664 13 %
Gross profit per used vehicle retailedGross profit per used vehicle retailed$2,475 $2,116 $359 17 %Gross profit per used vehicle retailed$2,530 $2,737 $(207)(8)%
Used vehicle retail gross marginUsed vehicle retail gross margin8.3 %8.5 %(0.2)%Used vehicle retail gross margin7.9 %9.7 %(1.8)%
Same Store:Same Store:Same Store:
Revenue per used vehicle retailedRevenue per used vehicle retailed$28,622 $24,743 $3,879 16 %Revenue per used vehicle retailed$32,336 $28,244 $4,092 14 %
Gross profit per used vehicle retailedGross profit per used vehicle retailed$2,402 $2,105 $297 14 %Gross profit per used vehicle retailed$2,213 $2,743 $(530)(19)%
Used vehicle retail gross marginUsed vehicle retail gross margin8.4 %8.5 %(0.1)%Used vehicle retail gross margin6.8 %9.7 %(2.9)%

Used vehicle revenue increased by $309.5$546.3 million (54%(67%) due to a $316.3$513.4 million (62%(68%) increase in used vehicle retail revenue partially offset byand a $6.8$32.9 million (11%(58%) decreaseincrease in used vehicle wholesale revenue. Same store used vehicle revenue increased by $209.1$70.7 million (38%(9%) due to a $232.1$88.6 million (47%(12%) increase in used vehicle retail revenue, partially offset a $23.0$17.9 million (37%(32%) decrease in used vehicle wholesale revenue. Total used vehicle retail unit sales increased by 36%48% while same store retail used vehicle unit sales increaseddecreased by 27%(2)% during the three months ended SeptemberJune 30, 20212022 as compared to the three months ended SeptemberJune 30, 2020.2021. Used vehicle revenues and unit salesvolume continued to benefited from the decline in new vehicle inventory availability during the thirdsecond quarter of 2021.

2022 although margins have begun to compress from the prior year period on both an all stores and
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same-store basis. For the three months ended SeptemberJune 30, 2021,2022, total Company and same store used vehicle retail gross profit margins decreased by 20180 basis points and 10290 basis points, respectively, as compared to the prior year quarter. The Company's wholesale revenue and gross profit declined as a result of our efforts to retail more used units due to the new vehicle supply shortage.

Our 2834 days of supply of used vehicle inventory as of SeptemberJune 30, 2021,2022, is slightly belowin line with our historic targeted range of 30 to 35 days.

Parts and Service—
For the Three Months Ended September 30,Increase
(Decrease)
%
Change
For the Three Months Ended June 30,Increase
(Decrease)
%
Change
20212020 20222021
(Dollars in millions) (Dollars in millions)
As Reported:As Reported:As Reported:
Parts and service revenueParts and service revenue$297.1 $237.2 $59.9 25 %Parts and service revenue$528.3 $292.4 $235.9 81 %
Parts and service gross profit:Parts and service gross profit:Parts and service gross profit:
Customer payCustomer pay109.3 84.0 25.3 30 %Customer pay$184.5 $106.8 $77.7 73 %
WarrantyWarranty23.7 25.7 (2.0)(8)%Warranty33.5 27.0 6.5 24 %
Wholesale partsWholesale parts8.7 5.8 2.9 50 %Wholesale parts19.6 8.0 11.6 145 %
Parts and service gross profit, excluding reconditioning and preparationParts and service gross profit, excluding reconditioning and preparation$141.7 $115.5 $26.2 23 %Parts and service gross profit, excluding reconditioning and preparation$237.6 $141.8 $95.8 68 %
Parts and service gross margin, excluding reconditioning and preparationParts and service gross margin, excluding reconditioning and preparation47.7 %48.7 %(1.0)%Parts and service gross margin, excluding reconditioning and preparation45.0 %48.5 %(3.5)%
Reconditioning and preparation *Reconditioning and preparation *$39.7 $29.8 $9.9 33 %Reconditioning and preparation *$56.8 $40.8 $16.0 39 %
Total parts and service gross profitTotal parts and service gross profit$181.4 $145.3 $36.1 25 %Total parts and service gross profit$294.4 $182.6 $111.8 61 %
Same Store:Same Store:Same Store:
Parts and service revenueParts and service revenue$256.0 $232.5 $23.5 10 %Parts and service revenue$317.8 $288.7 $29.1 10 %
Parts and service gross profit:Parts and service gross profit:Parts and service gross profit:
Customer payCustomer pay92.5 82.3 10.2 12 %Customer pay$122.0 $105.5 $16.5 16 %
WarrantyWarranty19.7 25.0 (5.3)(21)%Warranty20.6 26.7 (6.1)(23)%
Wholesale partsWholesale parts7.7 5.7 2.0 35 %Wholesale parts8.8 7.8 1.0 13 %
Parts and service gross profit, excluding reconditioning and preparationParts and service gross profit, excluding reconditioning and preparation$119.9 $113.0 $6.9 %Parts and service gross profit, excluding reconditioning and preparation$151.4 $140.0 $11.4 %
Parts and service gross margin, excluding reconditioning and preparationParts and service gross margin, excluding reconditioning and preparation46.8 %48.6 %(1.8)%Parts and service gross margin, excluding reconditioning and preparation47.6 %48.5 %(0.9)%
Reconditioning and preparation *Reconditioning and preparation *$36.0 $29.2 $6.8 23 %Reconditioning and preparation *$38.8 $40.2 $(1.4)(3)%
Total parts and service gross profitTotal parts and service gross profit$155.9 $142.2 $13.7 10 %Total parts and service gross profit$190.2 $180.2 $10.0 %
* 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 in the accompanying Condensed Consolidated Statements of Income upon the sale of the vehicle.
The $59.9$235.9 million (25%(81%) increase in parts and service revenue was due to an $47.7$152.4 million (30%(76%) increase in customer pay revenue, a $14.9$69.0 million (47%(159%) increase in wholesale parts revenue partially offset byand a $2.7$14.5 million (6%(30%) decreaseincrease in warranty revenue. Same store parts and service revenue increased by $23.5$29.1 million (10%) to $256.0$317.8 million during the three months ended SeptemberJune 30, 20212022 from $232.5$288.7 million during the three months ended SeptemberJune 30, 2020.2021. The increase in same store parts and service revenue was due to a $20.7$30.2 million (13%(15%) increase in customer pay revenue, a $11.1$7.8 million (35%(18%) increase in wholesale parts revenue partially offset by a $8.3$8.9 million (18%(19%) increasedecrease in warranty revenue.
During the three months ended SeptemberJune 30, 2021,2022, parts and service gross profit, excluding reconditioning and preparation, increased by $26.2$95.8 million (23%(68%) to $141.7$237.6 million and same store parts and service gross profit, excluding reconditioning and preparation, increased by $6.9$11.4 million (6%(8%) to $119.9$151.4 million. We attribute much of this increase to consumer driving habits returning to pre-pandemic levels. We continue to focus on increasing our customer pay parts and service revenue over the long-term by upgrading equipment, improving the customer experience, providing competitive benefits to our technicians, and capitalizing on our dealership training programs.programs, and upgrading equipment.


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Finance and Insurance, net— 
For the Three Months Ended September 30,Increase
(Decrease)
%
Change
For the Three Months Ended June 30,Increase
(Decrease)
%
Change
20212020 20222021
(Dollars in millions, except for per vehicle data) (Dollars in millions, except for per vehicle data)
As Reported:As Reported:As Reported:
Finance and insurance, netFinance and insurance, net$100.4 $80.8 $19.6 24 %Finance and insurance, net$174.7 $107.0 $67.7 63 %
Finance and insurance, net per vehicle soldFinance and insurance, net per vehicle sold$1,912 $1,795 $117 %Finance and insurance, net per vehicle sold$2,224 $1,827 $397 22 %
Same Store:Same Store:Same Store:
Finance and insurance, netFinance and insurance, net$93.8 $79.7 $14.1 18 %Finance and insurance, net$114.4 $106.0 $8.4 %
Finance and insurance, net per vehicle soldFinance and insurance, net per vehicle sold$1,955 $1,800 $155 %Finance and insurance, net per vehicle sold$2,409 $1,830 $579 32 %
F&I, net revenue increased by $19.6$67.7 million (24%(63%) during the thirdsecond quarter of 20212022 as compared to the thirdsecond quarter of 20202021 and same store F&I, net revenue increased by $14.1$8.4 million (18%(8%) over the same period. We attribute the increase in all stores' F&I, net revenue to a 17%34% increase in total retail units sold and a 7%22% improvement in F&I PVR.
Selling, General,
TCA SEGMENT
 For the Three Months Ended June 30, 2022
As ReportedDealership Inter-company EliminationsTCA After Dealership Eliminations
 (Dollars in millions)
Finance and insurance, gross revenue$51.9 $(23.6)$28.3 
Finance and insurance, cost of sales$10.2 $5.1 $15.3 
Finance and insurance, gross profit$41.7 $(28.7)$13.0 
TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP insurance, appearance protection contracts and Administrative Expense—lease wear-and-tear contracts. The majority of TCA's products are sold through affiliated LHM automobile dealerships.
 For the Three Months Ended September 30,Increase
(Decrease)
% of Gross
Profit Increase (Decrease)
 2021% of Gross
Profit
2020% of Gross
Profit
(Dollars in millions)
As Reported:
Personnel costs$133.9 27.9 %$106.5 31.7 %$27.4 (3.8)%
Sales compensation48.6 10.1 %32.4 9.6 %16.2 0.5 %
Share-based compensation3.8 0.8 %2.6 0.8 %1.2 — %
Outside services30.9 6.4 %21.9 6.5 %9.0 (0.1)%
Advertising7.4 1.5 %6.3 1.9 %1.1 (0.4)%
Rent8.3 1.7 %8.1 2.4 %0.2 (0.7)%
Utilities5.0 1.0 %4.2 1.3 %0.8 (0.3)%
Insurance3.3 0.7 %3.3 1.0 %— (0.3)%
Other27.5 5.9 %21.2 6.3 %6.3 (0.4)%
Selling, general, and administrative expense$268.7 56.0 %$206.5 61.5 %$62.2 (5.5)%
Gross profit$480.0 $335.9 
Same Store:
Personnel costs$118.5 28.1 %$104.7 31.8 %$13.8 (3.7)%
Sales compensation44.0 10.4 %31.9 9.7 %12.1 0.7 %
Share-based compensation3.8 0.9 %2.7 0.8 %1.1 0.1 %
Outside services27.6 6.5 %21.4 6.5 %6.2 — %
Advertising6.9 1.6 %6.0 1.8 %0.9 (0.2)%
Rent8.2 1.9 %8.0 2.4 %0.2 (0.5)%
Utilities4.4 1.0 %4.1 1.2 %0.3 (0.2)%
Insurance2.4 0.6 %3.1 0.9 %(0.7)(0.3)%
Other23.8 5.8 %20.7 6.5 %3.1 (0.7)%
Selling, general, and administrative expense$239.6 56.8 %$202.6 61.6 %$37.0 (4.8)%
Gross profit$421.8 $329.1 
SG&A expense as a percentage of gross profit decreased 550 basis points from 61.5% for the third quarter of 2020 to 56.0% for the third quarter of 2021. Same store SG&A expense as a percentage of gross profit decreased 480 basis points, from 61.6% for the third quarter of 2020 to 56.8%Revenue generated by TCA is earned over the same period in 2021.of the related service product contract. The decrease in SG&A expense as a percentagemethod for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of gross
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profit is primarily the result of higher gross profits on new and used vehicle sales. On a same store basis our personnel costs decreased by 370 basis points as a percentage of gross profit in the third quarter of 2021 as compared to the same quarter in the prior year. The Company has also focused on retaining the efficiencies and productivity gained during the COVID-19 downturn and has been judicious with adding headcount. Sales compensation as a percentage of gross profit increased on both a total and same store basis for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, due to increased commission expense as a result of our profitability.TCA's investment portfolio. During the three months ended SeptemberJune 30, 20212022, TCA generated $51.9 million of revenue, consisting primarily of earned premium partially offset by a loss of $8.1 million to 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 2020are amortized over the Company incurred $3.5 million and $1.3 million, respectively,related contract period. Expenses are matched with earned premiums resulting in professional fees related to acquisitions.
Other Operating (Income) Expense, net —
Other operating expense (income), net includes gains and losses fromrecognition over the salelife of property and equipment, and other operating items not considered core to our business.the contracts. During the three months ended SeptemberJune 30, 2020, we2022, TCA recorded an impairment charge$10.2 million of $0.7 million related to property and equipment reflected in Assets held for sale included in the Condensed Consolidated Balance Sheet ascost of September 30, 2020.
Floor Plan Interest Expense —
Floor plan interest expense decreased by $1.5 million (50%) to $1.5 million during the three months ended September 30, 2021 as compared to $3.0 million for the three months ended September 30, 2020,sales consisting primarily due to lower average new vehicle inventory levels.
Other Interest Expense, net —
The $1.9 million (15%) increase in other interest expense, net is primarily the result of higher average outstanding debt during the three months ended September 30, 2021 due to the $250.0 million September 2020 offering of the Senior Notes and the 2021 Bank of America Real Estate Facility as compared to the same period in the prior year.
Gain on Dealership Divestitures, net—
During the three months ended September 30, 2021, we sold one franchise (one dealership location) in the Charlottesville, Virginia market and recorded a pre-tax gain of $8.0 million.
During the three months ended September 30, 2020 we sold one franchise (one dealership location) in the Greenville, South Carolina market and recorded a pre-tax gain of $24.7 million.
Income Tax Expense —
The $14.0 million (44%) increase in income tax expense was primarily the result of a $64.8 million (51%) increase in income before income taxes. Our effective tax rate for the three months ended September 30, 2021 was 23.7% compared to 24.8% in the prior comparative period. We expect our effective tax rate for 2021 to be around 25%.

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RESULTS OF OPERATIONS
Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20212020
 (Dollars in millions, except per share data)
REVENUE:
New vehicle$3,649.6 $2,541.8 $1,107.8 44 %
Used vehicle2,386.1 1,510.2 875.9 58 %
Parts and service851.5 628.0 223.5 36 %
Finance and insurance, net295.7 217.8 77.9 36 %
TOTAL REVENUE7,182.9 4,897.8 2,285.1 47 %
GROSS PROFIT:
New vehicle325.6 135.6 190.0 140 %
Used vehicle211.5 117.0 94.5 81 %
Parts and service527.1 380.7 146.4 38 %
Finance and insurance, net295.7 217.8 77.9 36 %
TOTAL GROSS PROFIT1,359.9 851.1 508.8 60 %
OPERATING EXPENSES:
Selling, general, and administrative778.2 553.4 224.8 41 %
Depreciation and amortization30.6 29.0 1.6 %
Franchise rights impairment— 23.0 (23.0)(100)%
Other operating (income) expense, net(4.6)9.4 (14.0)(149)%
INCOME FROM OPERATIONS555.7 236.3 319.4 135 %
OTHER EXPENSES:
Floor plan interest expense6.5 14.1 (7.6)(54)%
Other interest expense, net43.2 41.7 1.5 %
Loss on extinguishment of long-term debt— 20.6 (20.6)(100)%
Gain on dealership divestitures, net(8.0)(58.4)50.4 86 %
Total other expenses, net41.7 18.0 23.7 132 %
INCOME BEFORE INCOME TAXES514.0 218.3 295.7 135 %
Income tax expense122.1 53.0 69.1 130 %
NET INCOME$391.9 $165.3 $226.6 137 %
Net income per share—Diluted$20.10 $8.56 $11.54 135 %
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 For the Nine Months Ended September 30,
 20212020
REVENUE MIX PERCENTAGES:
New vehicle50.8 %51.9 %
Used vehicle retail30.5 %28.0 %
Used vehicle wholesale2.7 %2.9 %
Parts and service11.9 %12.8 %
Finance and insurance, net4.1 %4.4 %
Total revenue100.0 %100.0 %
GROSS PROFIT MIX PERCENTAGES:
New vehicle23.9 %15.9 %
Used vehicle retail14.0 %12.5 %
Used vehicle wholesale1.6 %1.3 %
Parts and service38.8 %44.7 %
Finance and insurance, net21.7 %25.6 %
Total gross profit100.0 %100.0 %
GROSS PROFIT MARGIN18.9 %17.4 %
SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT57.2 %65.0 %
Total revenue for the nine months ended September 30, 2021 increased by $2.29 billion (47%) compared to the nine months ended September 30, 2020, due to a $1.11 billion (44%) increase in new vehicle revenue, a $875.9 million (58%) increase in used vehicle revenue, a $223.5 million (36%) increase in parts and service revenue and a $77.9 million (36%) increase in F&I, net revenue. The $508.8 million (60%) increase in gross profit during the nine months ended September 30, 2021 was driven by a $190.0 million (140%) increase in new vehicle gross profit, a $146.4 million (38%) increase in parts and service gross profit, a $94.5 million (81%) increase in used vehicle gross profit and a $77.9 million (36%) increase in F&I, net gross profit.
Income from operations during the nine months ended September 30, 2021 increased by $319.4 million (135%), compared to the nine months ended September 30, 2020, due to the $508.8 million (60%) increase in gross profit, a $23.0 million franchise right impairment charge recorded in 2020, a $14.0 million (149%) decrease in other operating expense, net, partially offset by a $224.8 million (41%) increase in SG&Aclaims expense and a $1.6 million (6%) increase in depreciation and amortization expense.
Total other expenses, net increased by $23.7 million (132%), primarily as a result of a $50.4 million decrease in the gain on dealership divestitures, net during the first nine months of 2021 when compared to the first nine months of 2020 and a $1.5 million (4%) increase in other interest expense, net partially offset by a $7.6 million (54%) decrease in floor plan interest expense and no loss on extinguishment of debt. Income before income taxes increased $295.7 million to $514.0 million for the nine months ended September 30, 2021. Overall, net income increased by $226.6 million (137%) during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.










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New Vehicle—
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20212020
 (Dollars in millions, except for per vehicle data)
As Reported:
Revenue:
Luxury$1,634.3 $865.9 $768.4 89 %
Import1,454.5 1,114.1 340.4 31 %
Domestic560.8 561.8 (1.0)— %
Total new vehicle revenue$3,649.6 $2,541.8 $1,107.8 44 %
Gross profit:
Luxury$166.8 $62.1 $104.7 169 %
Import112.2 42.5 69.7 164 %
Domestic46.6 31.0 15.6 50 %
Total new vehicle gross profit$325.6 $135.6 $190.0 140 %
New vehicle units:
Luxury26,568 15,508 11,060 71 %
Import45,125 37,886 7,239 19 %
Domestic12,054 13,198 (1,144)(9)%
Total new vehicle units83,747 66,592 17,155 26 %
Same Store:
Revenue:
Luxury$1,064.8 $829.8 $235.0 28 %
Import1,443.6 1,098.3 345.3 31 %
Domestic556.0 532.7 23.3 %
Total new vehicle revenue$3,064.4 $2,460.8 $603.6 25 %
Gross profit:
Luxury$103.2 $59.3 $43.9 74 %
Import111.4 42.3 69.1 163 %
Domestic46.3 29.3 17.0 58 %
Total new vehicle gross profit$260.9 $130.9 $130.0 99 %
New vehicle units:
Luxury17,795 14,851 2,944 20 %
Import44,885 37,383 7,502 20 %
Domestic11,953 12,558 (605)(5)%
Total new vehicle units74,633 64,792 9,841 15 %
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New Vehicle Metrics—
 For the Nine Months Ended September 30,Increase (Decrease)%
Change
 20212020
As Reported:
Revenue per new vehicle sold$43,579 $38,170 $5,409 14 %
Gross profit per new vehicle sold$3,888 $2,036 $1,852 91 %
New vehicle gross margin8.9 %5.3 %3.6 %
Luxury:
Gross profit per new vehicle sold$6,278 $4,004 $2,274 57 %
New vehicle gross margin10.2 %7.2 %3.0 %
Import:
Gross profit per new vehicle sold$2,486 $1,122 $1,364 122 %
New vehicle gross margin7.7 %3.8 %3.9 %
Domestic:
Gross profit per new vehicle sold$3,866 $2,349 $1,517 65 %
New vehicle gross margin8.3 %5.5 %2.8 %
Same Store:
Revenue per new vehicle sold$41,060 $37,980 $3,080 %
Gross profit per new vehicle sold$3,496 $2,020 $1,476 73 %
New vehicle gross margin8.5 %5.3 %3.2 %
Luxury:
Gross profit per new vehicle sold$5,799 $3,993 $1,806 45 %
New vehicle gross margin9.7 %7.1 %2.6 %
Import:
Gross profit per new vehicle sold$2,482 $1,132 $1,350 119 %
New vehicle gross margin7.7 %3.9 %3.8 %
Domestic:
Gross profit per new vehicle sold$3,874 $2,333 $1,541 66 %
New vehicle gross margin8.3 %5.5 %2.8 %
For the nine months ended September 30, 2021, new vehicle revenue increased by $1.11 billion (44%) as a result of a 26% increase in new vehicle units sold and a 14% increase in revenue per new vehicle sold. For the nine months ended September 30, 2021, same store new vehicle revenue increased by $603.6 million (25%) as the result of a 15% increase in new vehicle units sold and a 8% increase in revenue per unit sold.
For the nine months ended September 30, 2021, new vehicle gross profit and same store new vehicle gross profit increased by $190.0 million (140%) and $130.0 million (99%), respectively. Same store new vehicle gross margin for the nine months ended September 30, 2021 improved 320 basis points to 8.5%.
The seasonally adjusted annual rate ("SAAR") of new vehicle sales in the U.S. during the nine months ended September 30, 2021 was 15.8 million compared to 14.0 million during the nine months ended September 30, 2020, a 13% increase. The Company experienced continued strength in new vehicle sales for the nine months ended September 30, 2021, building on the new vehicle sales recovery in the latter part of 2020. The increase in new vehicle sales revenue for the nine months ended September 30, 2021 over the same period in the prior year is also attributable to thedeferred acquisition of the Park Place Dealership Group in August 2020 and a significant decline in new vehicle sales during April 2020 as a result of the COVID-19 pandemic. On a same store basis, we experienced an increase in gross profit margin across all three of our new vehicle categories which we largely attribute to the scarcity of new vehicle inventory as a result of manufacturer production challenges arising from the semiconductor chip shortage.
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Used Vehicle—
 For the Nine Months Ended September 30,Increase (Decrease)%
Change
 20212020
 (Dollars in millions, except for per vehicle data)
As Reported:
Revenue:
Used vehicle retail revenue$2,190.6 $1,366.0 $824.6 60 %
Used vehicle wholesale revenue195.5 144.2 51.3 36 %
Used vehicle revenue$2,386.1 $1,510.2 $875.9 58 %
Gross profit:
Used vehicle retail gross profit$189.7 $106.1 $83.6 79 %
Used vehicle wholesale gross profit21.8 10.9 10.9 100 %
Used vehicle gross profit$211.5 $117.0 $94.5 81 %
Used vehicle retail units:
Used vehicle retail units78,136 59,151 18,985 32 %
Same Store:
Revenue:
Used vehicle retail revenue$1,837.1 $1,311.7 $525.4 40 %
Used vehicle wholesale revenue127.9 140.4 (12.5)(9)%
Used vehicle revenue$1,965.0 $1,452.1 $512.9 35 %
Gross profit:
Used vehicle retail gross profit$162.1 $102.7 $59.4 58 %
Used vehicle wholesale gross profit15.3 11.0 4.3 39 %
Used vehicle gross profit$177.4 $113.7 $63.7 56 %
Used vehicle retail units:
Used vehicle retail units69,250 56,884 12,366 22 %

























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Used Vehicle Metrics—
 For the Nine Months Ended September 30,Increase (Decrease)%
Change
 20212020
As Reported:
Revenue per used vehicle retailed$28,036 $23,093 $4,943 21 %
Gross profit per used vehicle retailed$2,428 $1,794 $634 35 %
Used vehicle retail gross margin8.7 %7.8 %0.9 %
Same Store:
Revenue per used vehicle retailed$26,529 $23,059 $3,470 15 %
Gross profit per used vehicle retailed$2,341 $1,805 $536 30 %
Used vehicle retail gross margin8.8 %7.8 %1.0 %
Used vehicle revenue increased by $875.9 million (58%) due to a $824.6 million (60%) increase in used vehicle retail revenue, and a $51.3 million (36%) increase in used vehicle wholesale revenue. Same store used vehicle revenue increased by $512.9 million (35%) due to a $525.4 million (40%) increase in used vehicle retail revenue partially offset by a $12.5 million (9%) decrease in used vehicle wholesale revenues.
For the nine months ended September 30, 2021, gross profit margins increased by 90 basis points to 8.7%. Due to the new vehicle inventory shortages that have arisen due to manufacturer challenges, we continue to see an increased demand for used vehicles. Used vehicle gross profit increased for the nine months ended September 30, 2021 by $94.5 million (81%) on an all store basis and $63.7 million (56%) on a same store basis as compared to the nine months ended September 30, 2020.









costs.










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Selling, General, and Administrative Expense—
 For the Three Months Ended June 30,Increase
(Decrease)
% of Gross
Profit Increase (Decrease)
 2022% of Gross
Profit
2021% of Gross
Profit
(Dollars in millions)
As Reported:
Personnel costs$240.1 29.9 %$132.5 26.6 %$107.6 3.3 %
Sales compensation76.9 9.6 %51.7 10.4 %25.2 (0.8)%
Share-based compensation4.7 0.6 %3.7 0.7 %1.0 (0.1)%
Outside services47.5 5.9 %26.2 5.3 %21.3 0.6 %
Advertising14.2 1.8 %8.9 1.8 %5.3 — %
Rent11.0 1.4 %9.1 1.8 %1.9 (0.4)%
Utilities7.2 0.9 %4.5 0.9 %2.7 — %
Insurance6.3 0.8 %6.1 1.2 %0.2 (0.4)%
Other40.4 4.9 %27.0 5.5 %13.4 (0.6)%
Selling, general, and administrative expense$448.3 55.8 %$269.7 54.2 %$178.6 1.6 %
Gross profit$802.7 $497.2 
Same Store:
Personnel costs$139.4 28.5 %$130.7 26.6 %$8.7 1.9 %
Sales compensation48.0 9.8 %51.0 10.4 %(3.0)(0.6)%
Share-based compensation4.7 1.0 %3.7 0.8 %1.0 0.2 %
Outside services30.0 6.1 %25.9 5.3 %4.1 0.8 %
Advertising6.0 1.2 %8.7 1.8 %(2.7)(0.6)%
Rent11.6 2.4 %9.1 1.9 %2.5 0.5 %
Utilities4.6 0.9 %4.5 0.9 %0.1 — %
Insurance4.2 0.9 %6.0 1.2 %(1.8)(0.3)%
Other24.7 5.1 %26.8 5.4 %(2.1)(0.3)%
Selling, general, and administrative expense$273.2 55.9 %$266.4 54.3 %$6.8 1.6 %
Gross profit$488.3 $490.7 
SG&A expense as a percentage of gross profit increased 160 basis points from 54.2% for the second quarter of 2021 to 55.8% for the second quarter of 2022. Same store SG&A expense as a percentage of gross profit also increased 160 basis points, from 54.3% for the second quarter of 2021 to 55.9% over the same period in 2022. The increase in SG&A expense as a percentage of gross profit is primarily the result of higher personnel costs. On a same store basis our personnel costs increased 190 basis points as a percentage of gross profit in the second quarter of 2022 as compared to the same quarter in the prior year. The Company continues to focus on retaining the efficiencies and productivity gained during the COVID-19 downturn while continuing to provide competitive benefits to our employees. Sales compensation as a percentage of gross profit decreased 60 basis points on a same store basis for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021, due to decreased commission expense as a result of lower used vehicle gross profits.
Depreciation and amortization —
The $8.0 million (79%) increase in depreciation and amortization expense for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021 was primarily the result of depreciation associated with dealership acquisitions during the fourth quarter of 2021 and additional assets placed into service during 2022.
Floor Plan Interest Expense —
Floor plan interest expense decreased by $0.6 million (29%) to $1.5 million during the three months ended June 30, 2022 as compared to $2.1 million for the three months ended June 30, 2021, primarily due to lower new vehicle inventory levels and a higher average floorplan offset balance.

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Other Interest Expense, net —
The $23.2 million (161%) increase in other interest expense, net is primarily the result of higher average outstanding debt during the three months ended June 30, 2022. During the fourth quarter of 2021, we incurred additional debt to finance the acquisitions of the Larry H. Miller and Stevinson automotive groups resulting in higher interest expense during the quarter.
Loss on Dealership Divestitures, net—
During the three months ended June 30, 2022, we divested three franchise (three dealership locations) and one collision center and recorded a preliminary pre-tax net loss of $28.7 million.
Income Tax Expense —
The $16.5 million (33%) increase in income tax expense was primarily the result of a $65.8 million (33%) increase in income before income taxes. Our effective tax rate for the three months ended June 30, 2022 was 24.8% compared to 24.7% in the prior comparative period. We expect our effective tax rate for 2022 to be around 25%.

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CONSOLIDATED RESULTS OF OPERATIONS
Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20222021
 (Dollars in millions, except per share data)
REVENUE:
New vehicle$3,720.1 $2,520.1 $1,200.0 48 %
Used vehicle2,713.4 1,507.1 1,206.3 80 %
Parts and service1,022.1 554.4 467.7 84 %
Finance and insurance, net406.4 195.3 211.1 108 %
TOTAL REVENUE7,862.0 4,776.9 3,085.1 65 %
GROSS PROFIT:
New vehicle444.4 199.6 244.8 123 %
Used vehicle203.5 139.3 64.2 46 %
Parts and service566.9 345.7 221.2 64 %
Finance and insurance, net379.9 195.3 184.6 95 %
TOTAL GROSS PROFIT1,594.7 879.9 714.8 81 %
OPERATING EXPENSES:
Selling, general, and administrative903.8 509.5 394.3 77 %
Depreciation and amortization36.5 19.9 16.6 83 %
Other operating income, net(1.9)(4.2)2.3 (55)%
INCOME FROM OPERATIONS656.3 354.7 301.6 85 %
OTHER EXPENSES:
Floor plan interest expense4.1 5.0 (0.9)(18)%
Other interest expense, net75.2 28.4 46.8 165 %
Gain on dealership divestitures, net(4.4)— (4.4)— %
Total other expenses, net74.9 33.4 41.5 124 %
INCOME BEFORE INCOME TAXES581.4 321.3 260.1 81 %
Income tax expense142.3 76.4 65.9 86 %
NET INCOME$439.1 $244.9 $194.2 79 %
Net income per share—Diluted$19.52 $12.56 $6.96 55 %
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Table of Contents
 For the Six Months Ended June 30,
 20222021
REVENUE MIX PERCENTAGES:
New vehicle47.3 %52.8 %
Used vehicle retail31.7 %28.6 %
Used vehicle wholesale2.8 %2.9 %
Parts and service13.0 %11.6 %
Finance and insurance, net5.2 %4.1 %
Total revenue100.0 %100.0 %
GROSS PROFIT MIX PERCENTAGES:
New vehicle27.9 %22.7 %
Used vehicle retail12.4 %13.7 %
Used vehicle wholesale0.4 %2.1 %
Parts and service35.5 %39.3 %
Finance and insurance, net23.8 %22.2 %
Total gross profit100.0 %100.0 %
GROSS PROFIT MARGIN20.3 %18.4 %
SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT56.7 %57.9 %
Total revenue for the six months ended June 30, 2022 increased by $3.09 billion (65%) compared to the six months ended June 30, 2021, due to a $1.20 billion (48%) increase in new vehicle revenue, a $1.21 billion (80%) increase in used vehicle revenue, a $467.7 million (84%) increase in parts and service revenue and a $211.1 million (108%) increase in F&I, net revenue. The $714.8 million (81%) increase in gross profit during the six months ended June 30, 2022 was driven by a $244.8 million (123%) increase in new vehicle gross profit, a $221.2 million (64%) increase in parts and service gross profit, a $184.6 million (95%) increase in F&I, net gross profit and a $64.2 million (46%) increase in used vehicle gross profit.
Income from operations during the six months ended June 30, 2022 increased by $301.6 million (85%), compared to the six months ended June 30, 2021, due to the $714.8 million (81%) increase in gross profit, partially offset by a $394.3 million (77%) increase in SG&A expense, a $16.6 million (83%) increase in depreciation and amortization expense and a $2.3 million (55%) decrease in other operating expense, net.
Total other expenses, net increased by $41.5 million (124%), primarily as a result of a $46.8 million (165%) increase in other interest expense, net partially offset by a $0.9 million (18%) decrease in floor plan interest expense and a $4.4 million gain on dealership divestitures, net during the six months ended June 30, 2022 when compared to the prior year period. Income before income taxes increased $260.1 million to $581.4 million for the six months ended June 30, 2022. Overall, net income increased by $194.2 million (79%) during the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.
The Company's results for the first six months of 2022 include the results of our dealerships acquired in the fourth quarter of 2021. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.








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DEALERSHIP SEGMENT
New Vehicle—
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20222021
 (Dollars in millions, except for per vehicle data)
As Reported:
Revenue:
Luxury$1,135.5 $1,126.2 $9.3 %
Import1,485.4 995.6 489.8 49 %
Domestic1,099.2 398.3 700.9 176 %
Total new vehicle revenue$3,720.1 $2,520.1 $1,200.0 48 %
Gross profit:
Luxury$147.3 $106.6 $40.7 38 %
Import183.2 62.1 121.1 195 %
Domestic113.9 30.9 83.0 269 %
Total new vehicle gross profit$444.4 $199.6 $244.8 123 %
New vehicle units:
Luxury17,156 18,596 (1,440)(8)%
Import40,242 31,634 8,608 27 %
Domestic20,473 8,754 11,719 134 %
Total new vehicle units77,871 58,984 18,887 32 %
Same Store:
Revenue:
Luxury$965.8 $1,094.4 $(128.6)(12)%
Import801.3 995.6 (194.3)(20)%
Domestic319.4 398.3 (78.9)(20)%
Total new vehicle revenue$2,086.5 $2,488.3 $(401.8)(16)%
Gross profit:
Luxury$121.4 $103.3 $18.1 18 %
Import97.9 62.1 35.8 58 %
Domestic30.3 30.9 (0.6)(2)%
Total new vehicle gross profit$249.6 $196.3 $53.3 27 %
New vehicle units:
Luxury14,570 18,039 (3,469)(19)%
Import22,379 31,634 (9,255)(29)%
Domestic6,296 8,754 (2,458)(28)%
Total new vehicle units43,245 58,427 (15,182)(26)%
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New Vehicle Metrics—
 For the Six Months Ended June 30,Increase (Decrease)%
Change
 20222021
As Reported:
Revenue per new vehicle sold$47,773 $42,725 $5,048 12 %
Gross profit per new vehicle sold$5,707 $3,384 $2,323 69 %
New vehicle gross margin11.9 %7.9 %4.0 %
Luxury:
Gross profit per new vehicle sold$8,586 $5,732 $2,854 50 %
New vehicle gross margin13.0 %9.5 %3.5 %
Import:
Gross profit per new vehicle sold$4,552 $1,963 $2,589 132 %
New vehicle gross margin12.3 %6.2 %6.1 %
Domestic:
Gross profit per new vehicle sold$5,563 $3,530 $2,033 58 %
New vehicle gross margin10.4 %7.8 %2.6 %
Same Store:
Revenue per new vehicle sold$48,248 $42,588 $5,660 13 %
Gross profit per new vehicle sold$5,772 $3,360 $2,412 72 %
New vehicle gross margin12.0 %7.9 %4.1 %
Luxury:
Gross profit per new vehicle sold$8,332 $5,726 $2,606 46 %
New vehicle gross margin12.6 %9.4 %3.2 %
Import:
Gross profit per new vehicle sold$4,375 $1,963 $2,412 123 %
New vehicle gross margin12.2 %6.2 %6.0 %
Domestic:
Gross profit per new vehicle sold$4,813 $3,530 $1,283 36 %
New vehicle gross margin9.5 %7.8 %1.7 %
For the six months ended June 30, 2022, new vehicle revenue increased by $1.20 billion (48%) as a result of a 32% increase in new vehicle units sold and a 12% increase in revenue per new vehicle sold. On a same store new vehicle revenue decreased by $401.8 million (16%) as the result of a 26% decrease in new vehicle units sold partially offset by a 13% increase in revenue per unit sold.
For the six months ended June 30, 2022, new vehicle gross profit and same store new vehicle gross profit increased by $244.8 million (123%) and $53.3 million (27%), respectively. Same store new vehicle gross margin for the six months ended June 30, 2022 improved 410 basis points to 12.0%.
The SAAR for new vehicle sales in the U.S. during the six months ended June 30, 2022 was 13.5 million compared to 17.1 million during the six months ended June 30, 2021, a 21% decrease. The Company's increase in new vehicle sales revenue for the six months ended June 30, 2022 over the same period in the prior year is primarily attributable to the Company's acquisitions of the Larry H. Miller and Stevinson dealership groups in December 2021. We continue to be negatively impacted by a scarcity of new vehicle inventory as a result of manufacturer production challenges arising from the semiconductor chips, parts and other key components shortage.


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Used Vehicle—
 For the Six Months Ended June 30,Increase (Decrease)%
Change
 20222021
 (Dollars in millions, except for per vehicle data)
As Reported:
Revenue:
Used vehicle retail revenue$2,489.7 $1,366.9 $1,122.8 82 %
Used vehicle wholesale revenue223.7 140.2 83.5 60 %
Used vehicle revenue$2,713.4 $1,507.1 $1,206.3 80 %
Gross profit:
Used vehicle retail gross profit$196.6 $121.0 $75.6 62 %
Used vehicle wholesale gross profit6.9 18.3 (11.4)(62)%
Used vehicle gross profit$203.5 $139.3 $64.2 46 %
Used vehicle retail units:
Used vehicle retail units78,154 50,375 27,779 55 %
Same Store:
Revenue:
Used vehicle retail revenue$1,627.1 $1,346.2 $280.9 21 %
Used vehicle wholesale revenue91.1 139.4 (48.3)(35)%
Used vehicle revenue$1,718.2 $1,485.6 $232.6 16 %
Gross profit:
Used vehicle retail gross profit$112.1 $119.5 $(7.4)(6)%
Used vehicle wholesale gross profit2.0 18.1 (16.1)(89)%
Used vehicle gross profit$114.1 $137.6 $(23.5)(17)%
Used vehicle retail units:
Used vehicle retail units50,488 49,680 808 %

Used Vehicle Metrics—
 For the Six Months Ended June 30,Increase (Decrease)%
Change
 20222021
As Reported:
Revenue per used vehicle retailed$31,856 $27,134 $4,722 17 %
Gross profit per used vehicle retailed$2,516 $2,402 $114 %
Used vehicle retail gross margin7.9 %8.9 %(1.0)%
Same Store:
Revenue per used vehicle retailed$32,227 $27,097 $5,130 19 %
Gross profit per used vehicle retailed$2,220 $2,405 $(185)(8)%
Used vehicle retail gross margin6.9 %8.9 %(2.0)%
Used vehicle revenue increased by $1.21 billion (80%) due to a $1.12 billion (82%) increase in used vehicle retail revenue, and a $83.5 million (60%) increase in used vehicle wholesale revenue. Same store used vehicle revenue increased by $232.6 million (16%) due to a $280.9 million (21%) increase in used vehicle retail revenue partially offset by a $48.3 million (35%) decrease in used vehicle wholesale revenues.


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For the six months ended June 30, 2022, gross profit margins decreased by 100 basis points to 7.9%. We continue to see strong demand for used vehicles as a result of new vehicle inventory shortages that have arisen due to supply chain challenges. Used vehicle retail gross profit increased $75.6 million (62%) for the six months ended June 30, 2022 and decreased $7.4 million (6%) on a same store basis. On a same-store basis, our gross profit per used vehicle retailed decreased $185 (8%) when compared to the prior year period.

Parts and Service—
For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
For the Six Months Ended June 30,Increase
(Decrease)
%
Change
20212020 20222021
(Dollars in millions) (Dollars in millions)
As Reported:As Reported:As Reported:
Parts and service revenueParts and service revenue$851.5 $628.0 $223.5 36 %Parts and service revenue$1,038.1 $554.4 $483.7 87 %
Parts and service gross profit:Parts and service gross profit:Parts and service gross profit:
Customer payCustomer pay313.2 216.1 97.1 45 %Customer pay$357.0 $203.9 $153.1 75 %
WarrantyWarranty74.8 65.7 9.1 14 %Warranty67.0 51.1 15.9 31 %
Wholesale partsWholesale parts23.7 15.6 8.1 52 %Wholesale parts40.0 15.0 25.0 167 %
Parts and service gross profit, excluding reconditioning and preparationParts and service gross profit, excluding reconditioning and preparation$411.7 $297.4 $114.3 38 %Parts and service gross profit, excluding reconditioning and preparation$464.0 $270.0 $194.0 72 %
Parts and service gross margin, excluding reconditioning and preparationParts and service gross margin, excluding reconditioning and preparation48.3 %47.4 %0.9 %Parts and service gross margin, excluding reconditioning and preparation44.7 %48.7 %(4.0)%
Reconditioning and preparation *Reconditioning and preparation *$115.4 $83.3 $32.1 39 %Reconditioning and preparation *$110.6 $75.7 $34.9 46 %
Total parts and service gross profitTotal parts and service gross profit$527.1 $380.7 $146.4 38 %Total parts and service gross profit$574.6 $345.7 $228.9 66 %
Same Store:Same Store:Same Store:
Parts and service revenueParts and service revenue$700.0 $607.9 $92.1 15 %Parts and service revenue$612.9 $547.4 $65.5 12 %
Parts and service gross profit:Parts and service gross profit:Parts and service gross profit:
Customer payCustomer pay252.5 209.4 43.1 21 %Customer pay$233.3 $201.3 $32.0 16 %
WarrantyWarranty57.9 63.3 (5.4)(9)%Warranty40.8 50.4 (9.6)(19)%
Wholesale partsWholesale parts20.1 15.1 5.0 33 %Wholesale parts17.4 14.7 2.7 18 %
Parts and service gross profit, excluding reconditioning and preparationParts and service gross profit, excluding reconditioning and preparation$330.5 $287.8 $42.7 15 %Parts and service gross profit, excluding reconditioning and preparation$291.5 $266.4 $25.1 %
Parts and service gross margin, excluding reconditioning and preparationParts and service gross margin, excluding reconditioning and preparation47.2 %47.3 %(0.1)%Parts and service gross margin, excluding reconditioning and preparation47.6 %48.7 %(1.1)%
Reconditioning and preparation *Reconditioning and preparation *$100.8 $80.5 $20.3 25 %Reconditioning and preparation *$75.0 $74.6 $0.4 %
Total parts and service gross profitTotal parts and service gross profit$431.3 $368.3 $63.0 17 %Total parts and service gross profit$366.5 $341.0 $25.5 %
* Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed is included as a reduction of Parts and Service Cost of Sales in the accompanying Condensed Consolidated Statements of Income upon the sale of the vehicle.
The $223.5$483.7 million (36%(87%) increase in parts and service revenue was primarily due to a $168.1$301.7 million (40%(79%) increase in customer pay revenue, a $40.8$148.7 million (47%(183%) increase in wholesale parts revenue and a $14.6$33.3 million (12%(36%) increase in warranty revenue. Same store parts and service revenue increased by $92.1$65.5 million (15%(12%) from $607.9$547.4 million for the ninesix months ended SeptemberJune 30, 20202021 to $700.0$612.9 million for the ninesix months ended SeptemberJune 30, 2021.2022. The increase in same store parts and service revenue was due to a $72.9$60.3 million (18%(16%) increase in customer pay revenue, a $28.8$19.5 million (34%(24%) increase in wholesale parts revenue partially offset by a $9.6$14.3 million (8%(16%) decrease in warranty revenue.
Parts and service gross profit, excluding reconditioning and preparation, increased by $114.3$194.0 million (38%(72%) to $411.7$464.0 million, and same store gross profit, excluding reconditioning and preparation, increased by $42.7$25.1 million (15%(9%) to $330.5$291.5 million. The parts and service business was negatively impacted by "shelter in place" orders issued in response to the COVID-19 pandemic in 2020 but has since returned to pre-pandemic levels.







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Finance and Insurance, net—
For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
For the Six Months Ended June 30,Increase
(Decrease)
%
Change
20212020 20222021
(Dollars in millions, except for per vehicle data) (Dollars in millions, except for per vehicle data)
As Reported:As Reported:As Reported:
Finance and insurance, netFinance and insurance, net$295.7 $217.8 $77.9 36 %Finance and insurance, net$352.6 $195.3 $157.3 81 %
Finance and insurance, net per vehicle soldFinance and insurance, net per vehicle sold$1,827 $1,732 $95 %Finance and insurance, net per vehicle sold$2,260 $1,786 $474 27 %
Same Store:Same Store:Same Store:
Finance and insurance, netFinance and insurance, net$271.6 $212.2 $59.4 28 %Finance and insurance, net$224.3 $193.4 $30.9 16 %
Finance and insurance, net per vehicle soldFinance and insurance, net per vehicle sold$1,888 $1,744 $144 %Finance and insurance, net per vehicle sold$2,393 $1,789 $604 34 %
F&I revenue, net increased $77.9$157.3 million (36%(81%) during the ninesix months ended SeptemberJune 30, 20212022 when compared to the ninesix months ended SeptemberJune 30, 2020,2021, and same store F&I revenue, net increased by $59.4$30.9 million (28%(16%) over the same period. F&I revenue, net increased as a result of thea 43% increase in new and used retail unit sales for the ninesix months ended SeptemberJune 30, 20212022 as compared to the ninesix months ended SeptemberJune 30, 2020.2021. For the ninesix months ended SeptemberJune 30, 2021,2022, the Company was able to improve the F&I PVR by $95$474 per unit (5%(27%) over the comparable prior year period.

TCA SEGMENT
 For the Six Months Ended June 30, 2022
As ReportedDealership Inter-company EliminationsTCA After Dealership Eliminations
 (Dollars in millions)
Finance and insurance, gross revenue$109.2 $(55.4)$53.8 
Finance and insurance, cost of sales$10.9 $15.6 $26.5 
Finance and insurance, gross profit$98.3 $(71.0)$27.3 
TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP insurance, appearance protection contracts and lease wear-and-tear contracts. The majority of TCA's products are sold through affiliated LHM automobile dealerships.
Revenue generated by TCA is earned over the period of the related service product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the six months ended June 30, 2022, TCA generated $109.2 million of revenue, consisting primarily of earned premium partially offset by a loss of $10.8 million to 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. Expenses are matched with earned premiums resulting in recognition over the life of the contracts. During the six months ended June 30, 2022, TCA recorded $10.9 million of cost of sales consisting primarily of claims expense and amortization of deferred acquisition costs.

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CONSOLIDATED
Selling, General, and Administrative Expense—
For the Nine Months Ended September 30,Increase
(Decrease)
% of Gross
Profit Increase (Decrease)
For the Six Months Ended June 30,Increase
(Decrease)
% of Gross
Profit Increase (Decrease)
2021% of Gross
Profit
2020% of Gross
Profit
2022% of Gross
Profit
2021% of Gross
Profit
(Dollars in millions) (Dollars in millions)
As Reported:As Reported:As Reported:
Personnel costsPersonnel costs$383.5 28.2 %$273.3 32.1 %$110.2 (3.9)%Personnel costs$485.1 30.4 %$249.7 28.4 %$235.4 2.0 %
Sales compensationSales compensation137.6 10.1 %84.6 9.9 %53.0 0.2 %Sales compensation152.6 9.6 %89.0 10.1 %63.6 (0.5)%
Share-based compensationShare-based compensation12.2 0.9 %9.2 1.1 %3.0 (0.2)%Share-based compensation11.7 0.7 %8.3 0.9 %3.4 (0.2)%
Outside servicesOutside services81.1 6.0 %60.3 7.1 %20.8 (1.1)%Outside services92.9 5.8 %50.2 5.7 %42.7 0.1 %
AdvertisingAdvertising24.0 1.8 %17.9 2.1 %6.1 (0.3)%Advertising28.4 1.8 %16.5 1.9 %11.9 (0.1)%
RentRent28.7 2.1 %20.8 2.4 %7.9 (0.3)%Rent23.2 1.5 %20.3 2.3 %2.9 (0.8)%
UtilitiesUtilities13.8 1.0 %11.6 1.4 %2.2 (0.4)%Utilities15.1 0.9 %8.8 1.0 %6.3 (0.1)%
InsuranceInsurance16.8 1.2 %12.0 1.4 %4.8 (0.2)%Insurance15.0 0.9 %13.4 1.5 %1.6 (0.6)%
OtherOther80.5 5.9 %63.7 7.5 %16.8 (1.6)%Other79.8 5.1 %53.3 6.1 %26.5 (1.0)%
Selling, general, and administrative expenseSelling, general, and administrative expense$778.2 57.2 %$553.4 65.0 %$224.8 (7.8)%Selling, general, and administrative expense$903.8 56.7 %$509.5 57.9 %$394.3 (1.2)%
Gross profitGross profit$1,359.9 $851.1 Gross profit$1,594.7 $879.9 
Same Store:Same Store:Same Store:
Personnel costsPersonnel costs$323.9 28.4 %$265.1 32.1 %$58.8 (3.7)%Personnel costs$277.4 29.1 %$246.3 28.4 %$31.1 0.7 %
Sales compensationSales compensation120.2 10.5 %81.8 9.9 %38.4 0.6 %Sales compensation94.4 9.9 %88.0 10.1 %6.4 (0.2)%
Share-based compensationShare-based compensation12.2 1.1 %9.3 1.1 %2.9 — %Share-based compensation11.7 1.2 %8.3 1.0 %3.4 0.2 %
Outside servicesOutside services68.5 6.0 %58.1 7.0 %10.4 (1.0)%Outside services57.3 6.0 %49.5 5.7 %7.8 0.3 %
AdvertisingAdvertising20.9 1.8 %16.7 2.0 %4.2 (0.2)%Advertising11.9 1.2 %16.2 1.9 %(4.3)(0.7)%
RentRent28.2 2.5 %20.6 2.5 %7.6 — %Rent22.3 2.3 %20.3 2.3 %2.0 — %
UtilitiesUtilities11.5 1.0 %11.1 1.3 %0.4 (0.3)%Utilities9.2 1.0 %8.7 1.0 %0.5 — %
InsuranceInsurance13.2 1.2 %11.1 1.3 %2.1 (0.1)%Insurance10.0 1.0 %13.2 1.5 %(3.2)(0.5)%
OtherOther$66.1 5.7 %$62.1 7.7 %4.0 (2.0)%Other$48.5 5.2 %$52.9 6.1 %(4.4)(0.9)%
Selling, general, and administrative expenseSelling, general, and administrative expense$664.7 58.2 %$535.9 64.9 %$128.8 (6.7)%Selling, general, and administrative expense$542.7 56.9 %$503.4 58.0 %$39.3 (1.1)%
Gross profitGross profit$1,141.2 $825.1 Gross profit$954.5 $868.3 
SG&A expense as a percentage of gross profit decreased 780120 basis points from 65.0%57.9% for the ninesix months ended SeptemberJune 30, 20202021 to 57.2%56.7% for the ninesix months ended SeptemberJune 30, 2021,2022, while same store SG&A expense as a percentage of gross profit decreased 670110 basis points to 58.2%56.9% over the same period. The decrease in SG&A as a percentage of gross profit during the ninesix months ended SeptemberJune 30, 2021,2022, is primarily the result of higher sales volume and gross profits earned on new and used vehicle sales. On an as-reporteda total company basis, Personnel costs and Sales compensation increased by $110.2$235.4 million and $53.0$63.6 million, respectively, for the ninesix months ended SeptemberJune 30, 20212022 as compared to the ninesix months ended SeptemberJune 30, 2020,2021, primarily due to the inclusion of the Park Place acquisitionLarry H. Miller and Stevinson acquisitions in year-to-date 20212022 results. We also attribute the increase to higher sales commissions related to the increase in gross profit earned during the nine months ended September 30, 2021.
Franchise Rights Impairment—
During the nine months ended September 30, 2020, we recorded a franchise rights impairment charge of $23.0 million. As a result of the COVID-19 pandemic, we performed a quantitative impairment analysis of certain franchise rights assets and determined that their carrying values exceeded their fair value by $23.0 million as of March 31, 2020. We did not perform impairment testing related to franchise rights for the nine months ended September 30, 2021 as no triggering events had occurred.
Other Operating Expense, net—
Other operating expense, net includes gains and losses from the sale of property and equipment, and other operating items not considered core to our business. During the nine months ended September 30, 2021, the Company recorded other operating income, net of $4.6 million, primarily related to a $3.5 million gain arising from legal settlements and a $1.9 million gain on divestitures of certain real estate, partially offset by $1.3 million of real estate related charges. Included in the $9.4 million of other operating expense, net for the nine months ended September 30, 2020, was an $11.6 million charge related to certain
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financing transactions related to, as well as the initial termination of, the Park Place acquisition, partially offset by a $2.1 million gain related to legal settlements and a $0.3 million gain related to the sale of vacant real estate.
Floor Plan Interest Expense—
Floor plan interest expense decreased by $7.6$0.9 million (54%(18%) to $6.5$4.1 million during the ninesix months ended SeptemberJune 30, 20212022 compared to $14.1$5.0 million during the ninesix months ended SeptemberJune 30, 20202021 primarily as a result of lower new vehicle inventory levels.levels and a higher average floorplan offset balance.
Loss on ExtinguishmentOther Interest Expense —
Other interest expense increased $46.8 million (165%) during the six months ended June 30, 2022 from $28.4 million during the six months ended June 30, 2021 to $75.2 million during the six months ended June 30, 2022. During the fourth quarter of Debt—
On March 4, 2020,2021, we incurred additional debt to finance the Company redeemed its $600 million 6% Notes scheduled to mature in 2024 at 103% of par, plus accrued and unpaid interest. We recorded a loss on extinguishmentacquisitions of the 6% NotesLarry H. Miller and Stevinson automotive groups resulting in higher year-to-date interest expense.

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Table of $19.1 million which comprised a redemption premium of $18.0 million and the write-off of the unamortized premium and debt issuance costs totaling $1.1 million, net.Contents
As a result of the termination of the Asset Purchase Agreement (the "2019 Asset Purchase Agreement"), dated as of December 11, 2019, among the Company, Park Place and the other parties thereto, the Company delivered a notice of special mandatory redemption to holders of its $525.0 million aggregate principal amount of Senior Notes due 2028 (the "Existing 2028 Notes") and $600.0 million aggregate principal amount of Senior Notes due 2030 (the "Existing 2030 Notes") pursuant to which it would redeem on a pro rata basis (1) $245.0 million of the Existing 2028 Notes and (2) $280.0 million of the Existing 2030 Notes, in each case, at 100% of the respective principal amount plus accrued and unpaid interest to, but excluding the special mandatory redemption date. On March 30, 2020, the Company completed the redemption and recorded a write-off of unamortized debt issuance costs of $1.5 million.
Gain on Dealership Divestitures, net—
During the ninesix months ended SeptemberJune 30, 2021,2022, we sold one franchise (one dealership location) in the Charlottesville, Virginia market and recorded a pre-tax gain of $8.0 million.
During the nine months ended September 30, 2020, we sold one franchise (one dealership location) in the Atlanta, Georgia market, sixSt. Louis, Missouri, three franchises (five(three dealership locations) and one collision center in the Jackson, Mississippi market,Denver, Colorado, two franchises (two dealership locations) in Spokane, Washington and one franchisefranchises (one dealership location)locations) in the Greenville, South Carolina market.Albuquerque, New Mexico. The Company recorded a net pre-tax gain totaling $58.4 million.of $4.4 million for the six months ended June 30, 2022. The gain or loss on six dealership divestitures is preliminary pending final purchase accounting entries in connection with the LHM Acquisition.
Income Tax Expense—
The $69.1$65.9 million increase in income tax expense was primarily the result of a $295.7$260.1 million increase in income before income taxes. Our effective tax rate for the ninesix months ended SeptemberJune 30, 20212022 was 23.8%24.5% compared to 24.3%23.8% in the prior year period.
LIQUIDITY AND CAPITAL RESOURCES
As of SeptemberJune 30, 2021,2022, we had total available liquidity of $776.6 million,$1.01 billion, which consisted of $330.6 million of cash and cash equivalents $46.8of $14.8 million (excluding $85.3 million held by TCA), $229.3 million (excluding $75.0 million held by TCA) of available funds in our floor plan offset accounts, $190.0$389.0 million of availability under our new vehicle floor planfloorplan facility that is able to be converted to our revolving credit facility, $49.2$48.3 million of availability under our revolving credit facility, and $160.0$327.8 million of availability under our used vehicle revolving floor plan facility. The borrowing capacities under our revolving credit facility and our used vehicle revolving floor plan facility are limited by borrowing base calculations and, from time to time,time-to-time, may be further limited by our required compliance with customary operating and other restrictivecertain financial covenants. As of SeptemberJune 30, 2021,2022, these financial covenants did not further limit our availability under our other credit facilities. For more information on our financial covenants, see "Covenants" and "Share Repurchases and Dividend Restrictions" below.
On September 28, 2021, the Company entered into the Transaction Agreements to acquire the Larry H. Miller family of dealerships including the associated real estate and Total Care Auto, Powered by Landcar. In connection with entering into the Transaction Agreements, the Company entered into a commitment letter, dated September 28, 2021 (the “Commitment Letter”), with Bank of America, N.A., BofA Securities, Inc. and JPMorgan Chase Bank N.A. (collectively, the “Commitment Parties”), pursuant to which, among other things, the Commitment Parties have committed to provide debt financing for the Transactions, consisting of (i) a $2.35 billion bridge loan (the “HY Bridge Facility”); and (ii) a $900.0 million 364-day bridge loan (the “364-Bridge Facility”), on the terms and subject to the conditions set forth in the Commitment Letter. Each of the HY Bridge Facility and 364-Day Bridge Facility is subject to reduction as set forth in the Commitment Letter upon the completion of certain debt and equity financings, as applicable, and upon other specified events. The obligation of the Commitment Parties to provide this
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debt financing is subject to a number of customary conditions, including, without limitation, execution and delivery of certain definitive documentation.
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 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.
LHM Acquisition
On December 17, 2021, the Company completed the LHM Acquisition, which included 54 new vehicle dealerships, seven used vehicle 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. The purchase price was financed through a combination of cash, proceeds from the issuance of common stock and borrowings including the issuance of the 2029 Senior Notes and 2032 Senior Notes, the drawdown on the 2021 Real Estate Facility and the 2019 Senior Credit Facility and other floor plan borrowings.
Material Indebtedness
We currently are party to the following material credit facilities and agreements, and have the following material indebtedness outstanding. For a more detailed description of the material terms of these agreements and facilities, and this indebtedness, please refer to Note 1314 "Debt" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021. Additionally, as further outlined below, during the quarter ended June 30, 2022, we amended our LIBOR-based debt arrangements and related hedging financial instruments to revise their interest basis from LIBOR to a Secured Overnight Financing Rate ("SOFR"). See Note 9 "Debt" in our Condensed Consolidated Financial Statements contained herein for details of the revisions to the applicable debt arrangements.
2019 Senior Credit FacilityOn 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"). TheIn connection with the LHM Acquisition, the Company entered into a 2021 Third Amendment to the 2019 Senior Credit Facility on October 29, 2021. As amended, the 2019 Senior Credit Agreement provides for the following:
Revolving Credit FacilityA $250.0$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 described
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below, as of SeptemberJune 30, 2021,2022, we converted $190.0$389.0 million of aggregate commitmentsavailability from the Revolving Credit Facility to ourthe New Vehicle Floor Plan Facility (as defined below), resulting in $60.0$61.0 million of borrowing capacity. In addition, as of June 30, 2022, we had $10.8$12.7 million in outstanding letters of credit, as of September 30, 2021, resulting in $49.2$48.3 million of borrowing availabilityavailability. We began the year with $169.0 million drawn on our revolving credit facility. During the six months ended June 30, 2022, we had additional borrowings of $330.0 million and $499.0 million in repayments resulting in no outstanding borrowings as of SeptemberJune 30, 2021.2022.
New Vehicle Floor Plan FacilityA $1.04$1.75 billion New Vehicle Floor Plan Facility which allows us to transfer cash as an offset to floor plan notes payable. These transfers reduce the amount of outstanding new vehicle floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts.accounts within the same day. As a result of the use of ourthis floor plan offset account, and the reduction in LIBOR rates, we experienced a reduction in Floor Plan Interest Expense on our Condensed Consolidated Statements of Income. As of SeptemberJune 30, 2021,2022, we had $116.1$17.8 million outstanding under the New Vehicle Floor Plan Facility, which includes $1.1 million classified as Liabilities associated with assets held for sale on our Condensed Consolidated Balance Sheet and is net of $45.2$300.3 million in our floor plan offset account.
Used Vehicle Floor Plan FacilityA $160.0$350.0 million Used Vehicle Floor Plan Facility to finance the acquisition of used vehicle inventory and for among other things, working capital and capital expenditures, as well as to refinance used vehicles. We began the year with nothing$294.0 million drawn on our used vehicle floor plan facility and there was no activity duringfacility. During the ninesix months ended SeptemberJune 30, 2021.2022, we had additional borrowings of $100.0 million and $394.0 million in repayments resulting in no outstanding borrowings as of June 30, 2022. Our borrowing capacity under the Used Vehicle Floor Plan Facility was $160.0$327.8 million based on our borrowing base calculation as of SeptemberJune 30, 2021.2022.
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.
At our option, we have the ability to re-designate a portion of our availability under the Revolving Credit Facility to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility. The maximum amount we are allowed to re-designate is determined based on aggregate commitments under the Revolving Credit Facility, less $50.0 million. In addition, we are able to re-designate any amounts moved to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility back to the Revolving Credit Facility. On April 6, 2021, $190.0As of June 30, 2022, $389.0 million of our availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan FacilityFacility. We re-designated this amount to take advantage of the lower commitment fee rates.
Borrowings underrates on the 2019 Senior CreditNew Vehicle Floor Plan Facility bear interest, at our option, based on LIBOR or the Base Rate, in each case, plus an Applicable Rate. The Base Rate is the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the Bank of America prime rate, and (iii) one month LIBOR plus 1.00%. Applicable Rate means with respectwhen compared to the Revolving Credit Facility, a range from 1.00%Facility.
On May 25, 2022, the Company and certain of its subsidiaries entered into the fourth amendment to 2.00%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"), to replace the benchmark reference rate of LIBOR to SOFR. See Note 9 "Debt" for LIBOR loans and 0.15% to 1.00% for Base Rate loans, in each case based on the Company's consolidated total lease adjusted leverage ratio. Borrowings under the New Vehicle Floorplan Facility bear interest, at our option, based on LIBOR plus 1.10% or the Base Rate plus 0.10%. Borrowingsfurther details.
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under the Used Vehicle Floorplan Facility bear interest, at our option, based on LIBOR plus 1.40% or the Base Rate plus 0.40%.
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. The fee for unused commitments under the Revolving Credit Facility is between 0.15% and 0.40% per year, based on the Company's total lease adjusted leverage ratio, and the fee for unused commitments under the New Vehicle Facility Floor Plan and the Used Vehicle Facility Floor Plan Facility is 0.15% per year.
Manufacturer affiliated new vehicle floor plan and other financing facilitiesWe have a floor plan facility with the Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory. Our floor plan facility with Ford Credit was amended in July 2020 and can be terminated by either the Company or Ford Credit with a 30-day notice period. We have also established a floor plan offset account with Ford Credit, which operates in a similar manner to our floor plan offset account with Bank of America. As of SeptemberJune 30, 2021,2022, we had $22.1$27.7 million, which is net of $1.6$4.0 million in our floor plan offset account, outstanding under our floor plan facility. Additionally, we had $129.8$142.6 million, outstanding under our 2019 Senior Credit Facility and facilities with certain manufacturers for the financing of loaner vehicles, which are presented within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets. Neither our floor plan facility with Ford Credit nor our facilities for loaner vehicles have stated borrowing limitations.
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2029 and 2032 Senior Notes — On November 19, 2021, the Company completed its offering of $800.0 million aggregate principal amount of 4.625% senior notes due 2029 (the “2029 Senior Notes”) and $600.0 million aggregate principal amount of 5.000% senior notes due 2032 (the “2032 Senior Notes”). The New2029 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. The 2029 Senior Notes and the 2032 Senior Notes were offered, together with additional borrowings and cash on hand, to (i) fund the LHM Acquisition and (ii) pay related fees and expenses.
The 2029 Notes and 2032 Notes have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries other than the TCA Non-Guarantor Subsidiaries. In addition, the notes are subject to customary covenants, events of default and optional redemption revisions. The 2029 Notes and the 2032 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. The Existing 2028 Notes and Existing 2030 Notes mature on March 1, 2028 and March 1, 2030, respectively. Interest is payable semiannually, on March 1 and September 1 of each year. The 2028 Notes and the 2030 Notes were offered, together with additional borrowings and cash on hand, to (i) fund the acquisition of substantially all of the assets of Park Place, (ii) redeem all of our outstanding $600.0 million aggregate principal amount of 6.0% Senior Subordinated Notes due 2024 (the "6.0% Notes") and (iii) pay related fees and expenses.
On March 24, 2020, the Company delivered notice to the sellers terminating the 2019 Asset Purchase AgreementPark Place Agreements and the Real Estate Purchase Agreement. As a result, the Company redeemed $245.0 million aggregate principal million of the Existing 2028 Notes and $280.0 million aggregate principal amount of the Existing 2030 Notes pursuant to the Special Mandatory Redemption.a special mandatory redemption.
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 Existing 2028 Notes at a price of 101.0%101.00% of par, plus accrued interest from September 1, 2020, and $125.0 million aggregate principal amount of additional Existing 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"). After deducting the initial purchasers' discounts of $2.8 million, we received net proceeds of approximately $250.6 million from the September Offering. The $3.5 million premium paid by the initial purchasers of the Additional Notes was recorded as a component of long-term debt on our Condensed Consolidated Balance Sheet and is being amortized as a reduction of interest expense over the remaining term of the Notes. The proceeds of the September 2020 Offering were used to redeem the Seller Notes issued in connection with the Park Place Acquisition.
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. In addition, the notes are subject to customary covenants, events of default and optional redemption revisions. The 2028 Notes and the 2030 Notes were required to be registered under the Securities Act of 1933 within 270 days of the closing date for the offering of each respective series. The Company completed the registration of the 2028 Notes and 2030 Notes in October 2020.
Mortgage notesFinancingsWe have multiple mortgage agreements with finance companies affiliated with our vehicle manufacturers ("captive mortgages") and other lenders. As of SeptemberJune 30, 2021,2022, we had $73.1total mortgage notes payable outstanding of $69.0 million, of mortgage note obligations. These obligationswhich includes $2.8 million classified as Liabilities associated with assets help for sale, which are collateralized by the associated real estate at our dealership locations.estate.
20132021 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 provides for term loans in an aggregate amount equal to $689.7 million (the “2021 Real Estate Facility”). As of June 30, 2022, we had $677.9 million of outstanding borrowings under the 2021 Real Estate Facility. There is no further borrowing availability under the 2021 Real Estate Facility.
2021 BofA Real Estate FacilityOn September 26, 2013,May 10, 2021, we entered into a real estate term loan credit agreement (the "2013“2021 BofA Real Estate Credit Agreement”), by and among the Company and certain of its subsidiaries, Bank of America, N.A., as administrative agent and the various financial institutions party thereto, as lenders, which provides for term loans in an aggregate amount equal to $184.4 million, subject to customary terms and conditions (the “2021 BofA Real Estate Facility”). As of June 30, 2022, we had $177.0 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. On May 25, 2022, certain of our subsidiaries entered into amendments to our 2021 BofA Real Estate
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Facility to replace the benchmark reference rate of LIBOR to SOFR, effective June 1, 2022. See Note 9 "Debt" for further details.
2018 Bank of America FacilityOn 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, N.A. ("Bank of America"), as lender, providing for term loans in an aggregate amount not to exceed $75.0$128.1 million, subject to customary terms and conditions (the "2013"2018 BofA Real Estate Facility"). Our right to make draws under the 2018 BofA Real Estate Facility terminated on November 13, 2019. All of the real property financed by an operating dealership subsidiary of the Company under the 2018 BofA Real Estate Facility is collateralized by first priority liens, subject to certain permitted exceptions. As of SeptemberJune 30, 2021,2022, we had $31.7$76.1 million of outstanding borrowings under the 2013 BofA Real Estate2018 Bank of America Facility. There is no further borrowing availability under this agreement.the 2018 BofA Real Estate Facility. On May 25, 2022, certain of our subsidiaries entered into an amendment to our 2018 BofA Real Estate Facility to replace the benchmark reference rate of LIBOR to SOFR, effective June 1, 2022. See Note 9 "Debt" for further details.

2018 Wells Fargo Master Loan FacilityOn November 16, 2018, certain of our subsidiaries entered into a master loan agreement (the "2018 Wells Fargo Master Loan Agreement") with Wells Fargo as lender, which provides for term loans to certain of our subsidiaries that are borrowers under the 2018 Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (the "2018 Wells Fargo Master Loan Facility"). Our right to make draws under the 2018 Wells Fargo Master Loan Facility terminated on June 30, 2020. On November 16, 2018 and June 26, 2020, we borrowed an aggregate amount of $25.0 million and $69.4 million, respectively, under the 2018 Wells Fargo Master Loan Facility, the proceeds of which were used for general corporate purposes. As of June 30, 2022, we had $79.4 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. On and with effective from June 1, 2022, certain of our subsidiaries entered into an amendment to our 2018 Wells Fargo Master Loan Facility to replace the benchmark reference rate of LIBOR to SOFR. See Note 9 "Debt" for further details.
2015 Wells Fargo Master Loan FacilityOn February 3, 2015, certain of our subsidiaries entered into an amended and restated master loan agreement (the "2015 Wells Fargo Master Loan Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as lender, which provides for term loans to certain of our subsidiaries that are borrowers under the 2015 Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (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 SeptemberJune 30, 2021,2022, the outstanding balance under this agreement was $54.5$50.7 million. There is no further borrowing availability under this agreement.

the 2015 Wells Fargo Master Loan Facility. On and with effect from June 1, 2022, certain of our subsidiaries entered into an amendment to our 2015 Wells Fargo Master Loan Facility to replace the benchmark reference rate of LIBOR to SOFR. See Note 9 "Debt" for further details.
2018 Bank of America2013 BofA Real Estate FacilityOn November 13, 2018,September 26, 2013, we entered into a real estate term loan credit agreement (as amended, restated or supplemented from time to time, the "2018(the "2013 BofA Real Estate Credit Agreement") with Bank of America, N.A. ("Bank of America"), as lender, providing for term loans in an aggregate amount not to exceed $128.1$75.0 million, subject to customary terms and conditions (the "2018"2013 BofA Real Estate Facility"). Our right to make draws under the 2018 BofA Real Estate Facility terminated on November 13, 2019. All of the real property financed by an operating dealership subsidiary of the Company under the 2018 BofA Real Estate Facility is collateralized by first priority liens, subject to
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certain permitted exceptions. As of SeptemberJune 30, 2021,2022, we had $80.1$29.8 million of outstanding borrowings under the 2018 Bank of America Facility.
2018 Wells Fargo Master Loan FacilityOn November 16, 2018, certain of our subsidiaries entered into a master loan agreement (the "2018 Wells Fargo Master Loan Agreement") with Wells Fargo as lender, which provides for term loans to certain of our subsidiaries that are borrowers under the 2018 Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (the "2018 Wells Fargo Master Loan Facility"). As of September 30, 2021, we had $83.1 million, outstanding borrowings under the 2018 Wells Fargo Master Loan Facility. There is no further borrowing availability under this agreement.
20212013 BofA Real Estate FacilityOn May 20, 2021, the Company and certain of its subsidiaries borrowed $184.4 million under a real estate term loan credit agreement, dated as of May 10, 2021 (the “2021 BofA Real Estate Credit Agreement”), by the Company and certain of its subsidiaries, Bank of America, N.A., as administrative agent and the various financial institutions party thereto, as lenders, which provides for term loans in an aggregate amount equal to $184.4 million, subject to customary terms and conditions (the “2021 BofA Real Estate Facility”). The Company used the proceeds from these borrowings to finance the exercise of its option to purchase certain of the leased real property related to the Park Place dealerships. The Company completed the purchase of the leased real property on May 20, 2021. As of September 30, 2021, we had $182.5 million of outstanding borrowings under the 2021 BofA Real
Estate Facility. There is no further borrowing availability under this agreement.
Term loans underthe 2013 Real Estate Facility. On May 25, 2022, certain of our 2021subsidiaries entered into an amendment to our 2013 BofA Real Estate Facility bear interest, at our option, based on (1)to replace the benchmark reference rate of LIBOR plus 1.65% per annum or (2) the Base Rate (as described below) plus 0.65% per annum. The Base Rate is the highest of (i) the Federal Funds rate plus 0.50%, (ii) the Bank of America prime rate, and (iii) one month LIBOR plus 1.0%. We will be required to make 39 consecutive quarterly principal payments of 1.00% of the initial amount of each loan, with a balloon repayment of the outstanding principal amount of loans due on the maturity date. The 2021 BofA Real Estate Facility matures ten years from the initial funding date. Borrowings under the 2021 BofA Real Estate Facility are guaranteed by us and each of our operating dealership subsidiaries that leased the real estate now financed under the 2021 BofA Real Estate Facility, and are collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder.
The representations and covenants in the 2021 BofA Real Estate Credit Agreement are customarySOFR, effective June 1, 2022. See Note 9 "Debt" for financing transactions of this nature, including, among others, a requirement to comply with a minimum consolidated current ratio, minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the 2021 BofA Real Estate Credit Agreement. In addition, certain other covenants could restrict our ability to incur additional debt, pay dividends or acquire or dispose of assets. The 2021 BofA Real Estate Credit Agreement also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. Upon the occurrence of an event of default, we could be required by the 2021 BofA Real Estate Credit Agreement to immediately repay all amounts outstanding thereunder.further details.
Covenants
We are subject to a number of customary operating and other restrictive covenants in our various debt and lease agreements. We were in compliance with all of our covenants as of SeptemberJune 30, 2021.2022.
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 in our various debt and lease agreements.
Our 2019 Senior Credit Facility and our Indentures permit us to make an unlimited amount of restricted payments, such as share repurchases or dividends, so long as our Consolidated Total Leverage Ratio, as defined in those agreements, does not exceed 3.0 to 1.0 on a pro forma basis after giving effect to any proposed payments. As of September 30, 2021, our Consolidated Total Leverage Ratio did not exceed 3.0 to 1.0.
On January 27, 2021,30, 2014, our Board of Directors authorized our current share repurchase program (the "Repurchase Program"). On February 14, 2022, the Board of Directors increased the Company’s share repurchase authorization under our current share repurchase program (the "Repurchase Program")Repurchase Program by $33.7$100.0 million to $100 million, for the repurchase of our common stock in open market transactions or privately negotiated transactions from time to time.$200.0 million. The extent to whichthat the Company repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, legal requirements and other corporate considerations. The repurchase programRepurchase Program may be modified, suspended or terminated at any time without prior notice.
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During the ninethree months ended SeptemberJune 30, 2021,2022, we did not repurchase any shares of our common stock under the Repurchase Program and had remaining authorization to repurchase $100.0 million inProgram. During the six months ended June 30, 2022, we repurchased 1,069,203 shares of our common stock under the Repurchase Program for a total of $200.0 million. On April 27, 2022, our Board of Directors authorized an additional $200.0 million of share repurchases under our Repurchase Program. As of June 30, 2022, we had $200.0 million of shares remaining to repurchase under our Repurchase Program.
During the three and ninesix months ended SeptemberJune 30, 2021,2022, we repurchased 96436 and 65,12354,246 shares of our common stock for $0.1 million and $10.3$8.9 million, respectively from employees in connection with a net share settlement feature of employee equity-based awards.
Cash Flows
Classification of Cash Flows Associated with Floor Plan Notes Payable
Borrowings and repayments of floor plan notes payable to a lender unaffiliated with the manufacturer from which we purchase a particular new vehiclethrough 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 inon the accompanying Condensed Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "Floor Plan Notes Payable—Trade") is classified as an operating activity inon the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activity in the accompanying Condensed Consolidated StatementsStatement of Cash Flows. 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 a lenderour 2019 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturermanufacturers from which we purchased the related inventory. The majority of our floor plan notes are payable to parties unaffiliated with the entities from which we purchase our new vehicle inventory,2019 Senior Credit Facility, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles.
Floor plan borrowings are required by all vehicle manufacturers for the purchase of new vehicles, and all floor plan lenders require amounts borrowed for the purchase of a vehicle to be repaid within a short time period after the related vehicle is sold. As a result, we believe that it is important to understand the relationship between the cash flows of all of our floor plan notes payable and new vehicle inventory in order to understand our working capital and operating cash flow and to be able to compare our operating cash flow to that of our competitors (i.e., if our competitors have a different mix of trade and non-trade floor plan financing as compared to us). 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 "cash"Adjusted cash flow provided by operating activities, as adjusted"activities" (defined below) to compare our results to forecasts. We believe that splitting the cash flows of floor plan notes payable between operating activities and financing activities, while all new vehicle inventory activity is included in operating activities, results in significantly different operating cash flowflows than if all the cash flows of floor plan notes payable were classified together in operating activities.
CashAdjusted cash flow provided by operating activities as adjusted, includes borrowings and repayments of Floor Plan Notes Payable Non-Trade and used floor plan notes payable to lenders not affiliated with the manufacturer from which we purchase the related new vehicles. Cashborrowing base changes. Adjusted cash flow provided by operating activities as adjusted, has material limitations, and therefore, may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations we also review the related GAAP measures. Adjusted cash flow provided by operating activities for the six months ended June 30, 2021 differ from previously disclosed non-GAAP operating cash flow measures presented in Management's Discussion and Analysis due to the impact on operating cash flows, as reported, of the Company's recent material acquisitions. 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.
We have provided below a reconciliation of cash flow fromprovided by operating activities, as if all changes in floor plan notes payable, except for (i) borrowings associated with acquisitions and repayments associated with divestitures and (ii) borrowings and repayments associated with the purchase of used vehicle inventory and (iii) changes in the floorplan offset accounts were classified as an operating activity.
 For the Nine Months Ended September 30,
 20212020
 (In millions)
Reconciliation of Cash provided by operating activities to Cash provided by operating activities, as adjusted
Cash provided by operating activities, as reported$958.6 $625.2 
New vehicle floor plan repayments non-trade, net
(520.7)(207.4)
Cash provided by operating activities, as adjusted$437.9 $417.8 

activity for both Floorplan Notes Payable - Non-Trade and Floor Plan Notes Payable - Trade.
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 For the Six Months Ended June 30,
 20222021
 (In millions)
Reconciliation of Cash provided by operating activities to Cash provided by operating activities, as adjusted
Cash provided by operating activities, as reported$496.6 $587.3 
Change in Floor Plan Notes Payable Non-Trade, net(203.0)(407.9)
Change in Floor Plan Notes Payable Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures246.2 72.5 
Change in Floor Plan Notes Payable Trade associated with floor plan offset and net acquisition and divestitures4.1 (6.8)
Adjusted cash flow provided by operating activities$543.9 $245.1 
Operating Activities—
Net cash provided by operating activities totaled $958.6$496.6 million and $625.2$587.3 million, for the ninesix months ended SeptemberJune 30, 2022 and 2021, and 2020, respectively. NetAdjusted cash flow provided by operating activities as adjusted, totaled $437.9$543.9 million and $417.8$245.1 million, for the ninesix months ended SeptemberJune 30, 2022, and 2021, and 2020, respectively.
The $20.1 million increase in our Adjusted cash flow provided by operating activities includes net income, adjustments to reconcile net income to net cash provided by operating activities, as adjusted,changes in working capital, changes in used vehicle borrowing base, changes in Floor Plan Notes Payable—Non-Trade and Trade, excluding the impact of offsets, and excluding operating cash flows associated with acquisitions and divestitures related to loaner vehicles and new vehicle inventories financed through Floor Plan Notes Payable—Trade.
The $298.8 million increase in Adjusted cash flow provided by operating activities for the ninesix months ended SeptemberJune 30, 20212022 compared to the ninesix months ended SeptemberJune 30, 20202021, was primarily the result of a $226.6 million the following:

increase in $216.8 million net income and increase of $24.0non-cash adjustments to net income;
$96.5 million related to the lower balances ofan increase in accounts receivablepayable and contracts-in-transit around the period end, offset by a $87.6accrued liabilities;
$49.7 million decrease related to the changea increase in inventory, net of floor plan a $66.5notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and divestitures; and
$29.0 million decreaseincrease in other long term assets and liabilities, net.
The increase in our Adjusted cash flow provided by operating activities, was partially offset by:
$21.7 million related to sales volume and the timing of collection of accounts receivable and contracts-in-transit during 2022 as compared to 2021; and
$68.0 million related to the change in other current assets, a decrease in accounts payable and other current liabilities of $76.8 million and an increase in non-cash reconciling adjustments to net income of $15.0 million.net.
Investing Activities—
Net cash used in investing activities totaled $248.6$344.2 million for the ninesix months ended SeptemberJune 30, 20212022 compared to cash used in investing activities of $818.1$228.8 million, for the ninesix months ended SeptemberJune 30, 2020.2021. Capital expenditures, excluding the purchase of real estate, were $49.4$39.5 million and $27.5$26.7 million for the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively. We expect that capital expenditures for 2021during 2022 will total approximately $50.9$120.0 million to upgrade or replace our existing facilities, construct new facilities, expand our service capacity, and invest in technology and equipment. In addition, as part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations. No assurances can be provided that we will have or be able to access capital at times or on terms in amounts deemed necessary to execute this strategy.
During the ninesix months ended SeptemberJune 30, 2021,2022, we acquired the assets ofsold one franchise (one dealership location) in theSt. Louis, Missouri, three franchises (three dealership locations) and one collision center in Denver, Colorado, markettwo franchises (two dealership locations) in Spokane, Washington and one franchise (one dealership location) in Albuquerque New Mexico for aan aggregate purchase price of $15.9$379.7 million.
We funded this acquisition with an aggregate of $15.6purchased $25.9 million of cashdebt securities and $0.3$8.4 million of floor plan borrowings forequity securities during the purchasesix months ended June 30, 2022. We also received proceeds of $29.4 million and $8.9 million from the related new vehicle inventory. sale of debt and equity securities, respectively,
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during the six months ended June 30, 2022. We did not have any purchases or sales of debt and equity securities during the prior year period.
During the ninesix months ended SeptemberJune 30, 2021, we released $1.0 million of purchase price holdbacks related to a prior year acquisition.
During the ninesix months ended September 30, 2020, we acquired substantially all of the assets of, and leased the real property related to 12 new vehicle dealership franchises (8 dealership locations), two collision centers and an auto auction comprising the Park Place Dealership group for a purchase price of $889.9 million. We funded this acquisition with $527.4 million of cash, $200.0 million of Seller Notes, $127.5 million of floor plan borrowings for the purchase of the related new vehicle inventory and $35.0 million of floor plan borrowings for the purchase of the related used vehicle inventory. We also acquired the assets of three franchises (one dealership location) in the Denver, Colorado market for a purchase price of $63.6 million. 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. In the aggregate, this acquisition included purchase price holdbacks of $2.0 million for potential indemnity claims made by us with respect to the acquired franchises. In addition to the acquisition amounts above, we released $2.5 million of purchase price holdbacks related to a prior year acquisition.
During the nine months ended September 30, 2021, we sold one franchise (one dealership location) in the Charlottesville, Virginia market for a purchase price of $21.3 million. In addition, during the nine months ended SeptemberJune 30, 2021, we received cash proceeds of $21.5 million from the sale of real estate properties.
During the ninesix months ended SeptemberJune 30, 2020, we sold one franchise (one dealership location) 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 for an aggregate purchase price of $161.6 million. In addition, during the nine months ended September 30, 2020, we received cash proceeds of $4.2 million from the sale of vacant properties.
During the nine months ended September 30, 2021, and 2020, purchases of real estate, including previously leased real estate, totaled $7.8 million and $2.3 million, respectively.$222.6 million.
As part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations. No assurances can be provided that we will have or be able to access capital at times or on terms in amounts deemed necessary to execute this strategy.
Financing Activities—
Net cash used in financing activities totaled $380.8$919.6 million and $257.6 million for the ninesix months ended SeptemberJune 30, 2022 and 2021. Net cash provided by financing activities totaled $193.5 million for the nine months ended September 30, 2020.
During the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we had non-trade floor plan borrowings, excluding floor plan borrowings associated with acquisitions, of $3.40$3.62 billion and $2.84$2.40 billion, respectively, and non-trade floor plan repayments, excluding floor plan repayments associated with a divestiture, of $3.93$4.12 billion and $3.00$2.81 billion, respectively.
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During the ninesix months ended SeptemberJune 30, 2021 and 2020 we had floor plan borrowings of  $0.3 million and $131.6 million, respectively, related to acquisitions.
During the nine months ended September 30, 2021 and 2021,2022, we had non-trade floor plan repayments associated with divestitures of $0.8 million and $55.3 million, respectively.$21.6 million.
Repayments of borrowings totaled $33.7$24.1 million and $1.60 billion for the nine months ended September 30, 2021 and 2020, respectively. In addition, payments of debt issuance costs totaled $3.1$23.9 million for the ninesix months ended SeptemberJune 30, 2020.2022 and 2021, respectively.
Proceeds of $330.0 million were received in connection with borrowings under our Revolving Credit Facility during the six months ended June 30, 2022 and $499.0 million was repaid during the same period.
During the ninesix months ended SeptemberJune 30, 2020,2022, we had proceeds of $7.3 million related to a sale and leaseback of real estate in Plano, Texas.
During the nine months ended September 30, 2021, we did not repurchase anyrepurchased 1,069,203 shares of our common stock under our Repurchase Program butfor a total of $200.0 million and repurchased 65,12354,246 shares of our common stock for $10.3$8.9 million from employees in connection with a net share settlement feature of employee equity-based awards.
Off Balance Sheet Arrangements
We had no off balance sheet arrangements during any of the periods presented other than those disclosed in Note 1213 "Commitments and Contingencies" within the accompanying Condensed Consolidated Financial Statements.
Critical Accounting Policies and Estimates
For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021. Our critical accounting policies and estimates have not changed materially during the ninesix months ended SeptemberJune 30, 2021.2022.
Guarantor Financial Information
As of June 30, 2022, the Company had outstanding $405.0 million of 4.500% Senior Notes due 2028 and $445.0 million of 4.750% Senior Notes due 2030. 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”), with the exception of Landcar Administration Company, Landcar Agency, Inc. and Landcar Casualty Company and their respective subsidiaries (collectively, the “TCA Non-Guarantor Subsidiaries). The 2028 Notes and the 2030 Notes were required to be registered under the Securities Act of 1933 within 270 days of the closing date for the offering of each respective series. The Company completed the registration of the 2028 Notes and 2030 Notes in October 2020.

The following tables present summarized financial information for the Company and the Guarantor Subsidiaries on a combined basis after elimination of (i) intercompany transactions and balances among Asbury and the Guarantor Subsidiaries and (ii) assets, liabilities, and equity in earnings from and investments in any non-guarantor subsidiaries.

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Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries
As of
June 30, 2022December 31, 2021
(In millions)
Current assets$1,454.5 $1,778.4 
Current assets - affiliates$— $— 
Non-current assets$5,491.7 $5,511.3 
Current liabilities$1,038.9 $1,473.2 
Current liabilities - affiliates$80.6 $6.9 
Non-current liabilities$3,576.5 $3,916.7 

Summarized Statement of Operations Data for Asbury and Guarantor Subsidiaries for the six months ended :
For the Six Months Ended June 30,
2022
(In millions)
Net sales$7,824.2 
Gross profit$1,575.1 
Income from operations$626.7 
Net income$411.6 


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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We are exposed to risk from changes in interest rates on a portion of our outstanding indebtedness. Based on $102.9$139.2 million of total variable interest rate debt, which includes our floor plan notes payable and certain mortgage liabilities, outstanding as of SeptemberJune 30, 2021,2022, a 100 basis point change in interest rates could result in a change of as much as $1.0$1.4 million to our total annual interest expense in our Condensed Consolidated Statements of Income.
We periodically receive floor plan assistance from certain automobile manufacturers, which is accounted for as a reduction in our new vehicle inventory cost. Floor plan assistance reduced our cost of sales for the ninesix months ended SeptemberJune 30, 2022 and 2021 and 2020 by $42.9$44.2 million and $29.4$29.8 million, respectively. We cannot provide assurance as to the future amount of floor plan assistance and these amounts may be negatively impacted due to future changes in interest rates.
As part of our strategy to mitigate our exposure to fluctuations in interest rates, we have various interest rate swap agreements. All of our interest rate swaps qualify for cash flow hedge accounting treatment and do not contain any ineffectiveness.
We currently have fiveseven interest rate swap agreements. In May 2021,January 2022, we entered into atwo new interest rate swap agreementagreements with a combined notional principal amount of $184.4 million which will reduce to $110.6 million at maturity. This swap, along with our existing$550.0 million. These swaps wasare designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month LIBORSOFR rate. All interest rate through each swap's maturityswap agreements with an inception date of 2021 and prior were amended on June 1, 2022 to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR as noted incompared to the table below.previous benchmark rate of one-month LIBOR. The revisions to the interest rate swap agreements did not impact our hedge accounting. The following table provides information on the attributes of each swap as of SeptemberJune 30, 2021:2022:
Inception DateInception DateNotional Principal at InceptionNotional ValueNotional Principal at MaturityMaturity DateInception DateNotional Principal at InceptionNotional ValueNotional Principal at MaturityMaturity Date
(In millions)(In millions)(In millions)(In millions)(In millions)(In millions)
January 2022January 2022$300.0 $296.3 $228.8 December 2026
January 2022January 2022$250.0 $250.0 $250.0 December 2031
May 2021May 2021$184.4 $182.5 $110.6 May 2031May 2021$184.4 $177.0 $110.6 May 2031
July 2020July 2020$93.5 $87.9 $50.6 December 2028July 2020$93.5 $84.0 $50.6 December 2028
July 2020July 2020$85.5 $80.1 $57.3 November 2025July 2020$85.5 $76.1 $57.3 November 2025
June 2015June 2015$100.0 $70.6 $53.1 February 2025June 2015$100.0 $66.7 $53.1 February 2025
November 2013November 2013$75.0 $46.2 $38.7 September 2023November 2013$75.0 $43.3 $38.7 September 2023
For additional information about the effect of our derivative instruments, please refer tosee Note 10 "Financial Instruments and Fair Value" within the accompanying Condensed Consolidated Financial Statements.

Item 4. Controls and Procedures

Disclosure Controls and Procedures
As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of such period such disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time period specified in the rules and forms of the U.S. Securities and Exchange Commission, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. Management, including the principal executive officer and the principal financial officer, does not expect that our disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the control system are met. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the intentional acts of one or
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more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.
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the assets, including certain real estate, of 94 franchises (65 new dealership locations), seven used vehicle stores, eleven collision centers, a used vehicle wholesale business and an F&I product provider business. As permitted by the Securities and Exchange Commission, the scope of our Section 404 evaluation for the period covered by this report, does not include an evaluation of the internal control over financial reporting of these acquired operations.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended SeptemberJune 30, 20212022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we and our dealerships may become involved in various claims relating to, and arising out of our business and our operations. These claims may involve, but are not limited to, financial and other audits by vehicle manufacturers or lenders, and certain federal, state, and local government authorities, which relate primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants and (iii) payments made to government authorities relating to federal, state, and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings, and other dispute resolution processes. Such claims, including class actions, can relate to, but are not limited to, the practice of charging administrative fees, employment-related matters, truth-in-lending practices, contractual disputes, actions brought by governmental authorities, and other matters. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable.
We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity or results of operations.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that affect our business and financial results that are discussed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in Part II, Item 1A of our Quarterly report on Form 10-Q for the quarter ended March 31, 2021. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. There have been no material changes to such risk factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On January 30, 2014, our Board of Directors authorized our current Repurchase Program. On January 27, 2021, ourFebruary 14, 2022, the Board of Directors resetincreased the Company's share repurchase authorization under our Repurchase Program toby $100.0 million into $200.0 million. The extent to which the aggregate, forCompany repurchases its shares, the repurchasenumber of shares and the timing of our common stock in open market transactions or privately negotiated transactions. Anyany repurchases will be subject to applicable limitations in our debt ordepend on general market conditions, legal requirements and other financing agreements thatcorporate considerations. The Repurchase Program may be in existence frommodified, suspended or terminated at any time to time. without prior notice.
During the three months ended SeptemberJune 30, 2021,2022, we did not repurchase any shares of our common stock under the Repurchase Program butProgram. As of June 30, 2022 we had $200.0 million remaining authorization to repurchase shares of our common stock under the Repurchase Program.
In addition, during the three months ended June 30, 2022, we repurchased 96436 shares of our common stock for $0.1 million from employees in connection with a net share settlement feature of employee equity-based awards. As of September 30, 2021, we had remaining authorization to repurchase $100.0 million in shares of our common stock under the Repurchase Program.

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Item 5. Other Information

The information set forth below is included herein for the purpose of providing the disclosure required under “Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers” of Form 8-K.
On July 28, 2022, the Company entered into a severance agreement with Dan Clara, Senior Vice President, Operations of the Company (the “Severance Agreement”), which is identical to the form of severance agreement entered into with the other senior vice presidents of the Company. The Severance Agreement provides for one year of base salary, one year of benefits continuation, and a pro-rated bonus (which includes any payment under a non-equity incentive compensation plan) in the amount that the affected executive would have received had he not been terminated during such year (collectively, the “Severance Payment”) if (i) the affected executive is terminated by the Company without “cause,” if the affected executive terminates his employment for any of the following reasons: (a) mandatory relocation of the affected executive's current principal place of business to a location more than 50 miles away; (b) any material diminution in the affected executive's base salary; and (c) any material diminution in the affected executive's authority, duties or responsibilities.
The Severance Agreement requires the affected executive to execute a general release in favor of the Company as a condition to receiving any Severance Payments. The Severance Agreements also contain certain confidentiality, non-compete and non-solicit obligations and provides that, if such obligations are breached by the affected executive, the Company has the right to stop making any otherwise required Severance Payments. Additionally, the Severance Agreements provide that the affected executive will not receive any Severance Payment in the event of termination due to death, disability, retirement, voluntary resignation or termination by the Company for cause.
The foregoing summary of the Severance Agreement does not purport to be complete and is qualified in its entirety by reference to the Severance Agreement, a copy of which will is filed as exhibit 10.7 hereto and is incorporated herein by reference.
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Item 6. Exhibits
Exhibit
Number
Description of Documents
Exhibit 2.1 - PurchaseThird Amendment to the Credit Agreement, dated September 28, 2021 by andas of May 25, 2022, among Asbury Automotive Group, LLC, through oneInc., as borrower, certain of its subsidiaries and certain identified members of the Larry H. Mill Dealership family of entities (Portions of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K because they (i) are not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally to the Commission an unredacted copy of this exhibit upon request.)
Exhibit 2.2 – Real Estate Purchase Agreement, dated September 28, 2021 by and between Asbury Automotive Group, LLC, through one of its subsidiaries, and Miller Family Real Estate L.L.C. (Portions of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K because they (i) are not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally to the Commission an unredacted copy of this exhibit upon request.)
Exhibit 2.3 – Purchase Agreement, dated September 28, 2021 by and between Asbury Automotive Group, LLC, through one of its subsidiaries, and certain identified equity owners of the Total Care Auto, Powered by Landcar insurance business affiliated with the Larry H. Miller Dealership family of entities (Portions of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K because they (i) are not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally to the Commission an unredacted copy of this exhibit upon request.)
4.1 First Supplemental Indenture, dated as of September 3, 2021, among Asbury CO HG, LLC, Asbury Noblesville CDJR, LLC, Asbury Greeley SUB, LLC, Asbury CO GEN, LLC, Asbury Risk Services, LLC, Asbury Automotive Group, Inc. and U.S. Bank National Association, as trustee.of America, N.A.
4.2 First Supplemental Indenture,Fourth Amendment to the Third Amended and Restated Credit Agreement, dated as of September 3, 2021,May 25, 2022, among Asbury CO HG, LLC, Asbury Noblesville CDJR, LLC, Asbury Greeley SUB, LLC, Asbury CO GEN, LLC, Asbury Risk Services, LLC,Automotive Group, Inc., as a borrower, certain of its subsidiaries, as vehicle borrowers, the guarantors party thereto, Bank of America, N.A., as administrative agent, revolving swing line lender, new vehicle floorplan swing line lender, used vehicle floorplan swingline lender and an L/C issuer, and the other lenders party thereto
Second Amendment to the Amended and Restated Master Loan Agreement, dated as of June 1, 2022, by and among certain subsidiaries of Asbury Automotive Group, Inc. and U.S.Wells Fargo Bank, National Association as trustee.
10.1 Commitment Letter,Third Amendment to the Credit Agreement, dated September 28, 2021,as of May 25, 2022, among Asbury Automotive Group, Inc., as borrower, certain subsidiaries of Asbury Automotive Group, Inc. and Bank of America, N.A.
Second Amendment to the Master Loan Agreement, dated as of June 1, 2022, by and among certain subsidiaries of Asbury Automotive Group, Inc. and Wells Fargo Bank, National Association
Second Amendment to the Credit Agreement, dated as of May 25, 2022, by and among Asbury Automotive Group, Inc., certain subsidiaries party thereto as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., BofA Securities,as administrative agent
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and JPMorgan Chase Bank, N.A. (PortionsDaniel Clara dated as of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K because they (i) are not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally to the Commission an unredacted copy of this exhibit upon request.)July 28, 2022.
Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSXBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted in iXBRL Exhibit 101)
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Asbury Automotive Group, Inc.
Date:October 26, 2021July 28, 2022By: /s/    David W. Hult
Name: David W. Hult
Title: Chief Executive Officer and President

Date:October 26, 2021July 28, 2022By:/s/ Michael D. Welch
Name:Michael D. Welch
Title: Senior Vice President and Chief Financial Officer
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